Journal of Legal Research

Journal of Legal Research

A Protective Approach to Third Parties in Contract Formation

Document Type : Original Article

Authors
Javad Jabbari 1
Majid Ghamami 2
Alireza Iranshahi 3
1 PhD Student in Private Law, Faculty of Law, Center for Postgraduate Studies, Payame Noor University, Tehran, Iran.
2 Associate Professor, Department of Private and Islamic Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran.
3 Assistant Professor, Department of Private Law, Faculty of Law, Payame Noor University, Tehran, Iran.
10.48300/jlr.2024.459598.2681
Abstract
The traditional approach to contract law emphasizes the private nature and function of contracts, treating third parties and contractual relationships as essentially unrelated. Under this approach, the principle of privity of contract is generally regarded as sufficient to establish that contracts do not produce legal effects in relation to third parties. The modern approach, by contrast, cautions against the excessive emphasis placed on the principle of autonomy of will under legal liberalism. It regards contracts as social arrangements that operate within the public sphere and inevitably affect third parties. These effects extend beyond the scope of contractual privity, drawing attention to the need for greater protection of third parties against the adverse consequences of contracts. Although such protection is relevant throughout the legal life of a contract, this article focuses specifically on the formation stage and examines the exceptions to general contractual principles and rules that serve this purpose. These exceptions include restrictions and prohibitions on contract formation, which limit freedom of contract; formal requirements that depart from the principle of consensual formation; requirements to give notice of contractual intentions and publicize juridical acts to inform third parties; and the need to obtain third-party consent or approval. These limitations on the principle of autonomy of will are intended to protect third parties during contract formation and may, in certain circumstances, confer upon them a right to exercise control or oversight over the contract. Employing an analytical–empirical method, this article examines these exceptions and their role in protecting third parties at the contract formation stage.
Keywords
Autonomy of Will
Contract Formation
Third-Party Protection
Direct Effects of Contracts
Indirect Effects of Contracts
Social Function of Contracts
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Journal of Legal Research
Volume 25, Issue 66
Summer 2026
Pages 341-370