A Jurisprudential and Legal Analysis of the Impact of Damages Caused by the Bank's Improper Performance on Loan Recipients

Baradaran, Delavar; Heidari, Mohammad Javad; Asari, Mahamad

doi:10.30497/sj.2025.247467.1444

A Jurisprudential and Legal Analysis of the Impact of Damages Caused by the Bank's Improper Performance on Loan Recipients

Document Type : Original Article

Authors

delavar baradaran

Mohammad javad Heidari ¹

mahamad asari ²

¹ دانشجوی دکتری حقوق خصوصی، دانشکده حقوق، دانشکدگان فارابی، دانشگاه تهران ،ایران

² دانشجوی کارشناسی ارشد معارف اسلامی و حقوق، دانشکده حقوق، دانشگاه امام صادق علیه السلام، تهران، ایران

10.30497/sj.2025.247467.1444

Abstract

The banking system, as the vital artery of the economy, plays an irreplaceable role in allocating resources and granting facilities. However, operational complexities and extensive interactions can lead to damages for recipients due to banks' improper performance. This research explains the foundations and limits of banks' civil liability within the framework of Imamia jurisprudence and Iranian positive law. The fundamental question is: when borrowers incur losses from a bank's incorrect actions, what are the elements of liability, who is obligated to compensate, on what grounds, and to what extent?

Adopting a descriptive-analytical method and a comparative approach between jurisprudential principles and Iranian law, this study analyzes common credit agreements (like civil partnerships, lease-purchases, and ju'alah), their ensuing obligations, and the rules governing civil liability. Findings show that a bank's liability towards borrowers is primarily a form of professional liability. The pivotal role of the jurisprudential rule of attribution (intisab) in proving liability is emphasized, along with the need to distinguish between actual damages and loss of profits in determining compensability. Fundamental jurisprudential rules like daman yad (liability from possession), la darar (no-harm principle), itlaf , and tasbib (indirect causation) hold significant potential for addressing modern banking challenges. A combined flexible application of jurisprudential and legal theories is essential to navigate the complexities of banking operations and precisely establish liability.

Keywords

Shared Contracts

Ju’alah

Hire-Purchase Contract

Bank

Loan Recipient

Loss

Loss of Prospective Profits

Professional Liability