Valid Contract According to Sahriah Islamic Law

According to Islamic-World.net, the definition of Contract Islamic law is “a complex legal discipline in both its jurisprudential foundation and its practical function”. This is just applicable to Muslims and administered in the Syariah Courts. The Syariah Court is a state court, the state law is be used in the Syariah Court. And this is possessing civil jurisdiction. Besides, it is also a contract to meet the needs of the society, which comprises various dealings and transactions. There are several requirements for a valid contract according to Shariah/Islamic law: i.) subject of matter, ii.) contractors, iii.) wording of contract- offer and acceptance.

Firstly, Islamic Law stressed on several things regarding the subject matter of contract both items and consideration. For example: i.) lawfulness ii.) existence iii.) deliverability and iv.) precise determination v.) Legality

Lawfulness requires something to be permissible to trade, and its subject matter and the underlying cause must be lawful. Besides, the parties to a contract should legally own the object. Next, for the issues of existence, object must be exist at the time of contract. Islamic law requires that subject matter must be in existence at the time when an ‘aqd is concluded. Otherwise an ‘aqd is void, even if the subject matter would exist in the future. For example, selling a foetus yet to be born is void if the mother not part of the sale. Exception is given to bay al-salam such as advance sale payment for the future delivery), bay al-istisna (manufacturing contract), ijarah( hire contract) and musaqat(irrigation’ s contract) based on necessity and customs.

However, “deliver” emphasize that the object must be able to be delivered. Examples like camels that had fled, birds in the air and fish in the water are prohibited to be sold. Furthermore, the contract should be able to determine precisely the object’s essence, quantity and value. Moreover, the subject matter must be legal. Islamic law requires that subject matter must be of commercial value, otherwise an ‘aqd is void. For instant, the sale of the wine, blood, pork is void even if these articles are of value to others or according to civil law.

Next, in the point of view of contractors, the parties whose are related to this contract should be legally competent to enter into a contract. For example, they should be legally allowed to undertake the transaction. They should be mature. Two aspects are measure largely the mature, which are namely prudence and some meaningful puberty which is revealed into Quran: “Prove orphans till they reach the marriageable age; then if you find them if sound judgments, deliver over unto them their fortune”. (5:4). Lastly they should be in their senses while undertaking the transaction. This can be support by the case of Preston Corp. Sdn. Bhd v. Edward Leong dll. (1982). The Federal Court held that when an offeree intimates his/her willingness to enter into a legally binding contract, this will be considered as an offer.

Next requirement for valid Islamic contract which is as long as there are expressions of offer and acceptance, the Islamic law of contract recognizes express contracts and contract by conducts. Furthermore, the Islamic law of contract also described the two express contracts by conduct. However, Islamic law is maintain the contract’s session (majlis al-‘aqd) in sense, it will jointly connected the acceptance and offer in a one single session, this session don’t have contain any unnatural gap. The party who first manifests his willingness, by the use of the appropriate formula, to make a contract is said to be making an ijab. (Hanafis) This definition is similar to the word “offer” as used in conventional contract. For example, if a buyer in a sale of goods transaction offers to buy the goods from the seller by saying: “I bought this book from you for 100″. To which the seller replied: “I sold that book to you for 100″. In this situation, according to Hanafis’ view, it was the buyer who has said the Ijab being the first person who manifested the intention/willingness to contract.

On the other hand, according to the others’ view, the word of seller is the Ijab since he was the owner of the book, though his utterance came later.The same principle will be applicable when an offer is communicated by writing as it is simply a mere substitution of verbal communication. Thus, when an e-mail sent offering a specific object for sale for a specific price, this amounts to a valid offer which will be binding on the offeror upon its acceptance by the offeree. 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. By conduct, a person may intimate his intention to contract. In Fiqh it is better known as “mu‘atah”, “ta‘ati” or “murawadah”. This simply refers to the conduct of a seller; displaying commodities for sale attached to them its price and a simple statement such as “first come first served” (offer to sell). (Ijab according to all jurists) Likewise is the conduct of a buyer who takes the commodity and pays its price (offer to buy) (Qabul, according to Hanafis) and in return to this, the seller delivers the commodity to the buyer without any expression of words.

What is uttered later by the other contracting party that indicates his agreement upon and consent to accept the offer made by the first party is termed as Qabul (Hanafis) This definition is similar to the word “acceptance” as used in conventional contract.For example, if a buyer in a sale of goods transaction offers to buy the goods from the seller by saying: “I bought this book from you for 100″. To which the seller replied: “I sold that book to you for 100″. In this situation, according to Hanafis’ view, it was the seller who has said the qabul being the later person who manifested the intention/willingness to contract that is by accepting the offer. On the other hand, according to the others’ view, the word of the buyer is the qabul since the ownership of the book will be transferred to him although he was the first party to indicate the willingness to contract. Basically there is no specific proclamation or utterance that needs to be used to signify acceptance.

In addition, the contract terms shall bind on the offeror as soon as the contract has been accepted by the offeree, either expressly or implied. ’Except in contract for marriage where the jurists are differed in opinion, generally there is no specific words or terms specified the requirements to consider as an acceptance (Art. 3 of the Mejelle). 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). Or else, it will most probably not to be considered as an acceptance even though it may be so if the proposed modifications do not materially change the terms of the offer. Acceptance may also be made through conduct. For example, where there is an offer to buy, acceptance may take place by supplying the goods and likewise where there is an offer to sell and the commodity thus delivered, acceptance will be presumed once the commodity is used. But conduct will not constitute acceptance unless it is clear that the offeree does the act with the intention (actual or apparent) to accept the offer. Silence may not however constitute acceptance. So, when the goods have been delivered, the offered is not obligated to return them to reject the offer. The offerror cannot bind the offerree owing to his failure to return the goods.

Sale of goods (Malay States) Act 1957 divided by two sections, which is section 14(a) and section 14(b). In section 14(a), vendor who sells goods must possess the right to sell. Section 16 implies that “goods sold must be fit for the purpose for which they are sold and they should be of merchantable quality”. In section 14(b), it stated that “implied warranty buyer should have and enjoy quiet possession of the good’” and subsection (c) of the same implies that goods sold “shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.”