Possibility of Relying on the UNIDROIT Principles to Supplement the Iranian Contract Law System: A Comparative Analysis

Document Type : Research Paper

Authors

1 Professor, Department of Private Law, Faculty of Law and Social Science, University of Tabriz, Tabriz. Iran.

2 MA. Student in International Trade Law, Department of International Trade Law and Energy, Faculty of Law, College of Farabi, University of Tehran, Tehran ,Iran.

Abstract

Introduction
Over a century has passed since the enactment of the Iranian Civil Code, during which significant developments in contract law and commercial relations have emerged. The introduction of modern concepts such as good faith, anticipatory damages, mitigation of damages, fundamental breach of contract, anticipatory breach, price reduction, early performance of obligations, hardship, battle of forms, interpretation rules, cooperation between parties, assignment of contracts, and other contemporary issues has highlighted the lacunae and deficiencies in the Iranian Civil Code. Despite minimal amendments since its enactment, the Iranian legal system provides a framework to address these gaps and adapt to modern developments.
One such mechanism is Article 3 of the Iranian Code of Civil Procedure, enacted in 2000, which, alongside supplementary sources such as valid Islamic sources and religious rulings (fatwas), recognizes legal principles as an independent source of law. This provision empowers judges and arbitrators to rely on legal principles in cases where statutory laws are silent, inadequate, ambiguous, or contradictory, thereby facilitating the resolution of civil and commercial disputes.
The UNIDROIT Principles of International Commercial Contracts (“UNIDROIT Principles”) represent a pivotal international instrument in contract law, serving as a key reference for drafting and interpreting contracts. By offering flexible and comprehensive solutions, particularly in cases where national laws are deficient, the UNIDROIT Principles provide a reliable framework for resolving contractual disputes. Their application promotes harmonization among diverse legal systems and facilitates international trade.
This study investigates whether the UNIDROIT Principles can be invoked under Article 3 of the Iranian Code of Civil Procedure as a supplementary source to fill gaps in domestic and international contract disputes governed by Iranian law. Addressing this question holds both theoretical significance and practical importance, as the UNIDROIT Principles can serve as an effective tool for judges and arbitrators to address emerging legal needs not adequately covered by the Civil Code, thereby enhancing the efficiency of dispute resolution.
Method
This study employs a doctrinal legal methodology, focusing on the analysis of statutory provisions, judicial interpretations, and scholarly commentary to assess the applicability of the UNIDROIT Principles within the Iranian contract law framework. Central to this inquiry is Article 3 of the Iranian Code of Civil Procedure, which establishes the legal basis for invoking principles of law, including transnational instruments such as the UNIDROIT Principles. The research examines relevant provisions of Iranian statutory law, particularly the Civil Code and the Code of Civil Procedure, while drawing on comparative legal materials from other jurisdictions. It also analyzes international instruments and judicial practices in jurisdictions that have recognized or applied the UNIDROIT Principles in contractual dispute resolution.
Additionally, the study adopts a normative perspective to evaluate the potential legal and economic benefits of integrating the UNIDROIT Principles into the Iranian legal system. It reviews authoritative academic literature and case law to assess the compatibility of these principles with the foundational doctrines of Iranian law. By addressing both theoretical and practical dimensions, this research seeks to determine whether the adoption of the UNIDROIT Principles could modernize Iranian contract law, enhance legal certainty in international transactions, and promote alignment with global commercial standards.
Conclusions
 A comparative analysis of legal systems, particularly those with a tradition of incorporating transnational instruments, offers valuable insights. Numerous civil law and common law jurisdictions, including France, Germany, Italy, Spain, China, the United States, the United Kingdom (England and Wales), Australia, and others, have recognized transnational instruments as supplementary sources to their domestic laws to varying degrees. This approach enables legal systems to adapt to the rapid evolution of international trade and commerce, allowing proactive regulation of contractual relationships.
This study concludes that, under specific conditions, judges and arbitrators may invoke the UNIDROIT Principles through Article 3 of the Iranian Code of Civil Procedure to address lacunae in the Civil Code. The application of these principles can facilitate the expeditious resolution of civil and commercial disputes and contribute to the development and modernization of Iranian contract law. Furthermore, adopting the UNIDROIT Principles can align the Iranian legal system with international standards, strengthening Iran’s position in global trade. As a collection of widely accepted principles and rules, the UNIDROIT Principles can assist in updating Iran’s domestic contract law by incorporating globally recognized standards, ultimately enhancing the country’s economic and commercial environment.
 

Keywords

References

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Law Quarterly
Volume 55, Issue 2
August 2025
Pages 231-256

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