Analysis of Judicial Precedents on Force Majeure: Exploring the Boundaries of Impossibility, Hardship, and the Obligor's Fault

Given the recent sensitive situation and war-like conditions in the country (Note for foreign readers: This refers to the recent geopolitical tensions and conflicts in the Middle East, which have significantly impacted Iranian commerce, supply chains, and the execution of commercial contracts), one of the most pressing concerns for economic actors and legal professionals in Iran is the fate of ongoing contracts and the possibility of invoking the legal doctrine of Force Majeure.

Today, thanks to the Legal Commission of the Iran Chamber of Commerce, and through the valuable efforts and follow-ups of Mr. Atashhoosh and Mr. Neyestani, a specialized session on "Force Majeure and Contracts" was held.

During this session, I had the great honor of giving a joint presentation on Force Majeure alongside my esteemed and learned professor, Dr. Mojtaba Ghasemi (holding a Ph.D. in Law and Economics from the University of Siena, Italy, and a prominent professor at Shahid Beheshti University).

In my section of the presentation, through a careful examination of judicial rulings, I demonstrated that proving Force Majeure in Iranian courts is not as simple as merely making a claim. The courts adopt a strict and narrow approach, meticulously evaluating the following elements:

The Fine Line Between "Ta'azzor" (Impossibility) and "Ta'assor" (Hardship): (Note: In Iranian civil law, which is deeply rooted in Islamic jurisprudence, there is a strict distinction here). Economic fluctuations, hyperinflation, or international sanctions—if they merely make the performance of an obligation expensive or unprofitable (Hardship/Ta'assor)—are not considered Force Majeure. Force Majeure is only recognized when the execution of the obligation has become practically and objectively impossible (Impossibility/Ta'azzor).

The Timing of the Obstacle: The barrier must strictly occur after the conclusion of the contract, and the obligor must not have had any prior knowledge or foreseeability of it.

Absence of the Obligor's Fault: Administrative bans (like sudden government export/import bans) or external accidents only relieve the obligor of liability if they had no role in causing or exacerbating them (for example, the ban wasn't triggered by their own prior regulatory violations).

The Limits of Freedom of Will (Contractual Allocation): Although parties can contractually allocate or exclude the risks of certain events, these agreements have a red line known in Iranian law as "impossible conditions" (shorut-e gheyr-maqdur), meaning parties cannot legally bind themselves to perform the objectively impossible.

📄 The attached file to this post is the result of this research, containing an analytical review of 11 actual case files from the courts of Tehran Province. I highly recommend its reading to legal colleagues, lawyers, and business managers.

Written by Reza Bastani Namaghi