Islam is religion of evolution and invites to developing the principles and conditions

of contracts in order to increase efficiency, satisfaction of the parties of contracts and welfare of the community. Economic analysis of law is also leading to a revision of law in order to increase efficiency, reduce transaction costs and maximize satisfaction of the parties of contracts and welfare of the community. Legal system of common law, and at the top of it, the United States, will establish a strong link between law and the economy and will evolve on the basis of efficiency and in line with economic growth. Rules such as supplementary rules, transparency of information, misrepresentation, bargaining, and contractual freedom play a significant role in contract efficiency. The supplementary rules should be such that if the parties had enough money and time to negotiate, they would still accept such terms. Disclosure of information plays a large role in efficiency, and in the legal system of Islam, contrary to legal system of common law, there is a public duty to reveal the hidden imperfections. The bargaining theory seeks to find the most effective way of resolving disputes through negotiation rather than going to the judiciary. The principle of contractual freedom affects the effectiveness of the rules governing contracts as individuals provide better interests than any other institution.

Economically, a contract is complete to predict the effective obligations for future prospects. In some cases, the incomplete contract is efficient because of high negotiation costs, and in some cases, due to the importance of the issue, the conclusion of an incomplete contract has irrecoverable costs. Investigation of imposed terms from an economic point of view has a decisive role in contract. In order to increase efficiency, solutions such as modifying and interpreting the contract in favor of the weak side are presented. Effective breach of a contract is that in which the terms of the contractor, in addition to the damages to be paid, are better than before, and the creditor with compensation for his losses, it seems like his desired contract has been made. This theory in Iran's law and Imamiyya jurisprudence is faced with a serious obstacle, the principle of necessity. By imposing criminal penalties and equivalent terms, the parties can more effectively offset their damages.

Some contractual utilities are recognition of growth and lack of foolishness by comparing one's actions with wise people acts. Questions of this dissertation are about nature of the components of efficiency, relation of economic attitude to the rules of contracts with their efficiency, the most important examples of contract efficiency and economic justification of contract breach.

Keywords: Economic analysis of contract law, efficiency, economic efficiency, rules governing contractual rights, effective breach.