The Effect of the Dissolution of the Principal Contract on Its Dependent Contracts in Imami Jurisprudence and Iranian Law

Abstract

This study examines the effect of the dissolution of a principal contract on its dependent contracts within Imami jurisprudence and Iranian law. The central issue arises when the principal contract (such as a sales contract) is dissolved due to the realization of a condition subsequent or the exercise of the option of termination arising from breach of condition, while prior to dissolution, the subject matter of the transaction has been transferred to third parties. Using a descriptive–analytical method and library-based research, the findings indicate that the governing rule is not absolute and depends on the nature of the cause of dissolution. The Uniform Judicial Precedent No. 810 of the Supreme Court of Iran serves as the focal point of the analysis and confirms that in contractual options (khiyārāt), the dissolution of the principal contract extends to dependent contracts, enabling the original owner to reclaim the property from any possessor. This is because the first buyer’s ownership was unstable and conditional upon the non-occurrence of the condition of termination. Conversely, this effect does not apply to statutory options. Moreover, the effect of dissolution is prospective and does not retroactively extend to the past. By examining the foundations of this distinction, the article emphasizes the necessity of greater clarity in the Civil Code and enhanced public legal awareness.