Option of Lesion (Ghabn) in Transactions
Throughout history, individuals have continuously engaged in transactions of various forms and subject matters, and in some cases, one party may suffer loss as a result of a transaction. The science of law, by granting certain rights and options to contracting parties, seeks to reduce losses arising from transactions. One of the principal causes of loss in contractual relations is lesion, known in legal terminology as ghabn.
A lesion refers to causing loss to a person in a transaction and placing that person at a substantial disadvantage. A lesion occurs when there is a fundamental and non-negligible disparity between the actual value of the subject matter of the transaction and the price agreed upon by the parties.
To minimize losses resulting from transactions, the law has provided mechanisms known as options, or khiyarat, through which contracts may be dissolved and harm prevented. These options are legal rights granted to individuals to terminate their transactions under certain conditions. In legal terms, this termination is referred to as rescission, which allows the parties to terminate the contract when the required conditions are met.
One option recognized by law is the option of lesion. As noted, a lesion signifies loss. Accordingly, if a person enters into a transaction at a price that does not reflect the true value of the property and one or both parties are misled as to the actual value of the subject matter, the injured party may invoke the option of lesion and request rescission of the transaction.
Legal Effects of Exercising the Option of Lesion in Contracts
Meaning of the Option of Lesion, Waiver of Options, and Gross Lesion
In contracts, one may encounter a clause stating that all options, including the option of gross lesion, are waived.
The waiver of all options means the relinquishment of every right to rescind the contract. The term “all options” conveys an absolute and comprehensive waiver, leaving no remaining right of rescission.
Gross lesion refers to a severe and substantial loss. Therefore, if such a clause is included in a contract, all rights to rescind the transaction, even in cases of significant loss, are extinguished. For example, if a person sells their property at a price far below its actual value, they would ordinarily be entitled to invoke the option of the lessee. However, if the contract contains a clause waiving all options, including gross negligence, the seller will no longer have the right to rescind the transaction.
In exercising the option of lesion, it is also important to note that the injured party, whether buyer or seller, must act within a reasonable customary period from the time they become aware of the loss, provided such action does not conflict with the law or the terms of the contract.
Who Are the Injured Party and the Party Causing Lesion?
The person who suffers loss due to a lesion in a transaction is referred to as the injured party, while the person who causes such loss is known as the party causing the lesion.
Characteristics of the Option of Lesion
- The option of lesion is not exclusive to one party and may be exercised by either party to the transaction.
- The option of lesion is not limited to contracts of sale and may apply to other commutative contracts.
- It does not apply to gratuitous contracts and is limited to commutative transactions involving mutual obligations and transfer of property.
- The lesion must be gross in nature, such that it causes substantial loss to the injured party.
- Determination of a lesion requires careful and comprehensive examination of the contractual terms and circumstances.
- The buyer and the seller have equal rights of rescission only if the contract grants the lessee an option equally to both parties.
- The option to terminate the lease is an immediate option and must be exercised promptly.
Application of the Option of Lesion in Vehicle Transactions
If, after completing a vehicle purchase or sale, a party realizes that they have suffered a loss due to a significant disparity between the actual value and the agreed price, they may invoke the option of lesion to rescind the transaction. Given the immediate nature of this option, the injured party must act as soon as they become aware of the loss. Failure to do so will result in the lapse of the option.
A key condition for invoking the option of a lesion is the lack of knowledge of the true market value at the time of the transaction.
If the injured party was aware of the actual value and nonetheless proceeded with the transaction, they will not be entitled to rescind it. Lack of awareness is therefore a fundamental element of the option of lesion and must be proven.
It should also be noted that payment of the price difference by the party who caused the loss does not automatically extinguish the option of the lessee. The option is extinguished only if the injured party consents to accept the difference in price and thereby waives the right to rescind.
Frequently Asked Questions About the Option of Lesion in Transactions
The option of lesion is a legal right that allows a party to rescind a contract when substantial loss arises from a significant disparity between the actual value of the subject matter and the agreed price.
The injured party is the person who suffers loss due to the lesion, while the party causing the lesion is the one responsible for creating that loss.
By invoking the option of lesion, the injured party may rescind the contract. However, if the contract includes a clause waiving all options, including gross loss, the right to rescind is eliminated even in cases of severe loss.
It applies to both parties, covers non-sales contracts, requires a gross loss, must be exercised promptly, and depends on a careful assessment of the contractual terms and circumstances.
If a party discovers a significant price disparity after a vehicle transaction and was unaware of the true value at the time, they may rescind the contract through the option of lesion. Acceptance of a price adjustment requires the injured party’s consent to extinguish this right.
The option of lesion is immediate and must be exercised within a reasonable customary time upon discovery of the loss. Failure to act promptly results in the loss of this right. What is the option of a lesion in a transaction?
Who are the injured party and the party causing the lesion?
What are the legal effects of the option of lesion in a contract?
What are the main characteristics of the option of lesion?
How is the option of lesion applied in vehicle transactions?
What is the time limit for exercising the option of lessee?
