Fatemeh Rakideh
trainee lawyer at the Iranian Central Bar Association
English
Consultation
Contract termination (faskh)

Contract termination (faskh)

Termination of a contract arises where the contract is valid but one party has the power to end it under a legal right or contractual clause. Breach alone does not always create a right of termination; the source of that right must be established in the law or the contract.

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Contract termination (faskh)

Termination of a contract arises where the contract is valid but one party has the power to end it under a legal right or contractual clause. Breach alone does not always create a right of termination; the source of that right must be established in the law or the contract.

Practical point: Before announcing the termination, the text of the contract, the conditions for termination, deadlines, correspondence and the manner of implementation of the obligations should be reviewed. Incorrectly announcing the termination can itself be the source of a new dispute.

Important points in contract review

Point 1

The complete contract, addenda and relevant clauses

Point 2

When the obligation arose, its due date and evidence of performance or non-performance

Point 3

Correspondence, messages, formal legal notices, payment receipts, and delivery documents

Point 4

Security, agreed sums for breach, termination rights and dispute-resolution clauses

Legal review of documents and disputes concerning contract termination

Importance of a careful contract review

Choose the legal characterisation from the actual contract and evidence. Similar-looking cases may require different solutions, particularly for termination, nullity, compelling performance and damages.

Related topics

Right-to-terminate clauses and automatic-termination clauses

The difference between a contractual right of termination and a condition that terminates the contract upon its occurrence.

Compelling performance of contractual obligations

Follow up on the implementation of an obligation that has become due and the obligor has refused to perform it.

Claiming agreed sums for breach and contractual damages

Reviewing the agreed-sum clause, breach and availability of contractual damages.

Judicial invalidation and nullity of contracts

Reviewing missing conditions for validity and distinguishing nullity from termination, automatic termination and termination by mutual agreement (eqāleh).

  • Iranian Civil Code («قانون مدنی»)

  • Iranian Code of Civil Procedure («قانون آیین دادرسی دادگاه‌های عمومی و انقلاب در امور مدنی»)

This list identifies the principal legal provisions relevant to the page. The applicable law and amendments must be checked against the dates, subject matter and circumstances of each case.

The official texts and latest amendments are available in the National Database of Iranian Laws and Regulations.

Frequently asked questions

First, the existence of the right to terminate in the law or contract, the deadline and the method of its application must be examined. The announcement of termination must also be made in a way that can be proven and in the event of a dispute, confirmation of the termination and subsequent effects may be raised with the competent authority.
Non-performance alone does not always create a right to terminate. A contractual termination right, statutory right or another legal basis for ending the contract must exist. The contract and the particular breach require careful review.
Termination (faskh) usually concerns a valid contract and a right to end it; nullity concerns the absence of essential conditions for contractual validity. The correct legal characterisation depends on the contract and the actual facts.

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