Fatemeh Rakideh
trainee lawyer at the Iranian Central Bar Association
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contractual termination right and automatic termination clause under Iranian law

contractual termination right and automatic termination clause under Iranian law

The "termination clause" is usually used to create the power to terminate under certain circumstances,, while automatic-termination clause refers to an agreement that the fulfillment of the anticipated situation can have dissolution effect without the need to exercise a new will,.

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contractual termination right and automatic termination clause under Iranian law

The "termination clause" is usually used to create the power to terminate under certain circumstances,, while automatic-termination clause refers to an agreement that the fulfillment of the anticipated situation can have dissolution effect without the need to exercise a new will,.

Practical point: The wording of the contract must be examined very carefully; because the colloquial use of these terms does not always correspond to the legal effect intended by the parties.

Important points in contract review

Point 1

Full text of the contract, Related annexes and conditions

Point 2

Date of creation of the obligation, Deadline for execution and documents of its fulfillment or non-fulfillment

Point 3

Correspondence, Messages, Statements, Payment Receipts and Delivery Documents

Point 4

Guarantees, agreed contractual penalty, Termination clause or dispute resolution clause

Legal review of documents and disputes related to contractual termination right and automatic termination clause under Iranian law

Importance of a careful contract review

The legal title of the dispute must be selected based on the actual text of the contract and documents. The apparent similarity of two cases does not mean that their solution is the same; especially in matters such as termination,, invalidity, of the obligation to fulfill an obligation and claiming damages.

Related topics

termination or rescission of a valid contract under Iranian law

Reviewing the right to terminate, Options, Contractual terms, How to notify termination and its effects.

interpretation of disputed contract terms under Iranian law

Analysis of ambiguous clauses, The relationship of terms and identifying the legal effects of contract terms.

invalidity or nullity of a contract under Iranian law

Checking the absence of conditions for the validity of the transaction and the difference between nullity and termination, automatic termination by operation of law and termination by mutual consent (eqāleh).

  • Iranian Civil Code («قانون مدنی»)

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

This list, shows the main provisions related to the subject of the page. The governing law and subsequent amendments must be adapted to the time of occurrence, of the subject and the situation of each case.

The official text and latest amendments of the laws are available at National Information Database of Laws and Regulations of the Country is available to view.

Frequently asked questions

The termination clause gives the designated party or person the authority to terminate the contract if the stipulated conditions are met. The limits of the authority, the time and method of application must be specified in the text of the contract.
In automatic-termination clause, the contract is dissolved upon the fulfillment of the anticipated event; But in the termination condition, the right holder must exercise his will to terminate. The exact text of the condition is decisive.
Conditions for the realization of the right, Deadline, Required notice or announcement, Mutual obligations and effects after termination must be extracted from the contract and the governing rules.

Methods of contact

Contact us for advice and follow-up of the case through the following ways

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