The Study of Economic Policies and ChallengesinComposition Contracts: A Comparative Study of the Iranian, US, and UK Legal Systems

Document Type : Original Article

Authors

1 Ph.D. Candidate in Islamic Azad University, Gorgan, Iran.

2 Corresponding author, Assistant Professor in Department of Law, Payame Noor University, Tehran, Iran.

3 Assistant Professor in Islamic Azad University, Gorgan, Iran.

Abstract

Composition contracts are of great importance in international legal systems and are consideredto be an important tool for solving financial problems, as they contribute significantly toeconomic prosperity by preventing the complete dissolution of economic units. Therefore, acomparative study of composition contracts in different legal systems such as Iran, the UnitedStates and the United Kingdom can contribute significantly to the reform of commercial lawsand regulations in this field. Accordingly, the main purpose of the present study is to examinethe economic policies and challenges in composition contracts and their application in the legalsystems of Iran, the United States and the United Kingdom. The main question of the presentstudy is: “What are the main challenges of composition contracts in the legal systems of Iran,the United States and the United Kingdom?” In response, it can be hypothesized that the majorchallenge in the US and Iranian systems seems to be debt security, while in the UK, creditrestoration is considered a major challenge. The research findings indicate that in all threecountries, from a policy perspective, composition  agreements play a vital role in resolvingdebts and rebuilding the financial situation of debtors, but each of these countries faces its ownchallenges. In Iran, there are problems such as lack of transparency in assets and resistance fromsome creditors. In the US, challenges such as legal complexities and problems related to creditorcooperation are present. Despite having a modern legal framework, the UK also faces issuessuch as administrative complexities and the economic impacts of composition agreements.Given the problems in all three systems, it is suggested that policy and legal reforms be carriedout to facilitate the process of composition agreements in all three countries. This study uses adescriptive-analytical method and a comparative approach. Legal documents from Iran, the US,and England have been analyzed using library resources.

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