Abstract
Factoring is a modern and efficient method of financing in which economic enterprises assign their deferred claims and receivables to a financial institution (the factor) to obtain the required liquidity before the maturity date. Given the growing need of manufacturing and service units, as well as small and medium-sized enterprises (SMEs), for working capital, utilizing this legal-economic institution to facilitate the production cycle and reduce the risk of non-paymentegal analyses indicate that this institution can be approximately justified within frameworks such as “assignment of claims,” “debt purchase,” or “settlement contract.” However, due to the specific features and ancillary services of factoring (such as account management and debt collection), utilizing the framework of Article 10 of the Civil Code as an innominate contract is more consistent with its complex dimensions.Despite its numerous advantages, the implementation of these contracts in Iran faces several legal challenges. The lack of a comprehensive and independent law, ambiguities regarding the transfer of guarantees, the risk of usury (Riba) if Islamic standards are not strictly observed in discounting and debt purchasing, and conflicts in bankruptcy regulations are among the most significant obstacles to the development of this financing method. In this regard, international instruments such as the UNIDROIT Convention, by providing uniform and efficient rules, can serve as a suitable model for the Iranian legislature. The results of this research show that to effectively utilize the capacities of factoring in the Iranian economy and to overcome existing barriers, drafting a comprehensive and transparent legislative framework that is aligned with international trade standards, while observing domestic legal principles and jurisprudential foundations, is absolutely essential.