Islamic Jurisprudence Shabir

Ahmad

Define Contract under Islamic Law and its Essentials?

Introduction
The most important and prevalent mode of acquisition of ownership and possession of property is transfer by the act

of the persons, having legal title to another person. Such transfer is implemented by means of a mutual liability called

contract, which has a broader significance in Muhammadan Law than in English Law.

Meaning
(a) Derivation

The corresponding Arabic term for Contract is aqd.

(b) Linguistic Meaning

Literally aqd means conjunction or tie.

(c) Legal Meaning

As a term of Islamic jurisprudence aqd means conjunctions of the elements of disposition, namely, proposed (Aijab)

and acceptance (qubool).

Definition
(a) Article 3 of Al Mujallah

The obligations and engagements of two contracting persons in respect of particular matter. It expresses combination

of offer and acceptance.

(b) Sir Abdul Rahim

A contract is The conjunction of the elements of disposition namely offer and acceptance.

Contract in the Light of the Holy Quran

And keep the covenant, Lo! Of the covenant it will be asked. (BANI ISRAIL:34)
O ye who believe fulfill your agreements. (Al-Maidah:1)

Contract in the Light of Hadith

Prophet ( Peace Be Upon Him) said The Muslims will fulfill their settled contracts.

Essentials of Contract
Islamic Law specifies following four essentials of a valid contract.

(i) Faalia (Parties)

This cause appertains to the persons making the contract. A valid contract requires that there must be two parties

involved.

(ii) Maddia (Proposal and Acceptance)

This appertains the essence, namely, Proposal and acceptance. It is essential to constitute a valid contract that there

must be two parties, one parties, one party should make a proposal and the other should accept it.
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(iii) Suaria (Agreement of Minds)

This cause related to the outward manifestation, that is the minds of parties must agree and their declaration must

related to the same matter.

Illustration

A owns two houses, one in Karachi and second in Hyderabad. B offers him to buy one of his houses. B wants to buy

the house in Karachi and pursuance of the object he makes offer, but on the other hand. A accepts his offer

considering the house in Hyderabad as the subject matter of the contract. The contract is not valid because their

promises do not release to the same matter.

(iv) Ghyia (Legal Relationship)

This cause relates to the result aimed at, i.e, the object of the contract must be to produce a legal result. This is

regarded as the dominant idea of a contract in Muhammadan Law that it establishes a tie of legal relations arising

from the consent of the minds of two persons to deal with each other in respect of certain rights.

Illustration

A sells or gives an object to B. the former consents to pass on his proprietary rights therein to the latter who consent:

to take the property with whatever obligations might be incidental thereto, such as the liability to pay taxes if the

subject matter of the transaction be land, and to feed if the thing sold or given be an animal and in the case of sale,

also to pay the price. In the case of a gift, on the other hand, there is the moral obligation of gratitude on the part of

the done towards the donor, and Muhammadan Law does not ignore the moral aspect of a transaction.

Formation of Contract
Generally, Muhammadan Law does not require any formality such as English law but the following requirements have

to be fulfilled to form a valid contract.

(i) Declaration of Consent

All that is required, as we have seen, is declaration of consent by each party. The declaration which is first made is

called proposal and the second declaration is called acceptance. The two minds must be in agreement otherwise

there is not real consent.

(ii) Same Meeting (Majlis)

The proposal and acceptance must be made at the same meeting (Majlis), either in fact or what the law considers as

such.

Illustration
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A man proposes face to face to another to sell his horse to him, if the person addressed leaves the place without

signifying his acceptance the offer comes to an end, because there is no obligation on the owner of the horse to keep

his offer open.

But, if the offer is communicated by means of a messenger or a letter, the meeting for the purpose of acceptance is

held to be at the place and time the message reaches the person for whom the offer was intended. If the person then

signifies his acceptance the contract is concluded.

(iii) Use of Words

The Books speak of certain words as being plain (Surech) and certain other words as being allusive (Kinaya) in

relation particular kind of disposition. What is meant is that when a man has used plain language, there is not need

for inquiry as to what he meant, but such an inquiry becomes necessary when he has used ambiguous language. It is

not to be supposed that so far as contracts and dispositions relating to property are concerned that the mere

utterance of certain words without the corresponding intention as understood in Muhammadan Law, would effectuate

a transfer of property or create any obligation.

Conditions of a Contract
Following conditions are provided under Islamic Law for the validity of a contract

(i) Legal capacity of Parties

The validity of a contract depends first of all on the legal fitness of the person entering into it. If the persons making a

contract or disposition have not the necessary capacity, contract would be void altogether.

(ii) Fitness of Subject Mater

Another essential of a valid contract like that of any other juristic act is the fitness of its subject matter (mahal); if the

subject matter is not fit for he purpose, the contract relating there to would be void altogether.

Illustration

If A and B enter into a contract for the sale of a horse and while they discuss the sale price, the horse dies, there is no

consent, as the subject of the contract itself is extinct. Similarly, a marriage within prohibitory relationship is void ab

initio.

(iii) Free Consent

Consent is the essential of contract; where there is no consent there is no agreement and the consent should be free.

Illustration

The contract of marriage must be based on the free consent of parties; if the consent is not free the marriage is not

valid under Islamic Law.

(iv) The consent without knowledge of the Articles

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It is again necessary that a contract for an article which does not exist or which is defective apparently or otherwise is

ineffective is void.

(v) Consideration
This is an important factor but it can explained that in agreements where price is a deciding factor, the consideration

surely passes on to the other. As regards agreement of gift though there is no exchange of consideration, yet

the done is morally obliged to the donor.

Final Analysis
Hence for final analysis, we can say that a contract is a binding agreement between two parties which is

legally enforceable. The Rules regarding contract under Islamic law is very strict. Under Islamic law for a valid

contract there must be present four causes in the contract viz., faalia and maddia and suria and ghayia. The first

essential of valid contract is that parties must have reached agreement. To constituents of an agreement are Ijab and

Qabul which forms it into a promise which is enforceable by Law.

Additionally, the Western Jurisprudence defines contract as a promise or set of

promised. According to Islamic Law a promise may not be legally enforced although
it is strongly recommended by religious and moral values to be fulfilled. (Surah al-
Saf 61:2) (However Hanafi School of Law is of the view that a promise coupled with
condition is legally enforceable) Therefore a breach of promise to marry does not
give a cause of action according to Shari'a but may be enforceable by civil law (see
Article 50 of the Civil Code)

From the hadith, the Prophet (PBUH) expressly stated that Muslims are bound by
their conditions (Narrated by Al-Bukhari), except condition to make lawful what is
unlawful and to make unlawful what is lawful (narrated as the continuance to the
first hadith by al-Asqalani)
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Mutual consent of parties is the basis for formation of a contract. This is

emphasised in the Quran, eg, in surah al-Nisa 4:29 where it says: O you who
believed! Eat not up your property among yourselves in vanity, but let there be
among you trade by mutual consent. Similarly the Prophet is reported to have
said: It is unlawful to take the property of a Muslim except by his consent.
However consent is an intangible mental fact. Therefore this intention must be
manifested in sufficient form of words/conduct that indicates a definite intention to
contract

It is unanimously agreed that verbal communication will be the best way to

manifest the consent of the contracting parties. The Malikis & Hanbalis accept as
a sufficient manifestation of consent anything that is customarily regarded as
indicative consent. The Shafii accepts writing as manifestation of consent. The
Hanafis are of opinion that writing, conduct and even gesture are acceptable to
manifest consent.

Offer

Gestures represent an exception that may be used by dumb people. Article 70 of

the Mejelle stipulates that for dumb people, a sign or gesture is equal to speech.

SUBJECT MATTER

Muslim jurists had laid down four conditions for the subject matter:

1. It must be in existance at the the time of the contract

2. It can be delivered

3. It can be ascertained

4. It must be suitable for transactions according to Shari'a

Acceptance

When the acceptance is made verbally or in writing, it is necessary that it does

correspond to each element of the offer without any condition, limitation or
modification (Art. 177 of the Mejelle)
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O you who believe! When you deal with each other in transactions involving future obligations in a

fixed period of time, reduce them into writing.

Qur'an 2: 282
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