Document Type : scientific
Authors
1 Assistant Professor, Department of Law, Islamic Azad University, Yasuj Branch, Yasuj, Iran.
2 Researcher of the PhD program in Private Law, Yasuj Branch, Islamic Azad University, Yasuj, Iran. (Lecturer, Azad University).
Abstract
The expansion of blockchain technology and the growing use of smart contracts have posed novel challenges to contract law. One of the most significant challenges concerns the manner in which traditional legal institutions—particularly the option of termination (khiyār)—can be exercised within contracts that are designed to be self-executing and immutable. In Iranian law and Islamic jurisprudence, the option of termination constitutes a fundamental mechanism for ensuring contractual justice, removing harm, and preventing uncertainty (gharar). Nevertheless, the technical nature of smart contracts has cast doubt on the direct applicability of this right in digital environments. This study adopts an analytical–comparative approach and draws upon jurisprudential and legal sources as well as interdisciplinary research in law and technology to examine the feasibility of exercising the option of termination in smart contracts. The main hypothesis of the article is that the perceived conflict between khiyār and smart contracts is not inherent or conceptual in nature, but rather stems from the absence of an appropriate legal–technical framework capable of translating legal concepts into executable code. Accordingly, the present research proposes a three-layer model consisting of: (1) the establishment of the legal foundation of the option of termination, (2) jurisprudential and legal interpretation and adaptation in light of technological requirements, and (3) a technical translation layer. By relying on mechanisms such as programmable termination clauses, legal oracles, and hybrid or upgradeable smart contracts, this model enables the effective exercise of the option of termination within blockchain-based systems.
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