Journal of Islamic Law Research

Journal of Islamic Law Research

A Conceptual and Foundational Analysis of the 'Deemed Contract' in Islamic Law and the Iranian Legal System

Type : Research Article

Authors
1 Associate Professor, Department of Private Law, Faculty of Islamic Studies and Law, Imam Sadiq University, Tehran, Iran.
2 Assistant Professor, Department of Jurisprudence and Fundamentals of Islamic Law, Faculty of Theology and Islamic Studies, Allameh Tabataba'i University, Tehran, Iran.
Abstract
∴ Introduction ∴ ‌
The concept of a “deemed contract” has emerged from instances where the legislator, departing from the conventional requirement of mutual consent, imposes the effects of a contractual relationship upon parties that may never have intended to enter into such a contract. This phenomenon operates in two distinct scenarios, both evident in Islamic jurisprudence and Iranian law: first, when an existing contract terminates—through expiration of its term, rescission, or other legal grounds—yet the legislator continues to apply the contractual effects beyond the point of termination; and second, when no actual agreement exists but a contractual relationship is artificially imposed by legal mandate. In both situations, the legislative intervention overlays a “deemed contract” upon an “underlying relationship” that may have neither the formal structure nor the voluntariness of an authentic contract.
From a theoretical standpoint, the notion of deemed contracts stands in tension with the principle of autonomy of will, a cornerstone of contractual theory in both Islamic and Iranian legal systems. The premise that a contract’s legitimacy and consequences are derived from the agreement of the parties would seem to leave little room for the legislator to create contractual obligations unilaterally. Nonetheless, historical and contemporary legal sources do evidence legislative practices by which these obligations are artificially continued—or deemed to exist anew—despite the absence of explicit or continuing consent. This suggests a countervailing principle whereby the legal system permits or even requires the preservation or creation of contractual effects in order to serve broader social objectives, safeguard public interests, or protect the rights of vulnerable parties.

‌ ∴ Research Question ∴ ‌
Against this backdrop, the central research question of the study is as follows: What are the conceptual foundations, justifications, and legal mechanisms that allow the legislator to impose a deemed contract on an existing or a non-existent contractual relationship, and how does this legislative intervention reconcile with established principles of autonomy of will in Islamic and Iranian contract law?
This question seeks to bridge the theoretical gap between the foundational emphasis on mutual consent in Islamic legal doctrine and the practical phenomenon where contractual effects arise in the absence of a bona fide agreement. By pinpointing the rationale, scope, and operation of deemed contracts, the research aims to elucidate whether they represent a necessary exception to the principle of autonomy of will or an overreach that risks undermining parties’ freedom to structure their relationships.

‌ ∴ Research Hypothesis ∴ ‌
Based on preliminary observations of legal texts and juristic opinions, this study posits the following hypothesis: Deemed contracts in Islamic law and the Iranian legal system are legitimized by jurisprudential and statutory principles that permit the extension or imposition of contractual effects in pursuit of broader legal objectives, such as preserving social welfare, upholding fairness, and ensuring legal certainty. This hypothesis suggests that, while the core principle of contractual autonomy remains intact, there exist recognized exceptions whereby the legislator’s overriding will is used to preserve or create legal outcomes that promote societal or individual interests.

‌ ∴ Methodology & Framework, if Applicable ∴ ‌
The research follows a doctrinal methodology, engaging in an in-depth examination of primary sources of Islamic law (the Qur’an, Sunnah, and authoritative juristic treatises) alongside the key provisions of Iranian legislative texts and relevant judicial precedents. This analysis is complemented by an inductive approach, starting with concrete examples of deemed contracts across different statutory contexts, and gradually extracting the underlying legal principles and theoretical justifications.
The framework of the study can be outlined in several stages:
Conceptual Clarification: Identification and classification of the various forms of deemed contracts, drawing on both classical Islamic jurisprudence and modern Iranian law.
Jurisprudential Foundations: Exploration of the legal maxims and jurisprudential arguments (e.g., necessity, prevention of harm, or public interest) that may authorize or mandate the creation or continuation of contractual effects in the absence of genuine agreement.
Legislative and Judicial Analysis: Systematic review of statutory provisions and relevant court decisions to illustrate how and under what conditions deemed contracts have been recognized and enforced.
Comparative Evaluation: Where useful, references to parallel doctrines in other legal systems may be employed to highlight the universal or unique aspects of Iran’s legislative approach in the context of Islamic legal principles.

‌ ∴ Results & Discussion ∴ ‌
The core results of this study illustrate that the notion of a deemed contract is not merely an exceptional or ad hoc legal construct but rather a concept with solid jurisprudential underpinnings that has been systematically recognized and applied in both Islamic and Iranian law. Through examining various legislative instances and scrutinizing relevant jurisprudential texts, it becomes clear that there is a consistent pattern of legal reasoning by which legislators and jurists justify the imposition of contractual effects on relationships that lack the conventional hallmarks of consent and mutual intention.
A key insight gleaned from the analysis is that deemed contracts can arise under two main circumstances: (i) when an actual contract has ceased due to rescission or expiration, yet legal effects are prolonged by the legislator; and (ii) when no authentic agreement has been concluded, yet the legislator fabricates a contractual relationship. In either case, the pivotal aspect lies in the legislator’s perceived need to achieve certain legal or societal objectives—such as protecting public order, preventing harm, or safeguarding third-party interests—even at the cost of overriding party autonomy.
From a jurisprudential standpoint, the study identifies six principal foundations that are instrumental in justifying a deemed contract. These include reliance on appearance, equity and justice, the rule of no-harm [La-zarar], public order, the principle of Ta’zeer (understood here in a civil liability context), and public interest [Maslaha]. Collectively, these foundations highlight the multifaceted manner in which legal systems balance the principle of autonomy with broader concerns about fairness, social stability, and the protection of rights. For instance, reliance on appearance often emerges when third parties justifiably assume that a transactional arrangement continues to exist, thereby preventing unjust outcomes. Similarly, the rule of no-harm [La-zarar] and equity considerations come into play when abruptly terminating or refusing to recognize a contractual effect would result in disproportionate injustice or damage.
These findings underscore the functional role of deemed contracts as a protective mechanism. Rather than abandoning parties to the potential injustices that can arise from doctrinal rigidity, legislators employ the device of a deemed contract to ensure a more balanced outcome. However, one potential concern identified is the risk of overreaching by the legislator, wherein continual reliance on deemed contracts may erode the fundamental principle of party autonomy. The study posits that a prudent approach would involve legislative intervention only when the social or individual welfare at stake is sufficiently compelling.

‌ ∴ Conclusion ∴ ‌
The concluding observations of this research affirm that deemed contracts, rooted in established jurisprudential and statutory principles, serve as more than isolated legal anomalies. Instead, they constitute a recurring doctrinal rule in Islamic law and the Iranian legal system, wherein the legislator, guided by various jurisprudential bases, extends contractual effects to scenarios lacking the usual consensual framework. In many instances, the legislator’s ruling is premised on criteria of sufficient breadth and generality to qualify as a legal rule—an overarching standard that can be invoked in a range of circumstances to protect or advance societal and individual interests.
The evidence presented shows that the deemed contract meets the characteristics of a general legal rule: it possesses a binding force across cases, underscores an orderly social fabric, and is supported by an array of authoritative foundations. Among these foundations are reliance on appearance (ensuring that third-party assumptions are not undermined), equity and justice (aligning outcomes with principles of fairness), no-harm principle [La-zarar] (averting harm and ensuring proportional responses to wrongdoing), public order (maintaining societal stability), Ta’zeer (in its broad sense of enforcing liability for harmful conduct), and the principle of public interest [Maslaha]. Each of these conceptual underpinnings has sufficient explanatory power to justify transforming a non-contractual or expired contractual relationship into a deemed contract when the circumstances demand it.
Additionally, the study highlights that the legislator’s imposition of a deemed contract is most defensible when it aligns with these core jurisprudential justifications—namely, promoting fairness, preventing harm, preserving social order, and upholding the legitimate expectations of third parties. Where these objectives are absent or tangential, reliance on a deemed contract is more likely to conflict with the foundational premise of free will and consent that animates contract law generally.
Keywords
Subjects

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Volume 26, Issue 4 - Serial Number 70
Autumn 2025
Pages 1165-1198

  • Received 18 December 2024
  • Accepted 26 January 2025