The Role of Judicial Precedents in Achieving Economic Balance Between Contracting Parties: From Theory to Practical Function in Contract Law

Abstract

The present article examines the role of judicial precedents in achieving economic balance between contracting parties within the framework of contract law. The main issue addressed in this study is that, despite the existence of civil and commercial laws as well as consumer protection regulations, the realization of economic justice and protection of the weaker party in contracts faces considerable challenges in practice in Iran. The primary objective of the research is to identify the legal instruments and judicial practices that effectively promote economic balance and to conduct a comparative analysis with the legal systems of France, Germany, and the United States. The research method is descriptive–analytical, employing domestic and international legal sources, judicial decisions, international instruments such as the CISG and UNIDROIT Principles, and comparative evaluation of domestic and foreign precedents. The findings indicate that, although Iranian legislation provides the initial tools for protecting the weaker contractual party, legislative gaps, enforcement limitations, and the absence of unified judicial practice have hindered the full realization of economic balance in practice. Comparative analysis with France, Germany, and the United States reveals that coherent, dynamic, and principle-based judicial precedents can play a significant role in protecting weaker parties and establishing economic justice. Moreover, the incorporation of international instruments enhances alignment with global standards and increases the legal security of contracting parties. The study demonstrates that, to improve the practical performance of Iran’s judiciary, it is necessary to provide judicial training, develop guidelines, and promote judicial consistency to ensure that economic justice is achieved in a systematic and continuous manner. The findings further suggest that international experience can serve as an effective guide for reforming domestic judicial practices and adapting laws and procedures to evolving economic and social conditions. This research, through its practical and comparative analysis, underscores the importance of integrating domestic and international law to achieve economic justice and shows that judicial precedents can become an effective mechanism for protecting the weaker party in contractual relationships.