Transaction In Islamic Law

TRANSACTION IN ISLAMIC LAW •DEFINITION •THE PILLARS OF A CONTRACT •DISSOLUTION OF A CONTRACT •COMPARISON ISLAMIC LAW OF CONTRACT AND MALAYSIAN LAW OF CONTRACT

DEFINITION • In Arabic language refers to ‘aqd • Originally means tying tighly, as in tying a rope. • Also means make a covenant “aqad al ‘ahd’” • “aqd al yamin” to mean give an oath • It also carries the meanings of covenant and fulfillment • In Islamic jurisprudence usage means an engagement and agreement between two persons in a legally accepted, impactful and binding manner.

The pillars of a Contract a) Ijab (positive proposal) and Qabul (acceptance) b) The existence of two properly and aptly qualified contractors c) A format (sighat) d) Subject matter

a)Ijab and qabul Is confirmation The offer made by the first party to a contract It gives and confirms the freedom of acceptance to the second party If the second party agrees, then his statement is called qabul. The coming together of ijab and qabul makes up the contract

b) The existence of two properly and aptly qualified contractors.

It refers to the parties to the contract It is a condition of a valid contract that the parties possess capacity According to jurisprudents, it is quality which makes a person qualified for acquiring rights and undertaking duties and responsibilities.

Continue… These capacities are  a). Wujub (rights) that a person is entitled to all his legal duties; b). 'Ada (performance, action) that a person is qualified to take action which is legally valid. It is doesn't exist before a person acquires proper mental awareness and become discerning and reaches age of maturity.

c) A format (sighat) Means the the utterances expressing the wills of the two parties, showing the purpose of contract and bringing it into existence after it had been a hidden and unknown thing or intention. Jurist agree on that contract is concluded by using the past tense of the verb by the two parties, like when the first party says "I sold" and the second says "I bought" or "I am selling you this (commodity) for that (sum of money), " and other says, "I accept"

d)Subject matter The place of reference in contract is its subject matter which is the place of application of its rules and does not go against its purpose It should: 1) In principle be something legal otherwise the contract is nugatory, 2) it has to be specified and defined in way prevent ambiguity, and 3) it has to be existent.

DISSOLUTION OF A CONTRACT

Dissolution is breaking "INHILAL FASKH" in Western jurisprudence The theory of dissolution  The theory of dissolution passed through different phases in Western jurisprudence before it became an established theory relied upon by law. Roman law, in the beginning, did not recognize dissolution of contracts at all. It stipulated that each party in a contract had to abide by it and execute its obligations, separately from the obligations of the other party. None of the parties had the right to dissolve the contract on his own part; he could only demand that the other party execute his (the other party's) obligations. Nevertheless, Roman legists had to permit dissolution of a sale contract after this became based on mutual agreement and after they modified. It and included in it a condition which allows the seller to dissolve the contract if the purchaser did not pay the price.

 This was adopted by the ancient French which permitted dissolution of contract in such a case. It went a step further and stated that a seller can dissolve a sales contract if the buyer did not pay the price even if this was not stipulated in the contract originally. However, dissolution in this case could not be done except by a court order Dr AI-Sanhuri remarks that "When French civil legislation copied the principle of dissolution from the Romans, it was influenced by the Roman composition. In article 1184, it stated that the dissolution condition is implied in the contracts of mutual commitment in the case where one of the parties did not perform his contract obligations. This states nothing more than the rule which permits dissolution in situations where the debtor did not pay his debts.

The theory of dissolution in Islamic jurisprudence Islamic Shari'ah views a contract as a commitment which should be adhered to dissolving a contract is a very serious matter which should not be permitted except in the narrowest sense and the most serious of cases Islamic Shari 'ah did not open the door for dissolution of contracts for trivial reasons. The aim behind that was to preserve stability of transactions and dealings among people, and to teach them how to respect and keep their commitments and obligations. The Quran commands the believers to keep their contracts and their commitments

The principle of non-dissolution of contracts in Islamic Shari' ah is not a general comprehensive rule to be applied in all cases and on all contracts. Islamic jurisprudence views the commitment of each party as independent from that of the other. The buyer is committed to paying the price and the seller is committed to handing over the sold subject and transferring ownership. If one of the two parties fails to keep his side of the contract, the other party has the right to demand that the other party execute his obligations, but he does not have the right to demand the dissolution of the contract. This is a general rule. However, there is an exception to this rule which permits dissolution of the contract that is in the case of the destruction of the sold subject while it is still in the possession of the seller. Likewise, the destruction of a rented object renders the rent contract dissolved as we have seen in our discussion of the theory of contingencies.

sum up: dissolution to be 1. theTo contract mustfor be of mutual commitment, effective several conditions that is binding for both parties, must exist: 2. one of the parties fail his commitment, 3. the other party must have the ability to fulfill his commitment and to bring things back to their contractual state after the dissolution, and 4. The party demanding dissolution should warn the other party of his intentions first.

"A" reached an agreement with "B" that "B" build a house for "A" after "B" receives an initial payment of $ 50,000 from "A". Then, before paying this money to "B", "B" filed a case against "B" demanding dissolution of the contract. In this case, "B" is not right in suing "B"; rather, he has to do his part by paying the money to "B" first, and then demand that "B" fulfill his commitment. Giving ample warning to the second party is a prerequisite before demanding dissolution. This is a good measure which helps the judge in considering the case and in responding to the demand of dissolution; it also makes him nearer to taking a decision concerning damages besides dissolution.

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