Written Contractual Formalities as a Restriction on Freedom of Contract: A Comparative Study of Iraqi and Iranian Law

Abstract

Written formalities constitute one of the most significant restrictions on freedom of contract imposed by legislators in different legal systems to achieve various objectives, including protecting the contracting parties, ensuring transactional security, and preserving public order. Adopting an analytical-comparative approach, this article examines the position of written formalities in Iranian and Iraqi law as a restriction on freedom of contract. In both legal systems, the principle of consensualism governs contracts, while written formalities constitute an exception to this principle. The findings indicate that the Iraqi legislature has adopted a more explicit approach to requiring specific formalities and, in cases such as the sale of immovable property, has treated written form and registration as constitutive requirements for contract formation. By contrast, under Iranian law, written form generally serves an evidentiary function, except in specific cases where the law expressly makes it mandatory. In both systems, formalities may be classified as statutory or contractually agreed formalities. Statutory formalities impose a more substantial restriction on freedom of contract because failure to comply with them results in the absolute nullity of the contract. The comparative findings demonstrate that the Iraqi legislature has adopted a more formalistic approach to protect the parties and prevent potential disputes. Conversely, by emphasizing the principle of consensualism, the Iranian legislature imposes fewer restrictions on freedom of contract and requires specific formalities only in particular cases, such as the transfer of immovable property, the pre-sale of buildings, and the transfer of company shares. This difference in approach is influenced by the historical developments, legal culture, and socioeconomic needs of each society. By analyzing practical examples, including the sale of immovable property, the sale of motor vehicles, and insurance contracts, the article demonstrates that both legal systems have sought to establish a balance between freedom of contract and the necessity of protecting public and private interests. Nevertheless, it is recommended that the Iranian legislature prescribe clearer formal requirements in cases involving a substantial risk of prejudice to the rights of the contracting parties or third parties. The Iraqi legislature should likewise provide greater flexibility in cases where excessive formalism impedes the development and facilitation of transactions.