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ISLAMIC JURISPRUDENCE -2

TOPIC : CONTRACT

1. INTRODUCTION

The most important and frequent mode of acquisition of ownership is transfer by an act of parties.

Such transfer is affected by means of a contract (Aqd). Which as a technical term has a wider

signification in the Muhammadan law than in the English law.

Contract law ensures the parties to private agreements that any promises they make will be

enforceable through the machinery of the state. Islam attaches great importance to keeping of

promise. In case promises are not kept faithfully it will result in great confusion and mistrust. And

Islam also emphasis on the fulfillment of contract and breach of contract is regarded as one of the

characteristics of a hypocrite.

2. MEANING OF CONTRACT

The corresponding Arabic word for contract is “Aqd” which has its both legal and literal meaning.

(II) Literal meaning:

Literally it means conjunction, tie, knot”

(II) Legal meaning:

(i) “A contract or Aqd is any statement or word that has the effect of legally Binding a person

to fulfill an obligation or to perform a duty.”

(ii) In legal practice it means conjunction of the elements of disposition i.e. proposal and

acceptance.

3. DEFINITION:
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(I) Muslim jurists defined contract under the light of the practices of the Prophet (PBUH): It is

a covenant, a treaty, or an engagement.

(II) Majallah: defines: “ The obligation and engagement of two contracting parties in respect of

a particular matter. It expresses combination of offer and acceptance”

(III) Sir Abdur Rahim says: “ The conjunction of elements of disposition, namely offer and

acceptance”

4. IMPORTANCE OF CONTRACT ACCORDING TO QURAN AND SUNNAH

(I) The Holy Quran Says:

“O Ye who believe fulfill your agreements” (Al-Maidah: 1)

“Such as keep the pact of Allah, and break not the covenant” (Ar-Rad: 20}

The Sunnah of Holy Prophet (Peace be Upon Him) shows the importance of keeping the

agreements.

He says:

“He who has no respect for keeping promises, does not possess deen.”

5. FORMATION OF CONTRACT

There are no fixed rules for making a valid contract under the Islamic law. In this regard offer and

acceptance are essentials. A contract may either be oral or written.

Jurists have given following conditions for the formation of a valid contract:

(a) Legal capacity of the parties

(b) Lawful subject matter

(c) Physical transfer of subject matter

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6. INGREDIENTS OR ESSENTIALS OF CONTRACT IN MUHAMMADAN LAW :

Following are the ingredients or essentials of contract.

a. Plurities of Parties

A contract requires that there should be two parties to it, at least. Any one person cannot form a

valid contract.

b. Proposal -Aijab) and Acceptance -Qabul ( Madiah)

It is an essential to constitute a valid contract that must be two parties. one party should make a

proposal and the other should accept it. The offer and acceptance should be lawful.

Example:

‘A’ Offers to sell his car to ‘B. ‘B accepts his offer. It is a contract.

i. Conditions for Aijab and Qabul

Following conditions have been laid down by the jurists for the valid offer and acceptance.

(a) Conformity offer and acceptance

It is necessary that the acceptance must conform with the offer and any variation in the acceptance

made it a counter offer.

Example:

‘A’ Says to ‘B’ I have sold this car to you for 10,000 ‘“B replies I have accepted it for 3,000.” This

is not a valid acceptance and hence there is no contract.

(b) Must be in same session

The offer and acceptance must be made at the same meeting, either in fact or what the law considers

as such.

Example:
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‘A’ says to ‘B’ I want to sell my horse to you. ‘B’ says nothing and leaves the place. The offer

comes to an end and ‘B cannot accept it later.

© Acceptance Before the termination of offer

Acceptance must be made before the termination of offer, otherwise the contract cannot be made.

c. Lawful Subject Matter and Object (Mahall Al Aqd )

The subject matter and object must not be forbidden under Sharia. Consideration must be lawful

as well as, non- objectionable. Under State law ( Contract Act, 1872) a contract opposed to any

statue or public policy is unlawful.

i. Conditions of Subject Matter

The subject matter must have legal value.

(a) It must be in existence at the time of the contract.

(b) It should be potentially capable of delivery at the time of the contract.

© It must be known to the parties.

d. Competent Parties (Faa’lia)

The contracting parties must be competent to enter into a contractual relationship. i.e. They must

be sane, major, owner etc.

e. Lawful Consideration:

The consideration must never be unlawful, as for an unlawful consideration, a contract becomes

unenforceable.

f. Legal relation

The contract must be to establish legal relations arising from the consent of the minds of two

persons to deal with each other in respect of certain rights of theirs.

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g. Free consent

The consent of the parties must be free and genuine. [t must not be obtained By coercion, undue

Influence, fraud, mistake or misrepresentation.

h. Fitness of Mahall

It is subject matter is not fit for the purpose, the contract relating there will be void altogether.

i. Legal contract

A contract must be lawful or legal a contract is legal if it is not contrary to Islamic law e. g. contracts

in violation of the prohibition of riba or contrary to public policy @. G. contracts in restraint of

trade etc.

7. COMMON AND IMPORTANT CONTRACTS:

Some of the most common contracts taking place in society are:-

A) SALE CONTRACTS: It is an exchange of property for money, Following are major kinds of

sale:-

I) Bai (Sale) : It refers to the sale of a fixed article including house, or land for price.

Example: Selling a house in exchange for a specific amount of money

II) Barter: It is the exchange of an article for an article of equal value such as cotton

for grains. The exchange of goods without involving money.

III) Surf: It is the exchange of money for money e.g rupees for dollars.

IV) Salam: It is where price is paid in advance and article is to be sold in future. i.e.

booking orders.

Following are the conditions of a valid sale:-

I) The commodity must be in existence at the time of sale

II) The subject matter must be known

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III) The transaction must not have an element of gambling or uncertainty.

B) HIRE CONTRACT: Hire contract is known as Ijarah. It include contracts letting of things,

moveable or immoveable, such carriage of goods , getting a car for fare or rent.

C) SERVICE CONTRACT: They include contracts of specialized services of a person such as

professional services, domestic services etc.

D) LOAN CONTRACT: Here a thing is handed over, to be returned once purpose is

accomplished, without getting anything in return.

E) PLEDGE CONTRACT/ MORTGAGE CONTRACT : It is detention of property on account

of certain loan, The person giving loan acquires a special right in the property until loan is repaid.

Pledge is for movable things, While mortgage is for immoveable things.

8. PERFORMANCE OF CONTRACT UNDER SHARI’AH:

A contract with the intention of creating legal consequences. It’s with faithful execution is a

religious duty. Also Holy Quran and the Sunnah of Prophet ( PBUH) always stressed on the

fulfillment of contractual obligations.

Treaty of Hudeybia

Even at the time of treaty of Hudeybia, holy prophet ( PBUH) returned Abu Jandal to the Quresh

who fled from the custody of the Quresh, And wanted to protection of Muslims, at that time treaty

of Hudeybia was not yet signed, but holy prophet ( PBUH) kept his words. And returned him to

Quresh due to contractual obligations or terms of treaty of Hudeybia.

This shows how much Islam emphasizes on fulfillment of contracts.

9. REVOCATION OF CONTRACTS:
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Contract, under Islamic law, can be revoked either by agreement, notice, death, destruction of subject

matter or operation of law.

10. CONCLUSION:

To conclude, I can say, A contract is an agreement which is enforceable by law and the law of

contract In Islamic law is more or less similar to that of western law. The dominant idea of a

contract in Muhammadan law is that, it establishes a tie of legal relations and it is the most

important and frequent mode of acquisition of ownership.

The Texts in Islam have emphasized on fulfillment of contracts, once they are entered into and

holy Quran treats it as one of the features of Momin. Muslim scholars have discussed in detail,

different rules regarding elements, classification, performance and revocation of contracts, out of

which some have been discussed in this chapter.