The digital transformation and the expansion of blockchain technology have led to the emergence of a new generation of contracts that operate based on data and algorithms. This evolution has shifted the traditional concept of contract termination toward the notion of an “automatic termination clause,” a mechanism through which a contract is dissolved without human intervention and solely upon the occurrence of predetermined conditions within a digital environment. The present study aims to explain the nature and legal status of this mechanism under Iranian law and to conduct a comparative examination of its counterpart—the mechanism of contract avoidance—under the United Nations Convention on Contracts for the International Sale of Goods (CISG). The theoretical foundation of this research rests on the principle of freedom of contract, the legitimacy of resolutory conditions in Shia jurisprudence, and general rules of contracts in Iranian civil law. The study employs a descriptive–analytical method based on library sources and international instruments. The findings reveal that the automatic termination clause in Iranian law is comparable to contract avoidance under the CISG in terms of being rooted in party autonomy, though its basis in Iran lies primarily in contractual agreement, whereas in the CISG it is grounded in legal order and economic considerations. In terms of effects, both mechanisms result in future dissolution of the contract while preserving prior obligations, and in technological settings they can be executed automatically. In conclusion, the automatic termination clause in smart contracts reflects a continuation of human intent through technology and serves as a tool for achieving contractual justice in digital environments. It also possesses the potential for theoretical and practical convergence with the CISG framework. The study further recommends legislative reforms and the development of digital legal infrastructures to ensure the effective and transparent implementation of such clauses within the Iranian legal system.