Economic analysis of loss of subject matter of transaction before delivery

Iranian Civil Code has anticipated the risk of destruction of subject matter of transaction before delivery in the form of a default rule in Article 387 and introduces the transfer of risk of destruction as the result of delivery of subject matter of transaction. The default rule should economically reduce transaction costs and disclose information to reduce moral hazard. According to the legislator, the seller is responsible for the risk, since the seller can assign the risk with the lowest cost. This would be correct in most cases, but not always, and sometimes risk tolerance by the buyer seems more reasonable. This situation has convinced some authors to introduce the mentioned article as an irregularity and exception. Prediction of exceptions in this article will lead to further updating the provision. The parties should allocate the risk in a better manner. This study is intended to economically analyse the rule