The Rule for Resolving Conflicts Regarding Checks and Promissory Notes is Derived from the Domestic Legal Sources of the Country
Subject Areas : commercial law
Keywords: Check, Promissory Note, Law, Iran, Conflict of Laws, Endorsement,
Abstract :
If a transaction is conducted within the country and the check related to it is issued within the country, or if a check is issued without any transaction, and both parties to the contract are Iranian and residents of Iran, all legal actions related to it are governed by domestic laws, and there is no conflict of laws in this regard. However, if one of the parties is a foreign national or if the issuance of the check or the conclusion of the related contract occurs outside the country, due to the presence of a foreign element, a conflict of laws arises, and legal scholars have differing opinions regarding the rule for resolving this conflict. In this regard, the Geneva Convention on the Uniform Law for Bills of Exchange and Promissory Notes of 1931 exists, to which Iran has not yet acceded. In such cases, legal scholars, referring to Article 969 of the Civil Code, believe that the issuance of the check and the contract related to it are subject to the law of the place of issuance. However, there are different views on whether this law is mandatory or optional, with proponents of the mandatory view being more numerous. This issue is explicitly stated in Article 1 of the Check Law, which stipulates that checks issued for the bank that issued them, whether inside or outside of Iran, are considered enforceable documents. Based on the interpretation of this article, the legal status of Iranian checks issued, regardless of the place of issuance, nationality, and residence of the parties involved, endorsement, etc., is subject to Iranian laws. Therefore, for disputes related to Iranian checks, Iranian laws can be applied in all cases. However, for foreign checks issued by foreign banks, the situation is different. In this case, according to Article 969 of the Civil Code, checks issued abroad are the responsibility of foreign banks, and if the endorsement or guarantee of the check is carried out within Iran, it will be subject to Iranian laws. Otherwise, it will be governed by the laws of the place where the action occurred. This research uses a descriptive-analytical method to examine the rule for resolving conflicts regarding checks and promissory notes derived from the domestic legal sources of the country.
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