Conflict between Respecting the Client's Interests and the Rights of Third Parties; In light of the Unifying Decision No. 847 of the General Board of the Supreme Court

Ganj Khanloo, Mohammadreza; Jafari Khosroabadi, Nasrollah

doi:10.22106/jlj.2025.2064425.6335

Conflict between Respecting the Client's Interests and the Rights of Third Parties; In light of the Unifying Decision No. 847 of the General Board of the Supreme Court

Document Type : Research/Original/Regular Article

Authors

Mohammadreza Ganj Khanloo ¹

Nasrollah Jafari Khosroabadi ²

¹ Master's student in Private Law, Department of Law, Faculty of Theology and Islamic Studies, Meybod University, Meybod, Iran

² Associate Professor, Department of Law, Faculty of Theology and Islamic Studies, Meybod University, Meybod, Iran

10.22106/jlj.2025.2064425.6335

Abstract

The Unifying Decision No. 847 of the General Board of the Supreme Court dated May 14, 2024 addresses the observance of the client's interest in the relations between the lawyer and the client in attorney transactions; however, it fails to take into consideration the rights of a good-faith holder. Despite the emphasis of this decision on observing the client's interest, the ambiguity in dealing with good-faith third parties has given rise to doubts regarding the security of transactions and judicial practice. The aim of this research is to analyze the legal effects of the aforementioned Supreme Court Unifying Decision on the validity of transactions vis-à-vis good-faith third parties and to elucidate the criteria for establishing good faith. This research is based on a descriptive-analytical method. It examines jurisprudential sources, legislation, unifying decisions, and court judgments concerning the subject matter, and adopts a critical approach in analyzing judicial practice. Although Supreme Court Unifying Decision No. 847, by emphasizing the observance of the client’s interest, has recognized the possibility of invalidating a transaction even where the third party is acting in good faith, the theory of “Apparent Loss” has been introduced as a solution for preserving the rights of the third party. This approach can also be observed in certain judicial decisions, and it has been endorsed by the Law on Compulsory Registration of Transactions Concerning Immovable Property enacted in 2024. The results of this research can be effective in strengthening the legal security of transactions and developing clearer rules for determining the good faith of third parties.

Keywords

Good Faith Third Party

Apparent Loss

Interest

Transactional Security

Unifying Decision 847

Subjects