CONTRACT ISLAMIC
The contract in Islam form the basis form Quranic Verse 2:282
“O believers! Write down your transactions regarding future commitments in a certain
timeframe. Let a scribe write faithfully as between the parties. Allah has taught him to
write. Let the debtor decide, but let him dread Allah and not reduce his debt. If the party
liable is mentally deficient, weak, or unable to dictate, let his guardian dictate faithfully,
and get two witnesses, out of your own men or a man and two women, such as you
choose, so that if one errs, the other can remind her. Witnesses must testify. Disdain
not to reduce to writing (your contract) for a future period, whether it be small or big: it is
more just in the sight of Allah, more suitable as evidence, and more convenient to
prevent doubts among yourselves, but if it is a transaction you carry out on the spot
among yourselves, there is no blame on you. If you create a commercial deal, take a
witness and don't hurt them. Doing such harm would be evil. So fear Allah—it's
excellent to educate. Allah knows all. If you cannot find a scribe while travelling, a
pledge with possession may work. If one of you entrusts something to another, let the
trustee diligently fulfil his responsibility and fear his Lord. Whoever hides evidence is
stained with guilt. Allah sees everything”
Islamic contract definition is “a statement of the matching between one contractor's
favourable proposal and the other contractor's acceptance that affects the contract's
subject. ". Shariah commercial law, also known as fiqh muammalat, deals with contracts
and their legal ramifications. Shariah law requires several requirements for legitimate
communication. The offeror, offeree, subject matter, and compensation make it a
legitimate contract. Contract parties must be legally capable. Prudence and puberty
determine Islamic law transactions.
Legal debates about, among other things, financial and business transactions imply
Islamic conceptions of contract. The parties, the offer and acceptance procedure, and
the topic or subject matter are the three fundamental components of a contract. Fiqh
mandates certain formal requirements for all essential contract components. A human
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being must be a party to the agreement. Instead of using the term specifically, the
Islamic legal system recognises the concept of juristic individuality based on Islamic
praxis and treatment of certain Islamic schools. Therefore, as long as their
representatives handle the link, entities including corporations, schools, hospitals,
orphanages, and mosques can have a presumed personality and enter into contractual
agreements. The majority of Islamic nations in the Middle East have adopted this idea
into their legal frameworks.
The contractual party must be of legal age (Baligh), and they must also be mature and
capable of taking constructive action. Furthermore, while entering into contracts, minors
and crazy parties must always have custodians looking out for their interests. Interim
guardians must adhere to a few requirements, nevertheless, including having full legal
ability, being immune from punishment, and having a contract that won't harm children.
The offer, acceptance, and idea of the parties are the key components of a contract.
The offer and acceptance, or "version of the agreement" (Seaghat Al-'Aqd) as
academics refer to it, must adhere to the following requirements: They need to be
transparent, truthful, steady and consistent with one another, and exact. Contracts may
be negotiated verbally or in person in Islam. A contract is created when an offer is
accepted. Conclusions can be made in one of two ways: either the discussion meetings
have come to an end (khayar al-majlis) (negotiability during the discussion sessions); or
one party has given the other a clear choice regarding whether to accept or reject the
contract's conclusion (takhyear), and the other party has expressly accepted the most
recent proposal. The potential buyer accepts the offer made by the item's vendor.
It is the most significant contractual need, in Hanafis' opinion. In accordance with
Islamic law, a contract may be made orally or in writing (the latter being given
precedence in Quran 2:282), using any wording that are permissible under fiqh, with the
exception of marriage contracts, which must explicitly imply "to marry." Intentions are
important for some schools of thought, such Malakies, but they are only marginally
important for Hanafis. Hambalies use a middle ground approach, contrasting the
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significance of words and actions with the significance of intentions. Malakies claim that
good contract completion necessitates signs. Priority is given to making the offer and
accepting it simultaneously. The general norm is that a proposal may be retracted at
any point until acceptance, but Malakies think that once an offer has been made, it
cannot be withdrawn.
According to Islamic law, a contract must be devoid of compulsion (Ikrah), blatant
ignorance of the subject matter (ghalat), blatant disparity between the parties'
advantages (ghabn), fraud (tazweer), and dishonesty (tadlees), among other things.
A contract's aims and provisions must be reflected in its clear terminology and structural
coherence. Dr. Sharaf-Al-Deen insisted on a contract that was concise, decisive, and
paragraphed. The majority of parties believe that they should instruct their solicitors to
write their contract at the conclusion of discussions, however they may have
misinterpreted the goals of their rivals. Most issues start here. To achieve linguistic and
legal clarity, the lawyer should be present from the beginning of the negotiation process.
The traditional prerequisites for a contract's object are: It must be lawful in and of itself;
It must be accessible or eligible to participate in the future since unimaginable topics are
void; It must be valid for the contract's customary legal effects, be overseen by the
contractor or, in the event of a representative, their head, be able to be monitored, be
recognisable (unknown qualities of the subject matter may be a nullity), and be genuine.
A contract's clauses might contain anything that isn't specifically prohibited..
Islamic scholars appear to have differing views on how much latitude contractors are
allowed to fulfil a contract. The majority does, however, concur on the fundamental
issues; there are only minor differences amongst them. According to the first viewpoint,
which is shared by Hanbalis, Malakies, and Shi'a, contracting parties are free to engage
into any arrangement they see fit, provided that it complies with Shari's rules and
precepts.
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There is no standardized objective type since there are so many different types of
contracts, including loans, gifts, sales, purchases, hires, rentals, and pawns. Any
location of the contract, however, must adhere to Islamic law's interpretation of
contracts; for example, in a sale contract, the object must not only exist, but its features
must also be described. Whether a contract is legally binding or not determines its legal
effect. Lease, hire, buy, lease, and loan are some contracts that can be ended
bilaterally. On the other hand, contracts that can be dissolved unilaterally include
obligations, guarantees, and suretyships.
Commutative contracts, like marriage contracts, underpin civilization. Commutative
contracts must meet certain criteria to be valid. Hanafis distinguish between contract
legality and contract fulfilment (Shurut-al-in-iqad). Shurut-al-in-iqad requires an item to
exist, be financially valuable, lawfully useable, the seller's property, and fit for delivery.
Emphasise the object's pros and cons. Purchase consideration can be any legally
saleable object. Khiyar-al iradiyya (voluntary alternatives) in commutative contracts can
be enforced by any party. Khiyarat iradiyya has two basic types: shart and tayin. Khiyar-
al-ayb and Khiyar-al-ru'ya are implied in the. Malakies consider Khiyar-al-ru'ya khiyarat
iradiyya. Khiyar al-ayb requires the vendor to disclose any faults, and if they are not, the
buyer has two days to reject the goods. Shafi defines Khiyar-al-ru'ya as buying without
seeing. Gharar invalidates this. Khiyar-kash-al-Hal addresses measuring and malic.
Khiyar-al-ta'yin is a timed choice from a selection of similar things. Khiyar al-ghabn
occurs when the seller benefits unfairly without the buyer's knowledge. The Hambalies
and Malakies say the unfair enrichment is at least one-third of the traded item.
Islam officially forbids Salam, which is a contract in which the entire sum is paid in
advance for the delivery of a legal good at a later time (Mawardi, Hawi).
Joint partnerships (shirakat milk) and contractual partnerships (shirakat 'aqd) are the
two types of partnerships, or shirakat. Joint partnership (inherited property shared by
two brothers) is not a contract because it does not result from an offer and acceptance
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and serves no purpose. A contractual partnership has all the characteristics of a
contract, including an offer, acceptance, and purpose. In addition, the parties are
obligated to fulfil fiduciary responsibilities and have the ability to dissolve the agreement
jointly. The highlighted paragraph needs more details.
Ijarah is a type of trade that combines the employment of both humans and animals as
well as the leasing of goods. Ijarah, which is used to hire human labour, and Kira, which
is used to rent an object or animal labour, are distinguished by Western Malakies. It is
possible for both direct and indirect language training to produce this agreement. Dogs,
runway animals, and anything that have been illegally taken away are not acceptable
contract fulfilments. Renting requires a term or specific action. A hired person could be
used frequently and distinctively. For the creation of a legal contract in the event of
shared usage, a job description is necessary; however, in the case of exclusive use, the
length of the employment is sufficient. Various contract kinds all have compensation as
a fundamental element. The Hanafis distinguish between voidable and unenforceable
contracts. Contracts that aren't legal lack a defined price and performance. Hanafis
holds that a contract is invalid with the death of any party.
One arrangement in which the debtor's responsibility for the debt is transferred to a third
party is the Hawala.
This section's focus is the contract type. Agency can be created by an independent
contract or by implication, such as in the context of a partnership. The link between
Wakil and Muwakkil. During his lifetime, Wakil is given the authority to act on Muwakkil's
behalf; after death, he will naturally become wasiyya. A kid, a slave, or a persistently
insane person cannot be Muwakkil. Wakil is bound by the same limitations, but as a
minor, he must act responsibly. Wakil may work for pay or for free, but he has a duty of
care to the Muwakkil and is responsible for any damages that result from negligence.
The pieces of Gharar shall make up Wakil. Hanafis are prohibited from acquiring
common, openly accessible land, including forest wood. Unless it can be shown that
there is implicit permission, the actor cannot act contrary to the principle.
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Deposit is a type of agency that is based on a fiduciary relationship and is only
concerned with the characteristics of property and safekeeping. The depositor (mudi),
the depository (wadi), and the thing put (ayn) are the three participants in a jaiz
transaction. Any format may be used to show the offer and acceptance, but the parties
must be identified and emphasised. Negligence in a fiduciary relationship is actionable,
but gharar shouldn't exist. The depository may seek court action if the depositor does
not pay for storage expenses.
Need a suggestion and approval Rahn, which may be any valuable asset that will be
returned upon the repayment of borrowed money, is a security against a loan. Hanafis
disagrees with this reasoning, arguing that the pledger would not profit from the
property's fruits. Slaves may also be sold, but the sale is deemed void and ineffective if
the mother slave is not sold with her children.
Considerations are not really necessary for gifts. Hanbalis argue that a vague thing may
be offered for the purpose of giving, even if it is generally accepted that the donated
item must belong to the giver, exist, and be delivered. A gift cannot be subjected to any
restrictions.
Sharia law cases follow the contract criteria. Nash v Inman: Fletcher-Moulton LJ. “An
infant, like a lunatic, cannot make a contract of purchase, but if a man supplies
necessaries to the infant or lunatic, the law will imply an obligation to repay him and
enforce that obligation against the estate. The defendant's father named them to
establish infancy and clothes. Undisputed proof. The judge's decision was unaffected by
cross-examination and other evidence”. Bell V Lever Brothers Ltd: Lord Atkin stated:
“The law on error and contract seems obvious. Errors void consent. Parties may
misrepresent themselves, the contract, or its quality. These blunders may have legal
repercussions depending on who committed them. Thus, if it is apparent that A.
intended to deal only with B., his incorrect conviction that he is contracting with C. will
negative consent. Thus, A. and B.'s purchase agreement is invalid if the item dies
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before the transaction.” Ghose vs. Bibee. The mortgage was nullified by the Privy
Council. The court also denied the moneylender's plea for the minor's mortgage
repayment. The defendant claimed that Dharmodas had declared to be a major when
the contract was made, and if the declaration was false, he was entitled under sections
64 and 65 to receive back the money he had advanced to Dharmodas, but the Privy
Council rejected that plea and noted that Section 64 and 65 are not enforceable in
cases where no contract exists, and since it was made with a minor, no contract
existed.
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