A Survey on the Bases and Conditions of Insolvency Option

Subject Areas : Private law

Mostafa Elsan ¹ (شهید بهشتی تهران)

Received: 2017-05-02 Accepted : 2017-05-02 Published : 2017-05-02

Keywords: bankruptcy, Option, Insolvency Option, Mutuality of obligations, Right to terminate, Dissolution of contract,

Abstract :

In the bilateral contracts there is a reasonable balance between considerations of both parties. Non-fulfillment by one party or frustration of contract by one of the parties is creating an option to the other party of those contracts including option of delayed payment of price and option of unfulfilled sale in part. Insolvency option is one of these rights which enacted for protection of the party who has to fulfill his promise or is willing to fulfill his contractual obligation. This legal option to terminate of contract is based on Islamic jurisprudence and predicted in the article 380 of Iranian civil code. In addition, there are articles in Iranian commercial code which relating to the right to retention or retaking of goods which loan or sold to bankrupted merchant. This paper has analyzed the subject in Islamic jurisprudence and Iranian related Acts.