The Mechanism of Contract Termination in the 1980 Convention on International Sale of Goods and Its Comparison with Contract Termination in Iranian and Iraqi Law

Abstract

The subject of contracts constitutes a significant part of international trade, as they serve as an essential means to fulfill economic needs. Contracts are the primary source of obligations in both domestic and international transactions, as a properly executed contract establishes reciprocal obligations between the parties. In civil law, one of the topics examined under the general rules of contracts is contract termination. Under Iranian law, following the principles of Imamiyyah jurisprudence, the principle of contract necessity is recognized, particularly in Article 219 of the Civil Code. One of the exceptions to this principle is contract termination, which is addressed in the Civil Code under the concept of Khiyar (contractual options), outlining its instances and rulings. Additionally, certain articles, such as Articles 286, 287, 288, and 429, refer to the effects of contract termination. In the United Nations Convention on Contracts for the International Sale of Goods (CISG) (Vienna, 1980), the conditions under which the seller and buyer may terminate the contract are stipulated in Articles 49 and 64, respectively. Furthermore, Articles 81 to 84 address the effects of contract termination, the most significant of which include contract dissolution and the restitution of exchanged goods and payments. This study examines the mechanism of contract termination under the 1980 Convention on the International Sale of Goods and compares it with contract termination in Iranian and Iraqi law. Given the importance of extensive trade exchanges between Iraq and Iran, it is necessary to analyze how contract termination is addressed in the legal frameworks of these two countries and to consider the conditions and procedures for contract annulment in these legal systems. The findings of this research indicate how contracting parties may act in cases of non-compliance with contractual obligations, which, in addition to affecting the enforcement of international contracts, also has broader implications. Furthermore, the concept of contract termination, which is designed to prevent further damage and to bring the legal life of the contract to an end in favor of the aggrieved party, does not conflict with the injured party's right to claim compensation for damages incurred.