Oil contracts, as one of the most important legal instruments in the oil and gas industry, play a significant role in the economic development of resource-rich countries. depending on their legal system and economic policies. Given their long-term nature, oil and gas contracts often become a battleground for conflicting interests between international oil companies and host governments. This characteristic can render such contracts vulnerable to unforeseen political, economic, and legal changes between the time of signing and completion. Consequently contracting parties tend to employ mechanisms to maintain the economic balance established from the contract's initiation to its fulfillment. This paper conducts a comparative study of the principles and legal foundations governing oil contracts in Iran and Iraq. By examining general principles such as balanced interests, transparency, risk management, state sovereignty over natural resources, and international cooperation, the research analyzes the differences and similarities in the legal frameworks of the two countries while identifying the nature of such contracts. In Iran, oil contracts are regulated under laws such as the Petroleum Law of 1987 and the Constitution (Articles 44 and 45), In Iraq, the Oil Law of 2007 and the Constitution (Article 111) define the legal framework, with the dominant models being production sharing contracts and technical service agreements. The paper concludes by offering recommendations such as enhancing transparency, developing risk management mechanisms, and increasing contract flexibility. proposing solutions to improve the legal frameworks of both countries.