The Jurisprudential and Legal Foundations of the Theory of Judicial Modification of Contracts in the Legal System of Iran and Egypt

Judicial modification through fundamental change of circumstances is one of the issues that has attracted the attention of lawyers in many countries. The need for the legislator to accept this concept, especially in countries with fragile and unstable economies, is extremely evident. Our country cannot be excluded from this rule in light of severe sanctions and unbridled inflation, as some changes and, consequently, difficulties in implementation have affected even short-term contracts and caused immense and unconventional losses for the committed party. In such a situation, in the absence of modification by the legislator or the parties, the judicial system should be held accountable. However, the key question arises as to whether the judge can interfere for the purpose of enforcing justice in contracts concluded between the parties. In addition, if the answer is positive, on what legal and jurisprudential basis can this intervention be defended? The findings and results of this research indicate that in the domestic legal system, the legislator has restricted judicial modification by judges, but the existing legal vacuum cannot be regarded as a prohibition of judicial review, since the legislator has allowed the judge to act based on judicial ijtihad. Therefore, it seems that in the domestic legal system, the judge can restore commutative justice to the contract on the basis of rules such as No-Damage, Denial of Hardship, and the theories of Implied Condition and Accidental Loss. Additionally, in the Egyptian legal system, investigations have confirmed that the Egyptian legislator has accepted judicial modification based on the theory of al-Hawadath al-Tara’ah and ‘Amal al-Qal, as provided in Articles 147 and 129 of that country’s Civil Code, with a strong enforcement guarantee.