Research and development in private law

Research and development in private law

Comparative Study of the Impact of Contractual Assignment on Third Parties in Iranian and American Law

Document Type : Original Article

Authors
Pejman Mohammadi 1
Mahmoud Sadeghi 2
Mohammad Javad Zolghadr 3
1 Professor at the Faculty of Law - Tarbiat modares University Tehran, Iran.
2 Associate Professor at the Faculty of Law - Tarbiat modares University Tehran, Iran
3 Ph.D. student of private law - Tarbiat Modares University Tehran, Iran
10.22034/jpl.2025.2067233.1224
Abstract
Contracts, as instruments for the circulation of wealth, may, during the course of their legal existence, encounter challenges that undermine the justification (or raison d’être) for their continued validity in their original form. Contract transfer (Assignment) constitutes one of the modern and significant institutions within the sphere of contract law that plays an essential role in ensuring the continued realization of contractual objectives. Since the transfer of a contract, in addition to affecting the transferor and the transferee, also implicates the rights of various third parties, determining its legal impact on third-party rights emerges as one of the more complex and delicate questions in this area of law, carrying substantial practical significance. The present study, through a doctrinal and comparative methodology, undertakes an examination of this issue by relying on the collection of data from primary and secondary sources, including statutory provisions, judicial precedents, and scholarly writings within the legal systems of Iran and the United States. The research initially focuses on identifying a workable criterion for determining who qualifies as a “third party” in relation to contract transfer under each of these two legal systems. Having established such a criterion, the study then proceeds to analyze the tripartite legal relationships that arise between: (i) the transferor and the transferee, (ii) the transferor and the original contractual counterparty, and (iii) the transferee and the original contractual counterparty. The research findings demonstrate that, under Iranian law, the transfer of contract is treated as consistent with the principle of privity of contracts and therefore does not fundamentally depart from established contractual doctrines. By contrast, under United States law, contract transfer is understood to constitute an exception to the general principle of contractual privity and is thereby regarded as a deviation from the default rule. Accordingly, the comparative inquiry highlights both the convergences and divergences in approach between the two systems, offering deeper insights into the protection of third-party rights in the context of contract transfer.
Keywords
Contractual Assignment
Principle of Relativity of Contracts
Contractual Assignment in Iranian Law
Contractual Assignment in U.S. La
Subjects
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