Formation of a Contract, a Fiqhi Perspective.
Islam is very clear on the subject of the formation of a contract, that is, a group of stipulations that both parties intend on sticking to, in the pursuit of mutual benefit. Despite the various types of contracts in Islam that are not necessarily trade-related, the prototype of these contracts is found in buying and selling (al bay’), the student of Fiqh or researcher in this area will begin to realise that the various types of contracts in Islamic law all tend to follow the structure of buying and selling.
In buying and selling, Islam puts some stipulations on who can buy and sell, this person should be at the age of maturity, of sound mind, and free, this is because to buy or sell, one must have an intention which requires mental faculty, an ability to own property, and the ability to make sound decisions, the absence of such traits would inhibit a person’s ability to trade within an Islamic paradigm. The parties also need to agree on what exactly is being bought and sold, the formation of a contract cannot occur if what is to be bought or sold is unknown (gharar), a farmer for example, is not able to sell the milk of one of his cows if that milk has not yet left the udder of the cow, nor can a person ‘sell you their car’ without detailing the make, the year, etc. This is to ensure that the seller enters the contract knowing what to expect from the seller.
On instructions from the Qur’an and numerous Hadith, Islam places great emphasis on mutual consent in buying and selling, Islam strictly forbids the sale of goods under duress, and the Qur’an explicitly stipulates the need for both parties to be pleased with the state of affairs (taradin) before the sale becomes binding. Through this, we see that Islam gives autonomy to the individual with how they wish to spend their money, the autonomy of the individual is a common theme throughout contract law in Islam. Given that wealth is attributed to its owner, state intervention is not stipulated in contract law, so long as two parties, agree to enter a contract, it is not a matter for the state to involve themselves in such agreements.
Once the item has been agreed upon, and both parties are happy with the price being paid, the next step is for the sale to take place, this is done by the giving of the offer (ijaab) and its subsequent acceptance (qabul). Traditionally, the scholars of Fiqh stipulated that this must be done verbally, however, a concurrent view amongst the scholars of Fiqh was that the changing of hands was sufficient, this latter view has now become the mainstream, and it appears to be most in line to what is found in the Qur’an and Sunnah and the actions of the early Muslims. The scholars of Fiqh refer to the setting in which the sale takes place as the (Majlis) lit. place of sitting, according to the rulings of Fiqh, even after the exchange of goods at the majlis, the binding nature of the sale will only occur once the parties depart from the majlis, as long as they remain within the majlis, they remain under a grace period wherein both parties have the choice (khiyar) of rescinding the deal and going their separate ways. This article may sound long-winded, but if a person walks into a shop to buy a can of Coke, they have, knowingly or unknowingly, followed the rules of Islamic trade in buying and selling.
