The document discusses the subject matter of contracts in Islamic law. It states that the subject matter refers to anything exchanged in a contract, including goods and consideration. It then lists examples of subject matters for different types of contracts, such as goods for a sale contract and usufruct for a lease contract. The document outlines conditions for a valid subject matter, including that it must be lawful, existing, deliverable, and precisely defined. It also discusses the purpose and effects of contracts, and how parties' intentions may differ from contractual purposes. Muslim jurists differ on whether hidden intentions invalidate contracts if outward requirements are met.
The document discusses the subject matter of contracts in Islamic law. It states that the subject matter refers to anything exchanged in a contract, including goods and consideration. It then lists examples of subject matters for different types of contracts, such as goods for a sale contract and usufruct for a lease contract. The document outlines conditions for a valid subject matter, including that it must be lawful, existing, deliverable, and precisely defined. It also discusses the purpose and effects of contracts, and how parties' intentions may differ from contractual purposes. Muslim jurists differ on whether hidden intentions invalidate contracts if outward requirements are met.
The document discusses the subject matter of contracts in Islamic law. It states that the subject matter refers to anything exchanged in a contract, including goods and consideration. It then lists examples of subject matters for different types of contracts, such as goods for a sale contract and usufruct for a lease contract. The document outlines conditions for a valid subject matter, including that it must be lawful, existing, deliverable, and precisely defined. It also discusses the purpose and effects of contracts, and how parties' intentions may differ from contractual purposes. Muslim jurists differ on whether hidden intentions invalidate contracts if outward requirements are met.
subject matter is applied to anything that is exchanged in the contract. It includes both the commodity and the consideration. The subject matter of a contract differs from transaction to transaction. In a sale contract the subject matter refers to the sold item. Cont’d
In a lease (ijarah) contract it refers to the
usufruct. In a transfer of debt (hawalah) it is the debt that is transferred. In an agency (wakalah) it is a service. In a partnership it includes the capital contributed by the partners while in mudarabah contract it includes the capital and the labour or expertise. Conditions of the subject matter • Muslim jurists have attached great significance to the subject matter of a contract. They have laid down various conditions in order to ensure that the property, usufruct, or the service on which a contract is concluded is permissible, free from ambiguity and uncertainty (gharar), in existence, deliverable and properly defined. 1. The legality of the subject matter : The property on which a certain contract is concluded should be valuable (mutaqawwim). A valuable property is a property which is permissible in Islamic law (Shari’ah) and could be secured and possessed. A contract which involves a non valuable property or a property, which is not secured , or possessed, is void . For example, contracts involving fish in the sea or birds in the sky are void as they are not considered valuable property as they are not possessed and secured. • Similarly, contracts involving prohibited (haram) items such as wine, intoxicants, pigs, blood , idols, crosses and statues are not valid as Muslims are prohibited to do business in forbidden things. • Purpose for which a certain transaction is concluded should be lawful. It must not go, for example, against public interest, public order or morality. • Contracts with immoral aims or those , which are harmful to the public morality, are void. • For example, when a rented house is used as a gambling casino or rented machinery is used to produce alcoholic beverages. In both cases the house and the machinery are valuable properties but the purpose for which they are used is prohibited. 2. Existence of the subject matter: the property on which certain contract is concluded should be in existence while the contract is concluded. The wisdom behind this prohibition is the possibility of uncertainty (gharar) which may arise when a contract is concluded on non existence properties. An exception is in Salam (forward contract), or the future provision of a certain commodity which is specifically permitted by the Prophed ( S.W.A). Muslim jurists have also argued on the grounds of necessity and Istihsan for the contract of Istisna’ (contract of manufacture). Istisna’ involves future products, manufactured or provided for by a prior order. However, the subject matter must be specifically defined and precisely determined as to its quantity, quality and the time of is delivery. Similarly, the price also must be agreed upon and ascertained in advance. 3. Certainty of Delivery: the delivery of the subject matter must be certain. The party to a contract must have complete ownership over the property and possess it. He must be capable to deliver the goods or the services. For example, the sale of debt and the sale of a bird in the air , or a fish in the sea are prohibited on these grounds. • Similarly, a contract to perform a service, which is not certainly possible, is prohibited. The significance of this principle is to avoid conflict that may arise out of a contract where the delivery of the subject matter or a certain service is not possible. 4. Precise Determination of the Subject Matter : if the subject matter is present at the session of the contract, the knowledge of the subject matter is attained if it is seen. If the subject matter is not present at the session of the contract, it should be precisely determined. It should be clearly defined and sufficiently described in a way that would dispel all elements of ignorance (Jahalah). The genus, species, quality and quantity should be clearly described. • The definition given must be sufficient to render the subject matter of the contract distinguishable from other goods. • Similarly, when the object of a contract is an obligation or performance, or a service, its nature and value must be precisely determined. This condition is designed to prevent ambiguity and the resulting conflicts between the parties. The purpose and effect of a Contract • In Islamic law of transaction each contract has a certain purpose and effect. • The purpose of a contract refers to the main purpose for which people use that contract. • The effect of a contract refers to its consequences or results, and the rights and liabilities of the parties. • For example, the purpose behind a contract of sale is to enable the parties to exchange their counter values with mutual consent while its effect is the transfer of ownership from the seller to the buyer in return for a consideration or compensation. • The purpose of a lease contract is to allow the tenant to use the leased asset while its effect is to transfer the ownership over usufruct to the tenant with consideration. • The purpose of Kafalah contract is to provide a guarantee to the creditor while its effect is to enable creditor to claim his debt either from the principle debtor or the guarantor. • The purpose of lending things (al-’iarah) is to give the borrower the permission to use the borrowed item while its effect is to transfer the usufruct without consideration. • The purpose of transfer of debt (hawalah) contract is to help a creditor to recover his debt while its effect is to transfer a debt from the principal debtor to a third person or the transferee. • The parties are at liberty whether or not to enter into a certain permissible contract . • However ,once they have concluded the contract they are automatically entitled to its purpose and effect. • Islamic law has so jealously guarded the purpose and effect of each individual contract that it has prohibited any condition that would change the purpose and the effect of a contract. • Thus, the parties who enter into a certain contract achieve its predetermined purpose and are entitled to its predetermined effect. EXPRESSION (IRADAH ZAHIRIYYAH) AND HIDDEN INTENTION (IRADAH BATINIYYAH)
Conflict between the purpose of a
contract and intention of the parties: It is possible that the parties may conclude a contract for a purpose other than for which it is intended. In this case the purpose or motive of the contracting parties differs from the purpose of the contract. • In this case the purpose or motive of the contracting parties differs from the purpose of the contract. They may have an unlawful purpose or motive when they conclude a lawful contract. • For instance, a sale contract is normally used to meet the mutual needs of the parties for the sold item and the price. • However, a person may sell his properties to his close relatives or others in order to avoid creditors who have obtained a bankruptcy order against him. The parties have concluded a sale contract not because they are in mutual need of the counter values but for the purpose of avoiding the creditors to recover their debts. • Such a sale contract may have fulfilled all the pillars and conditions related to the expression, the parties and subject matter. • However, the purpose for which it is concluded is not a valid purpose. • Similarly, the parties may enter into a repurchase agreement (bay al-inah) whereby one of them sells a certain asset for deferred payment and repurchases the same asset for lower cash price. • The purpose for which the two sales are concluded is not to purchase the item or commodity as it reverts to the initial seller but to provide cash to one of the parties who would later have to pay a higher deferred price. • Similarly, a gift is given for a purpose to show appreciation and strengthen relationships. However, it could be used as camouflage for a bribe. • A person may also use the gift contract to transfer all his wealth to his wife and children at end of certain period to avoid zakat. • It is also possible that a person may make a gift in favour of one or some of his heirs to deprive other heirs from inheritance. • In all these examples the purpose of the contracting parties and the purpose of the contract itself are not in agreement. • However, when a contract of such a nature is concluded all its pillars and conditions concerning the offer and acceptance, the contracting parties and the subject matter are fulfilled. The unlawful purpose itself is never referred to in the agreement. Questions that may arise 1) Is it sufficient for the validity of a contract to fulfill its pillar and conditions? 2) should contract be concluded for a purpose for which it is intended by the Shari‘ah? 3) Should we also take into account the hidden intention and purpose of the contracting parties while determining the validity of a contract? 4) Does the existence of invalid intention make a contract void? Views of Muslim Jurists
Muslim jurists are of two opinions on the
issue of hidden intention or purpose. 1) The Shafi‘is and Hanafis look at the agreement itself and the purpose of the parties as expressed in the agreement. They don't look beyond the agreement at the hidden intention or motive of the contracting parties. Cont’d
They argue that the Shari‘ah requires that
the parties should enter into a certain permissible contract by mutual consent and fulfill all its pillars and conditions. According to them once the parties enter into a properly concluded contract the question of bad or good or hidden intention or motive is irrelevant to the validity of the contract. Cont’d
According to them, bay al-‘inah, the sale
of grapes to a person who would make wine, the sale of arm during the civil war, and ziwaj al muhallil are contractually valid (sahih) although they are makruh tahrim to the Hanafis and haram to the Shafiis if the parties intend to use them to obtain an unlawful purpose. Cont’d
2) The Malikis, Hanbalis, and the
Shi‘ah Fiqh Schools, on the other hand, look at the hidden intention/motive or purpose of the parties while deciding on the validity of a contract. Cont’d
• According to them, if the motive or
purpose of the parties is unlawful, the contract is also void. For example: They view a gift to the people in authority as a bribe. The profit in a repurchase sale (bay‘ al-‘inah) is similar to lending charges or interest added to a loan. Fictitious (false, fictional or assumed to be true) Contract (al-‘Aqd al-Suri)
A- fictitious contract is a contract
where there exists offer and acceptance (iradah zahiriyyah) by the parties but the intention (iradah batiniyyah) to conclude the contract is absent. Cont’d contracts made by mistake, coercion, and contracts made for an unlawful purpose are considered fictitious. Acts and contracts made in jest are not valid unless they relate to marriage, divorce and ruj‘ah . A contract made for an unlawful purpose such as giving gift to people in authority or repurchase sale (bay‘ al-‘inah) are also considered fictitious. WASSALAM