The nature and characteristics of swap contracts

The use of swap contracts as a new method of trade has become internationally widespread and results tosome important advantages such as reduction of shipping costs, time saving in movement of the goods and elimination of export and import risk. The increasing significance and prevalence of such contracts, give rise to some questions including: what are the nature and characteristic of the swap contract in the Iranian legal system? Is there any similar concept to the swap contract in our domestic law? The present article considers similar legal concepts in response to the questions and comes to the conclusion that swap is an innominate contract under Article 10 of the Iranian Civil Code based on party autonomy. Despite undeniable similarities with barter contract, swap has a particular nature,the subject matter of the contract usually consists of fungible goods and includes special obligations based on mutual agreement of the parties as a general rule. Accordingly, the swap contract has its own specific characteristics, which have been examined in detail.