A Contrastive Study of Cession of Claim and Novation by Substitution of Creditor in Iranian Legal System

According to Article 292 of the Iranian Civil Code, substitution of an obligation has three types, one of which is substitution of the creditor. Many jurists believe that Paragraph 3 of the mentioned Article has mistakenly defined cession of claim instead of novation and therefore, there is a lack of a thorough definition for novation by substitution of creditor in the civil code. In this paper, in addition to clarification of the differences among these two legal terms, a critical review of their distinctions regarding their legal background, change or existence of the obligation, extent of validity and parties of the legal relationship and also the state of guarantee of the obligation has been done. As a result, it's been found that in Iranian legal system, the legislator has independently accepted both of the legal terms of cession of claim and novation by substitution of the creditor. Moreover, although the regulations of novation has been legislated briefly in only two Articles of the civil code, its complete nature, specific conditions and legal effects can be recognized by consideration of general rules of contracts and there is no room for confusing it as a subdivision or type of cession of claim.