CONTRACTS IN TRADING
It is the most important and the most common of all the
contracts, because it is needed and used by most people, therefore
it is important to give special attention to the rules of Shari’ah
concerning it.
Definition of the Trade Contract
The Hanafi definition: It is the exchange of a specific
wealth with another wealth
The Shaafi’ee definition: It is the exchange of a wealth
with another wealth for the purpose of ownership
The Maliki definition: It is an exchange contract that
excludes services and temporary benefits
All these definitions means that there should necessarily be an
exchange of wealth for the purpose of ownership, that buying and
selling include only what is defined as wealth in the Shari’ah, and
also that there should necessarily be a transfer of ownership, and
that this transfer should not be temporary but definitive.
It's Legitimacy
Trade is a legitimate transaction according to the Shari’ah, and
the proofs of its legitimacy are in the Qur’aan, the Sunnah, and the
consensus of scholars. some of the proofs in the Qur’aan are:
‘whereas Allah has permitted trading and forbidden ribaa (usury,
interest).’ (2:175), "But take witnesses whenever you make a
commercial contract.’ (2:282), "Except it be trade amongst you by
mutual consent.’ (4:29), ‘There is no sin on you if you seek the
Bounty of your Lord (during Hajj by trading’ (2:198)
The proofs in the Sunnah are numerous; we will name only a few:
‘The best of earning is that of a man who works with his own
hands, and a blessed trade,’ (Ahmad, al-Hakim)
‘Trading is by mutual consent’ (ibn Majah, al-Bayhaqi). Also
trade was very common before the advent of Islam and the prophet (Sallallaahu
Alayhi Wasallam) approved of it later on and said, ‘The honest
trustworthy merchant will be with the prophets, the siddiqeen (the
very honest), and the martyrs on the hereafter.’ (Tirmidhi)
As for the consensus: the whole Ummah, since the time of the
prophet (Sallallaahu Alayhi Wasallam) has agreed that trade is
allowed and is a necessity for humankind, therefore, Allah Ta’ala,
has made it allowable to lift up the hardship on them.
It's Rule
In principle, trade is permissible, as ash-Shaafi’ee said, ‘All
trades are in principle permissible if the mutual consent of the
contractors is achieved, except what has been prohibited by the
Messenger of Allah (Sallallaahu Alayhi Wasallam).’ Its
permissibility is stated in the Qur’aan, ‘Allah has permitted
trading,’ (2:175), ‘Except it be a trade amongst you by mutual
consent.’ (4:29)
Wisdom Behind It
People are in need of various goods, and since they cannot
produce all the goods they need by themselves, it is necessary that
they exchange goods between themselves, and this exchange does not
occur unless there is mutual consent. This mutual consent is the
trade contract. Likewise, a person may have the money but needs the
goods, or vice versa. The transfer of possession of the goods or of
the money cannot take place except with a trade contract.
Man by instinct seeks to fructify his wealth and to achieve more
financial gain; trade, not ribaa, is the sound way to achieve this
goal.
Elements of the Trade Contract
As in any financial contract the trade contract must have certain
basic elements which must satisfy certain conditions for it to be
valid according to the Shari’ah. These elements are:
The formulation (the offer and the acceptance)
The contractors
The object of the contract (the price and the assessed good)
Dr. Houcine M Chouat and Dr
Abdul-Haq Hemmish
Last modified:
July 19, 2007
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