Financial leasing contract Its concept and its legal nature- a comparative study

One of the problems that are seen as an impediment to business projects and enterprises is finding sources of funding. Due to the burdens of the traditional sources, a new mean of financing has been devised representing the culmination of the legal development of the funding formulas which achieves the potential of access to capital and productive assets for businesses without having to discharge the full value or the obligatory cost, and this method is represented in what has become known as Leasing. Based on the importance of this topic the study has elucidated the concept of leasing from the legal perspective through defining and determining its kinds and characteristics. And then describing the provisions of this type of contracts, their implications and the attribute of the two parties involved and the nature of the funds placed at this contract. As there is an absence of a legislative regulation for this method of financing in Iraq, the research focused on the possibility of creating a legislative ground for this contract in the Iraqi law, or to find provisions that can be applied to it, and indicating the extend of the possibility for labeling and attaching it to the Named Contracts in the Iraqi law. The research reached to state that the Leasing Contract is of a special kind regarding its status and the character of its parties, its subject is the utilization of the Leased funds by the lease for the duration of the contract for his/her commitment to pay financial premiums while retaining the ownership of this funds to the lessor. One of its most significant advantages is that at the end of the contract the lease will enjoy the right of choosing between purchasing the funds at a price which takes into account in its assessment the paid premiums, or to renew the contract with new terms or restitution of the money to the lessor.. Accordingly, this contract has a number of legal consequences for the two parties that do not go with any of the named contracts in the Iraqi law, and therefore it is difficult to find a legislative principle to it in Iraqi law because the legal principles for these contracts in the Iraqi law are not applicable on the leasing contract. In addition, this contract is not considered a commercial business in accordance with the provisions of the Iraqi Trade Act, No. (30) for the year (1984), and that the businesses which are considered commercial under the aforementioned act do not include all forms of leasing contracts. Given the importance of this type of contracts, as an adapted financial means, and considering the interim requirements of Iraq, the research came to the end with several recommendations including: Urging the legislature to pay legislative attention in this issue by adding a new article after article (5) of the Trade Act of Iraq makes the leasing contracts a commercial action. For that purpose, a text has been proposed. The research also recommends the issuance of a special law to regulate this contract just like the compared legislations because of its importance in the commercial field so that its effects and the competent authorities to issue a license to implement this financing process can be determined and stating the conditions that must be met in the financial institutions which make the contract its profession, given their great credit role for protecting the commercial and financial credit in general.