Prediction of the Hardship Principle and Its Impact on Adjustment, Modification, and Impossibility Based on the Interests and Economic Equilibrium of Contracting Parties in the Legal Systems of Iran and Egypt

Abstract

The institution of hardship, defined as the occurrence of unforeseeable circumstances that render the performance of contractual obligations excessively onerous, has in recent decades become one of the key mechanisms for restoring the economic balance of contracts. This study adopts a comparative approach to analyze the recognition of hardship principles and their effects on the adjustment, modification, or impossibility of contractual performance within the legal systems of Iran and Egypt. Egyptian law, through the explicit provision of Article 147 of the Egyptian Civil Code, has not only legally recognized hardship but has also developed it as an active instrument for protecting the economic interests of contracting parties through numerous judicial decisions issued by the Court of Cassation and appellate courts. In contrast, despite the rich jurisprudential background of Iranian law—including principles such as the rule of no harm (La Darar), the rule of hardship (La Haraj), and the doctrine of changed circumstances—the absence of a clear statutory provision has resulted in a lack of doctrinal coherence and legislative support in this field. Iranian courts have generally relied on the principle of the binding force of contracts (pacta sunt servanda) and have refrained from exercising a judicial adjustment function, except in limited cases grounded in general legal principles or the doctrine of good faith. The findings of this research indicate that Egyptian law, benefiting from statutory clarity and dynamic judicial practice, has successfully institutionalized hardship as a mechanism for preserving contractual justice. By contrast, Iranian law remains largely at a theoretical stage and lacks an effective enforcement framework. The study concludes by proposing legislative reform in Iran, including the incorporation of a provision comparable to Article 147 of the Egyptian Civil Code, in order to strengthen the legal status and practical application of the hardship doctrine.