Comparative Law Researches

Comparative Law Researches

The Feasibility of Accepting the Tort of Intentional Interference with Contractual Relations as a Remedy for Breach of the Negative Pledge Clause (a comparative study of English and Iranian Law)

Authors
Mohammadbagher Parsapour 1
molouk dehghani 2
1 Associate Professor in Private Law, Faculty of Law, Tarbiat Modares University, Tehran, Iran
2 M.A. Student in Private Law, Faculty of Law, Tarbiat Modares University, Tehran, Iran
10.48311/CLR.29.3.1
Abstract
The negative pledge clause is a restrictive covenant in financing agreements, whereby the borrower (funding recipient) is prohibited from creating any security interest over its assets in favor of other creditors until the loan is fully repaid. This clause, which is common in unsecured financing contracts, aims to protect the lender (financier) against the risk of default. A breach occurs when the borrower fails to honor this commitment and grants security to a new lender. Among various proposed remedies, this article examines filing a tort claim for intentional interference with contractual relations against the new lender. This tort, which provides significant protection for the rights of the beneficiary of the negative pledge clause (the original lender), is analyzed through a comparative study with English law. This descriptive-analytical research aims to lay the groundwork for recognizing this tort in Iranian law to strengthen the position of the said beneficiary. By examining its constituent elements, it is concluded that, under certain conditions, accepting this cause of action as a remedy for breaching the negative pledge clause is feasible within the Iranian legal system.
Keywords
pledge
negative pledge clause
financing contracts
Intentional Interference with Contractual Relations

Subjects

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Comparative Law Researches
Volume 29, Issue 3 - Serial Number 129
Fall
Autumn 2025
Pages 104-128