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Tuesday, June 26, 2012

Define contract? What are the ingredients of a valid contract in Islamic law?

Q. Define contract? What are the ingredients of a valid contract in Islamic law? (1994, 1999, 2000, 2003, 2004/A, 2005/A, 2006/A)
Q. Discuss the ingredients of a contract under the Islamic civil law. (2002, 2003/S)
Q. Define contract. What are the essentials of valid contract in Islamic law? (2007/A)
1. Introduction

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.
2. Meaning of contract
The corresponding Arabic word for contract is “Adq” which has its both legal and literal meaning.
(I) Literal meaning:
Literally it means conjunction, tie, knot.”
(II) Legal meaning:
(i) The union of the declaration of one of the contracting parties with that of the other in a legal manner, the result of which is reflected in their subject matter.”
(ii) “A contract or adq is any statement or word that has the effect of legally binding a person too fulfill an obligation or to perform a duty.”
3. Importance of contract according to Quran and Sunnah
(I) The Holy Quran says:
“And keep the covenant. Lo! Of the covenant it will be asked”. (Al-Isra: 34)
“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.”
4. Formation of contract
The formation of contract does not require any formality under Islamic law. In this regard offer and acceptance are essentials.
5. Ingredients or essentials of contract in Muhammadan law
Following are the ingredients or essentials of contract.
(I) Plurality of parties
A contract requires that there should be two parties to it, at least. Any one person cannot from a valid contract.
(II) Aijab and Qabul
Ijab and Qabul or proposal and acceptance are the constituents of a contract one party should make a proposal and the other should accept it.
‘A’ Offers to sell his car to ‘B’. ‘B’ accepts his offer. It is a contract.
(i) Conditions for Ijab 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.
‘A’ says to ‘B’ I have sold this car to you for 10,000 ‘B’ replies I have accepted it for 8,000.” 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.
‘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.
(c) Acceptance before the termination of offer
Acceptance must be made before the termination of offer, otherwise the contract cannot be made.
(III) Mahall Al Aqd (subject-matter of contract)
The mahall-al-aqd is the thing for which an agreement has been made, and in which the effects of the contract are visible. It is almost same as the term consideration in English law.
(i) Conditions of Mahall al Aqd
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.
(c) It must be known to the parties.
(IV) Capacity to enter into contract

The parties must have the capacity to enter into the contract. They must be sane, major etc.
(V) 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.
(VI) Free consent
The consent of the parties must be free and genuine. It must not be obtained by coercion, undue influence, fraud, mistake or misrepresentation.
(VII) Fitness of Mahall
It is subject matter is not fit for the purpose, the contract relating there to will be void altogether.
(VIII) 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 e. g. contracts in restraint of trade etc.
6. Conclusion
To conclude, I can say, that 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.



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