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Introduction to Contract Law in Islam<br />Junaid Mirzajunaid@islamicfinanceboard.com<br />
Outline<br />Definition<br />Pillars<br />Conditions<br />2<br />
Constracts / Instruments in Islamic Finance<br />
Definition of a Contract<br />Islamic Law<br />Liguistic: ‘aqd – tying tightly, as in tying a rope<br />Legal: an engageme...
Definition of a Contract of Sale<br />… the exchange of an owned commodity for another in a specified manner or the exchan...
Pillars of a Sale Contract<br />Hanafis<br />Ijaab – positive proposal<br />Qabool – acceptance<br />Other jurists<br />Pa...
Conditions of a Sale Contract<br />The Contractor<br />Sane and able to run his own affairs<br />Legal age is not as impor...
Conditions of a Sale Contract<br />The Contract<br />The offer and acceptance must correspond to each other<br />The Place...
Conditions of a Sale Contract<br />The Object<br />The object of sale must exist (i.e., cannot sell non-existent objects o...
Other Conditions<br />The object of sale and the price are known beyond dispute<br />The object is made known to the buyer...
Questions?<br />11<br />
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Introduction To Contract Law In Islam

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An brief introduction to the contract law in Islam, specifically with respect to the conditions and pillars of a basic sale contract.

Introduction To Contract Law In Islam

  1. 1. Introduction to Contract Law in Islam<br />Junaid Mirzajunaid@islamicfinanceboard.com<br />
  2. 2. Outline<br />Definition<br />Pillars<br />Conditions<br />2<br />
  3. 3. Constracts / Instruments in Islamic Finance<br />
  4. 4. Definition of a Contract<br />Islamic Law<br />Liguistic: ‘aqd – tying tightly, as in tying a rope<br />Legal: an engagement and agreement between two parties in a legally accepted, impactful and binding manner<br />Common Law<br />an agreement between competent parties, upon a consideration sufficient in law, to do or not to do a particular thing<br />Civil Law<br />an agreement which commits a person or a group of persons to give something, do something, or refrain from something to another person or group of persons<br />4<br />
  5. 5. Definition of a Contract of Sale<br />… the exchange of an owned commodity for another in a specified manner or the exchange of an owned commodity for another in a beneficial and special manner, excluding unbeneficial exchanges (e.g., exchanging one coin for a similar one) or that which is of no use (e.g., dust, dead animals)<br />… the exchange of an owned commodity for another with the exchange of ownership<br />5<br />
  6. 6. Pillars of a Sale Contract<br />Hanafis<br />Ijaab – positive proposal<br />Qabool – acceptance<br />Other jurists<br />Parties – buyer and seller<br />Object / Subject – what commodity / service<br />Price – at what consideration<br />Language of the contract – ijaab and qabool<br />6<br />
  7. 7. Conditions of a Sale Contract<br />The Contractor<br />Sane and able to run his own affairs<br />Legal age is not as important as ability to run affairs<br />If ability of a child is in question, sale is valid only in case of purely beneficial dealings<br />Multiplicity of contractors (i.e., a single legal proxy cannot conclude on behalf of both parties)<br />Exceptions include a father, a legal guardian, or a judge in a court case<br />7<br />
  8. 8. Conditions of a Sale Contract<br />The Contract<br />The offer and acceptance must correspond to each other<br />The Place<br />The acceptance is made in the same ‘session’ as the offer<br />8<br />
  9. 9. Conditions of a Sale Contract<br />The Object<br />The object of sale must exist (i.e., cannot sell non-existent objects or objects that may cease to exist)<br />The object of sale must be good (i.e., must be beneficial in nature)<br />The object of sale must be privately owned and in possession of the seller<br />The object of sale must be deliverable at the conclusion of the sale<br />9<br />
  10. 10. Other Conditions<br />The object of sale and the price are known beyond dispute<br />The object is made known to the buyer by physical examination or ample description<br />The price must not change after the contract has been executed<br />The sale is not temporary (i.e., not timed)<br />The sale is beneficial<br />There are no conditions that may make the contract ‘corrupt’<br />The seller has the absolute authority to sell the object<br />The contract is executed under mutual consent (i.e., no coercion)<br />10<br />
  11. 11. Questions?<br />11<br />

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