The Rationale of Contract Law: A Contest of Values in the Context of the Objectives and Foundations of Article 10 of the Iranian Civil Code

Document Type : Original Article

Author

Assistant Professor, Faculty of Law, University of Tehran: College of Farabi, Qom, Iran Corresponding Author Email: rajabya@ut.ac.ir

Abstract

Introduction 
One of the enduring questions in legal theory concerns the foundations of the state’s intervention in contracts. Why do states intervene in private agreements, the foundation of which lies in the principle of freedom of will? This question is significant because the adjudication of contractual disputes and the enforcement of contractual obligations do not easily fit within the traditional and ordinary functions of law. The issue is not merely theoretical nor confined to public law and state governance; rather, it has direct implications for private law, forming the intellectual and normative basis of contract law itself.
Methods
Answering this question would ideally require a comprehensive analysis of the role of the state and the philosophy of legal intervention, but such an undertaking lies beyond the scope of this study. Instead, the present work relies on what has already been achieved in comparative and historical scholarship, particularly in Western legal thought. It reviews past and present judicial and doctrinal developments concerning contract law and draws on the foundations established by both Islamic jurisprudence and Western civil law traditions. By considering these precedents alongside the specific provisions of the Iranian Civil Code, this paper seeks to determine the prevailing view of contracts within Iran’s existing legal system. The research roadmap proceeds as follows: First, the general rationale behind the regulation of contracts is examined. Second, the Iranian legal approach is analyzed in light of its historical and doctrinal roots. Finally, with a focus on Article 10 of the Civil Code, the paper identifies the fundamental principles underlying Iran’s law of contract and situates them within broader debates on the philosophy and values of contract law that have evolved over recent decades.
Results and Discussions
Contract law is grounded in a set of values inherent in every legal system. These values are the driving forces that shape both the content and interpretation of contractual rules. They include freedom, morality, justice, public interest, and, in the Iranian context, the realization of Sharia, which functions as an independent and fundamental value. Accordingly, five distinct yet interrelated justifications for contract law can be identified: Protection of freedom of will; Promotion of promise-keeping and social morality; Pursuit of equality and exchange justice; Encouragement of economic efficiency; and Preservation of the Sharia order. Although all these principles are conceptually linked, it is often difficult to identify a single, dominant foundation. The rationale for supporting contractual formation and enforcement is most clearly crystallized in Article 10 of the Iranian Civil Code, which stands as one of the most significant provisions of Iranian contract law. This article provides the legal basis for recognizing private agreements as binding, authorizing the courts to uphold the product of the parties’ will so long as it does not contravene statutory or moral limits. Article 10 therefore acts as both a permission and a command: it permits individuals to shape their private relations through contract, and it obliges judges to respect and enforce these arrangements as expressions of legal will. In this sense, it constitutes a formal rule addressed to the judiciary, delineating when and how the law may intervene in private transactions. The provision is founded on the theory of the Autonomy, emphasizing that a contract is the result of voluntary agreement rather than a mere reconciliation of conflicting interests. However, focusing solely on the sanctity of promise would be too narrow. The contract must also be viewed as an instrument for achieving justice, social morality, and economic welfare. The challenge lies in determining which of these principles takes priority in interpretation and enforcement. When the will of the parties is prioritized, literal interpretation of contractual terms prevails; when considerations of justice or public interest dominate, a contextual interpretation becomes necessary. Thus, the hierarchy of values directly influences judicial methodology and the understanding of contractual obligations.
Conclusion
Contracts can be classified based on the relative importance of will and justice. In civil contracts, where personal relationships and moral intentions often outweigh material exchange the principle of autonomy predominates. In commercial contracts, however, where the fairness of exchange and economic equilibrium are essential, the legal system gives greater weight to contractual balance and consideration. In continuous or long-term contracts, the role of will is strongest at the formation stage, when the parties choose to enter into a legal relationship. Thereafter, the operation of the contract is largely governed by principles of economic efficiency and exchange justice. Legislators and judges remain concerned with maintaining justice, which serves as the foundation for many legal rules. Consequently, any contract that violates justice—whether moral, social, or economic—is regarded as defective. In conclusion, the justification for contract law in Iran, as reflected in Article 10 of the Civil Code, lies in the delicate reconciliation of freedom of will, morality, justice, public interest, and Sharia. Each represents a competing yet complementary value within the legal system. The enduring task of contract law is to determine, in each case, which of these principles should prevail in the interpretation and enforcement of private agreements.

Highlights

*Article 10 of the Iranian Civil Code is concerned with the interests of the state and the legal system in the enforcement of private individuals’ contractual obligations (the rationale for contract law).
*Several distinct theoretical foundations may be identified as supporting the rationale for contract law, including the protection of and freedom of will, the preservation of pacta sunt servanda and social morality, the promotion of equality and corrective justice, the advancement of economic efficiency, and, ultimately, compliance with the principles of the Sharia-based legal order.
*An examination of the historical development and substantive provisions of the Iranian Civil Code indicates that the primary objective of Iranian contract law has been the protection of individual autonomy. Nevertheless, in contemporary legal thought, considerations of commutative justice, and in certain instances distributive justice, have assumed an increasingly significant role.

Keywords

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References

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History

  • Receive Date: 19 August 2025
  • Revise Date: 28 September 2025
  • Accept Date: 18 October 2025

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