ISLAMIC LAW

OF
CONTRACT

Contract
Definition : Offer and Acceptance of two or
more parties on a specific subject with
mutual consent.

CONTRACT IN ISLAM
CONTRACT
Subject
Matter
* Specified
* Quantified

Contractors

Wording of
Contract

* Non-restricted

* Present

* Sane

* Unconditional

* Mature

ISLAMIC LAW OF
CONTRACT
CONTRACT OF SALE (BAI)
exchange of a thing of value with

another thing of value with mutual

consent
the sale of a commodity in exchange of

cash

ISLAMIC LAW OF
CONTRACT
TYPES

OF SALE

1. Valid sale (Bai Sahih)

2. Void/Non existing Sale (Bai Baatil)
3. Existing sale but void due to defect (Bai

Fasid)
4. Valid but disliked sale (Bai Makrooh)

ISLAMIC LAW OF
CONTRACT
1. VALID SALE (Bai Sahih)
a sale is valid if all elements

together with their conditions are

present

elements of valid sales are:

1. Contract (Aqd)
2. Subject matter (Mabee)
3. Price (Thaman)
4. Possession or delivery (Qabza)

ISLAMIC LAW OF
CONTRACT
V a lid S a le
(B a i S a h i h )
C o n tra c t o r tra n s a c ti o n
(A q d )

S o ld g o o d s o r
s u b j e c t m a tte r
(M u ta ' a q u a d e e n )
1

P ri c e
(T h a m a n )
2

D e l i v e ry o r p o s s e s s i o n
(Q a b z a )
o n l y i n re s p e c t o f m o v a b l e
g o o d s , n o t im m o v a b le 4

ISLAMIC LAW OF
CONTRACT
ELEMENTS

Sahih)

OF A VALID SALE ( Bai

CONTRACT (Aqd)

Offer & Acceptance (Ijab-o-Qobool)

Oral (Qauli)
Implied (Isharaa)
Credit sales (Istijrar)
Hand to Hand (Taati)

Buyer and seller (Mutaaquadeen) must be:

Sane
Mature

ISLAMIC LAW OF
CONTRACT
ELEMENTS

OF A VALID SALE (Bai Sahih)

CONTRACT (Aqd)
Conditions of contract (Sharaet-e-Aqd)
sale must be non-contingent
unconditional contract
under reasonable conditions
under unreasonable conditions but at market
practice
sale must be immediate

ISLAMIC LAW OF
CONTRACT
ELEMENTS

OF A VALID SALE (Bai Sahih)

SOLD GOOD OR SUBJECT MATTER

(Mubee) must be:

Existing
Valuable
Usable
Capable of ownership/title
Capable of delivery/possession
Specific & Quantified
Seller must have title & risk

ISLAMIC LAW OF
CONTRACT
ELEMENTS

OF A VALID SALE (Bai

Sahih)
PRICE (thaman) must be:
Quantified (Maloom)
Specified & certain (Mutaaiyan)

ISLAMIC LAW OF
CONTRACT
ELEMENTS

OF A VALID SALE (Bai

Sahih)
DELIVERY OR POSSESSION (QABZA)
Physical (Haqiqi)
Constructive (Hukmi)

ISLAMIC LAW OF
CONTRACT
2. VOID/NON EXISTING SALE (BAI
BAATIL)
certain conditions are not met. These

relate to:

conditions of offer and acceptance

Oral acceptance
Implied acceptance
Credit sales
Cash sales

ISLAMIC LAW OF
CONTRACT
VOID/NON

EXISTING SALE (BAI

BAATIL) contd.!
certain conditions are not met. These relate to:

conditions for Buyer and Seller

Sane
Mature

ISLAMIC LAW OF
CONTRACT
VOID/NON

EXISTING SALE (BAI

BAATIL) contd.!
certain conditions are not met. These

relate to:

conditions for Sold Goods where goods should

be:
Existing
Valuable
Usable
Capable of ownership/title

ISLAMIC LAW OF
CONTRACT
VOID/NON

EXISTING SALE (BAI

BAATIL) contd.!
certain conditions are not met. These

relate to:

the buyer does not have the title to subject

matter
the seller does not have title to price
Both subject matter and price cannot be used
lawfully
the produce of both will be unlawful

ISLAMIC LAW OF
CONTRACT
VOID/NON

EXISTING SALE (BAI BAATIL)

contd.!

Shariah Status
Transaction is completely null and void.
Ownership doesn't transfer.
For Seller taking price is not Halal.
Transaction is haram from its inception.

ISLAMIC LAW OF
CONTRACT
EXISTING SALE BUT VOID DUE TO
DEFECT (BAI FASID)

3.

Sale exists but will be void due to defect of non

compliance to:

Conditions of a contract
Sale must be immediate not deferred to future
Sale must be non-contingent
unconditional
under reasonable conditions
under unreasonable conditions but within market
practice

ISLAMIC LAW OF
CONTRACT

EXISTING SALE BUT VOID DUE TO DEFECT

(BAI FASID) contd.!
Sale exists but will be void due to defect

of non compliance to:

Conditions of Sold goods :

goods should be specified and quantified
seller must have title and risk

Conditions of Price
quantified
specific and certain

ISLAMIC LAW OF
CONTRACT
EXISTING

SALE BUT VOID DUE TO DEFECT

(BAI FASID) contd.!

Shariah Status
the subject matter should not be possessed by the

buyer
if possessed with the consent of the seller, title or
ownership will be passed to the buyer but usage of
subject matter will be impermissible
Buyer must return the goods to the seller
However if the defect is rectified the sale becomes
valid

ISLAMIC LAW OF
CONTRACT
4. VALID BUT DISLIKED SALE (BAI
MAKROOH)
sale is valid but not liked due to certain
conditions like:
sale after Juma Azan
sale after hoarding
sale by intervention of a third party while two
are negotiating

ISLAMIC LAW OF
CONTRACT
C o n tra c t o r T ra n s a c tio n
(A q d )
1
O ffe r & A c c e p ta n c e
(Ija b -o -Q o b o o l)

B u y e r & S e lle r
(M u ta ' a q u a d e e n )
1 .1

O ra l
(Q a u li )
(In p a s t te n s e )

C re d it S a le
(Is tijra r)
(e g s e ttle m e n t a t th e e n d
o f th e m o n th ) 1 .1 .2 (a )

1 .3

1 .2

Im p lie d
(Is h a ra a )
(In p a s t te n s e )
1 .1 .1

C o n d itio n s o f C o n tra c t
(S h a ra e t-e -A q d )

S ane
1 .1 .2

C a s h S a le
(T a a ti)
(e g a s in s u p e rm a rk e ts )
1 .1 .2 (b )

1 .2 .1 .

M a tu re
(If m in o r, m u s t u n d e rs ta n d
n a tu re o f tra n s a c tio n )
1 .2 .2
U n c o n d itio n a l c o n tra c t

S a le m u s t b e
n o n -c o n tin g e n t

S a le m u s t b e im m e d ia te
N o t d e fe rre d to fu tu re
(e g p ro p e rty m u s t p a s s 1 .3 .2 .
1 .3 .1 o n s a le d a te n o t o n fu tu re d a te

U n d e r re a s o n a b le c o n d itiio n s U n d e r u n re a s o n a b le c o n d itio n
b u t in m a rk e t p ra c tic e
(e g . w a rra n ty o f 1 y e a r
1 .3 .1 (a )
1 .3 .1 (b )
o n s a le o f frid g e 1 .3 .1 .(c )

Jazak-a-Allah-al-Khaira