A Jurisprudential and Legal Analysis of the Effects of Contract Termination on the Restitution of the Transaction Object in the Iranian Legal System, with Emphasis on the Law Mandating Official Registration of Transactions Involving Immovable Property

Document Type : Original Article

Authors

1 Professor, Department of Islamic Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran

2 دانشیار گروه فقه و حقوق خصوصی مدرسه عالی شهید مطهری

3 دانشجوی دکتری فقه و حقوق خصوصی دانشگاه شهید مطهری

10.30497/sj.2025.247565.1447

Abstract

The Iranian legislator has remained silent in the Civil Code regarding the legal implications of contract termination (faskh) on the restitution of the transaction object. However, the Supreme Court addressed this issue in its Unifying Opinion No. 810. Note 1 of Article 1 of the Law Mandating the Official Registration of Transactions Involving Immovable Property—ratified by the Islamic Consultative Assembly on 28 November 2022 and by the Expediency Discernment Council on 16 May 2024—considering the transaction object, if transferred through binding contracts (‘uqūd lāzima), as legally perished, and distinguishes between transfers effected through binding contracts and those through revocable contracts (‘uqūd jā’iza).
Nonetheless, this distinction is not reflected in the prevailing opinions of Imāmīa jurists . Contrary to the aforementioned Note, even if the transaction object is returned to the original owner through mutual rescission (iqāla) or the exercise of a contractual option (khiyār), restitution is not deemed obligatory. Regarding the effect of termination on the restitution of registered immovable property, the Iranian legislator has abrogated Supreme Court Unifying Opinion No. 810 through the enactment of the aforementioned law dated 6 June 2025.
According to the dominant view among Imāmīa jurists, the transfer of the transaction object via binding contracts constitutes a form of constructive loss, and in this respect, the law aligns with their jurisprudential stance. However, these jurists do not differentiate between movable and immovable property, nor between formally registered and unregistered transactions, in contrast to the distinctions made in the statutory text.
We have, therefore, presented through a descriptive/ analytical and library research approach, an examination of  the related jurisprudential and legal  foundations , due to the novel stance of the issue in the statute.

Keywords

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  • Receive Date: 12 January 2025
  • Revise Date: 17 May 2025
  • Accept Date: 10 March 2025