Theories of Contract Interpretation in Iranian and American Law

In Iranian law there are two theories in interpretation of the contract: the theory of "Interpretation Based on the Common Intention of the Parties" vs. the theory of "Sociological and Free Interpretation". In American law,"Textualism" and "Contextualism" are the most important theories of contract interpretation. Other theories have been proposed in American law, which include: "Literalism","Subjectivism","Objectivism" and "Objective - Contextual Interpretation" which is a combination of subjectivist and objectivist approaches. The main question is what are the strengths and weaknesses of the interpretation theories, and what relationship can be established among the theories of contract interpretation in Iranian and American law. In the present study, it has been determined by the descriptive-analytical method that in American law, although contextualist and subjectivist theories claim to best discover the real intention of individuals as the main goal of interpretation and fully guarantee the "Principle of Free Will", It seems that although Textualism and Objectivism maintain legal values such as the stability of transactions and trust in the legitimate intentions of individuals, at the same time they also provide economic values such as efficiency and maximum profit in transactions. Therefore, in interpretation of the contract, Textualism with an objective approach is superior to Contextualism and Subjectivism. Lack of reliance on textual interpretation theories and inattention to economic criteria such as efficiency and maximum profit are the major weaknesses of contract interpretation theories in Iranian law.The interpretation of the contract with the inner intention approach in Iran is related to subjectivist and contextualist theories, and the interpretation based on apparent intention can be considered close to objectives and textual theories.