The Theory of "Nullity of Unauthorized Transactions": A Case Study of Islamic Denominations' Jurisprudence, English Law, and Iranian Law

Iranian civil law considers unauthorized transactions as non-enforceable. However, some Shiite jurists and certain Sunni schools assert that such transactions are void. The legal treatment of unauthorized transactions in English law differs from that in Iranian law; while Iranian law categorically regards unauthorized transactions as non-enforceable in all cases—regardless of whether the unauthorized party acts for themselves or on behalf of the owner, and irrespective of the buyer's awareness of the seller's lack of ownership—English law generally holds that these transactions are void. This means that a contract is devoid of any legal effect due to the absence of one or more essential conditions for the validity of transactions. Nevertheless, due to factors such as facilitating trade, recognizing possession as a form of ownership, and imposing legal effects based on the good intention of the buyer, this principle has exceptions that can render unauthorized transactions valid and enforceable. These exceptions include: estoppel, sales by commercial agents, sales in public markets, sales by possessing seller post-sale, a seller who continues to possess the property after the sale, sales by possessing buyer post-sale, sales based on revocable ownership. It appears that within Iranian law, particularly in the current commercial code, there are instances that can somewhat align with English law. This article employs an analytical-descriptive method based on reputable sources from Islamic jurisprudence, English law, and Iranian law to explore and examine the theory of nullity concerning unauthorized transactions.