Journal of Legal Research

Journal of Legal Research

Comparative Study of Termination Conditions in Sales Contracts with Emphasis on Fundamental Breach under CISG and Options in Iranian Law

Document Type : Original Article

Author
Assistant Professor, Department of Law, Payam Noor University, Tehran, Iran.
10.48300/jlr.2026.574501.3140
Abstract
Avoidance of a sales contract, as the ultimate remedy for breach of obligations, terminates the contract. The CISG, in Articles 49 and 64, makes avoidance conditional upon a fundamental breach or failure to perform within an additional period, thus preferring survival of the contract over termination. In Iranian law, avoidance is also contrary to the general principle, and the Civil Code emphasizes specific performance, treating avoidance as the last resort. Adopting a comparative-analytical method and examining judicial decisions, this paper analyzes the conditions for avoidance under the CISG and compares them with Iranian law. The findings show that both legal systems share the exceptional nature of avoidance, but differ fundamentally in two respects: first, the con-cept of fundamental breach is not provided for in Iranian law; second, while the CISG requires notice of avoid-ance as a condition for its effectiveness, Iranian law does not consider notification as a prerequisite. The innova-tion of this paper is presented at two levels: offering a practical four-step test for identifying fundamental breach in the Iranian legal system, which courts can use as an immediate solution without any need for legislative amendment; and proposing two amending provisions to the Civil Code, namely the addition of new Article 238bis and the amendment of Article 402, based on the CISG model, as a long-term structural solution. Togeth-er, these two levels of proposal will significantly contribute to the uniformization of judicial practice and the fill-ing of the legislative gap in Iranian law.
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