The Legal Definition of Contract and Its Rational Roots in Iran

Abstract

According to some commentators of the Iranian Civil Code, the definition of sale stated in Article 183 is influenced by Article 1101 of French Civil Code. They have concluded that the essence of sale is confined to mutual consent, i.e. the sale would not be valid without the consent of either party. They have taken even a step further and considered the contents of Article 338 of the civil code, which describes contract of sale, contradictory to Article 183 and argued that the sale of a specified concrete object is not contained in Article 183 while the sale of unascertained goods is obliged to that article. They believe that the definition of Article 183 of civil code excludes not only all commitments, but also swap contracts because there are two mutual commitments and two agreeing legal contracts in a swap contract while there is no mentioning of them in Article 183. However, the objections are not rightfully lodged because first, the contracts and obligations are not incompatible with the definition of Article 338 as the seller and the buyer within a contract of sale are obliged to give authority to the other party over the object of sale or the price. It means that there are two commitments and the obligation of the seller to give authority over the object of sale appears in two ways: (A) dominion over concrete object while making a transaction and (B) dominion over non-specified object with the obligation that it does not attend to fulfil possession by the time of the sale. Secondly, Article 183 contains the phrase “their acceptance” which includes swap contract too because this phrase indicates that the acceptance is mutual.