The governing law and the language of a contract with a foreign party
The presence of a foreign party in the contract does not take the draft outside the rules Iraqi law imposes where those rules are mandatory. The framework is on preparing a contract. Review of a contract drawn up in more than one language is on its page.
The law agreed to be applied, and what cannot be excluded
The parties may agree on the law that is to govern their contract, within the limits the texts allow. Mandatory rules in the Civil Code — including the voidness of an agreement contrary to the hardship rule in article 146, second paragraph, and the voidness of an agreement contrary to the rules on when agreed compensation is not due or may be reduced in article 170, second paragraph — are not excluded by a clause choosing another law. Likewise, where a special Iraqi statute imposes a form or a restriction on the activity, such as a work permit, a commercial-agency licence or the entry of a trademark, the choice of a foreign law does not stand in for those steps before the bodies those texts name.
The conflict-of-laws rules are not set out article by article here; the general rule above is therefore stated, and the detail is read from the text that applies to the file. That distinction remains when the file is read: an agreement on the law that governs the obligations does not move a step that a mandatory Iraqi text requires away from the body that text names.
The language of the contract
The language of the draft is a matter for agreement, but particular transactions require one language or two. Work-permit Instructions No. 1 of 2026 require the employer to make the contract with the foreign worker in Arabic and English, or in the worker's mother tongue. In official dealings with State departments, what the path requires of the Arabic language is reviewed. If the contract is drawn up in more than one language, it is asked which text is to prevail on a conflict, and the bilingual-review page is consulted.
The office follows a reading from Baghdad, al-Yarmouk.
Legal basis and sources
- Civil Code No. 40 of 1951
- Instructions No. 1 of 2026 on the recruitment, employment and work permits of foreign workers — Article 9
Frequently asked questions
Does the choice of a foreign law stand in for steps that a mandatory Iraqi statute requires?
No. What a mandatory Iraqi text requires — a licence, an entry or a form — remains on its path before the body that text names.
If the parties agree on arbitration, where is that path read?
A distinction is drawn between choosing a law that governs the contractual obligations, and steps taken before a department or a court that an Iraqi text names. The choice of law does not move a licence, an entry or an authentication file off its Iraqi path if that path is imposed by a mandatory text. If the parties agree on arbitration, that path is read from the arbitration provisions of the Civil Procedure Law and from the parties' agreement.
Related topics and articles
- 01Drafting a contract when dealing in BasraDrafting a contract when dealing in Basra under the federal Civil Code, followed from Baghdad.
- 02What does the Civil Code govern in a contract?How a contract is formed and becomes binding under Civil Code No. 40 of 1951: offer, acceptance and subject-matter.
- 03Points to review in a contract before signingMatters to review before signing: parties and authority, subject-matter, time, rescission, compensation and language.
- 04A consultancy contract, and how it differs from a contract of employmentConsultancy and employment contracts under Labour Law No. 37 of 2015, including article 37 on the written contract.
- 05Drafting a commercial franchise contractA franchise contract is read from the Civil Code, a trademark licence and the 2020 agency instructions, with no published standalone statute or templates.