The Effects of Contracts in Islamic Jurisprudence
A contract is defined as a lawful binding connection between the components of a transaction, or as the mutual agreement of an offer and acceptance in a permissible manner, which produces effects concerning their subject matter. The effects of contracts in Islamic jurisprudence can be categorized as follows:
- Valid (Sahih) Contracts
A valid contract is one that is lawful in its essence and description. This means it has fulfilled its essential components, including the offer and acceptance (ijab and qabul), the contracting parties, the subject matter of the contract, and the legal conditions. This type of contract produces its effects and legal rulings as soon as it is concluded. An example is a sale contract that is free from any option to cancel, which establishes the buyer’s ownership of the sold item and the seller’s title to the sale price.
- Invalid (Batil) Contracts
An invalid contract is one that lacks one of its essential elements, such as an offer, acceptance, a contracting party, or subject matter. Such contracts do not produce any legal effects and are considered void by the majority of scholars. Examples include the sale of prohibited items such as alcohol, dead animals, pigs, the sale of nonexistent goods, and marriages involving permanently prohibited individuals. In such cases, ownership of the sold item does not transfer to the buyer, nor does ownership of the price transfer to the seller.
- Corrupted (Fasid) Contracts
This type of contract is recognized by some scholars as one that is lawful in its essence but has become unlawful due to some description or condition attached. While it fulfills its essential components, it is tainted by a prohibited characteristic.
An example includes a sale of an undetermined item that leads to significant ambiguity, such as selling land, a vehicle, or a house without specifying the exact details, or selling a commodity like wine. Furthermore, transactions involving multiple contracts combined into one or selling a sheep described as pregnant fall into this category. The effects of a corrupted contract only materialize if possession has taken place; if not, it remains void.
Corrupted contracts should be annulled by a judge if the subject matter has not been changed prior to possession or if there is no right associated with the subject matter pertaining to a third party.
Types of Valid Contracts
Valid contracts can be divided into two categories, each with its consequent effects as recognized by scholars:
- Enforceable (Naef) Contracts
An enforceable contract is one that is initiated by a person who has the legal capacity and authority to make such a contract. This includes a fully developed adult who is sane and owns the right to enter into contracts, such as a mature person or an agent acting on behalf of a principal. The effects of this contract are immediate upon its creation, and it is considered valid without needing approval from others.
- Suspended (Muwqaf) Contracts
This contract is executed by a person who possesses complete legal capacity for contracting but lacks the authority or right to execute it. While that person can enter into the contract, they do not possess the legal power to engage in transactions, such as an unauthorized agent or a discernible minor who is indecisive between right and wrong. The effects of such a contract take place only upon approval by the authorized party. If approved, it is enforceable; otherwise, it becomes void.
Categories of Enforceable Contracts
Enforceable contracts can be further divided into two categories, each with specific consequences recognized by scholars:
- Necessary (Lazim) Contracts
Necessary contracts are those from which one party cannot withdraw without the consent of the other party, such as sale and lease agreements. These contracts become binding immediately upon the offer and acceptance being established.
- Permissive (Jaa’iz) Contracts
These contracts allow either party or both parties to dissolve the agreement without the consent of the other party, such as in agency, loan, or deposit agreements. They are not binding for both parties.
Contracts Based on Possibility of Annulment
Contracts may also be categorized based on their acceptability for annulment or lack thereof:
- Binding Contracts (Lazim)
These contracts cannot be annulled even by mutual agreement of the parties, such as marriage and divorce contracts, but can be terminated under specific conditions.
- Non-Binding Contracts
These contracts may be annulled by the agreement of both parties, such as in monetary exchange contracts, including buying, selling, and leasing.
- Binding for One Party
These contracts, such as guarantees and pledges, are binding for the guarantor and pledger but not for the beneficiary.
- Non-Binding for One Party
These contracts allow both parties to annul them and withdraw, such as deposits, loans, and agency agreements.