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Chapter 1 · General Principles of Contracts in the · Qur‟n and the Sunnah

The methodology of the Shar‟ah in dealing with „ibadt (devotional acts) and mu„amalat, i.e., (transactions) is somewhat different in character. A thorough study of the Quran and the Sunnah on this subject reveals that „ibadt have been dealt with in detail, while mu„amalt have been discussed in general terms. The wisdom appears to be that „ibadt are held to be universal truths that are unaffected by time and space. They are not subject to modification or change by means of ijtihd or otherwise. As these fixed commandments were necessary and they have been provided for. The mu„amalt are matters pertaining to individuals interacting amongst themselves. The variety of this interaction is neither foreseeable nor capable of being complied with by a regime of fixed rules. They are also changeable in different epochs of time within various geographical entities. Imam ibn Taymiyyah explaining the difference between „ibadt and mu„amalt writes:

The acts and deeds of individuals are of two types: „ibadt (devotional acts) whereby their religiousness is improved and adapt (transactions) with they need in their worldly matters. An inductive survey of sources of the Shariah establishes that devotional acts are sanctioned by express injunctions of the Shariah. Thus, what is not commanded cannot be made obligatory. As for transactions, the principle governing them would be permissibility and absence of prohibition. So, nothing can be prohibited unless it is proscribed by Allah and His Messenger.1 In view of this, the Shariah has laid down rules in connection with mu„amalt in general terms so that different people at different places and in different times may seek guidance. By giving a general framework, the Lawgiver conceded the right to Muslim jurists to frame specific rules for mu„amalt, which may be deemed necessary under prevailing circumstances. This methodology envisaged by the Shariah provides people a reasonable degree of liberty in their dealings with each other and entering into contracts and transactions.

Keeping such treatment of the mu„amalt in Islamic law under consideration the broad principles can be elaborated as follows.

1.

Free Mutual Consent

Free mutual consent of the contracting parties is a prerequisite for the validity of a contract. This is the cause that brings into being the obligations arising from a contract. The consent that is required for the formation of valid contract is a free consent. A consent that is obtained through coercion, fraud, misrepresentation or some other illegal means renders a contract invalid in the Shariah. Similarly a contract made in a state of intoxication or by way of jest or through mistake is also invalid in Islamic Law. This is because the elements of free consent and the intention of the parties to enter into a contract and accept consequential obligations is missing in such cases. The principle of free mutual consent has been emphasized in a number of verses of the Qur‟n and Adth of the Holy Prophet (s.a.w.s.). A number of verses and traditions can be cited in support.

َيَا أَي ُّهَا الَّذِينَ آمَنُواْ الَ تَأْكُلُواْ أَمْوَالَكُمْ ب َي ْنَكُمْ بِالْبَاطِلِ إِالَّ أَن تَكُون

ْتِ َارَةًة َن ت َ َااٍض مِّمنكُم

Q1. Ibn Taymiyyah, al-Fatw al-Kubr, Beirut: Dr al-Kutub

1. you who believe, devour not your property among yourselves by unlawful means except that it be trading by your mutual consent.2

The Holy Prophet (s.a.w.s) said: “The contract of sale is valid only by mutual consent”.3 In another adth the Holy Prophet (s.a.w.s) said: “My people are forgiven for that which they have done through mistake, forgetfulness and under coercion”.4

The principle of free consent requires that the consenting parties have certain and definite knowledge of the subject matter of the contract and the rights and obligations arising from it.

2.

Prohibition of Gharar

Prohibition of gharar is another principle that governs all contracts and transactions. The Arabic word gharar conveys the meanings of indeterminacy, speculation, hazard and risk. As a technical term it is applied to uncertainty about the ultimate outcome of a contract, which may lead to dispute and litigation.

A contract is presumed to suffer from gharar if it is about:

(a) an occurrence about which the parties are unaware whether such in event will take place or not;

(b) a thing that is not within the knowledge of the parties.

(c) a thing about which it is not known whether it exists or not;

(d) a thing whose acquisition is in doubt; and

(e) a thing whose quantum is unknown.

Examples of transactions based on gharar are: sale of fish in water, birds in the air, a fetus in the womb, and fruits of trees at the beginning of season when their quality cannot be established.

2 Qur‟n 4:29 3 Muammed ibn Yazd ibn Mjah, Sunan, Istanbul: Dr al-Da‟wah, 1952 adth no. 2245. 4 Nr al-Dn „Al Haytham, Majma„ al-zaw‟id, Beirut: Dr al-Kitb al- „Arab, 1982, vol. 6, p. 250.