Comparison of the Theory of Trust and Similar Institutions in Iranian and Common Law

Abstract

The theory of trust is one of the most important theories in the law of obligations and stands in contrast to the theory of will sovereignty. This theory has a direct relationship with good faith. The theory of trust contains specific elements that have sparked differing opinions in common law countries. The United States, Canada, and Australia have accepted it, while countries like England have rejected it, similarly to how they reject unilateral obligations. This theory shares common points with the principles of unjust enrichment and reliance on property or actions and has been studied in relation to the theory of consideration. However, the characteristics of this theory include unpredictability, lack of comprehensiveness, lack of explanatory power, the absence of a necessary link between trust and obligation, the imposition of liability without fault, ambiguity in the concept of trust, undesirable judicial outcomes, and disregard for moral virtues. As mentioned, in Iranian law, some rules, such as the principles of unjust enrichment and reliance, bear similarities to this theory in non-contractual liabilities. In contrast, in common law, this theory has been compared and analyzed alongside estoppel, good faith, and unilateral obligations. Therefore, the present research conducts a comparative study of the evolution and scope of the application of the theory of trust in the law of obligations in Iran and common law through an analytical and descriptive method. It concludes that the acceptance of the theory of trust in both common law and Iranian legal systems is subject to criticism and, despite its similarities to various institutions such as agency, unjust enrichment, and reliance, it is more frequently raised in the context of civil liability than in the realm of obligations.