Article 454 of the Civil Code in the Mirror of Unified Judicial Precedent No. 810 and the Effect of Rescission on Contracts Subsequent to the Subject Matter

Document Type : Research Paper

Authors

1 . Ph.D. Student, Department of Law, Faculty of Theology, Meybod University, Meybod, Iran

2 Associate Professor, Department of Law, Faculty of Theology, Meybod University, Meybod, Iran

Abstract

Introduction
 In many transactions, the buyer pays the price in installments, and in return, the seller stipulates that if any installment is not paid, the sale shall be rescinded or the seller shall have the right of rescission (Khiyar). This practice has become particularly prevalent in relation to transactions involving immovable property. In this regard, one of the ambiguities and points of divergence in judicial practice is the legal status of transfers and dispositions that conflict with the seller's right of option (Khiyar), and the answer to the question: Does the existence of a right of rescission (Khiyar al-faskh) constitute an obstacle to the transfer of the sold property (mabi') by the buyer? In answer to this question, briefly, it must be said that the 




Article 454 of the Civil Code in the Mirror of Unified Judicial Precedent …




existence of a right of option (Khiyar) does not preclude the validity of dispositions made by the party against whom the right of option exists (man alayh al-khiyar), unless there has been an implicit stipulation or an express condition prohibiting dispositive transfers of the corporeal property (ayn) or its usufruct (manfa'ah). In effect, the effect of rescission (faskh) is prospective, and exercising the right of rescission after the sale of the property by the first buyer cannot invalidate the subsequent sale. This is unless the buyer had initially undertaken not to make any dispositive transfer, and thus his right of transfer had been limited in some way. On this basis, the esteemed Prosecutor General of the Country, in order to resolve the conflict between two judgments issued by Branches 16 and 25 of the Court of Appeal of Mazandaran Province, considering an optional sale (bay' khiyari) as non-binding (ghar nafiz) and void (batil) in the absence of the consent of the party holding the right of option (man lahu al-khiyar) in the event of the contract's dissolution, deemed the parties obligated to return the sold property (mabi'), and this led to the issuance of Unified Judicial Precedent No. 810 dated 04/03/1400 (May 25, 2021).
 
Methods
 This research has been conducted with an analytical approach and using library resources to collect opinions and analyze and examine them. Its aim is to answer the question: "Based on Unified Judicial Precedent No. 810, what effect does the dissolution of the underlying contract have on subsequent transactions and their status, and on what basis has this precedent obligated the buyer to return the sold property (mabi')?" For this purpose, we first explain the nature of the condition leading to the dissolution of the underlying contract in the event of non-payment of installments of the price, then examine the effect of the dissolution of the underlying contract on subsequent transactions and their status, and finally, analyze the foundations of the Unified Judicial Precedent.
 
Findings
 According to Unified Judicial Precedent No. 810, if it is stipulated within a contract of sale that, in the event of non-payment of the price installments on the specified dates, the seller has the right to rescind (faskh) and recover the sold property (mabi'), then upon the realization of the condition and the exercise of the right of rescission, even if the buyer, without considering the right of rescission, has sold the sold property to another person, the sold property must be returned to the seller, and the subsequent transfer is void (batil). The findings of the article indicate that when the seller stipulates in the contract that the transaction will be dissolved if any installment of the price is not paid, jurisprudential (fiqhi) and principles (usuli) rules dictate that the buyer does not have the right to make dispositions conflicting with the right of option (Khiyar) in the sold property. Because, although ownership of the sold property is transferred upon the conclusion of the transaction, and dispositions of the sold property are generally permissible, since the parties themselves, at the time of concluding the transaction by accepting the condition in the contract, have accepted the limitation on their dispositions, therefore, based on Articles 454, 455, and 460 of the Civil Code, they are obligated to refrain from any disposition that conflicts with the right of the party holding the option (dhi al-khiyar). This condition is a type of implicit, tacit condition (shart-e zamani-ye ertekeazi) which, by the dictate of reason (hukm-e aql), must be observed by the parties, and the contracting parties are inevitably bound to accept its effects, which is the restitution of the counter-values (atawayn/considerations) upon the dissolution of the contract.




Volume 18, Issue 1, Spring 2026
 




 
 
Conclusion
Therefore, the basis for the dissolution of contracts subsequent to the subject matter is the implicit condition prohibiting dispositive transfers of the corporeal property (ayn) and its usufruct (manfa'ah), which is referred to in Article 454 of the Civil Code. According to the maxim "what is known by custom is like a stipulated condition" (al-ma'ruf 'urfan ka al-mashrut shartan) and "believers are bound by their stipulations" (al-mu'minuna 'inda shurutihim), this condition must be respected. Thus, Unified Judicial Precedent No. 810, based on these very foundations, upon the realization of the condition and the exercise of rescission, has deemed the buyer obligated to return the sold property (mabi').

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Main Subjects

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