Potential Breach in the United Nations Convention on Contracts for the International Sale of Goods (CISG - 1980) and Iranian Law

Abstract

Before the due date for performance, the promisee may, based on the actions, statements, or circumstances of the promisor, and under reasonable and rational assumptions, conclude that the promisor will not fulfill their contractual obligations when the performance is due. This situation introduces the concept of "hypothetical breach" or "potential breach" of the contract, where the promisee, under such circumstances, may exercise the right to suspend or terminate the contract and seek damages. The theory of potential breach has been accepted in the common law system after undergoing a process of development, particularly in international regulations, such as the CISG. However, it has not been acknowledged in Iranian law, nor is there any specific legal provision for it. This study, with a comparative approach, aims to clarify the position of Iranian law regarding this theory through a theoretical examination of the subject.