Contract rescission serves as a crucial legal mechanism for terminating contractual obligations, ensuring fairness, and maintaining the balance of rights between parties. This study aims to examine the effects of contract rescission in Iranian civil law and to compare them with those in comparative law, analyzing the legal aspects, conditions for rescission, and its consequences. In Iranian law, contract rescission is generally possible either legally or contractually, and its effects mainly include the termination of future obligations, restitution to the prior state, and compensation for damages resulting from contractual breaches. In comparative legal systems, particularly in French and English law, similar concepts exist; however, notable differences can be observed regarding restitution, the extent of damage compensation, and the role of the parties’ will. The research employs a descriptive-analytical method, relying on legal texts, doctrinal analysis, and judicial precedents to identify points of convergence and divergence among various legal systems. The findings indicate that while the fundamental principles of contract rescission are largely similar across jurisdictions, differences exist in the execution of rescission and its impact on complex economic contracts. Moreover, comparative law generally offers greater flexibility in determining the effects of rescission and compensating associated damages, whereas Iranian law provides a more defined and limited legal framework. This study concludes with recommendations to enhance the regulation of contract rescission in Iranian law, offering practical guidance for legal practitioners, judges, and contract drafters.