Istisna’ Contract in Light of the General Rules of Contracts in Civil LawA Comparative Study

Abstract

The contract of Istisna‘ constitutes a hybrid contract, combining elements of both sale and construction contracts. Under this arrangement, the manufacturer (sāni‘) undertakes to produce a specific item or perform a defined work according to agreed-upon specifications and deliver it to the purchaser (mustasni‘) in exchange for an agreed price. The distinctive feature of this contract lies in its composite legal nature, which complicates its precise classification under conventional civil law frameworks.

In Iraqi civil law, Istisna‘ has not been regulated as an independent contract; rather, it is merely referenced under the provisions governing construction contracts, without a clear delineation of the parties’ obligations or the contract’s legal effects. This legislative gap generates ambiguity regarding legal disputes over delivery, payment, defect liability, and transfer of ownership, leaving the contract’s classification oscillating between a sale and a construction contract.

Accordingly, there is an urgent need to enact specific legal provisions for Istisna‘ contracts. Such regulation should define its independent legal nature, clarify the obligations of the manufacturer and the purchaser, organize formal requirements in special cases such as real estate or machinery, determine remedies for breach, and address unforeseen circumstances that may impede performance. A comprehensive legal framework for Istisna‘ would enhance transactional stability, protect the parties’ rights, reduce disputes arising from its hybrid nature, and align with contemporary economic and industrial developments.