Agency Law in Iran and the United States – A Comparative Perspective

In both Iranian and American legal systems, the concept of agency plays a central role in business transactions, legal representation, and everyday contractual dealings. This document offers a comparative overview of agency law in Iran and the United States, highlighting key similarities, differences, and legal implications.

Agency in Iranian Law

Under Iranian law, agency is primarily governed by the Civil Code, particularly Articles 656 to 683, where it is referred to as 'Wakalat' (power of attorney). It is considered a contractual relationship that requires mutual consent. Agency may be express or implied, and must fall within the boundaries of Islamic jurisprudence. The agent must act in the interest of the principal and observe duties of loyalty, honesty, and non-interference with the principal’s rights.

Agency in U.S. Law

In the United States, agency law is based on common law principles and outlined in the Restatement (Third) of Agency. The U.S. framework recognizes a broader set of authority types, including:
- Actual Authority: Express or implied permission by the principal.
- Apparent Authority: Third-party belief in authority based on the principal’s conduct.
- Inherent Authority: Authority implied by the agent’s role or title.
The system emphasizes how an agent appears to outsiders, not just internal agreements.

Similarities

Both legal systems share foundational principles regarding agency relationships, including:
- The agent’s duty of loyalty and care.
- Importance of acting within authorized scope.
- Protecting third-party interests.
- Restrictions on post-agency use of confidential information.

Practical Applications

Agency plays an essential role in many legal and commercial areas in both jurisdictions, such as:
- Legal representation and POA filings.
- Contract negotiation and execution.
- Banking, insurance, customs, and trade.
- Employment and franchise agreements.

Conclusion

While both legal systems serve the same function of allowing one person to act on behalf of another, the underlying legal theories and applications differ. Iranian law focuses on contractual structure and religious doctrine, while U.S. law emphasizes practical outcomes, third-party protection, and commercial realities. Understanding both frameworks is vital for individuals involved in cross-border transactions or legal disputes involving both systems.