The Technical Foundations of the Theory of Termination
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Abstract
Praise be to God, and peace and blessings be upon the Chosen Prophet, his family, his companions, and all those who follow his path. O God, show us the truth as it is and grant us the ability to follow it, and show us falsehood as it is and grant us the ability to avoid it. Now then:
First and foremost, the fundamental principle in contracts is their binding nature, as stated in the Almighty's words: "O you who have believed, fulfill your contracts"(1). The intended purpose of fulfilling a contract is its execution in a manner consistent with the principle of good faith in contract execution (2). Good faith presupposes that the clauses contained in the contract must be implemented. The binding nature of execution is not limited to one party to the contract alone, but extends to all parties. Therefore, the concept of reciprocity in obligations paves the way for the application of the principle of fulfilling contractual clauses. Furthermore, this situation is not permanent, but rather fluctuates with the circumstances of contract execution, sometimes favorable and sometimes unfavorable. The law permits a contracting party to be released from the contractual obligation if the other party's performance becomes impossible. This simultaneously represents the penalty for breaching contractual obligations(3). This outcome undoubtedly indicates the extent of respect and sanctity accorded to the contractual bond, and also points to the concept of the penalty resulting from disrespecting this bond. The obligations, however, while placing the option of termination in the hands of the contracting party, signify the independence of that party in releasing themselves from contractual obligations. It places the fate of the entire contract under the authority of one of the parties, as termination serves as a penalty, holding the defaulting party liable. On the other hand, it represents the non-liability of the party exercising the termination right due to the other party's unjustified refusal to perform. Furthermore, this does not imply the independent will of either party to steer the contractual relationship towards dissolution; rather, the matter is entrusted to the judiciary to consider the possibility of contract termination, based on the circumstances surrounding each party. From these elements, a clear vision emerges: the termination system has two aspects. First, it is a right for the contracting party who is serious about fulfilling the contract. Second, it is a penalty imposed on those whose actions cause a breach in the performance of the obligations arising from the contractual relationship. To clarify these two concepts, we will present, in turn, the provisions of the termination system, and we pray to God Almighty for success and guidance in this endeavor.
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References
[1] Part of Surah Al-Madina, verse 1.
[2] See the text of Article (150) of the Iraqi Civil Code No. 40 of 1951, Article 150:
a. The contract must be executed according to its terms and in a manner consistent with good faith.
b. The contract is not limited to obligating the contracting party to what is stated therein, but also includes what is required by law, custom, and equity, according to the nature of the obligation.
[3] See: Texts that refer to the right of termination: the new French Civil Code of 2016, Articles (1224-1230), Article (157, paragraph 1) of the Egyptian Civil Code, and Article (177) of the Iraqi Civil Code.
[4] This is evident from the phrase "the other contracting party may" in Article (177), paragraph (1).
[5] Article (177), paragraph (1). (3) See: Muhammad Hassan Qasim, Towards Unilateral Termination: A Reading of Modern Judicial and Legislative Trends - Journal of Law for Legal and Economic Research, Faculty of Law, Alexandria University, Issue 1, 2010, p. 59. http://libwebserver.uob.edu.bh/en/Teachingresources/Law
[6] Hamdi Abdel Rahman, The Intermediate in the General Theory of Obligations, Book 1, Dar Al-Nahda Al-Arabiya, Second Edition, 2010, p. 589.
[7] Ismat Abdel Majid Bakr, A Concise Guide to Named Contracts: Sale and Lease, Zain Legal Publications, First Edition, 2015, p. 277.
[8] This is evident from the phrase "the other contracting party may" in Article (177), paragraph (1).
[9] Article (177), paragraph (1). (3) See: Muhammad Hassan Qasim, Towards Unilateral Termination: A Reading of Modern Judicial and Legislative Trends - Journal of Law for Legal and Economic Research, Faculty of Law, Alexandria University, Issue 1, 2010, p. 59. http://libwebserver.uob.edu.bh/en/Teachingresources/Law
[10] Hamdi Abdel Rahman, The Intermediate in the General Theory of Obligations, Book 1, Dar Al-Nahda Al-Arabiya, Second Edition, 2010, p. 589.
[11] Ismat Abdel Majid Bakr, A Concise Guide to Named Contracts: Sale and Lease, Zain Legal Publications, First Edition, 2015, p. 277.
[12] Abdel Moneim Farag Al-Sadda, Sources of Obligation, Dar Al-Nahda Al-Arabiya, 1992, p. 219.
[13] Article (177) of the Iraqi Civil Code.
[14] See: Appeal No. 0973 of 1989, Technical Office 40, Page 440, dated 09-02-1989, Subject: Contract, Collection of Egyptian Court of Cassation Judgments.
[15] See: Appeal No. 0472 of 1969, Technical Office 20, Page 7, dated 02-01-1969, Subject: Contract, Collection of Egyptian Court of Cassation Judgments.
[16] Dr. Raqia Abdul Jabbar Ali indicated in her book, "The Contract of Sale – A Comparative Study between Bahraini Civil Law and Comparative Arab Laws," on page 9, that the French legislator divided contracts in Articles 1105 and 1106 into gratuitous contracts and exchange contracts. However, this assertion is incorrect, because... During the 2016 amendment to the French Civil Code, this division was mentioned exclusively in Article 1106. It should be noted that the book was published in 2017, and it would have been more appropriate to research any subsequent developments in French law.
[17] See Professor Dr. Tharwat Abdel Hamid – General Theory of Obligations in Egyptian Civil Law – Sources of Obligation – p. 319.
[18] See the provisions of Article (246) of the Iraqi Civil Code No. 40 of 1951, as amended.
[19] Dr. Muhammad Azmi Al-Bakri – Termination of Contracts – Dar Mahmoud for Publishing and Distribution – 2017 – p. 15.
[20] Said Hamdine – Abuse of the Right of Termination in Contracts – Master's Thesis in Private Law – Algeria – p. 17 – Website: http://193.194.83.98/jspui/bitstream/1635/13914/1/HANTIT_AMMAR.pdf
[21] Dr. Muhammad Hassan Qasim, Civil Law, Obligations, Contract, Volume Two, Al-Halabi Legal Publications, 2018, p. 388.
[22] Dr. Ismat Abdul Majeed Bakr, Contract Theory in Arab Civil Laws: A Comparative Study, Publisher: Dar Al-Kutub Al-Ilmiya, 2015, p. 632.
[23] Counselor Anwar Al-Amrousi, The Comprehensive Encyclopedia of Civil Law, 5th Edition, Dar Al-Adala, 2015, p. 557.
[24] See in this regard Dr. Muhammad Azmi Al-Bakri – Termination of Contracts – Dar Mahmoud for Publishing and Distribution – 2017 – p. 66.
[25] Dr. Omar Ali Al-Shamsi, Termination of Contract, National Center for Publications, 2010, p. 434.
[26] Dr. Muhammad Azmi Al-Bakri, same source, p. 11.
[27] Abdul Majeed Al-Hakim, A Concise Guide to the General Theory of Obligation, Vol. 1, Al-Sanhuri Library, 2008, pp. 179-180.
[28] Counselor Anwar Al-Amrousi, The Comprehensive Encyclopedia of Civil Law, Dar Al-Adala, 5th ed., 2013, p. 558.
[29] Sahar Jabbar Yaqoub, Judicial Termination of Administrative Contracts Due to Administrative Error, pp. 14-20, published in the Al-Marjaa Al-Ilmiyya website: https://almerja.com/reading.php
[30] See in this regard: Dr. Salah al-Din al-Nahi, A Concise Guide to the General Theory of Obligations, 1950, p. 162.
[31] Our professor: Dr. Munir Mahmoud al-Watari, Administrative Contracts and Socialist Transformations, a research paper published in the Iraqi Judiciary Journal, Issue 2, Volume 32, 1977, p. 177.
[32] Lawyer Abdel Wahab Arafa, Contract Rescission, Contract Dissolution, Contract Dissolution, Dar Al Majd for Publishing and Distribution, no place or year of publication, p. 48.
[33] Ahmed Farag Hussein – Ownership and Contract Theory in Islamic Jurisprudence, University Press, Alexandria, no publication date, p. 70.
[34] Dr. Muhammad Hassan Qasim, Civil Law, Obligations, Contract, previous source, p. 376.
[35] Dr. Al-Allamah Al-Sanhuri states that the first to propose this well-known comparison between the subject matter and the cause was Professor Audot, and many jurists subsequently adopted it. See Al-Sanhuri, "The Intermediate Treatise on the Explanation of Civil Law," Part One, "Sources of Obligation," p. 338, footnote 1.
[36] Dr. Jamal Al-Din erred in his work, "The Reason for Obligation and its Legality in Islamic Jurisprudence," a study. Comparison on page 121, where he said: “There is no doubt among us that the reason according to the fundamentalists differs from the reason we are discussing, which is the reason for the obligation.” (See our late professor, Dr. Mustafa Ibrahim Al-Zalmi, Obligations in Islamic Law and Arab Civil Legislations – Al-Nahrain University – College of Law – Part One – Al-Saadoun Printing and Publishing Company, no publication date – Baghdad – pp. 114-115). This relates to the contract at the time of non-performance of the obligation by one of the parties to the contractual relationship, as stated in Article (177) of the Iraqi Civil Code: “(1- In bilateral contracts, if one of the contracting parties does not fulfill what is required of him in the contract, the other contracting party may, after giving notice, demand termination with compensation if warranted.)” The essence of this text points to the idea of the interconnectedness of obligations arising from the contract, and the content of this interconnection in the event of non-performance of one of the parties’ obligation arising from the contract. It is necessary to terminate the contract because it is not permissible to compel the other contracting party to perform his obligation himself, except to demand performance of exactly what the debtor committed to, whenever possible, just as he has the right to demand termination.
[37] Dr. Muhammad Hassan Qasim: Civil Law Obligations, previous source, p. 377.
[38] Dr. Muhammad Hassan Qasim, same source, p. 378.
[39] In accordance with the provisions of Article (177) Paragraph 1 of the Iraqi Civil Code, see: Federal Court of Cassation Judgment No. 616 dated 7/6/2008.
[40] Dr. Mahmoud Gamal El-Din Zaki, A Concise Guide to the General Theory of Obligations in Egyptian Civil Law, p. 401; Dr. Abdel Fattah Abdel Baqi, The Theory of Contract and Unilateral Will, p. 952; Dr. Samir Abdel Sayed Tanago, The Theory of Obligation, p. 171.
[41] Dr. Sharif Al-Tabakh, The Comprehensive Encyclopedia of Civil Defenses, 1st ed., Dar Al-Adala for Publishing and Distribution, Cairo, 2015, p. 392.
[42] Federal Court of Cassation Ruling No. 493 dated 12/5/2008, Civil Section, published on the website of the Iraqi Supreme Judicial Council https://www.hjc.iq/qview.909/
[43] Dr. Muhammad Hassan Qasim, Civil Law, Obligations, Contract, previous source, pp. 279-280
[44] Al-Mufeed fi Sharh al-Qanun al-Madani al-Iraqi (The Useful Explanation of Iraqi Civil Law), Dr. Abdul Basit Jassim, College of Law and Political Science, Department of Law, University of Anbar, Iraq, p. 8. Website:
http://www.uoanbar.edu.iq/eStoreImages/Bank/11176.docx
[45] Dr. Omar Ali Al-Shamsi, Termination of the Contract, previous source, pp. 44-47.
[46] See the following articles of the Iraqi Civil Code: (150); (282, paragraph 1).
[47] Our professor: Dr. Suleiman Barak Dayeh, Termination as a guarantee of implementation, research published in the Journal of the College of Law for Legal and Political Sciences, University of Anbar, College of Law, pp. 105-106. The journal's website: https://www.iasj.net/iasj/download/a3bb04f3628d9219