Comparative Study of Frustration of Contracts ‎in Upstream Oil and Gas Contracts in Iran and ‎Common-law Legal Systems

Upstream oil and gas contracts are of the most important public contracts that have technical, economic, social, legal, financial, political and environmental aspects and are concluded for investing in and oil operations in exploration, development and production. The contract may be hindered or stopped because of contractual excuses. In this study, by studying the upstream oil contracts in the Iranian legal system and common-law, we have examined the frustration of the contract from the perspective of concept and basis, conditions and effects and guarantee of the performance of this excuse. The results show that frustration of the contract is recognized as the most important contractual excuse in the upstream contracts concluded in the common-law legal system. In the Iranian legal system, the frustration of contracts is not recognized with terms and characteristics of the common law system, but examples can be found that are similar to contractual excuses in the upstream contracts of the oil and gas industry. The nature and special features of these contracts make the legal management of the contract to be the main priority of the parties to continue the life of the contract and the effects and guarantees of contract frustration are adjusted according to the specific characteristics of these contracts and different forms of general non-oil contracts.