Tag: Contract

There is a difference of opinion among Muslim scholars as to what constitutes a valid contract. The evidences behind their conclusions are discussed in more advanced classes. In the Hanbali school, the following seven conditions must be met for a contract to be considered valid:

1. Both parties willingly agree to the contract
   • If forced, then it is invalid
     • Exception: if a ruler intercedes on behalf of the buyer because the latter’s rights were violated in some way, then in this case the ruler can force the seller to sell based on the original agreement between the two
2. Both parties be among those for whom it is permissible to conduct the contract
   • Related to qualification and competence. Meaning they should be:
     • Free
       • Because slaves do not generally own anything and it is invalid to sell something one does not own
       • (Note: Even though the institution of slavery is abolished in our times, however, rules related to slaves are still studied today because it helps understand the rulings and their connections to various Qur’anic verses and hadiths)
     • Pubescent and sane (mukallaf)
     • Rasheed – those who are mature enough to understand it
       • They need to be able to understand the sale and be able to make a decision on it
         • A small child or a senile cannot understand the sale
           • It is valid for children to deal with small priced items but not complicated or high value contracts that they cannot grasp
3. There is some sort of commodity in place for exchange that has value
   • The commodity is whatever contains permissible benefit
     • So it is invalid to sell or buy impermissible things
4. The commodity should be owned by the seller or the seller has authorization from the owner to sell the commodity on his behalf
   • It is invalid to sell something one does not own
5. The seller must have the ability to deliver it
   • So he cannot sell something that is not in his possession
     • Ex: a seller says, “I will sell you a fish from the sea.” This would make the contract invalid because the particular fish must already be in his possession
   • This condition is there to safeguard the rights of the buyer so that he is not deceived or loses money because the seller could not deliver on his promise
6. They should both know the commodity by either one of two ways:
   • Seeing it (if both have access to it)
     • So that they can see what they are buying or selling
     • If the commodity changes with time, then you need to view it every time before purchase
       • Ex: an animal, fruit, etc.
   • There is a sufficient description of the commodity that will be delivered at a later date (if both do not have access to it)
     • Meaning the description is clear and precise enough so that they both understand what they are buying or selling, when it will be delivered, where it will be delivered, etc.
       • Ex: the product is in a warehouse and there is an accurate description of the product online or in a sale flyer
7. The exact price of the commodity must be known
   • It must be clear how much a particular commodity will cost before the deal is finalized, if it is not, then the transaction is invalid
     • There should be no hidden fees. The exact amount that the buyer will pay must be clear
     • This is to safeguard the buyer from being cheated or deceived
   • Examples
     • It is invalid if a seller says, “I will sell you such and such item for whatever the amount for it is in my store.”
       • Because the price is unknown

I am a Pakistani-American Muslim blogger. I hold a B.S. in Information Technology and a B.A. in Islamic Studies. I am also a follower and a student of the Hanbali school of Islamic law. Read more

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