Reciprocal Sale Contracts in the Oil Sector: A Comparative Case Study of Legal Frameworks in Iran and Iraq

Abstract

The legal characterization of reciprocal sale presents a fundamental challenge within both domestic and international legal frameworks. Under Article 338 of the Iranian Civil Code, sale is traditionally defined as the transfer of ownership of an object for a specified consideration rooted in ownership, exchange, and tangibility. Yet, an important question arises: can reciprocal sale be subsumed under this definition? By contrast, Iraqi law defines sale in Article 506 as the exchange of property for money and further broadens its scope in Article 507 to encompass deferred sales. These divergent legal formulations generate conceptual tension when applied to reciprocal sale, a practice positioned at the crossroads of national legislation and international commercial transactions.

Methodologically, this study adopts a doctrinal and comparative approach, examining Iranian and Iraqi legal provisions alongside international instruments, with particular emphasis on the definition advanced by the United Nations Economic Commission for Europe (UNECE). The analysis demonstrates that reciprocal sale only partially corresponds with classical definitions of sale, as it bears closer resemblance to countertrade. In such arrangements, contractual obligations extend beyond simple bilateral exchanges to include commitments to purchase goods or services of equivalent or near-equivalent value.

The findings suggest that both Iranian and Iraqi legal systems require interpretative development or legislative reform to effectively accommodate the complexities of reciprocal sale. Such reform would enhance coherence between domestic legal regimes and international trade practices, thereby facilitating smoother commercial interactions across jurisdictions.