Given the complexity of the issues relating to compensation as a remedy for breach of contract, Iraqi law, namely the Iraqi Civil Code no. 40 of 1951 which is the law regulating the general provisions for the origins of obligations, has addressed the matter of compensation and placed the general rules upon which the courts rely in connection with relevant claims filed before it. In this article we address the rules upon which compensation is awarded and other issues relating to compensation such as liquidated damages.

Pursuant to the Iraqi Civil Code, compensation is not owed should any of the following conditions be met:

• The relevant obligation became impossible to fulfil;

• The debtor failed to fulfil the obligation due to foreign cause of force majeure;

• The fulfilment of the obligation was deemed to be overburdening; or,

• The other party failed to fulfil its obligations as well.