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BAYERO UNIVERSITY, KANO

FACULTY OF LAW

LECTURE NOTE ON

MU’AMALAT I (LAW 3309)

DELIVERED BY: MALLAM OMAR HUSSEIN

SEMESTER: FIRST

LEVEL: 300

COURSE OUTLINE

1. General Principles of Islamic Law of Contract,2. The Essentials of a Valid Contract;

a. A statement of contract,b. Al Aqidan (The Contracting Parties),c. Mahal Al Aqd (Subject Matter)d. Consideration

3. The theory of the meeting place4. Al – Khiyarat (The Options)

GENERAL PRINCIPLES OF ISLAMIC LAW OF CONTRACT

Today’s commercial practice found in our market especially in Kano, it does not differ muchfrom what was obtained prior to introduction of Islamic Legal System. The history, memory orname will reveal to us that prior to the Islamic law of contract each business, transaction, tradingor any forms of commercial system that there are in existence, norms, customs and usagegoverning or regulating the practice. For those vast in the area of Islamic history, will find thatthe Messenger of Allah (SAW) was an accomplished businessman who know so much and vastin the knowledge of the principle of Islamic law of contract with the establishment of Islamic lawof contract.

The Islamic principle of the law of contract was subjected to the following test;

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First Stage: that the norms, customs, usage and rules found to contradict Shariah completelywere all prohibited.

Second Stage: that the norms, customs, usage and rules found not to be totally contradicting, theShariah are modified.

Third Stage: All the above traditions found not be contradicting the Shariah were all allowed.

The following are the major sources of Islamic law of contract;

i. The Qur’anii. The sayings of the Messenger of Allahiii. The consensus of the Ulamahiv. The Ijma

It must be noted that during the reign of Al-Khulafah Rashidun to date, Muslim scholars startedexpanding the literature, jurisprudence on principles of law of contract and other commercialactivities. Rich materials are made available as a result of those works which are found in severalvolume of work.

You are to note that jurists develop several of legal regimes that provide framework and legalsolution to any emerging problem.

DEFINITION, MEANING OF THE TERM AL–AQD

Muslim jurists are of the opinion that the following terms convey or create the concept of right,interest and obligations and which they connote contract, these are;

1. Aqd (Obligation)2. Al – Wahad (Promise)3. Amanah (Trust)4. Al Yaman (Oath)5. Bay (sale)6. Ahad (Contract or Obligation)

Muslim jurists relied on the following terms to provide the definition. The term they relied on isAl Aqd which literally means a tie and simply means that it is to tie a rope from two ends by wayof proposal of Ijab (offer) and Qabul (acceptance).

In technical terms, jurists define Ijab and Qabul as a connection that exist between twostatements (offer and acceptance). For a contract to be valid, effective, binding and enforceable itmust fulfill the basic requirements and the basic requirements are;

1. Offer and acceptance (a statement in contract technically called Al-Sigha),2. Al – Aqidan (the contracting parties),

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3. Mahal – al – aqd (the subject matter of the contract)4. Al – Saman (consideration).

27th May, 2015

The general rule for a contract or any transaction to be valid, the following rules must befulfilled;

1. Consent: For a basic validity of a contract, consent of the contracting parties is verysignificant. The rule is that the consent of the contracting parties must be free, devoid ofignorance, uncertainty, misrepresentation, cheating, fraud, error and it must also be freefrom Riba (usury), also must be free from any attribute of game of chances and gambling.The jurists are of the opinion that any contract or transaction should be free and theQur’an chapter 4 verse 29 and the Holy Prophetic Hadith which provide that “there is novalid mutual sale without a consent”, the above textual authorities highlighted thesignificance of consent and they stipulated that consent must be free and protect theintegrity of consent.

2. A contract should be devoid of Garar (uncertainty): Garar is defined by the jurists asspeculation, hazard and risk. Technically jurists defined Garar as a contract where thequantum is unknown or where the subject matter does not exist or is a contract where theparties have no knowledge of it meaning. The parties are unaware whether the sale willtake place or not. The messenger of Allah (SAW) prohibited any transaction that containsan element of Garar.

3. The contract should be free of Riba (usury): Riba has been described by the jurists as anincrease or growth or unlawful gain. The following text in the holy Qur’an clearlyprohibited Riba and that the prohibition of Riba appears eight times in different verses ofthe Holy Qur’an Q 2 v 275, 2 v 276, 2 v 278, 3 v 130, 4 v 161, 30 v 39.

4. Contract should not contain an attribute of Gambling and Game of Chances: It isconsensus of the Muslim jurists that gambling which is a form of increase and moneygained which depend entirely on luck or chance, if a Muslim business man acquired alottery draw or he purchases, or a Muslim that make a slot in gambling machine or aMuslim that acted on an SMS or text message that he has won certain amount of money,jurist describe such situation as unlawful and forbidden practice for any Muslim and alsoamount to getting a gain without working for it. The following Qur’anic text clearlyprohibited gambling and game of chances Q 5 vs. 20.

5. Contract should be free from Fraud and Cheating: Jurist are of the opinion that fraudand cheating is a practice such as give short measurement, false biding to rise a price,false swearing, hiding of defects. Therefore, such practices are unlawful and illegal. Thefollowing text of the Qur’an clearly prohibits fraud and cheating Q 83 v 1-3.

6. Two Mutually Inconsistent Contracts are not allowed: The messenger of Allahprohibited two mutually inconsistent contracts which involves sale of two articles at twodifferent prices, sale of a single object at two prices.

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7. Contract should not be contrary to the objective of the Shariah

OFFER AND ACCEPTANCE

What is an offer (IJAB)? Jurist define offer as a declaration or manifestation of intention tocreate legal relationship by competent contracting parties, such declaration must be free fromvitiating elements. In other words jurists are of the opinion that it could be any word pronouncedfor instance if A says to B I make you owner of my house and B replies I accepted, juristsdescribe this as a definite promise that bounds the parties together. The person making the offeris referred to as offeror and the person accepting the offer is the offeree.

Acceptance (QABUL): Jurists define qabul as a response to declaration made by the offeror thatwhen an offer is accepted the product is an agreement that binds the parties.

Conditions and Validity of Offer and Acceptance

Offer and acceptance must be expressive of intention of the contracting parties. Offer and acceptance must be made by mukalaf i.e. a competent person. Offer and acceptance must conform to each other. Offer and acceptance must be communicated in the meeting place of the contracting

parties. Offer and acceptance must be free from misrepresentation, fraud and the like. Offer and acceptance must be made on a lawful object.

Means of Expressing Offer and Acceptance

Offer and acceptance can be expressed in any of the following manners;

Oral (Bil Kalam); Jurists are of the opinion that spoken words or expression is an effectivemeans of making offer and acceptance especially if the parties are in the same meeting place orthey are over the phone or they are online.

By Way of Writing (Bil Kitab): In the opinion of the Muslim jurists, offer and acceptance can bevalidly made through writing such as by way of letter writing, sending of an email or an SMS(Short Message Service) or by any other electronic means.

Through Al-Rasul (Agent or Messenger): Jurists are of the opinion that if the offeror makes adeclaration to the agent and the agent communicated same to the offeree then a valid offer is inoperation and the offeree is given an opportunity to make up his mind on either to accept orotherwise. The Jamhur of the jurists are of the opinion that any offer made by an agent is validbut in the opinion of the Maliki jurists the agent or a messenger must be a trustworthy person.

By Ishara (Gesture): A valid offer and acceptance can be express through Ishara, however,jurists express different of opinion on the validity of the use of Ishara. In the opinion of theJamhur of jurists, that the use of Ishara is only valid for deaf and dumb person. Imam Shafi’i

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who is part of the Jamhur added that if the deaf and dumb can read and write then the offershould be made to them through writing while in the opinion of the Maliki, he accepted anycontract made through Ishara without attaching any condition, he also added that such Isharashould be clear and understood and he relied in Q 19 V 10-11. Maliki also added that Isharareduces the language barrier that may exist between the contracting parties.

By conduct (Bil Fi’l): Offer and acceptance can be expressed by conduct, by the Jamhur of thejurists offer and acceptance can be made by conduct but conduct is not valid for contract ofdivorce. In the opinion of Imam Maliki that conduct is a valid means of constituting a validcontract, he also added that custom, usage which is accepted by a society for constituting acontract by conduct is allowed.

Silence: The general rule is that silence cannot be used to constitute a valid contract therefore inthe opinion of the jurists a silent party has no statement in contract. The above general ruleaccommodates the following exceptions where jurists are of the opinion that silence connotesconsent in the following;

Silence of a virgin girl where her consent is sought for marriage Silence for the beneficiary of the Wasiyyah Silence of the beneficiary of WAQF, in the case of KABARA vs. KABARA (2000) 13

NWLR Pt 683 Pg 10.

Al-Sigha: This is the second essential of a valid contract without it no valid contract. Sigha isdefined by the jurists as a means of ascertaining or establishing the existing offer. In practicevalid lawful contract create legal consequences therefore, consent of the contracting parties is themain pillar for any valid contract i.e. contract cannot exist without a statement unless someonehas made an offer to enter into a valid legal relationship and another person responding to it.Therefore the significant of Sigha is to ascertain or establish. Jurists are of the opinion that Sighaconsist of the following;

The Present Tense The Future Tense The Imperative or Command Tense In a Question Form The Past Tense

The Present Tense: In the opinion of Abu Hanifa, when an offer is made in the present tense itconveys the following;

A momentum action that may take place now or in the future for instance if Y says to Z I amselling this car to you and Z replies am buying it. In the opinion of Abu Hanifa am selling ambuying is not accomplishing a valid contract until when the seller clarify his intention. He addedthat when present tense is used it simply means that the contract is meant for the future. Maliki

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jurist on the other hand is of the opinion that when the present tense is used it does not bind thecontracting parties i.e. when the parties express their offer and acceptance in the present tensethey never intended that contract. Imam Shafi’i is of the opinion that when present tense is usedit reflects the period the parties intended to form their intention. Therefore, if the intention hasnot been formed the offer and acceptance is invalid but if one of the contracting parties is able toascertain or establish the intention of the other party the contract is MOKUF (suspendedcontract) meaning that the party with the offer will be made to clarify his intention.

Future tense: In the opinion of Abu Hanifa when future tense is employed by the contractingparties then the intention of the contracting parties that the actual sale SHALL take place in thefuture for instance A says to B I am selling my Toyota car to you and B replies I will be buyingit. In the opinion of Abu Hanifa the response by B is that the legal obligation will take place inthe future. In the opinion of the Jamhur of the jurists that any contract which involve future tenseshould not be allowed. In the opinion of the contemporary jurists when future tense is used suchcontract is valid especially in contract of BAY ASSALAM or manufacturing contract.

Command or Imperative Tense: In the opinion of Abu Hanifa that any offer express by way ofcommand and if there is a response to it i.e. there is acceptance, the contract is formed but is notbinding. Imam Maliki on the other hand is of the opinion that whenever command tense is usedto express offer and acceptance, the contracting parties never intended that contract, therefore it’snot binding. Shafi’i and Hambali are of the opinion that any contract formed through commandtense is a valid contract.

Question Form: It is the unanimous opinion of the Muslim jurists that any contract formed byway of question form, such contract is void due to the fact that the contracting parties lack theintention and statement in the contract.

Past Tense: It is the opinion of the entire Muslim jurist that past tense is the most ideal form offorming a valid contract under the Shariah as the past tense express the intention of thecontracting parties for instance “I sold my car to you” “I bought it”.

Withdrawal of Offer

Muslim jurists express differences of opinion with regards to withdrawal of an offer. In theopinion of Abu Hanifa, Ahmad and Ibn Hambali, a valid offer can be validly withdrawn at anystage. They argued that it is only equitable, fair and just to allow the offeror to withdraw his offerand this may be against the background that the offeror might have made a mistake whenexpressing the offer therefore he should be allowed to withdraw his offer. They also added thatduring the length of the offer the offeree was given an opportunity and reasonable time to reflecton the offer before he indicated his acceptance. Imam Maliki on the other hand is of the opinionthat once an offer is communicated and the offeree responds to it, the offeror lack legal basis andit is morally wrong on his path to withdraw his offer because he/she has already created anobligation. Maliki added that the offeror must have made up his mind before expressing or

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communicating his offer but if the offeror persisted on withdrawing the offer then in suchsituation he must subscribe to an oath before a competent court and the Judge or Alkali mustmake a declaration to that effect.

AL AQIDAN (CONTRACTING PARTIES)

This is an essential of a valid contract. Jurists defined Al-Aqidan as a person (mankind,institution, and organisation) that can enter into a formal agreement. Legal capacity of thecontracting parties is a base pre-requisite needed to be established before a person can be seen toenter into a valid transaction. This legal capacity is technically referred to as AHLIYYAH.Ahliyyath is the capacity required in the part of the contracting party and Muslim juristsconsidered the following;

1. Al – Bulugh (Puberty).2. Al – Aql (sanity or mental awareness) – this is the basis of taklif technically

called judicial responsibility.3. Another component of Ahliyyah is maturity and Muslim jurist refer to it as the

ability of the contracting parties to understand things better i.e. the contractingparties should be able to take into account the legal consequences of the contract.However, maturity is a matter of debate among the earlier and contemporaryjurists. The earlier jurists are of the opinion that sound judgment which is calledAr-Rushd is an essential of maturity.

What is Ahliyyah

Ahliyyah has been defined by the jurist as the quality by which a person becomes fit for what heis entitled to or for the discharge of legal obligation to which he is liable in the eye of theShariah. For a contracting party to enter into a contract he/she must have the above listedqualities.

Another definition of Al-Ahliyyah is the ability to make the contract. The parties must be fully ofsane, physical condition, with a healthy mental awareness. It must be noted that not every personcan make a legal contract e.g. a minor, an insane person and any person not capable of makingdecisions due to possession of mental faculty i.e. Al-Aql, intellect/intelligence is the basis oftaklif. Islamic law concerns itself with the effect of lack of sanity and capacity of contractingparties. Therefore, minorship, insanity, duress, intoxication all affects a mental awareness.

Legal capacity is primarily divided into two (2) types;

1. Capacity to receive rights and obligations, and2. Capacity for active exercise of rights and obligations.

With regards to the first type of capacity to receive, jurist described it as excessive capacity andthey are of the view that every mankind is indulge with legal capacity in one kind or another.

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Excessive legal capacity is defined by the jurists as the ability of individual to receive rights andobligations on a limited scale.

Whereas active legal capacity enable the contracting parties to fulfill their rights, establishinterest and discharge their obligations. To effect a valid act or transaction such person bears fullresponsibility towards Allah and his fellow human beings. It must be noted that with regards tothe first classification, jurists regard that stage as Ahliyyatul Wujub and this covers stage one andtwo of man with relation to his Ahliyyah and the basis of his life. Ahliyyatul Wujub has beendefined by the jurist to mean the fitness for Al-hukum Al-taklif i.e. obligatory rules. Anotherdefinition for Ahliyyatul Wujub is a fitness of a person to claim right, interest from individualsand institutions and also regarded as a fitness of a person to establish for him certain rights andfinally as fitness of a person to claim what he is entitled to.

Classification of Ahliyyatul Wujub

Ahliyyatul Wujub is divided into the following two (2);

1. Ahliyyatul Wujub Al-Naqisah2. Ahliyyatul Wujubf Al-Kamila

With regards to Ahliyyatul Wujub Al-Naqisah, it refers to incomplete fitness as contained understage 1 and 2 of man with relation to his Ahliyyah. Jurist describe it as a capacity of a person toreceive right such as right to inheritance, right to gift and right to waqf. At this stage, such personeither an unborn child, such person has no statement in contract and they are not in position tomake a valid contract and no valid contract could be constituted in their names, such persons arenot liable for any wrong and that no parent or legal guardian can make any contract in theirnames.

While Ahliyyatul Wujub Al-Kamila is also covered by stage 2 of man in his relation to hisAhliyyah, this is a situation where an unborn child is born alive and at this stage he enjoys Al-Dhimma up till the age Tamyiz.

Ahliyyatul Wujub Al Kamila also covers the third stage of man with his relation to his Ahliyyahand at this stage what matters is the ability to receive right and interest with no correspondencein responsibility. Under Ahliyyatul Wujub Al-kamila is that at this stage the minor can start todistinguish between right and wrong. This ability to distinguish does not give the personcontractual capacity or disposition even though the person at that stage can understand things andhe may exhibit intelligence of mind but still he has no contractual disposition i.e. he cannot makea valid contract obligation.

Al Sabiyyu Al Mumayaz is defined by the jurist as an intelligent minor who has reached the ageof seven (7) and can distinguish right from wrong and he may possess ability to understand thingbut he has no ability to understand the legal consequences of a contract.

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However, the position of the law is that a minor who destroys someone’s property or physicallyinjures a person for his tort his parent or legal guardians are responsible to pay compensation forthe victim, for his injury or crime, the parent or legal guardian can pay from his property.However, jurists are of the opinion that under the doctrine of necessity, Al Sabiyyu Al Mumayazthrough his guardians can enter into the following contracts;

1. Contract of Education2. Contract of Health Services3. Contract of Shelter

Ahliyyatul Ada on the other hand is not called the active legal capacity. It has been defined bythe jurist as the ability and competency of a person to discharge obligation. Jurist referAhliyyatul Ada as age of taklif, here a person becomes Mukalaf. He or she is competent to makea valid contract and their statement in contract is always view in a keen interest. The bases forAhliyyatul Ada are;

1. The existing of a mental awareness, and2. Maturity

It is the unanimous opinion of the Muslim jurist that Al-Ahliyyah i.e. the legal capacity eitherWujub or Ada is the attribute of mankind. However jurist differs on what constitute maturityunder Ahliyyatul Ada, some of the views is that active legal capacity is only acquired uponattaining certain level of intellectual maturity and competent. In that regard a person whounderstands his act, his statement is competent to conclude a contract and discharge anobligation and he can be held liable for his contract or be punished for violating the law,therefore, active legal capacity is found in the capacity of the mind to understand events.However, jurists are of the opinion that intelligence is a hidden fact or the quality of intelligencesometimes is apparent and in some regard is hidden.

Therefore not every person who attained the age of puberty is regarded as an intelligent person.Intelligence is factual and must be established. Islamic law pays attention to intellectual facultythan the age of puberty; jurists regard intelligence as the bedrock of legal capacity.

Ahliyyatul Ada is classified into two;

1. Ahliyyatul Ada Al-Naqisah (Incomplete legal capacity), and2. Ahliyyatul Ada Al-Kamila (Complete legal capacity)

Jurists discuss active legal capacity and the following three situations are envisaged by them;

1. To have legal capacity i.e. when a person may be totally enjoying active legal capacity,such person is not suffering from any of the factors that impedes the legal capacity suchas insanity (al junoon),

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2. The second situation with regards to active legal capacity is where a person may bepartially lacking active legal capacity such as person suffering from a lucid mind, aminor, and

3. The third classification is a person may be totally lacking of active legal capacity such asmad person, sleeping sickness, death illness etc.

Jurists are of the opinion that under the active legal capacity, if a person is enjoying a partialactive legal capacity even though he is indulges with al-aql; he has no statement to the contract.However, he can make contract under the doctrine of necessity. Also, a person that is mentallychallenged when he regains his senses he can conclude a valid contract. Other jurist are of theopinion that he can contract a voidable contract provided that such contracts are totally of benefitto him and they can do so without the consent of their guardians but if the contract is injurioussuch as contract of gift or pronouncing a divorce then such contract is not valid at all even if theirguardians approves it.

Jurist also discussed the concept of freedom of contract under the second classification of activelegal capacity i.e. complete active legal capacity. Jurists are of the opinion that on the attainmentof the age of puberty, the law is that such person enjoying the freedom of contract and he can dowhatever he wishes, he can have control over his properties. However the Jamhur of the juristsare of the opinion that puberty or maturity is not sufficient to allow a person to enjoy the freedomof contract. It must be established or proven that such contracting person possesses Al- Rushd(sound judgment) to this end see Q 4 V 6.

Abu Hanifa on the other hand, is of the opinion that if somebody attains puberty and he attainedthe age of 25 and in other narrations 28 years, he should be given the freedom over his affairsand contract.

FACTORS OR IMPEDIMENTS FOR ACTIVE LEGAL CAPACITY

AL – AWARIDH SAMAWIYYAH: In the consideration of Al-awaridh we have come acrossAhliyyatul Wujub and its classification and the basic feature of Ahliyyatul Wujub is life. Withregards to legal capacity, two attributes/features are significant to the active legal capacity, theseare;

1. The mental health sometimes called sanity, and2. The attribute of majority.

The active legal capacity which addresses the ability of a contracting party to undergo anycontract, there are factors or causes that affect the Ahliyyatul Ada, these causes are of two (2)types;

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1. Factors SAMAWI: These are factors or causes that are beyond the control of mankind.Jurists describe it as the state or condition of mankind after birth and before theattainment of age of puberty.

2. The second classification are MAUKTASABA meaning that its factors that are acquiredand these factors or causes affect the legal capacity and is created by mankind in whichthe mankind have the will and choice to control it.

Jurist consider the following as factor from the heaven or involuntary impediment to legalcompetency, we have,

1. Al-Junoon – Insanity,2. Lucid mind,3. As-Sigar – minorship,4. Marad al Maut – death illness,5. Al-Nisyaan – forgetfulness,6. Marad Naom – Lose of consciousness,

Al – Junoon: what is insanity? Insanity is a disease that affects the mind and therefore destroysthe mental health of the sufferer It is an illness that may appear at the birth or before theattainment of Al-Bulugh (puberty). It affects al aql (the intellect of the affected person) and if heremains in such condition, a person is deprived of his mental capacity. Insanity is of two types;

a. Permanent insanityb. Temporary insanity

Jurists are of the opinion that an affected person by Permanent Insanity is a person that is totallylacking competence to exercise any of his rights and discharge obligations. Jurists also addedthat an affected person cannot enter into any financial transaction. Therefore, his contract is donethrough his guardian provided that such contracts are of benefit to him and also he is not liable ifhe damages or causes any damage to another person’s property but he is liable in his property.

With regards to Temporary Insanity is described by the jurists as a disease of mind or conditionthat appears after birth but before the attainment of the age of puberty. Temporary insanity is asituation where by an affected person his aql/ intellect is affected and when so affected he loseshis consciousness. But he may regain that conscious and at this he regains his memory.

Jurists differ with regard to the legal effect of a contract of a person suffering from temporaryinsanity/lucid mind. In the opinion of some of the jurists, if the affected person regains hisconsciousness and remains in the same condition, he is competent to enter into any contract.However, in the field of medicine, they are of the opinion that such a person may not have a totalmemory therefore he is not liable if he exercises his right to contract. The reason for that is thatsuch a person is not liable if he fail to exercise the right of Allah.

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Jurists argued that human intellect is so important to any contractual disposition, therefore, if onthe attainment of complete active legal capacity and the mind becomes restricted which is apractical situation, then such person may become incompetent with regards to his right and theexercise of the capacity depends in his condition of mind. Therefore, he should not do any act tomisuse al-aql. The Qur’an severely condemned the misuse of mind see Q 7 vs. 179 and Q 8 vs.22. These two verses simply provide that no human action can be carried out well and correctlywithout using human intellect correctly.

Marad An- Naom (Loss of Consciousness): This is technically described by the jurists as lose ofconsciousness. It is a situation where a person cannot be able to exercise his right or discharge anobligation. It is a natural phenomenon that affects the mental awareness, power and body senseof the affected person. Jurists regard marad an-naom as one of al-mawani (impediment) of activelegal capacity. It is the unanimous opinion of the Muslim jurists.

It is important to note that al-hukum taklif the insane person or a person suffering from maradan-naom is not under obligation to perform any duty due to their state of mind. The Messenger ofAllah is reported to have said that “the pen is lifted against three persons;

a. A child until he grows up,b. A person who is sleeping until he is awake, andc. An insane person until he recovers”.

Jurist understood the above text under al-hukum taklif that the three categories of personsmention have no any obligation to perform any religious duty by virtue of which they cannotenter into any contractual obligation. However, they may be held liable under the law of tort buttheir guardians will be held liable for any damage. But for their crime they are not liable but fortheir property will be held to compensate the victim.

Marad Al Maut (Death Illness): Jurists describe death illness as an illness that causes theapprehension of death. It creates anxiety and destroys the mental state of the sufferer. Due to thefact that the affected person is under a severe condition due to been worried, and the pain ofanxiety, the Muslim jurists described death illness as one of al-mawani to active legal capacity.However, Muslim jurists differ with regard to the validity of contract of marriage of the affectedperson. On the other hand, jurists also express different opinion with regard to the validity ofdivorce of an affected person.

AN-Nisyaan (Forgetfulness): It has been reported that the Messenger of Allah said that “myUmmah are not subjected to liability when

a. They committed a mistake,b. An-Nisyaan i.e. forgetfulness, andc. When they have been coerced”.

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Jurists are of the opinion that forgetfulness is one of al mawani that impedes the active legalcapacity. Jurists are of the opinion that a person who attain the age of puberty and developdiminishing illness of the mind, such person have no legal competent and also has no sufficientintellectual capacity to understand rights and obligation, therefore his actions is not binding.

Al - Sigar (Minorship): Jurists describe minorship as a phenomenon. It is a phenomenon whichdiminishes the legal competency of a person as a result of his age. Jurists describe Al Sigar asone of al mawani of active legal capacity. Therefore it negates Ahliyyatul Ada. The position ofthe law is that a minor has no statement in contract because he does not possess the intelligenceto do such contract.

AL – AWARIDH AL MAUKTASABA (VOLUNTARY): Factors or causes that are acquiredby the mankind activities and within his control. Jurists regard them as Mawani Iktiyariya. Juristsare of the opinion that

1. They are impediment to active legal capacity as a result of conscious human choice.2. Those factors could be avoided by the mankind when appropriate measures are taken.3. It can be rectified when apart.

Jurists contemplated the following as voluntary impediment to active legal capacity;

1. As-Safaha (Extravagant or Recklessness)2. Al Khata (Mistake)3. Intoxications or Drunkenness4. Al Jahala (Ignorance)5. Insolvency6. Slavery7. Captivity (as a result of insurgency or kidnap)8. Al Hazal (Jest).

Jurists are of the opinion that the above factors or causes are within the mankind control and theycould be avoided. Jurists also contemplated the following which can either affect the Ahliyyah orthe consent of the contracting parties;

1. Ikra’a (Coercion)2. Al Tajlis (Fraudulent activities)3. Deception or Al Gaban.

As Safaha: This is defined by jurists as a person being reckless in the manner he spend hiswealth after attainment of age of puberty. Therefore, his freedom of contract must be proven thathe is free and proper to deal with his property. In other words safaha has been described by thejurists as recklessness, and is a situation where a person acts without responsibility. Jurists are ofthe opinion that freedom of contract could only be exercised when it is established that either of

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the contracting parties of a complete legal competent and they display AR Rushd i.e. a soundjudgment in dealing with their properties. If a person possesses a sound judgment then suchperson is fit to make any valid contract this is the opinion of the Jamhur. Hannafi jurist on theother hand oppose the concept of AR Rushd, he is of the opinion that on the attainment of age ofpuberty, such person possess freedom of contract and therefore he is free to make any contractualdispositions and he should be allowed to have control over his property. The Jamhur replied thatsound judgment is the basis of maturity therefore, if any person displays lack of sound judgmentsuch person lack the legal capacity and therefore he cannot enjoy or exercise his freedom ofcontract and he is only allowed to have contract if the subject matter is of benefit to him. In othercontracts other than this, he is not competent and must be placed under Al-Hijir. Al Hijir is akind of declaration issued by a competent Court placing a person and his property under theCourt’s control.

Abu Hanifa replied that such declaration amount to the denial of such person’s right to hisproperty.

Intoxication/Drunkenness: This has been described by the Muslim Jurist as one of acquiredimpediment and jurist described it as a deliberate choice of the affected person that he intendedhis act. Jurists define intoxication as consumption of any substance that normally intoxicates.Jurists divide the effect of intoxication into the following;

1. The Involuntary Intoxication2. The Voluntary Intoxication

Jurists describe Involuntary Intoxication as a result of taking a substance. Ordinarily, it does notintoxicate but afterwards it was discovered that the substance taken affected the party. It is theconsensus of the Muslim jurist that the effect of such intoxication negates the Ahliyyah of theaffected party therefore it renders any contract, any statement in contract, any act or omissiondone by such person as void ab initio and such person will not be held liable for his contract andhis statement in contract should be held void.

Jurists differed with regards to the effect of Voluntary Intoxication. In the opinion of theJamhur, a voluntary intoxicated person i.e. a person who takes a substance and fully aware thatsuch substance intoxicate, his contract, his statement in contract, his act or omission, he isresponsible and such statement in contract is of legal effect i.e. he is liable for his contractbecause he had the intention to place himself under that situation. His commercial dealings, hiscontract of marriage and that of divorce he will be held liable because he intended his action.

Imam AZ Zahiri Ibn Azm, a contemporary jurist contended that there is no difference betweenvoluntary and involuntary intoxication therefore they must be accorded the same legal effectmeaning that if a person voluntarily intoxicate himself and entered into a contract under suchsituation, his contract should be treated null and void because he lack intention, Ibn Azm reliedon Q 4 vs. 43, the following that;

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1. a person who is drunk cannot approach prayer until he is sober,2. there is no manifestation of intention on the part of the drunk person,3. there is no difference in the state of mind of voluntary and involuntary intoxication4. By subjecting the voluntary intoxicated person to liability of his contract such decision

amount to double punishment.

Jahala: Jurists describe jahala (ignorance) as one of the impediment to active legal capacity.Therefore, when parties to a contract are ignorant of the subject matter of their contract, suchcontract is void ab initio on the account of ignorance see the case of JAWULE v. SULE (2001)32 WRN Pg 65-66.

Insolvency (Bankruptcy): Jurist regards insolvency as one of acquired voluntary impediment ofAhliyyah. Jurist described insolvency as liability of a person which engulfed his property. Juristsalso added that insolvency is invoked in other to protect the right of creditors. It is worthy to notethat in insolvency matters the declaration of the Judge to that effect is important. The Courtprotects the right of the creditors by placing the properties of the debtor under Hijir.

Slavery: It is an established principle of the Shariah that slave lack legal capacity and contractualdisposition to make a valid contract by virtue of being slave see the case of SONGS v. SONGS(2000) 44 ALL FWLR Pt. 44.

Captivity: Jurist described that captivity can occur as a result of insurgency, war and kidnapping.Jurists regard it as one of voluntary impediment of Ahliyyah. Therefore, any contract doneduring the tendency of captivity is null and void.

Al Hazal (Jest): Jurists describe Al Hazal as an act that invokes laughter. Jurists differ withregards to contract of a jest person. The Jamhur of the jurists are of the opinion that the contractof a jest person especially in contract of marriage and divorce is valid, binding and operative.The other jurists are of the opinion that the statement of a jest person, his act and his statement incontract are not valid for lack of intention therefore his contract is invalid.

AL Khata’a (Mistake): Victims of mistake, deceit or fraud etc their contract is voidable.

The following are also contemplated by the jurists that they can affect either the Ahliyyah or theconsent of the contracting parties;

AL-TADLIS (FRAUDULENT ACTIVITIES/419)

This could be defined as a false statement of fact or any other conduct intended to induce theother party to enter into a contract and in fact induces him to do so.

What constitutes misrepresentation in Islamic law even though no general theory of it in Islamiclaw, yet it can be achieved in the following ways;

i. By conduct (Active Fraud) i.e. non disclosure,

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ii. By a false statement

Tadlis (Taghir) Fi’ili (Active Misrepresentation): By active misrepresentation the seller ismaking a representation that certain facts exist which in his knowledge does not exist. Hisobjective in doing so is to create a false impression in the mind of the buyer in order to inducehim to contract.

If for example a seller of an article uses some article in order to make the appearance of thearticle lies as its reality, e.g. refurbishing old cloths to make the buyer believe they are new. It’sthe agreement of Muslim jurists that by way of analogy is an active tadlis (ActiveMisrepresentation). This ruling is based on the analogy from a tradition attributed to the Prophet(SAW). He was reported to have prohibited the tasriya of animal (i.e. refraining from milking ananimal for sometime so that it can produce large amount of milk when it is milked).

According to the above hadith, a person who buys an animal and after milking it discovers that ithas been so treated, he has the option of rescinding the contract by giving back the animal andclaim compensation for the milk he has drown from the animal. If the buyer however prefers notto rescind the contract, he gets nothing.

In all cases of active tadlis, the buyer has the option to rescind the contract e.g. dying the grayhair of a slave girl black, dressing of unskilled to look smart etc. The option to rescind couldtherefore be interpreted as a remedy for a contract in which consent is vitiated by tadlis.

In practice, tadlis impede consent (A person induced to enter into the contract by tadlisapparently consents to the contract, but such consent could be said to be unreal in so far as it hadbeen given under a misrepresentation as to the true facts).

What are the opinions of the jurists as regards active tadlis (active fraud/misrepresentation)?

In Shafi’i school, option to rescind will not apply if the act was not done fraudulently even if thebuyer suffers damages. Therefore, in Shafi’i opinion, the basis of the option is the making of themisrepresentation with the intention to deceive.

Other jurists from the Hambali School are of the opinion that the basis of the option is theinjury/damage suffered by the buyer. As long as the buyer suffers damages, he can rescind thecontract even if the act was not done fraudulently.

The Maliki School argued that the seller must be taken as having warranted by his representationthat the goods are what they appear to be if not the seller will be guilty of a breach of a term ofthe contract. Therefore, the option is a remedy for the breach of a term of the contract.

The Hannafi School is of the view that the basis of the option is in regard to the concealment ofdefect, but under what circumstances will the option be granted? No uniform answer but theyconsidered the following circumstances;

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a. The fraudulent act must amount to concealment of a defect e.g. where the subject matterof a contract of sale turns out to be defective, the buyer can rescind the contract byexercising his option of defect.Hambali School put it as Al-Jawhari, said that active tadlis means concealment of adefect in the subject matter from the buyer. Therefore, what it means is any fraudulent actthat tends to enhance the price even though it does not involve concealment of defects.

b. Intention to deceive: The existence of an intention to deceive is necessary prerequisite forthe granting of the option.

c. The maker must be responsible for the misrepresentation.d. Inducement must occur.e. Injury to the party who suffered from the misrepresentation.f. Non-disclosure: The general rule is that contracting parties are under legal obligation to

disclose material facts known. Therefore, a seller is under duty to disclose defects in agood known to him.

False Statement: This in brief suffices that once there is a false statement inducing a buyer into acontract, and then there is option to rescind.

IKRAH (COERCION)

See Q 2 vs. 256, 16 vs. 107 and 24 vs. 33. Also the hadith of the Prophet (SAW) “Liability isexempted from a duress person”, (narrated by Ibn Majah) is regarded as the most reliable sourceconcerning the legal rules of duress.

Literally, Ikrah is derived from the root word KARAHA which is constructed as AKRAHAHUmeaning “to force someone to do something against his wishes”. The word KURH is also theantonym of HUBB as such these two (2) terms are used in an opposite sense, as in for examplein the Q 2 vs. 216 which reads; “But it is possible that ye dislike a thing which is good for you,and that ye love a thing which is bad for you”.

Technically, jurists offered various definition of duress, Sarukhsi defined it as follows; “byduress one designates the action of one person against another, suppressing the consent ofthis latter person/vitiating his free will”. Zayla on the other hand considers duress as an actiondirected against a person which suppresses his consent. Bukhari defines it as forcing a person toperform an act against his wishes by way of threat of which the person exerting duress (Mukrih)is capable so that the duressed person (Mukrah) is intimidated and deprived of free consent.

A more precise definition is given by Assalan, by stating that duress is to force another to dowhat he does not wish.

Contemporary jurists on their part give no different definition except by either modifying oraccepting those offered by their predecessors e.g. Abu Zahrah states that duress is an order fromone person to another to commit an act or utter words under threat of the infliction of evil in the

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case of non compliance. Zahrah refers to duress as a physical or moral constraint directed againsta person in order to compel him to ratify or not to ratify a judicial act. Elements of duress in thedefinition are;

1. Act done or to be done under duress,2. Exercise of an unlawful pressure on a person to create in him the kind of fear which

causes him to enter into the contract.

Types of duress

Generally, the jurists classified duress into two (2) categories;

1. Unjust duress (Ikrah bi Ghayr Haq)2. Just duress (Ikrah bi Haq)

Unjust Duress (Ikrah bi Ghayr Haq): Jurists do not agree unanimously in classifying the typesto duress falling within this area. According to the Hannafi school, duress can be divided intotwo Constraining (Mulji) and Non-constraining (Ghayr Mulji) which are known as a completeduress and incomplete duress respectively. Both types according to Hannafi School nullifyconsent and not the active legal capacity but only the former vitiates choice. These kinds ofduress are established when the threat is either directed against the person under duress (Himself)or against his property.

Another type of duress according to them is known as “Moral Duress” (Ikrah Adabi) in which athreat is not directed against the person under duress but rather against his relatives such as athreat to imprison his father or son, this type of duress negates only consent but does not negatechoice.

The majority of the jurists on the other hand like Maliki and Shafi’i, they agreed with Hannafi inclassifying duress into constraining and non-constraining nevertheless, differ in the aspect ofinterpretation. To them, constraining duress is so called when a person under duress has nopower or choice such as in the case of a person being thrown onto another person resulting in thekilling of that person. In this case, the person thrown has no power to avoid such act as if he is ineffect of a tool of person exerting duress.

As for non-constraining duress, this occurs when the situation does not amount to theconstraining one and this may include some aspect of duress.

The Zahiri School divided duress under unjust into “duress on utterances” and “duress ondeeds”. Thus the former causes no effect unless it is accompanied by the Shariah doneintentionally, such as forcing to pronounce cause to abandon Islam (Kalimat al-kufr). As fordeeds, their effect depends much on the type of act to be done under duress as to whether this actis permissible in a state of necessity or not. Therefore, what’s permissible under the rule ofnecessity such as drinking wine will also be permissible under duress.

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From the above classifications, we can conclude the followings;

1. Concerning the Hannafi’s classification, as far as contract is concerned, there is nosignificance in dividing duress as constraining and non-constraining as evident from theworks of the jurists when they discuss the law relating to a contract made under duress.Furthermore, the impression of the word constraining used by the majority of jurists suchas throwing a person from a high place does not support Hannafi’s classification,

2. With regards to Zahiri, their classification is more concerned with the acts to be doneunder duress not duress itself,

3. It seems that the classification of the majority of the jurists with their definitions is morepreferable since it clearly puts a limitation on what is considered to be duress and what isnot. Furthermore, they are more concerned with a field of contract.

Just Duress (Ikrah bi Haq): Justified duress also known as legal compulsion (Ijbar Shari) is anaction taken by the authorities to force a person to carry out a valid act relating either to anotherperson or public interest such as forcing a debtor to repay his debt.

The jurists are unanimous that in order for duress to be justified, the act to be done under duressmust be in conformity with Sharia rules. Thus, when this requirement is fulfilled then duress isenforceable despite the absence of the consent of the person under duress. This is because in thecase of contradiction between his consent and the consent of Sharia, the latter will prevail.

Legal compulsion can take several forms namely; “Compulsion to avoid harm or enforcespecial rights” and “Compulsion for the sake of the public interest”. With regards to the first,this refers to a person who has been asked to fulfill certain obligation towards others but who hasrefused to do so resulting in the need to invoke authority of the Sharia e.g. the judge has thepower to compel a debtor to sell his properties in order to repay his creditors. The same is true inthe case of tax collector appointed by the ruler whereby they are forced to return what he hasbeen collecting unjustly from the people.

The second type of legal compulsion concerning public interest is utilized to protect the public.In the case where there is conflict of interest between the individual and the public interest thatcannot be harmonized, for instance to force land owner to sell his land in order to build mosque.Another example cited by Maliki is that if the price of a particular food item is artificially veryhigh, then the ruler may ask whoever is responsible to bring it to the open market.

From the above discussion, it’s quite clear that legal compulsion cannot be classified underduress except on the basis of apparent similarity i.e. the use of force by the authorities, forinstance to sell a debtor’s property in order to settle the debt.

Contract Made Under Duress

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Jurists unanimously agreed that duress does not completely remove or destroy legal capacity, thisholds true as reason (Aql) is regarded as the basis for active legal capacity. Therefore, whatexactly is the effect of duress?

Jurist attempted to address this question by focusing on two (2) problems;

i. The effect of duress on intention and consent (rida),ii. Whether the person who exert duress or the duressed person should be held liable for

an act carried out under duress.

As far as the first issue is concerned, jurists have used the term “Choice” (Iktiyar) and“Intention” (Qasd) interchangeably. Terms which imply the intention to carry out an act whichwaivers between realization and non-realization which is within the doer’s power to achieve bypreferring one alternative to the other? On the other hand, Consent (Rida) indicates feelingpleasure for someone at doing something in which his interest lies.

Although, the majority of jurists maintained that both terms are identical, while Hannafi hold thatthere are nevertheless disparities between the two, this is due to the fact that choice refers only tothe intent underlying the cause upon which the effect of the deed depends, whereas consent is thedesire to achieve that effect. Hence, according to the Hannafi, duress can influence either ofthese two elements, i.e. its effect can either negate consent or will (Iktiyar), negate consent butnot will, or lastly, it may not negate either consent or will.

However, the majority of jurists opine that choice refers to intention which in turn encompassesconsent.

With regards to the second issue i.e. an act carried out under duress as to whether liability shouldbe related to the person exerting duress or the duressed party. Originally, any act whatsoevershould be attributed to its doer in accordance with Q 53 vs. 38-41. However, in a case whereduress involves contract, liability for the act carried out will lie with the person exerting duressas maintained by the Shafi’i. This said jurist does not agree as to the validity of a contract madeunder duress.

According to the Maliki and some Hannafi (Zufar), a sale contract for instance concluded by aperson under duress is upheld valid but its effect is suspended (Mawquf). Zufar argued that thiskind of sale is valid because it resembles the sale made by an unauthorized agent (Fudali) in thesense that both instances do not fulfill the requirement of a proper contract. Therefore, if the salemade an unauthorized agent to be suspended, the effect of duress on the sale will accordingly bethe same.

The majority of jurists such as Shafi’i and Hambali on the other hand opined that the existence ofduress in a sale contract render it null and void (batil) and thus carries no effect whatsoever.

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They based their opinion on Q 4 vs. 29; this verse clearly indicates that every kind of propertyexchange will not be lawful unless it is carried out by mutual consent of the parties concerned.

Undoubtedly, consent is absent if a contract is concluded under duress, rendering such a contractas void. In this regard, the above verse is evidence of the voidance of the sale carried out by aduressed person due to the absence of consent. Moreover, the Prophet tradition; “Allah has liftedfrom my followers (the liability of) mistake, forgetfulness and duress” which shows that everyact of issuing from a person under duress is not considered lawful.

Apart from this evidence, the majority of the jurists also argued that a sale by a duressed personis similar to that of a jesting person (Hazil) in the sense that both of them in reality do not intendto conclude that contract. Therefore, accepting that the sale by a jesting person is void, in thesame vein, the sale made by a duressed person should also be void.

In addition, according to the Qur’an, if a person is forced under duress to abandon Islam, thisabandonment is regarded as void. This is because his consent was not given. Similarly, if he isforced to enter into a contract under duress, such a contract should also be void.

Majority of Hannafi jurists hold that a sale made under duress is irregular (fasid), but can beratified by the consent of the duressed person. They maintained that consent is a condition for acontract to be valid and not condition for its conclusion.

Note that in certain contract such as contract of sales of usury (Bay Ribawi), is for the right ofSharia that cannot be removed by the consent of the contracting parties. On the contrary, in a salemade by a duressed person, the rights of the contracting parties prevail.

Remedies for Duress

Hannafi and Maliki jurists agreed that the right and revocation rest with the duressed person.According to Maliki jurist, the duressed person has the absolute right to revokes the contract.However, the person exerting duress may revoke it only with the approval of the duressedperson. The Hannafi concur with the Maliki’s view provided that taking possession (of the solditem) is completed.

For duress to operate as defence, the majority of jurists discussed the following conditions;

1. The person exerting the duress is capable to carry out the act,2. The person exerting the duress is serious in his threat,3. The duressed person has no opportunity to reach or seek help and must be known to resist

such threat, and4. The threat must be imminent.

One of the above conditions must be fulfilled before duress can operate as a defence.

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SUBJECT MATTER (MAHAL-AL-AQD)

Subject matter is defined as an object upon which a valid contract is formed and from whichlegal rights and obligations of the parties ensue. Imam Al-Sanhuri described subject matter as thecenter of a contract entered between the parties. It is the central focus of the legal effect accruingfrom a validly concluded contract. The subject matter may defer in accordance to the type of thecontract, it may be a substance as in the contract of a sale of a vehicle, it can be a usufruct as inthe contract of a lease of a house, and it can equally be a service as in the contract of labour.

However, whichever is the type of the subject matter and or the contract itself, certain conditionshave been laid by the jurists to be fulfilled before an object can be considered as a valid subjectmatter of a contract;

1. Existence of the Subject Matter: It is the requirement of Islamic law that the subjectmatter of a contract at a time when the contract is entered into by the parties should be inexistence. Generally, it is discouraged under Islamic law to enter into a contract on nonexisting subject matter. The jurist unanimously agreed that an object that is not existingand which is existence is impossible in the future cannot be subject matter of a contract.Similarly, jurists invalidate a contract upon a commodity of which its existence isuncertain. Any subject matter which the risk of its non existence is greater than theprobability of its existence cannot be a subject matter of a valid contract. Where howeverthe contract is on usufruct of an object, the jurists unanimously are of the opinion that therequirement of existence does not apply in this case. This is because usufruct by its naturecannot be in existence at one time as it is a gradual and recurring process. Majority of thejurists’ opinion championed by Imam Maliki is that contract can be formed on nonexisting subject matter as long as there is certainty or even probability of its existence inthe future. However, for Maliki this is only restricted to gratuity i.e. gifts and endowment,to Maliki this type of contract hardly resolve in some dispute between the parties.Hambali jurist on the other hand argued that as long as there is a possibility of an objectexistence in future and nothing will stop it from being delivered then a contract enteredupon it is valid.The whole premise of this principle of Islamic law on the existence of the subject matterof a contract is predicated upon the Prophetic tradition which says “do not sell what doesnot belong to you”. Jurists argued that this tradition signifies not only actual ownershipof the subject matter but possession as well.

2. Legality of the subject matter: The subject matter must be lawful in the eye of the law. Itmust be lawful and valuable therefore sale of things like swine and blood is void even ifthey are valuable to others. The subject matter must equally be compatible with the typeof the contract entered by the parties. Perishable goods for instance cannot be used forcontract of mortgage. The validity of the contract requires that the object and the

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underlining clause of the contract must be legal. Thus a contract may for the usage of aproperty, for the commission of a crime is illegal as long as the parties are aware of thepurpose.

3. Knowledge of the subject matter: The subject matter must be known by its features, bythe parties to a contract. The law requires that subject matter must be ascertained by allits attributes for the avoidance of any dispute between the parties as regards its quantityand quality. Where there is uncertainty as to its class, kind or description the contract willremain void. The jurists however, allow minor uncertainty that is not likely to lead to adispute between the parties, however, on gratuitous contract the jurists defer in theopinions. For Maliki and Hannafi jurists, uncertainty as to the knowledge of the subjectmatter does not negate the validity of such contract. Shafi’i on the other hand argued thatuncertainty even in gratuitous contract negate the validity of such contract.

4. The subject matter must be an object that can be delivered: An object which is a subjectmatter of a contract must be able to be delivered to the contracting party otherwise thecontract is void. The delivery must be effected without causing damage to the subjectmatter otherwise the contract is voidable. Therefore a fish in the river or a strained camelcannot be a valid subject matter in a contract of sale. Maliki however allowed gratuitouscontract to be entered on a strained camel. Jurists equally disallow the sale of anycommon lawful property before it is captured.

AL – KHIYARAT (OPTION

Khiyarat which is a plural form of khiyar and which is defined as option is a right given toparties in a contract to either confirm, cancel or back down from the contract. The term istechnically defined by the jurists as a right ordained for the contracting parties to accomplish ordissolve the contract. The term is used to express an option within a certain period of time afterthe conclusion of a contract through which either of the parties may cancel it. Therefore there aretwo possible options;

1. To ratify by choosing from the alternative objects, or2. To cancel the contract entirely.

The concept of khiyarat has envisaged by the jurists is to protect the interest of the contractingparties. Therefore, it is not intended to create a risk management formula but to ensure fairnessamong the contracting parties. Khiyar therefore, is an option to continue or discontinue with acontract due to certain circumstances or where the subject matter does not comply withspecification and terms of the contact. Options that are recognized by the Shariah are of twocategorize;

1. There are those guaranteed by the law regardless of whether they are stipulated by theparties and these are option of defect and option of inspection.

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2. There are those clearly spelt out and agreed upon by the parties in the cause ofnegotiating the contract and these are option of stipulation and option of selection.

Legality of Khiyarat

Legality of options generally in contract can be found in the tradition of the holy Prophet (SAW).It was reported that one companion Ibn Mabdun complained to the holy Prophet (SAW) that hewas frequently victim of cheating in contractual transactions. The Prophet (SAW) replied thus“when you conclude a sale you may say that there must be no fraud reserving for yourself anoption lasting for three days”. In another tradition it was reported by Ibn Umar that a party to asale are free to revoke their agreement before they Part Company except in a sale that is subjectto option. The jurists hold that these traditions establish the basic legality of option.

Khiyar Al – Sharf (Option of stipulation)

Option of stipulation is defined as a right given to the parties or any other person appointed bythem to confirm or cancel a contract entered into by the parties within a specified period of time.However, the validity of this option depends on it been stipulated by either of the parties i.e. by acontracting party for himself or for the other party.

The option is accepted by the jurists because of two reasons;

1. The holy Prophet (SAW) accepted it and sanction it, and2. Some people naturally require guidance as they may not be clever to make decisions for

themselves.

On whether or not exercise of option of stipulation can be delegated by the party holding it to astranger to exercise on his behalf, the jurists’ opinions vary. Maliki, Hannafi, Hambali and somejurists in Shafi’i School hold the view that exercise of option of stipulation may be delegated to athird party by his order. They argue that the party with the right may not be knowledgeable withthe subject matter and may seek the help of the professional opinion. On the other hand, somejurist from Shafi’i School and Imam Ibn Umar are of the view that the option cannot bedelegated to a stranger in the contract. The argument is if the parties are allowed to that, it willamount to ascribing the power over the contract to people having nothing to do with the contract.

The jurists’ views equally differ with respect to the period of time within which option ofstipulation may be exercised. Abu Hannafi and Shafi’i are of the view that it must not exceedthree (3) days as reported to have been approved by the holy Prophet (SAW). To them 3 days areenough for the other to determine and make up his mind as regards to the contract. Abu Yusufand Imam Hambali opinion is that it can exceed 3 days as long as the time is determined anddefined. Maliki’s opinion is similarly to Abu Yusuf and Imam Hambali but added that it can onlyexceed 3 days in a situation where by the subject matter is in a place that is very far and cannot

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be reach within 3 days. These jurists (2nd and 3rd views) argue that the limitation of 3 days in theProphetic tradition does not signify impermissibility of its extension more than 3 days.

Where however, the parties stipulate different agreed period for the exercise of option, then theshorter period will be considered. Where also parties even though agreed on option, but silent onthe period then 3 days will be ascribed.

Jurists equally discussed the ownership of the subject matter during the subsistence of the optionperiod. Shafi’i and Hambali Schools view is that the ownership of the subject matter istransferred to the buyer during the period of the option. Abu Hanifa’s view is that the ownershipof the subject matter is not transferred to the buyer and the buyer is not equally expected to paythe price during this period of option. Maliki and Abu Yusuf subscribed to the view of Hannafibut added that even though the ownership is not transferred to the buyer during the period of theoption, the price money may be given to the seller.

Termination of Option of Stipulation

Option of condition terminates by;

1. Accomplishment or revocation of the contract.2. Extinction of the subject matter while in the hands of the holder of the right.3. Death; where the holder of the right dies according to Hannafi and Hambali jurists, the

option terminates as it cannot be transferred to his heirs since it is a personal right. ForMaliki and Shafi’i, the right is transferable to the heirs as it is a financial right. Theyrelied on the Prophetic tradition which says he who left a property or a right of theproperty or the right belongs to his heirs.

Khiyar Al – Taayin (Option of Selection)

Parties to a contract have a right to stipulate an option to choose the object of sale out of varietiesto a given article. This gives a contracting party a right to select one item among many of similarquality. The selected item will then become the subject matter of the contract. Imam Abu Hanifaand Imam Abu Yusuf approve this option. Majority of the jurist however disallow it as to themthe subject matter is unknown at the time of the contract. The minority argued that the subjectmatter is known as it among the varieties only for the buyer to select which he wants among thevarieties.

Conditions for the Validity of Option of Selection

1. There must be at least more than one item to select from2. The items must be different in some respect e.g. color3. The prices of the items must be specified4. The period within which he exercised the option must be specified

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Termination of Option of Selection

1. Discharge: where the option holder exercises his right by choosing among the optionseither expressly or by implication, the option is discharged.

2. Destruction of either all or one of the items: where one or all of the items presented gotdestroyed in the hands of the option holder, the option is discharged and the contract hascome into being between the parties with the destroyed item as the subject matter of thecontract.

Khiyar Ar – Ru’ya (Option of Viewing or Inspection)

Jurists define Ar-ru’ya to mean the awareness or knowledge of a subject matter of a contract andthe inquiry into its condition. A contracting party who has not seen or inspect a subject matterbefore the contract is concluded will have an option to accomplish or invalidate the contract afterhe has seen the subject matter. This may be in a situation where either he has not seen the subjectmatter prior to the conclusion of the contract or he actually had seen the subject matter before thecontract but there is a long lapse of time between seeing and the conclusion of the contractsufficient for the subject matter to change condition. This is still open to a contracting partyaccording to the jurists, even where the subject matter has been described to him as description,no matter how accurate cannot substitute inspection which gives unbiased knowledge of thesubject matter to a contracting party. This option is established by the prophetic tradition wherehe is reported to have said “He who buys a commodity without seeing it will have a right ofoption when he sees it”, and in another tradition, it is added that “If he likes he takes it, if helikes he rescind it”.

Condition for the Validity of Option of Inspection

1. The subject matter must have been inspected by the contracting party before theconclusion of the contract or there should be sufficient lapse of time between theinspection and conclusion of the contract.

2. The subject matter must be substance property like a house, whether the house isdescribed at the formation of the contract. There must be an option for inspection for thecontracting parties.

3. The option does not accommodate irrevocable contract like contract of marriage anddivorce at the instance of the wife. For example, where a house is offered to a woman asa dowry or a woman offers a house to her husband as compensation for divorce. If theyaccept without inspection they will not have an option of revoking the contract afterinspection.

4. The option holder cannot exercise the option until he inspects the subject matter notbefore.

Time Period for the exercising the Option of Inspection

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For the time of exercising this option, Hannafi jurists hold that since it is a right given by the lawgiver, no time will be stipulated for its exercise. The option is due whenever the option holdersees the subject matter. For this jurist, the duration of this option has no specific time in which itceases. It starts from the time of inspection and continues until the option holder will declare thathe accepts or rejects the subject matter as the case may be.

Other jurists’ opinion on the other hand is that the duration starts from the inspection and endsimmediately after a reasonable period in which the holder can declare his intention. If he doesnot do that within the period stipulated, the option lapse.

Termination of Option of Inspection

1. Where the parties made declaration after he sold and inspected the subject matter.2. Where the subject matter is destroyed while in the hands of the purchaser after it has been

delivered.3. Where the option holder pays for the price after he has inspected it.4. Where the buyer mortgagees the subject matter or gives it as a security after the

inspection, the option automatically terminates.5. Death of the option holder before exercising it, the option terminates.

Khiyar Al – Ayb (Option of Defects)

This is a right given to a party to rescind a contract when he discovers in the subject matter adefect which reduces the value of the subject matter or which negates the parties’ specification.This option is guaranteed by the Sharia to protect a contracting party where the subject matter isdefective, rendering it less valuable or even valueless to accept or revoke the contract as hedeems fit.

Validity of Option of Defects

The following prophetic traditions established option of defect as a right to a contracting party.The Prophet (SAW) is reported to have said “It is illegal for someone to sell something withoutshowing its qualities and it’s illegal for someone who knows about it not to show it”. In anothertradition, he was reported to have said “No person shall sell anything until he discloses alldefects in the subject matter”.

He was also reported to have adjudicated between two (2) companions, where one bought a slavefrom the other and discovers a defect with the slave, the Holy Prophet (SAW) gave him theoption of defect. The seller contended that the buyer has already made use of the slave and theProphet said “profit follows responsibility”. It was equally reported that the Prophet (SAW)

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passed by someone selling foodstuffs, he puts his hand in it and found it wet then he said; “Hewho cheat us is not one of us”.

Conditions for the Applicability of Option of Defect

1. The defect must be in existence in the subject matter before the contract or even after thecontract but prior to its receipt by the holder.

2. The holder must not be aware of the defect at the time of the contract and he must not besatisfied with it after it came to its knowledge. Where the defect is removed before theholder exercises his right, the option lapse.

3. The defect must be capable of rendering the subject matter unfit for the purpose of whichit is intended i.e. it must not be insignificant.

4. There must not be any stipulation in the contract for waiver or releasing the seller forliability for the defect in the subject matter.

However, on this, the jurists are not unanimous on the applicability of this stipulation No.4. AbuHanifa and his disciple Abu Yusuf approved a provision in a contract exempting a seller fromdefect even if the defects were not mentioned in details. Maliki and Shafi’i on the other hand,hold the opinion that this stipulation only covers defects that are in existence at the time of theconclusion of the contract. It does not cover defects accruing after that and before delivery of thesubject matter.

Compensation for Defect in the Subject Matter

Jurists allow an option holder to demand compensation where he had used the subject matterbefore he realizes that it was defective. The holder can only seek for compensation if it can beproved that he used the subject matter before the defect comes to his knowledge.

Termination of Option of Defect

The option lapses in the following circumstances;

1. Declaration of assent by the option holder: immediately the option holder declares hisassent to defective subject matter the option immediately terminates.

2. Where the new defect occurs in the hand of the holder or the subject matter got destroyedor damaged completely, the option terminates.

3. Where something is added to the subject matter by the holder, the option lapses and thecontract executed.