Legal nature of shipbuilding contracts: with the emphasis on the Legal System of England and Iran

Shipbuilding contact is a unique one. On one hand, regarding its outcome, it may be considered sale in which the builder has an absolute obligation to build and sale the ship, on the other hand, the long term of the contract and subsequently continued obligations of the parties against each other differentiate the shipbuilding contract from sale contract and simulate it to project construction contract. In this article, the legal nature of shipbuilding contract, emphasizing at English law, because of its selection in most of shipbuilding contract as governing law and comparing it with Iranian law, will be studied. Although Iranian case law has not yet found the opportunity to consider the nature of shipbuilding contract, scholars have considered this contract as sale. Traditionally, English law regards shipbuilding contract as sale and several authorities have also confirmed this issue. Some recent cases, however, have challenged this presumption in conformity with the continued obligations of the parties, such as designing and construction and payment of the price by way of installments.