The Necessity of Announcing the Revocation of a Contract to the Other Party

Introduction
The right to rescind a contract (termination) is a well-established and widely recognized right in Iranian civil law, arising either from statutory provisions or through stipulations agreed upon by the contracting parties. With the expansion of modern trade and the increasing complexity of contractual relationships, the question of how and under what conditions this right may be exercised has gained renewed importance. The central question of this research is whether the exercise of the right of rescission (termination) without notifying the other party is valid and effective in Islamic jurisprudence and Iranian law, or whether such notification constitutes a necessary condition for its legal effect. Although Article 449 of the Iranian Civil Code provides that “termination is effected by any expression or act indicating such intention,” judicial practice has, in numerous cases, regarded rescission without notice as legally ineffective. From the perspective of legal scholars and jurists, two different approaches are identifiable: one emphasizing the sufficiency of the rescinding party’s unilateral intention, and the other insisting on the necessity of informing the counterparty to ensure the enforceability of the termination. The purpose of this study is to analyze these two approaches and to establish a coherent jurisprudential and legal foundation for the obligation to notify the other party of termination, as well as to determine the legal consequences of failing to do so.
Methods
This study employs a descriptive–analytical method. First, the conceptual foundations and legal characteristics of termination were examined through the analysis of jurisprudential sources, relevant articles of the Iranian Civil Code, and the opinions of jurists and legal scholars. Subsequently, the study reviewed judicial precedents and decisions of Iranian courts, particularly the rulings of the Supreme Court and advisory opinions issued by the Legal Department of the Judiciary. In the next stage, several jurisprudential maxims and legal principles were evaluated as potential theoretical bases for the obligation to notify, including the rules of Lā Ḍarar (No Harm), Nafī al-ʿUsr wa al-Ḥaraj (No Hardship), Ḍamān al-Ghurūr (Liability for Deception), Nafī Ikhtilāl al-Niẓām (No Disruption of Order), as well as the principles of Public Order and Good Faith. Finally, the data were analyzed through logical interpretation and deductive reasoning within the framework of Iranian private law.
Results and discussion
The findings show that, while Iranian law does not explicitly stipulate notification as a condition for the validity of rescission, judicial interpretation has effectively treated it as such for practical and equitable reasons. Numerous court rulings—including the Supreme Court’s binding decision of 2008—have held that notification to the counterparty is essential for the termination to produce legal effects. The study of the opinions of the General Legal Department of the Judiciary also confirms this perception. Advisory opinion No. 1870/96/7 (dated November 6, 2017) issued by the Legal Department of the Judiciary confirmed that although termination becomes effective upon declaration, notification to the other party is necessary to prevent adverse consequences. From a jurisprudential standpoint, several Islamic legal principles justify this requirement. The Rule of No Harm (Lā Ḍarar) prohibits any act or omission causing harm to another; thus, the silence of the rescinding party, leading to damage for the other contracting party or third persons, is inconsistent with this rule. The Rule of No Hardship (Nafī al-ʿUsr wa al-Ḥaraj) also applies whenever failure to notify results in unbearable hardship, making the duty of notification a means of relieving such hardship. Under the Rule of Liability for Deception (Ḍamān al-Ghurūr), any person whose behavior deceives another and causes harm must compensate the injured party; therefore, a party who terminates without notice may be liable for the losses of others who reasonably relied on the appearance of validity. In addition, the Rule of No Disruption of Order (Nafī Ikhtilāl al-Niẓām) implies that no conduct should disturb social and economic order. Failing to notify the other party can lead to void or unauthorized transactions (so-called Fuduli contracts), multiple lawsuits, and general instability in market confidence. The Principle of Public Order likewise requires the maintenance of stability and predictability in contractual relations and thus mandates notification as a necessary element of effective termination. Finally, the Principle of Good Faith obliges parties to act honestly and fairly, which entails the duty to inform the other side when terminating a contract, in order to prevent unnecessary loss or deception. Therefore, although termination technically occurs through a unilateral act of will, its legal enforceability and evidentiary reliability depend on notifying the counterparty. Without such notification, the rescission remains incomplete and unenforceable against others, and the rescinding party may bear civil liability for the damages caused to the other party or bona fide third persons.
Conclusion
This research concludes that notifying the counterparty of termination is not a condition of validity, but it is a condition of enforceability and reliance. Hidden or uncommunicated termination, although valid in form, is ineffective in substance due to its harmful economic and social consequences. Jurisprudential maxims and legal principles, all support the necessity of such notification and judicial practice has also been established along this line. Accordingly, it is recommended that the Iranian Civil Code, particularly Article 449, be amended and expressly recognize notification as a requirement for the enforceability of termination in order to prevent the emergence of judicial disputes, an increase in lawsuits and damages resulting from hidden termination. This reform would enhance legal certainty, protect third-party reliance, and strengthen the principles of contractual justice and public order within the Iranian legal system