Examination of the Right of Retention in Transactions and Specific Contracts

Ali Akradlou, Attorney at Law

Introduction
The right of retention is one of the most important legal institutions in Iranian law and Islamic jurisprudence. It allows parties to a reciprocal contract to withhold performance of their obligations under certain conditions until the other party fulfills theirs. This right serves as a guarantee for contractual performance and plays a key role in ensuring fairness in exchanges.

Historically, the concept has been recognized in various legal systems, including Roman law and Islamic law, with the aim of protecting parties against breach by the other side. In Iranian law, it is addressed particularly in the Civil Code and applies to contracts such as sale, lease, and marriage.

This article first examines the concept and foundations of the right of retention, then discusses its conditions of application, followed by its instances in specific contracts, and finally its termination and exceptions.

1. Concept and Foundations

1.1 Definition
The right of retention means that one party may refuse to perform their obligation until the other party fulfills theirs. It applies in reciprocal contracts and serves as a protective mechanism against potential harm.

In Iranian law, this right is explicitly recognized in various provisions of the Civil Code, including Article 377 regarding sale contracts.

1.2 Jurisprudential Foundations
Islamic jurists justify this right based on several principles, most notably the rule “no harm and no harassment,” which prohibits causing harm. Since performing without receiving consideration may cause harm, this rule supports the right of retention.

Another principle is the obligation to fulfill contracts. If one party fails, the other may also withhold performance.

The principle “the contract is the law of the parties” is also cited, emphasizing adherence to contractual terms.

1.3 Legal Foundations
In Iranian law, the right of retention is considered a guarantee for the performance of obligations in reciprocal contracts. Obligations are generally expected to be performed simultaneously unless otherwise agreed.

The Civil Code particularly recognizes this right in contracts like sale, lease, and marriage to maintain balance and prevent harm.

2. Conditions for Application

2.1 Reciprocal nature of the contract
The contract must be reciprocal, involving mutual obligations.

2.2 Due obligations
The obligations must be due. If one party’s obligation is deferred, the other cannot invoke this right.

2.3 Non-performance by the other party
If one party refuses to perform, the other may also refuse, provided both obligations arise from the same contract.

2.4 Unity of contractual source
If obligations arise from separate contracts, the right of retention cannot be invoked.

3. Right of Retention in Specific Contracts

3.1 Right of Retention in Sale Contracts
Article 377 of the Civil Code provides that in a sale contract, the seller and buyer may refuse to deliver the goods or the price until the other party performs their obligation.

3.2 Right of Retention in Lease Contracts
In lease agreements, the tenant is obliged to pay rent, while the landlord must deliver the leased property.

3.3 Right of Retention in Marriage Contracts
According to Article 1085 of the Civil Code, a wife may refuse to fulfill marital duties until she receives her dowry.

4. Exceptions and Termination of the Right of Retention

4.1 Agreement to Waive the Right
If the parties agree in the contract to waive the right of retention, such a condition is valid.

4.2 Partial Performance of Obligation
If one party performs part of their obligation, the other party’s right of retention may be extinguished.

4.3 Existence of Adequate Guarantees
If sufficient guarantees are provided, the court or the other party may consider the exercise of the right unjustified.

Conclusion
The right of retention is one of the most important legal tools for ensuring fairness in contractual exchanges. It allows parties to withhold performance when the other party defaults.

However, exercising this right requires specific conditions, and it may be lost in certain cases due to agreement or partial performance. The analysis of this concept in Iranian law shows that it plays a key role in ensuring the performance of obligations and protecting the creditor.