Journal of Research and Development in Comparative Law

Journal of Research and Development in Comparative Law

Contractual Justice and Equity in Smart Contracts: A Comparative Study of Iranian Law and Common Law-Based Systems

Articles in Press

Document Type : scientific research paper

Authors
saeed khorshidi 1
seyed mohsen ghaemi khargh 2
sajjad moghadas 3
1 "Level 4 seminary student of Jurisprudence and Private Law at the Islamic Jurisprudence, Law, and Judiciary Complex of Qom."
2 Assistant professor shahid beheshti university
3 enviromental law beheshti uni
10.22034/law.2026.2070934.1701
Abstract
Smart contracts, a pivotal innovation in blockchain technology, have transformed contract law through automation, transparency, decentralization, and immutability, enhancing efficiency and trust in digital transactions. However, their self-executing and algorithmic nature raises significant challenges in achieving contractual justice and equity, particularly when compared to traditional contracts that allow judicial interpretation to mitigate unfair outcomes. This article employs a comparative approach, analyzing the compatibility of smart contracts with principles of justice and equity in Iranian law and common law-based systems (notably England and the United States). Using a descriptive-analytical method based on library studies, it first examines the nature and technical features of smart contracts, such as their reliance on blockchain’s distributed ledger and conditional “if-then” logic. It then explores their legal and algorithmic challenges in ensuring digital fairness, including the absence of ex post justice mechanisms, the rigidity of code execution, and the inability to adapt to unforeseen circumstances or ethical considerations. These challenges are evaluated comparatively, contrasting the flexibility of Iranian legal principles with common law doctrines like unconscionability, both of which are constrained by the automated execution of smart contracts. To address these issues, the article proposes solutions such as centralized smart contracts with trusted third-party oversight, hybrid models balancing on-chain efficiency with off-chain flexibility, and upgradable smart contracts using technical patterns like the Proxy Pattern. These solutions aim to integrate legal principles such as good faith and contractual adjustment, drawing insights from both Iranian and common law-based frameworks. The findings indicate that without legal and technical mechanisms, smart contracts may lead to economic inequality, exploitation of weaker parties, or contract invalidity. The article underscores the need for legal systems to adapt to digital environments by leveraging comparative perspectives to ensure justice and equity in smart contracts. Future research should focus on practical applications of these solutions in domains like decentralized finance and transnational contracts to align smart contracts with universal fairness principles.The findings indicate that the hybrid equity-focused model, with emphasis on the formation stage, achieves the best balance between technological efficiency and contractual justice.
Keywords
smart contracts
Justice
Equity
Blockchain
Algorithmic Challenges
Comparative Law
Subjects
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Journal of Research and Development in Comparative Law

Articles in Press, Accepted Manuscript
Available Online from 18 April 2026