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Qawaid al-Fiqhiyyah

[ISF 2102]

Introduction to Qawaid al-Fiqhiyyah


5 Major Legal Maxims
5 Main Legal Maxims Relating to Contract

Course
Outline

3 Important Maxims Dealing with Profit & Liability


3 Essential Maxims Dealing with Peoples Rights
6 Maxims Dealing with other Forms of Muamalat

INTRODUCTION TO QAWAID ALFIQHIYYAH

Qawaid al-Fiqhiyyah

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Definition
Qawaid is plural of qaada, means
base, foundation, principles
Al-fiqhiyyah is plural of faqaha,
means proper understanding of
what is intended
Qawaid al-fiqhiyyah are general
rules which can be applied in
various cases that come under
common rulings

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Definition

Qawaid al-Fiqhiyyah

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Characteristics
In form of short epithetical
statements
Derived from the detailed reading
of the rules of fiqh on various areas
General in nature
Actual wordings taken from AlQuran and Sunnah

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Characteristics

Qawaid al-Fiqhiyyah

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Importance
To know how previous scholars
solved problems and formed
general rules
To solve new problems
To promote Islam is comprehensive
religion

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Importance

Qawaid al-Fiqhiyyah

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Related disciplines
Qawaid usuliyyah
Deals with sources of Islamic Law
with their interpretation for
deriving law
How to recognize prohibition

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Qawaid Usuliyyah

Qawaid al-Fiqhiyyah

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Related disciplines
Dawabit fiqhiyyah
Restricted to one particular field
For example Imam Malik said If
something does not make your
clothing impure, it will not make
the water impure

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Dawabit Fiqhiyyah

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Related disciplines
Al-Ashbah wa al-Naza-ir
From letter that Caliph Umar alKhattab addressed to a judge, Abu
Musa al-Ashari of Basrah
As-Subkis
To signify that something is very
similar to something else
Example: Private authority is stronger
than public authority

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Al- Ashbah wa Al-Naza-i

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Types
Which taken from a
particular text of AlQuran and Sunnah
masyaqqah tajlib taysir,
hardship begets facility
umuru maqasidiha,
Acts are judged by their
goals and purposes
dhararu yuzal, harm
must be eliminated

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Which are formulated


by jurists
yakin la yazilu bi
syakk, certainty is
not to be overruled
by doubt
dar al mafasid awla
min jalb al manafi,
Harm prevention
should be given the
priority than
promoting the benefit
Types

HISTORY

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HISTORICAL DEVELOPMENT

Origin and
Formation

Growth and Consolidation and


Articulation
Systemization

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Historical Development of the Discipline

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Origin and Formation

Start 399 AH
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Emergence of qawa'id during the
lifetime of Prophet (PBUH)
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Quranic verses and the Prophetic
traditions are the essential source from
which legal rulings are deduced
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Qawa'id developed after prophet's
(PBUH) demise.
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Historical Development of the Discipline

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Origin and Formation

Among the earliest jurists who developed


most of the Fiqh maxims are the jurists of the
Hanafi school
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Earliest compilation of maxims was written
by Abu al-Hassan al-Karkhi (334AH) and
Sufyan ibn Tahir al-Dabbas
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Imam al-Dabbas compiled 17 general
axioms, then al Karkhi (340AH) adopted some
and compiled up to 37.
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Historical Development of the Discipline

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Growth and Articulation

400 1100 AH
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Imam al-Dabusi Abd Allah b. Umar
Zayd al-Hanafi (430AH) composed his
book Ta'sis al-nazr, continuing alKarkhi's work on jurisprudential
guidelines specifically on legal axioms.
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Amongst the pioneering qawa'id works,
also considered the first work on
comparative law
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Introduction to Qawaid al-Fiqhiyyah

Historical Development of the Discipl

ISF 2102

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Growth and Articulation

These are some famous texts on legal


principles:
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Al-usul (340AH) by Abu Hasan al-Karkhi
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Al- Ashbab wal-naza'ir (430AH) by Zayn
al-din Ibn Nujam
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Majallat al-ahkam al-'adaliyya by Hanafi
Ottoman scholars
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Introduction to Qawaid al-Fiqhiyyah

Historical Development of the Disc

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Consolidation and Systemization

1200 AH - onwards
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At first the jurisprudential maxims was highly
dispersed and embedded among other legal arts
such as legal-theoretical principles and
hypothetical problems.
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Ottoman empire scholars developed a careful
process by which they selected and ordered the
statutes in the most concise expression
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This codification known as mejelle became like a
legal encyclopedia of practical rulings.
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Introduction to Qawaid al-Fiqhiyyah

Historical Development of the Discipline

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Hanafi Mazhab

Usul Al-karkhi written by Abu Al-Hassan AlKarkhi from Iraq (340 AH). Each Qa'idah
begins with a word Al-Asl (in principal) and
includes 36 Qa'idah
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Ta'sis An-Nazar was written by Abu Zaid AdDabusy (430 AH) from ad-Dabusiyyah and
comprised 68 Qa'idah
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Al-Ashbah Wan-Naza'ir was written by Ibn
Nujaim (970 AH) from Egypt. This book
includes 25 Qaidah
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Introduction to Qawaid al-Fiqhiyyah

Qawa'id Fiqhiyyah in Each Mazhab

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Maliki Mazhab

Usul Al-Futiya fi Al-Fiqh was written by


Imam Muhammad Ibn Harith Ibn Asad
Al-Khushani
Anwar Al-Boruq fi Anwa' Al-Furuq
includes 548 Qa'idah by Imam Abu AlAbbas Ahmad Ibn Abul-'Alla Idris Ibn
Abdur- Rahman or Al-Qarafi (684 AH)
from Egypt
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Introduction to Qawaid al-Fiqhiyyah

Qawa'id Fiqhiyyah in Each Mazhab

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Shafi'iy Mazhab

Qawa'id Al-Ahkam fi Masalih Al-Anam


by Imam Izz-ud-Din Ibn 'Abd-us-Salam
(660 AH)
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Al-Ashbah Wan-Naza'ir by Imam AbdurRahman Ibn Abu Bakr Ibn Muhammad
AS-Seyuti (911 AH)
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Introduction to Qawaid al-Fiqhiyyah

Qawa'id Fiqhiyyah in Each Mazhab

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Hanbali Mazhab

Al-Qawaid An-Nuraniyyah Al-Fiqhiyyah


by Imam Ahmad Ibn Abdul Halim Ibn
Abdus-Salam Ibn Abdullah Ibn
Tiymiyyah
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Taqrir Al-Qawa'id wa Tahrir Al-Fawa'id
by Imam Abdur-Rahman Ibn Shihab Ibn
Ahmad Ibn Abu Ahmad Rajab (795 AH).
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Introduction to Qawaid al-Fiqhiyyah

Qawa'id Fiqhiyyah in Each Mazhab

Qawaid al-Fiqhiyyah

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Majallat al-Ahkam al-Adliyyah

Introduced in 1286 AH,the discipline has


reached its full mature stage and has become
fully distinguished sort of science
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The first codification of Islamic commercial
law by the ottoman reform movement.
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the book of rules of justice became the civil
code of Ottoman Caliphate for 50 years and
continued to be commercial law of many Arab
countries such as Syria, Iraq, Kuwait and
Jordan
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Introduction to Qawaid al-FiqhiyyahContemporary works on Qawa'id Fiqhiyyah

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Twentieth century works

Emergence of Harakat Ihya' al-Turath al-Islami


(movements for reviving the Islamic legacy). Main
concern was to edit the manuscripts on different
Islamic disciplines and publish them in printed form
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These are some examples of academic works
(Master or PhD theses) with each focuses on their
field of research
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Extracting Qawa'id from Traditional Fiqh Books AlQawaid wal-Dawabit al-Mustakhlasah Min al-Tahrir lilImam Jamal al-Din al-Husayri (636 AH) by Ali alNadwi. PhD thesis published in Cairo in 1991. AlNadwi extracted the Qawa'id and dawabit and
arranged them according to their legal theme
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Introduction to Qawaid al-Fiqhiyyah Contemporary works on Qawa'id Fiqhiyyah

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Twentieth century works

Collecting and arranging Qawa'id in


comprehensive Encyclopedia Maws'at alQawa'id al-Fiqhiyyah by Muhammad Sidqi alBurnu consists of 12 volumes aranged
alphabethically totaled to 4192 Qawa'id. It
explains the Qa'idah in brief and a few of its
applications.
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Studying Specific Qawa'id Al-Niyyah Waatharuha Fil-Ahkim al-Shar'iyyah by Salih alSadlan. The book is about the first of the five
universal Qawa'id al-umur ni-maqasidiha
(matters are judged in light of the intention
behind them)
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Introduction to Qawaid al-Fiqhiyyah Contemporary works on Qawa'id Fiqhiyyah

5 MAJOR LEGAL MAXIMS

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1ST MAJOR LEGAL MAXIM :


MATTERS ARE DETERMINED BY
TO INTENTIONS

Matters are determined by to intentions

Definition

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Matters are determined by to


intentions
Al-Umur
-Plural form of al-amr, which means, to command, being
superior to or make a high order to do something.
-It also gives the meaning of matter, affair, case,
condition,
status, and situation.
Al-maqasid
-Plural form of al-maqsad, derived from verbal noun alqasd
which means intent, aim, purpose

Matters are determined by to intentions

Translation of Arabic

Qawaid al-Fiqhiyyah

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Meaning of the maxim


It has a wide and general sense

which encompasses everything that


is done by the human being such as
words and deeds.
Shariah rulings in human affairs and
their dealings shall be according to
their intention.

atters are determined by to intentions

Definition

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The Quran says:


In most of their secret talks there is no good: But if one exhorts
to a deed of charity or justice or conciliation between men,
(secrecy is permissible): To him who does this, seeking the good
pleasure of God, We shall soon give a reward of the highest
(value)
(al-Nisa;114)

Hadith

Actions are but by intention and every man shall have but that
which he intended. Thus he whose migration was for Allah and
His messenger, his migration was for Allah and His messenger,
and he whose migration was to achieve some worldly benefit or
to take some woman in marriage, his migration was for that for
which he migrated
(Narrated by Umar
ibn al-Khattab)

atters are determined by to intentions

Legal sources of the maxim

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Applications of Maxim in Fiqh:


1) Slaughtering animals for food and consumption

purposes. Animals could also be slaughtered for


sacrificial purposes during pilgrimage (Hajj) and Eid
al-Adha

2) If a person kills another person intentionally, the

heirs of the victim have the right to demand the


death penalty (qisas) if the killer is convicted, but if
the crime is perpetrated unintentionally the
punishment differs, in that case, blood money (diyah)
must be paid.

atters are determined by to intentions

Application in Fiqh

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Application of Maxim in Islamic Banks:

For example, in a contract of lease the amount


of rental is stipulated while in borrowing no
rental is charged. If two persons conclude a
contract apparently of borrowing but the
borrower is charged a certain specific rental,
the agreement would be regarded as a lease
contract.

atters are determined by to intentions

Application in Islamic Ban

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Related Maxim:
-Al-ibrah fi al-uqud li-al-maqasid wa-al-maani la li-al-alfaz
wa-al-mabani
The effect in contracts depends on the intention and
meaning and not the words and phrases

The rule above means that any contracts refers to its


meaning and purpose, not to words and forms or
acceleration.
The meaning of the rules is that the assumption lies in
the akad, its meaning and purpose and not to forms
and words.
That means, in any valid contract in which there is a
distinction between the intention and purpose of the
covenant that is seen through words or what is remarked
upon in the contract.

atters are determined by to intentions

Branches of the

2ND MAJOR LEGAL MAXIM :

CERTAINTY IS NOT OVERRULED


BY DOUBT

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Certainty

The knowledge that a fact has either definitely


occurred or not.
No difference between an initial yaqin permitted or
prohibitive
Rulings are made
base on
Example:
A coma person cannot be judged alive or dead initial
yaqin: alive
- Wealth distribution cannot be made
-Initial yaqin can only be overruled if his death is
proven

ertainty is not overcome by doubt

Meaning

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Doubtfulness

The temporary doubts that happen after the occurrence of yaqin.


The state of being hesitant between two matters that are
opposite to each other / contradicting each other without being
ableOne
to oftarjih
(choose) any one of them.
two matters was tarjih through
evidence

Al-Zann (Conjecture)
An opinion or conclusion formed on the basis of incomplete information.

Ghalabat Al-Zann (The preponderance of the evidence)


This state: Consideration of the Shariah when making rulings on most
issues supported by Shariah evidence.

ertainty is not overcome by doubt

Yaqin (Certainty)
Meaning

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Any Shariah ruling will not be lifted by mere doubt.


The situation in which the person is uncertain
about the occurrence of something or the possible
occurrence of it.
Waswasah : vacillation
- difficult situation that can be a habit in a person
- face hardship in carrying all types of worshipping acts /
Allahs command

CERTAINT
Y
(Confirmed)

ertainty is not overcome by doubt

CERTAINTY

DOUB
T

continued
until
the uncertainty is
proven

Clear
evidenc
e

Meaning

Qawaid al-Fiqhiyyah

ISF 2102

Legal sources:

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Yunus,
10:36

ertainty is not overcome by doubt

History

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2 Hadith

Abu Huraira reported: The Messenger of Allah (


)said: If any one of you has pain in his abdomen, but
is doubtful whether or not anything has issued from him,
he should not leave the mosque unless he hears a sound
or perceives a smell. (Sahih Muslim).

ertainty is not overcome by doubt

History

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A person is proven indebted to another uncertain about


his repayment the person remain indebted.
A person sure that his cloth is impure (najis) but not sure
the najis spot have to wash the whole cloth his doubt
(spot of najis) will not overrule the impurity of the cloth.

A knows that a particular subject matter belongs to B C


challenged the ownership A can stand as a witness that
the subject matter is Bs even it is possible that the
subject matter have been sold by B to C.
A defect found in a piece of particular type of product when
it was with the seller sound same defect of the same type
of product that was picked by a buyer when concluding the
transaction the buyer confused whether the one he picked
same with the one spotted having defect at the seller the
buyer has no right to return the purchased product.

(Other similar case: whether the defect is pre-existing or


not)
ertainty is not overcome by doubt
Application

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TAKAFUL
Takaful participant paid the takaful contribution to a takaful
agent
- did not get any receipt
The participant is liable for the payment if the takaful agent
denies the payment
or
The participant is liable for the payment if the takaful agent
resign or terminated from company

The takaful participant must insist on the receipt (as


evidence)
* In reality, this is a rare case the regulators made strict regulations to
ensure protection

ertainty is not overcome by doubt

Application in Islamic Financ

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The default ruling in muamalah is permissibility.

The use of paper money, cheques, bank drafts,


telegraphic transfers, ATMs, e-banking etc.
Permissible: encourages the circulation of wealth

The use of accounting methods that do not contradict


the contractual responsibilities of the various parties

ertainty is not overcome by doubt

Application in Islamic Bankin

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Other related maxims

The norm (of Shariah) is that non-liability

If a debtor & creditor argue about the amount of debt,


the statement of the debtor will be accepted unless
the creditor has shown evidence on the additional
amount.
If there is disputes in terms of the inspections of the
sales, the statement of the purchaser shall be
accepted the original status is the absence of
inspection.

ertainty is not overcome by doubt

Application in Islamic Bankin

3RD MAJOR LEGAL MAXIM :

HARDSHIP BEGETS FACILITY

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HARDSH
IP

HARDSHIP BEGETS FACILITY

To be
heavy/unbearab
le
Refer to legal
excuses such as
minority, illness
etc

FACILITY

To be easy
Legal mitigation
on account of
hardship as an
exception to the
general rules

Hardship begets facility by the relaxation of rules which are


difficult to observe
Basic approach of Shariah implementation of
obligation/prohibition causes excessive hardship
Hardship becomes the cause for facilitation as the application
of rules in certain circumstances cause difficulties to people.
OPTIONS to relieve the difficulty and enforces ease during
difficulty
. Hardship begets facility
Definition

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HARDSHIP BEGETS FACILITY

Al-Ghazali said, Everything that exceeds its limit changes into


opposite.
Thus, it becomes necessary to lighten the peoples burden
and to disregard general rules in certain exceptional
circumstances if their application were to result injury and
hardship.

Hardship begets facility

Definition

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1) The hardship has to be real


(haqiqiyah) and not imaginary.
2) The hardship must be above
what a human is usually
expected to bear.
For example, someone can say that
5 daily prayers are a hardship but
people are required to take this
hardship as it is ordained in Shariah.
So 5 daily prayers are what human
should be able to bear according to
Shariah.

3) It can not be that the Shariah has


a goal in you suffering from that
hardship.

4) the facility should not infringe the


fundamental principles of Shari`ah
protecting
Hardship begets
facilityhuman rights, establishing

ISF 2102

Hardship
begets
facility
Subject :
Hardship

Ruling :
Facility

General Application

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Al- Quran :
Allah intends for you ease, and He does not want make things
difficult for you
(Al-Baqarah:185)

On no soul doth Allah place a burden greater than it can bear (AlBaqarah:286)

He did not make any difficulty for you regarding the religion (din of
Islam)
(al-Hajj:78)

Hardship begets facility

Origin of the maxim

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Sunnah :
Abu Hurayrah narrated from the Prophet (s.a.w)
Religion is very easy and whoever overburdens himself in his
religion will not be able to continue in that way. So you should not
be extremist, but try to be near perfection and receive the good
tidings that you will be rewarded and gain strength by worshipping
in the mornings, the nights
Anas narrated from the Prophet (s.a.w)
Make things easy for the people and do not make it difficult for
them and make them calm (with gad tidings) and do not repulse
(them)
Narrated by Bukhari and Muslim
Aishah r.a said: Whenever the Prophet (s.a.w) was given a choice
between two things he chose the easier one unless it was a sin

Hardship begets facility

Origin of the maxim

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Travelling
Muslim also gets the permission to defer obligatory fasting.
It is permissible to cancel the contract of ijarah due to travelling
When judges are not available, it is permissible to sell a property that belongs to
travel companion who died during the journey. Sale proceeds is kept for his heirs

Sickness
Permission to defer obligatory fasting.
Can tayammum instead of wudu.
Can sit or lying down during solat if unable to stand

Coercion
Person who is forced to eat haram food otherwise harm/injury will be inflicted on
him that endanger his life is permissible to eat.
Person who is forced to say something Kufr, is permissible to say such thing as
long as his faith is maintained in Islam.

Hardship begets facility

Type of hardship

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Forgetfulness
If the person commits something that will subject him to a
punishment, his forgetfulness can be used to waive the
punishment

Ignorance
Those who has share in the partnership property, didnt know that his partner has
sold that property his right in that property cannot be dispelled.
If a person declares his Islam in a country Islamic law is not implemented and
complete knowledge of Islamic Shariah has not yet been conveyed to him- excused if
he commits any divinely-prohibited matters not knowing about the prohibition.

Difficulty/Umum al-Balwa
Those who suffer the disease (unable to control the discharge of his urine), are
excused to perform solat in unclean (najis) condition.
Permissible to perform solat if got soil on the cloth during rainy days.

Hardship begets facility

Type of hardship

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Deficiency / Al-Naqs
In the case of minor, insane person they are not obliged to
practice Islamic injunctions as much as matured sane
person if obliged, they would be in hardship
Women are not obliged to perform Jumaat prayer and Jihad.

Hardship begets facility

Type of hardship

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1) IJARAH
If someone enters into a rental contract - travel for certain
reasons, he is allowed to cancel the rental contract. Under a
normal circumstance, a person is not allowed to cancel this type of
contract unless it is agreed between the contracting parties
beforehand. However, forcing a person to continue paying the
rental when he is not occupying the premise, will amount
to hardship, therefore theshariahis allowed the cancellation
under specific circumstances in order to avoid hardship.
2) BAY AL SALAM
A prompt payment for a commodity that the seller does not
posses is permissible producers who need finance for inputs.
If finance is not forthcoming at the time of sowing, production will
cease- harmful for entire community.
Sale before possession only confined to Bay Al-Salam and cannot
be used in other transaction

Hardship begets facility

Examples and applications of maxim in

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(idh dqa al-amr ittasaa)


An opening must be found when a matter becomes very difficult
Example: A debtor who accedes to his obligation but is unable to
pay must be given time- if this would enable him to clear the debt

(Ad-darurt tubh al-mahzurt)


Necessity renders prohibited matters permissible
Example: A person is allowed to consume prohibited food in order
to survive under extreme situation provided that no other food is
available.

Hardship begets facility

Related

4TH MAJOR LEGAL MAXIM :


HARM MUST BE ELIMINATED

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Origins from Prophet Muhammad (s.a.w) sayings:

""


(Harm may neither be inflicted nor be reciprocated)
Al-Hafiz Ibn Abd al-Barr, The meaning of this hatidh is Sahih,
al-usul. It was verified that the Prophet (s.a.w) said: The
Almighty Allah has ruled that a believers blood, property,
and dignity are unlawful to anyone and a believer must also
be thought good of.
As, one of the pillars of Shariah, this legal maxim is the basis
for prohibiting any harmful acts and arranging for any
compensation and punishment for the results of harmful acts.
Ibn al Najjar said: Rulings in the Islamic jurisprudence are set
either to bring or ward off harm, therefore they include the
protection of the five necessities which are religion, life,
posterity , property and dignity.

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Definition

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Differences
Dhirara

ISF 2102

Between

Dharar

&

Ibn Abd al Barr : al dhara is noun while al


dhirar is verb
Quoted by al Khushani, Dharar is what brings benefits to you,
but harms the neighbour, but Dhirar is what brings you no
benefit but still harms your neighbour. Example :
Car delivers the passenger to destination but also produce CO2
and polluting the environment, the car is Dharar
while, Cigarette does not gives any benefits to smokers also it
is dangerous to other people. Cigarette is Dhirar.

By Al Tufi in his explanation of Al Nawawi Forthy


Hadiths; Dharar means causing harm to another person
while Dhirar is the respond of the harm from the causing
person.

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Definition

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Exception to the Maxim


Ibn Rajab The Prophet (s.a.w) forbids al-Dharar and al-Dhirar to be
unlawfully exercised. However, causing harm with a legal sanction is
permitted.
Example : A person will be punished / exercised by Allah according to his
crime / sin.
Harming people under law (as punishment) to criminal is allowed,
and the maxim is excepted. (ex: Qisas)

Application in Islamic Finance

In Islamic Finance industries, removing harm financially, can be done by


establishing firm regulation of practice on the Industries.
Malaysia as one the tower in Islamic Finance practice applied this Maxim in such
way by establishing Shariah Advisory Board and Shariah Advisory Committee. The
role of the board also involves the reviewing and overseeing of all potential new
product offerings. Given thatshariahlaw is derived from studies of both the Quran
and the Sunna, The Shariahboards in ensuring the conformity of the

institutions offerings, boards


contemporary Islamic scholars.

troduction to Qawaid al-Fiqhiyyah

include

acknowledged

experts,

such

as

Definition

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Application in Islamic Finance

ISF 2102

(continue)

Duties and Responsibilities of Shariah Committee:


1) Responsibility and accountability
2) Advise to the Board and Bank including the Banks subsidiaries
3) Endorse Shariah policies and procedures
4) Endorse and validate relevant documentations
i. the terms and conditions contained in the forms, contracts,
agreements or other legal documentations used in executing the
transactions; and
ii. the product manual, marketing advertisements, sales illustrations
and brochures used to describe the product.
5) Assess work carried out by Shariah review and Shariah audit
(etc.)
Takaful
Muamalat.com.my
In Islamic Finance contract, removing harm financially, can
be done by the practice of
Takaful.
Takaful service is the alternative to conventional insurance as they are using Shariah
principles, avoid involvement of usury, gambling, and minimize the elements of uncertainty.
The service is design to cooperate with the participant and not to cheat them.
It segregate the Participants of Takafulaccount and the shareholders' accounts. Also shares
any surplus of the fund to the Participant.

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Definition

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Branches of the Maxim (9)


1.
Necessities render prohibited things permissible
In emergency situations people are allowed to undertake actions which are
prohibited for them in normal situations as concern to the Islamic Law (Majallah
al Ahkam al Adliyyah) Example: unconsent seize of properties of insolvent
person, who does not settle the debt, by Legal Authorities.

2.
Necessity is determined by the extent thereof
Under courts order to sale the assets of a negligent debtor to clear his liabilities,
it should start with the movable assets if this would suffice to clear the debt,
before selling his fixed assets. (Al-Sabuni, Al Madkhal al Fiqhi wa-Tarikh alTashri al Islami).

3.
Necessity does not invalidate the right of other
In case of leasing and farming has expired but it is yet to harvest, the contract
shall continue until the harvest at the usual time and the lessor shall pay the
rent, as the necessity of the lessor to the land, it doesnot invalidate the right of
rental property

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Definition

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4.
An injury cannot be removed by a similar injury
Majallah al-Ahkam al-Adliyyah stipulated that, if a new defect appears in the
sold object during buyers custody and afterward another defect appears, the
buyer is not allowed to return the item due to age-old fault but entitled to
compensation of flaw.

5.
To avoid public injury, a private injury may be endured
Application: A distributor/supplier shall not intermix their sales item to creditor
for settling debt.

6 .
A greater injury may be avoided by a lesser injury
In a combined business, if the major shareholder wants the higher position
while it may harm the partner, the demand shall be responded, otherwise, his
harm would be more and may affect the employees.

7 .
Harm cannot establish a predecent
Through lapse of time, Dharar shall not be justify by tolerance.

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8 .
Preventing harm is preferred over attracting benefit
Shariah would ban such an act that would bring benefits while at the same
time causing harm to the world. Despite the benefit is valid.
Example: Casino and tobacco businesses contribute huge amount of tax yearly
to government, however the sector also corrupt the population and brings
cancer. This kind of business is not supported by Islamic Finance sector.

9 .
No reliance on mere imagination
Maxim is related to a matter of 'certainty and doubt'. Imagination or delusion
lies at the lowest rank of doubt. The Majela,(2003:12) "To imagination without
foundation on fact, no weight is give.
If a man exit from a house, running, with knife full of blood in his hand, and
later people came in and found a bleeding corpse, by evidence the man is
suspected the killer.
To eliminate harm decision is measured by evidence not imagination or theory.

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Definition

5TH MAJOR LEGAL MAXIM :


CUSTOM IS AN ARBITER /
CUSTOM IS A BASIS OF
JUDGEMENT

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( al-adah muhakkamah)


CUSTOMS IS AN ARBITER
(Adah)

A noun derived from the verb ada/yaudu, which means to


return, to come back.
Adah used to represent custom because a custom is a
practice that keeps come back.

(Muhakkamah)

The passive participle of the verb hakkama/yuhakkimu


which means to choose someone or something as an
arbitrator
Its use in this maxim connotes the status of customs as
reference for resolution of disputes .

Legal Maxims : Customs is An Arbiter

Definition- Arabic translatio

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Explanation of the Maxim

The principle that customary usage is the determining


factor basically means that the customs of the people are
recognized and acknowledged by Islamic Law as long as
certain conditions are met.

The custom- the practices of the people whether in their


actions or sayings, regardless of whether they are the
general practices of the people or the practices of certain
groups.

Habit or custom in the eyes of the Shariah can be a basis


for deriving Shariah rules pertaining to peoples
behaviours.

Legal Maxims : Customs is An Arbiter

Definition

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The Definition and Difference between Adah and Urf

If a person feels comfortable towards a particular action


due to a certain motive and repeats that action, then the
action will a habit (adah).

If others follow or imitate him/her in doing that action such


that it becomes widespread among most people, then urf
is established.

Urf is in habit (adah) of a group of people.

Legal Maxims : Customs is An Arbiter

Definition

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The General Types Of Customs

THE
GENERAL
CUSTOMS
Widely spread all

Widely spread all


over the world
Can be timerelated: Widely
spread throughout
the years since
during the time of
Prophets companion
or spread during a
certain era
Can be placerelated Widely
spread in all places
or being practiced in
whole country
Eg: practicing
istisna

THE
SPECIFIC
CUSTOMS
Specifically in
certain country,
place or among
certain group of
people
Example:
custom among
traders on what is
considered as a
defect
custom in some
countries of
allowing price to
be paid in
installments or
specific number of
installments

Legal Maxims : Customs is An Arbiter

SHARIAHBASED
CUSTOMS
Eg: prayer,
zakat, hajj
etc

Definition

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1. Al-Quran
Allah S.W.T says in Surah Al-Baqarah verse 233 :

ISF 2102

Mothers suckle their children for two whole years if they wish to complete the
term, and
the father shall bear the cost of their food and clothing in a fair manner.
No one should be burdened with more than they can bear. (Surah Al-Baqarah:
233)

Legal Maxims : Customs is An Arbiter

Sources of the Maxims

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2. Hadith
Abd Allah ibn Masud said:


What the Muslims determine to be good is good with
Allah

Legal Maxims : Customs is An Arbiter

Sources of the Maxims

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Application of the Maxim in Fiqh

A person sold a good to another in Malaysia for deferred


payment of one thousands without specifying the currency.
On the settlement date, the buyer makes payment of one
thousand Malaysian ringgits, but the seller insists that he
meant USD1000. In this case, sellers claim is rejected
because the custom of Malaysia is to pay in ringgits, not
dollars.

Legal Maxims : Customs is An Arbiter

Application in Fiqh

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Application of the Maxim in Islamic Finance

Traditionally, sales took place face-to-face between a buyer


and a seller. There was an offer and acceptance. The
exchange of commodity, its payment and possession
between two parties was physical and immediate.
Nowadays, people are not necessarily to meet each other
to buy goods. They can just click on a mouse to choose the
good he wants and then providing the seller with his credit
card information. After all the information has been verified
and the card issuer has approved payment, the sale is
concluded. The seller will receive his payment on his
account after a few days and the buyer will receive his
goods after some days by courier.
These new practices are acceptable in Islam because they
have standard practice.

Legal Maxims : Customs is An Arbiter

Application in Islamic Financ

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ISF 2102

Traditionally custom

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Seller

transaction

Buyer

1. Payment and exchange of commodity are made immediately.

Modern Days custom

Seller

transaction

Buyer

1. Buyer and seller not need to see each other to make the transaction
2. Firstly, the buyer has to confirm what goods that he decides to buy.
3. Payment are made using credit card. After all the information has been verified and
the card issuer has approved payment, the sale is concluded.
4. The seller will receive his payment on his account after a few days and the buyer will
receive his goods after some days by courier.

Legal Maxims : Customs is An Arbiter

Application in Islamic Financ

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Related Maxims
( al-maruf

urfan kal-mashrut

shartan)
A Matter recognized by custom is regarded as if stipulated by
agreement
Al-maruf
Well known standard practice among people in their transaction.
Al-mashrut
Something stipulated by one/both contracting practice in their
contractual agreement to make contract enforceable
Explanation of the Maxim
It means that the customary practice is to be considered without
the need of its stipulation in the contracts and dealings.

Legal Maxims : Customs is An Arbiter

Branches of the Maxim

5 MAIN LEGAL MAXIMS


RELATING TO CONTRACT

1ST MAIN LEGAL MAXIMS RELATING TO CONTRACT

JUDGMENT IS BASED ON KNOWLEDGE AND UNDERSTANDIN

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Guiding critical thinking


Fiqh; Ijtihad
Exertion of effort to arrive at a
considered judgment about the rule of
the Shariah on a particular matter.
Two types; 1) Attempting to interpret
Shariah
texts.
2) Applying the rules contained in
the texts to real cases.

Main Legal Maxims Relating to Contract


Judgement is Based on Knowledge and understand

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A. Explanation of the Maxim

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Judgment, valuation, decision, opinion and


verdict.
To make a statement about anything is to
deliver a kind of judgment on it.
To relate one matter to another, either In
affirmation or negation.
Must be by jurist of human acts.

What is possible to know or to make a


statement about.
Tangible objects, people, and animals.

Main Legal Maxims Relating to Contract


Judgement is Based on Knowledge and understand

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A. Explanation of the Maxim

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Branch
Secondary or subsidiary matters.

Picture, image and form.

Attention to definitions and their


implications is essential in determining
whether a given rule is relevant to a
particular act.
The concept of theft.

Main Legal Maxims Relating to Contract


Judgement is Based on Knowledge and understand

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B. Authority of the Maxim

Quran

And when there comes to them information


about [public] security or fear, they spread it
around. But if they had referred it back to the
Messenger or to those of authority among
them, then the ones who [can] draw correct
conclusions from it would have known about it

Main Legal Maxims Relating to Contract


Judgement is Based on Knowledge and understand

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B. Authority of the Maxim

Hadith
A man from Yemen asked the Prophet PBUH about
a drink called mizr, prepared from sorghum, which
they drink in his land, Allahs Messenger asked;
Does it intoxicant?
He said, Yes The messenger of Allah remarked,
Every intoxicant is forbidden.

Main Legal Maxims Relating to Contract


Judgement is Based on Knowledge and understand

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C. Application of the Maxim in Fiqh

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Al-Ghazali applied this principle on passing


judgment on the writings of Muslim adherents of
Greek philosophy.

When he read Muslim theologians, refutations of the


ideas of philosophers, he perceived that they were
attributing outlandish views to them that no one in
his right mind would believe.
Refuting a school of thought without understanding
it and perceiving its true nature is like shooting in
the dark
no one can understand the flaws of the
knowledge until he has reached the limits of that
type of knowledge.

Main Legal Maxims Relating to Contract


Judgement is Based on Knowledge and understand

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D. Application of the Maxim in Islamic Finance

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Determine whether the financing products of an


Islamic bank are Shariah compliant, all the related
contracts should be presented to the banks
Shariah advisory board.

The Shariah advisory board must understand the


product and thoroughly examine the associated
legal documents prior to issuing a fatwa on it.

Main Legal Maxims Relating to Contract


Judgement is Based on Knowledge and understand

2ND MAIN LEGAL MAXIMS RELATING TO CONTRACT




THE PRESUMPTION OF VALIDITY AND PERMISSIBILITY
APPLIES TO ALL CONTRACTS AND CONDITIONS

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The presumption of validity and permissibility applies to all contracts
and conditions

Asl
Root, origin, foundation, basis
The original rule for something, one which could possibly be overridden by
countervailing evidence for specific cases
Civil law presumption

uqud (plural of aqd)


aqada to connect or tie
aqd a connection between two contracting parties that is established
by an offer and acceptance executed in accord with the Shariah

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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Shurut (plural of shart)


A provision, condition, clause or stipulation
[a factor] whose absence requires the absence of a certain rule whereas
its presence does not, in and of itself, require the presence or absence
of that rule

Jawaz
To travel or cross a location, to pass by or through
Acceptability, permissibility
The basic rule for all things created by Allah is that they are halal
except for that which has been explicitly prohibited in the authentic
texts

Sihhah
An act which is accordance with the Shariah

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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It is He who created all that is on the earth for you (Surah al-Baqarah
verse 29)

God has already fully explained what He has forbidden you (Surah alAnam verse 119)

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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Hadith

The halal is what Allah has made lawful in His Book,


and the haram is what Allah has prohibited in His Book;
and whatever He has remained silent about is part of
what He has excused.

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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Application of the Maxim in Fiqh


Imam Shafii
General permissibility of sales in his rulings that it is permissible for a
man to buy a good on deferred payment and then sell it back to the
original seller for a spot payment less than the delayed payment. As
long as the two sales are not linked as separate, reciprocal transactions
he saw no reason to suspect the contracting partys intention.

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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Application of the Maxim in Fiqh


Imam Ahmad
If a man marries a woman, having accepted her stipulation
that he shall not remove her from her home country, her
stipulation is to be honoured, based on the hadith, The
most deserving of conditions to be fulfilled are those by
which you make intercourse lawful

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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Application of the Maxim in Fiqh


Hanafi School
If the seller stipulates that he will only sell the good on the
condition that the buyer will not hold him liable for any
defect, if the buyer agrees, the seller will be free from
liability

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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Application in Islamic Finance


Takaful operators may stipulate different monthly
premiums for different individuals to join a family
takaful plan based on actuarial data on different risk
profiles for different demographic groups
Higher risk higher contribution
Conditions in contracts are lawful and valid - do not
contradict the nature of the contract

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

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Application in Islamic Finance


Combination of contracts (i.e. musharakah
mutanaqisah, ijarah muntahiyah bi al-tamlik)
Issue raised on how to reconcile with the prophets prohibition on two
transaction in one transaction
AAOIFI combining contracts is permissible

Each contract itself is permissible


Concluding one contract is not made conditional upon concluding the other
The particular combination has not been specifically prohibited by a shariah text
Combination is not used as a legal trick to get around the prohibition of riba
The contracts do not have contradictory goals and rulings

Maxims: The presumption of validity and permissibility applies to all contracts and conditio

3RD MAIN LEGAL MAXIMS RELATING TO


CONTRACT



THE FUNDAMENTAL
REQUIREMENT IN EVERY
CONTRACT IS JUSTICE

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Two keywords that define this


maxim
1.asl: defined as a continuosly
operative and comprehensive rule
or principle.
2.adl: infinitive of the verb
adala/yadilu
lto act justly, equitably, with
fairness.

egal maxim relating to contract

Definition

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Context of Islamic finance


Fairness refers to fulfillment of all financial rights
and obligations at the minimum level
The conclusion of a sale contract gives rise to
numerous financial rights and obligations
Examples:
i. Transfer ownership
ii. Delivery of the counter-value on the date agreed
iii. The obligation of making periodic payment of
debt created by a deferred sale
iv. Fulfillment of the agreed conditions
l Failure to fulfill other rights while having ability to
do so is considered injustice

egal maxim relating to contract

Definition

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The Quran states:

Allah commands justice (adl) and kindness


(ihsan), and generosity towards relatives, and He
forbids what is shameful, blameworthy and oppressive.
He teaches you so that you may take heed
Justice (adl) is the fundamental requirement of all
exchange contracts
Another category; tabarru (charitabble) contracts,
which are based upon kindness; therefore , the
criteion of equivalency between counter-values is
not applicable.

egal maxim relating to contract

Authority of the

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As for the Sunnah, the Prophet quotes Allah, in a hadith qudsi, as


saying:


O my slaves, I have prohibited injustice upon
Myself, and I have made it prohibited betwwen
you, so do not oppress one another.
Numan ibn Bashir related that his father gave him a substantial
gift and went to the Prophet (peaace be upon him) asking him to
bear witness to the transaction. The Prophet asked him, do you
have other children as well? he said, yes. Prophet asked, did
you give all of them a similar gift? he said, no.


then do not call me as witness, for I do not bear
witness to Injustice
The Prophet said;

egal maxim relating to contract

Authority of the

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Bashir had performed an act of ihsan.


Giving his son a present without any return.
Be unfair to his other children because not given
comparable gifts
Other children will feel jealous of their brother and
resentful toward their father.

egal maxim relating to contract

Authority of the

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In Fiqh:
1. Two counter-values that are subject of a sale
contract must be known, specified,
deliverable and agreed upon; otherwise, there
will be no justice for the contracting parties.
2. It is unfair to stipulate that the lessee pay for
major maintenance of the leased property
because the long-term benefit is for the lessor
since he is its owner.
3. Lessee is not liable to pay the price of the subject
matter if it is damaged before it is delivered.
It is unfair to take payment without delivery of the
equivalent counter-value.

egal maxim relating to contract

Application of the Maxim

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In Islamic Finance:
1. The contractual basis of the relationship between the
bank and the depositor is mudarabah. The two parties
share any profits while any financial loss is to be
borne by the rabb al-mal. It is unfair for the depositor
to demand a guarantee of the principal along with a
share of profits because it violates the principle of
justice in mudarabah contract. If the mudarib has
guarantee the capital, it becomes like a loan (qard).
2. Some banks require a customer who applies for house
financing to agree to a clause that will make the
customers heirs responsible for the debt is repaid. To
hold the heirs responsible of the deceased is contrary
to shariah, unless they had explicitly agreed to the
condition.

egal maxim relating to contract

Application of the Maxim

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2
1
THE GENERAL PRINCIPLE CONFERRING
VALIDITY OF CONTRACTS IS
2
THE CONSENT OF BOTH PARTIES
AND EFFECTIVE TERMS AND CONDITIONS
5
4TH MAIN LEGAL MAXIMS RELATING TO CONTRACT

The General Principle Conferring Validity Of Contracts Is The Consent Of Both Parties And Effective
Terms And Conditions

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This maxim mentions an important


general principle of contracts; therefore
it is necessary condition of validity, but it
is not sufficient by itself. If the stipulated
condition contradicts with shariah text or
nature and implication of the contract to
which it is concluded, the condition is
invalid, even if both parties agrees to it.
It is clear that the freedom to stipulate
condition in financial contracts is not
absolute; rather, it is restricted by
certain rules laid down by the Lawgiver

egal maxim relating to contract

Definition

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ISF 2102

The maxim contain two keywords


1. Rida : is a noun derived from the verb ridaya/yarda, to be
satified, content, to consent, agree, to improve.
l is an agreement and consent based on satisfaction.
satisfaction is inner reality. Therefore, the legal ruling is
based on the outward expression of offer and acceptance.
As long as there is no evidence that either of these has
been corrupted by coercion, they are regard as valid
indicators of satisfaction

2. Mujib : is the active participle of the verb awjaba/yujibu , to


make necessary, obligatory, binding
l Means obligating o necessitating or it can mean
requirement. In the context of a contract, a mujib is the
requirement it imposes

egal maxim relating to contract

Definition

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The legal effect of contracts are


determined by the following :
1. The legal effect set by the shariah
-. The shariah has set the legal effect of
the financial contracts and make them
binding on the contracting parties.
hence, the parties to the contract are not
allowed to disregard them by stipulating
any condition that violates them
-. For example; the shariah requires that
the subject matter of a sale contract be
deliverable

egal maxim relating to contract

The legal effect of the

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2. The stipulation of conditions by either of


the contracting parties
-. In general, the contracting parties may
stipulate conditions that do no clash with
the shariah. Once both parties agree to
them, the condition become binding upon
them.
3. Custom and circumstantial evidence
associated with the contracts.
- The factor in this point are recognized
when they do not conflict with the first
two (custom is arbiter)

egal maxim relating to contract

Legal effect of the

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The Quran states :

O you who believe! Do not consume


one anothers wealth wrongfully;
rather, let there be trade by
mutual consent; and do not kill one
another, for Allah is indeed merciful
for you.

egal maxim relating to contract

Authority of the

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More specifically, the Quran states :

and give woman their bridal due to spirit


of a gift; but if they are happy to give
up some of it to you, you may enjoy it
with clear conscience.

egal maxim relating to contract

Authority of the

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The sunnah tells the same general concept :





" .






it is not lawful (to acquire) a persons wealth
without his freely consent
There is legal consensus (ijma) of all scholars
that mutual consent is a requirement in
financial contracts.

egal maxim relating to contract

Authority of the

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For example :
1. Party A sells all asset to part B without
specifying the price at the time the contract is
concluded. According to Hanafi school, the
contract can be verified if the two parties
agree on a specific price after the contract
session, due to the realisation of mutual
consent. Otherwise, the asset should be
returned to its owner
2. If it is proven that party A was forced to sell
his land (or any other asset) to party B, the
contract is invalid and party A has right to take
his land back (and return the selling price)

egal maxim relating to contract

Application of the maxim in

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Example :
1. An audit find that an Islamic bank charged
a fee for early settlement of a deferred
payment sale agreement. The charge was
not mentioned in the contract signed with
the client. Therefore it is invalid. So, the
amount must be returned to the customer.
2. In order to avoid a lengthy legal action
process in case of specified trigger events,
the bank and customer in a property
financing may agree to assign disposal
right of the property to a third party

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Application of maxim in Islamic

5TH MAIN LEGAL MAXIMS RELATING TO CONTRACT


DEFERMENT CONSTITUTES A PART OF THE PRICE

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Deferment constitutes a part of the price

Explanation:
1. - Ajal is related to the verb ajila/yajalu: to hesitate or linger
- Ajjala/yuajjilu means to delay or postpone
- Ajal: appointed time, a deadline, a respite or delay
- Bil ajal: on credit
2. - Qist is related to the verb qassata/yaqassitu: to distribute something, to pay in installment
- Qist also means share, portion, quantity, installment
3. - Thaman means cost, price or value

ain Maxims: Deferment constitutes a part of the price

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If payment is made on the spot, there is no harm in it; but if payment is delayed, it is not valid

In an exchange contract of money for money, a delay in payment by one of the


parties would mean:
The party who received immediate payment derive immediate benefit
The other partys benefit would be delayed
The exchange involves a disparity, a form of riba

Delayed payment is allowed in exchange contracts as long as the counter-values are


not from the same class of ribawi goods. Allahs Messenger stated:

gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt;
like for like, in equal amounts and hand to hand. But when the type (asnaf) differ, then sell as
you please as long as it is hand to hand

ain Maxims: Deferment constitutes a part of the price

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sell gold for silver as you please in a spot transaction, and sell wheat for dates as you please in a
spot transaction, and sell barley for dates as you please in a spot transaction

you who believe, when you contract a debt for a stated term, put it down in writing

Al Tabari quotes Ibn Abbas that the above verse was about
Forward (salam) sales sales in which the buyer pays the seller in advance for later
delivery
Delayed payment sale (bay bi thaman ajil) sale in which the buyer takes
immediate receipt of the good while the seller takes receipt of the payment at a
specified future date

ain Maxims: Deferment constitutes a part of the price

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2 of the Tabiin had a disagreement about salam sales and referred the matter to the
Companion Ibn Abi Awfa, who told them:

We used to make advance payment for wheat, barley, raisins and dates during the eras of the
Prophet, Abu Bakr and Umar
Allahs Messenger knew about this practise and permitted it on the condition that the volume or
weight of the item sold be known and the delivery date be specified

The permissibility of a delayed payment sale (bay bi thaman ajil):

Aishah and Ibn Abbas narrated that Allahs Messenger bought grain from a Jew on credit and
mortgaged his armour to him

ain Maxims: Deferment constitutes a part of the price

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The Hanafi scholar al Kasani states that there is a difference in value between spot
and delayed delivery of the same amount:

there is no equality between spot and deferred payment because cash is better than debt and the
immediate has a higher value than the deferred
Whether the delay does represent portion of the price

Deferment
constitutes part of
the price

Deferment does
not correspond to
any part of the
price

ain Maxims: Deferment constitutes a part of the price

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Authority of the maxim

those who consume riba cannot rise up except as one arises whom the devil has driven mad by his
touch. That is because they say trade is just like riba; whereas Allah permits trading and
forbids riba

The majority of jurists allow a markup on a deferred payment:


1. The Hanafi scholar al Marghinani because the price increases due to the deferment
2. Ibn Taymiyyah of the Hanbali School if he sells it to him for a price for that deferred
period, then the deferred period takes a portion of the sale price

ain Maxims: Deferment constitutes a part of the price

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However, a number of scholars disagreed with the view: Zayn al Abidin Ali Ibn
Husayn, Simak ibn Harb and a few Zaydi jurists. They based their view on:
Abu Hurayrah states that the Prophet prohibited 2 sales in one sale

Interpretation of 2 sales in one sale


- The seller offers an item to the buyer at one price for spot payment and at a higher
price by delayed payment
- It is objectionable if the contracting parties fail to specify which of the 2
alternatives they will seal the deal upon renders the price unknown
- The objectionable feature is not the markup on the delayed payment sale

ain Maxims: Deferment constitutes a part of the price

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Application of the maxim in Fiqh


1. Just as Muslim jurists allow the seller to charge extra when payment is deferred,
they allow the buyer to ask for a discount for advanced payment in a salam sale.
2. The price in an ijarah contract for the rental of any item always takes into account
the period of time for which the item will be used.
3. In Murabahah contract, if the buyer discovers that the seller failed to inform him
that the price he quoted was based on the seller paying for the item by deferred
payment, the buyer has the right to annul the sale. This is because the seller could
have paid less for it if he had paid for it on the spot.

ain Maxims: Deferment constitutes a part of the price

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Application of the maxim in Islamic Finance


1. When one partner contracts to buy the equity of other partner, the price reflects the
payment period; the longer the payment period, the higher the price
2. The market practice regarding mudarabah contract is that the longer the duration of
the enterprise, the higher the portion of the profit that the rabb al mal will demand
3. In murabahah contract, if a customer wishes to purchase an item but he cannot
afford by spot payment, he will approach the bank and promise to buy it at the
banks cost plus a mutually agreed markup. The amount of markup is calculated by
taking into account the payment period

ain Maxims: Deferment constitutes a part of the price

MAXIMS DEALING WITH PROFIT & LIABILITY

ISF 2102

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1ST LEGAL MAXIMS DEALING WITH PROFIT & LIABILITY

(al- kharaj bi-dhaman)


BENEFITS GOES WITH LIABILITY

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(al- kharaj bi-dhaman)

BENEFITS GOES WITH LIABILITY

Kharaj ()
Yield, Return, Revenue
The yield or separable
benefit or corpus resulting
from an owned asset

Legal Maxims : Customs is An Arbiter

Daman ( )
Responsibility, Liability,
Guarantee
Liability for an asset in
case it is damaged or
destroyed

Definition

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EXPLAINATION of the
MAXIM
GENERAL MEANING
The benefit of an asset is the right of one
who indemnifies it if it is damaged
A person who is held liable in case an asset is damaged,
deserved to take its benefits as compensation
Debtor can enjoy the money that he borrowed, since he is the
one who will pay its principal, under all circumstances
Profit earned without bearing liabilities/risk is prohibited

Legal Maxims : Customs is An Arbiter

Explanation of the Maxim

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Causes that triggering daman (), as


recognized by Shariah:
Damaging the property of another, either directly or
indirectly.
Possession of an asset and having the ability to handle or
dispose it
Eg: Wadiah (deposit)

Entering into a contract : violates the conditions

The maxim ONLY applies to the liabilities that comes


from taking possession of an asset by ownership or by
the owners permission, when the possessor take
possession for his own benefit

Legal Maxims : Customs is An Arbiter

Explanation of the Maxim

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AUTHORITY of the MAXIM


Quran, Surah al-Baqarah, verse 275 :

.
.
(Surah al-Baqarah : 275)

Allah has permitted sale and prohibited riba ,..

Abd Allah ibn Amr ibn al-As has quoted Allahs Messenger
(S.A.W.) saying;


Profit is not lawful..from that for which one has no liability,

Legal Maxims : Customs is An Arbiter

Authority of the Maxim

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Application of the Maxim in FIQH

Shirkat Wujuh

: A traders partnership,
without capital but based on good reputation.
Purchase good on credit
Liability proportion are created from the purchase that they
made
Sell the goods, repay the debt &divide the profit

Legal Maxims : Customs is An Arbiter

Maxim Application in Fiqh

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APPLICATION IN ISLAMIC FINANCE


The Sleeping Partner in a Musyarakah or
Mudarabah contract is still entitled to a share of
the profit even if he is not involved in the work
and management of the company because of his
capital is exposed to risk of loss
Depositor is liable to bear the expenditure of
safe-keeping because he who benefits from the
safety.

axims Dealing with Profit & Liability

Maxim Application in Islamic Financ

*BR. HAFIZI
2nd LEGAL MAXIMS DEALING WITH PROFIT & LIABILITY

3RD LEGAL MAXIMS DEALING WITH PROFIT &


LIABILITY



(Al-Jawzu al-Shariyyu Yunfi al-amn)

LEGAL PERMISSION NEGATES LIABILITY

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- Al-Jawzu al-Shariyyu : Legal permission


The general permission of the Shariah to perform an action or to
leave it



- al-amn : Liability

Imam Ghazali defined liability (al-amn) as
Duty to return the same thing or its alternative which is equal in
value or price

LEGAL PERMISSION NEGATES LIABILITY


The maxim denotes that no indemnity is warranted for a
legitimate action if it happens to cause harm or loss to
others. That is because it would be contradictory to give
permission for an act and then require indemnity for an
asset damaged due to that permitted act

Maxims Dealing With Profit & Liability: Legal Permission Negates Liability

Definition

Qawaid al-Fiqhiyyah

ISF 2102

Explanation of the Maxim

1
The legal maxim means that an act which is
3 allowed by the law cannot be made the subject of
a claim to compensation.
2
In other words, if an injury was a result of a lawful
1 action, the injurer is not liable for the
damage caused, and subsequently, he is not
9 liable to compensate the affected person.
5 He shall not be liable to compensate the third
party that is afflicted by the damaged due to his
2 action as long as it was legally permissible

egal Maxims : Legal Permission Negates Liability

Definition

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ISF 2102

Conditions :

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Although legal permission negates liability, the abuse


of rights is prohibited in Islamic law
1. The action should be perform safely
Eg: Government allows a person who pass a driving test to
drive cars on public road, but its predicted on driving safely.

2. The damage to anothers asset should not be


for the interest of himself
A person facing starvation is allowed to eat food belonging to
someone else, however since he does so for his own benefit,
he should pay for it when he is able






Necessity does not annul the right of others

egal Maxims : Legal Permission Negates Liability

Definition

Qawaid al-Fiqhiyyah

ISF 2102

Writings
about
the
maxim
1

3
2 Books of qawid :
1
9
Moden works :
5
2

Article number 90 in Majallat al-Ahkm al-Adliyyah


Al Suytis collection of al-qawid al-kulliyyah

Al-Manthr (al-Zarkash)
Manfi al-Daqiq (al-Khdim)
Al-Farid al-Bahiyyah (Mahmd Hamzah)

Madkhal al-Fiqh al-mm by Muaf al-Zarq


Al-Qawid al-Fiqhiyyah Bayna al-Alah wal-Tawjh by
Muhammad Bakr Ismil
Al-Wajz F al-Qawid al-Fiqhiyyah by idq al-Brn

Maxims Dealing With Profit & Liability: Legal Permission Negates Liability

Definition

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1. Al-Quran (Al Tawbah 9:91)






ISF


2102


(91)

No blame lies on the weak, nor on the sick, nor on
those who can find nothing to spend if they are
sincere to Allah and His Messenger. There is no
way (to blame) against the doers of good. And
Allah is Forgiving, Merciful(91)

egal Maxims : Legal Permission Negates Liability

Sources of the Maxims

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2. Hadith

:

:
" :
:
: :
:
" :
:

[Muslim]

Abu Hurairah (May Allah be pleased with him) reported:


A man came to the Messenger of Allah and asked, "O
Messenger of Allah! What shall I do if someone comes to
me with the intention of taking away my property?" He
replied, "Do not hand over it to him." The man asked,
"What shall I do if he fights me?" The Messenger of Allah
said, "Then fight him." "What will be my position in the
Hereafter if he has killed me?" The Messenger of Allah
replied, "In that case you are a martyr." The man asked:
"What if I killed him?" The Messenger of Allah replied,
"He
will be
in the Hellfire."Liability
egal Maxims
: Legal
Permission
Negates
Sources of the Maxims

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Application of the Maxim in Fiqh


1. If a doctor treats a patient according to the
recognized standards of medical practice but the
patient dies, the doctor is not liable
2. If a merchant open a store next to an existing store
that sells the same commodities, and the revenues
of the first store decreases, the owner of the new
store cannot be asked for compensation because
his activity is perfectly lawful.
3. The one who digs a hole in his own land or house
will not be liable if another person or animal falls
into it since he does not violate the rights of others.

egal Maxims : Legal Permission Negates Liability

Application in Fiqh

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Application of the Maxim in Islamic Finance


1. A trustee in a wadah contract returns the wadah item to
the depositor by an agreed upon, reliable courier company,
but the item is damaged on the way. In this case, the
trustee is not liable to compensate.
2. Investors in an investment fund authorise the funds
manager to invest their funds according to his judgement
within the limit specified in the contract. A fund manager
(Murib) cannot be held liable for losses to the capital if he
adheres to the stipulation of the investment contract,
follows the accepted investment practice and exercises due
diligence in investing the murabah capital

3. Employer provides equipment and goods for their


employees to perform the job well. In the case of any
damage happen to the equipment (employers property)
that occur in the course of the employee doing their jobs,
the
employee
areNegates
not toLiability
be held liable
for that
damage
egal Maxims
: Legal
Permission
Application
in Islamic
Financ

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Besides the general natural legal permission, which is granted to all


individuals to enjoy in normal circumstances, jurists have mentioned a
number of urgent situations when one is also free from legal
liability.
1. Daf al-sil
- literally means to repel the attacker.
- It is a self-defence situation, when one is forced to fight against a
thief, or any other aggressors, who broke in ones own property for
stealing or any other harmful actions.
- If the fighting resulted in the wounding or even the killing of the
aggressor, one is exempted from any legal liability, such as the
payment of the diyah or the blood money to the aggressor or to his
family.
2. Attacked by an animal
- Eg : angry bull
- One is not to pay any compensation to the owner if one, to defend
himself, killed the animal.

egal Maxims : Legal Permission Negates Liability

Exception

MAXIMS DEALING WITH PEOPLES RIGHT

1ST LEGAL MAXIMS DEALING WITH PEOPLES RIGHT


Ijtihad is not set aside by another
Ijtihad

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Ijtihad is not set aside by another

Ijtihad

Al-Ijtihad
Derived from the verb jahada/yajhadu which means to
strive or put oneself out.
Means the exertion of effort to arrive at a considered
judgment about the rule of the Shariah on a particular
matter

Yunqadu
The passive voice of the verb naqada/yanqidu which has
range of meaning:
To demolish, tear down
To violate
To repeal, revoke

had is not set aside by another Ijtihad

Translation of Arabic

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Meaning of the maxim


Ijtihad if it has been properly
conducted, cannot be
reversed by another
persons ijtihad or even by
later ijtihad by the same
mujtahid.

had is not set aside by another Ijtihad

Definition

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From the consensus of the Companions


of the Prophet Muhammad S.A.W
Ibn al-Sabbagh narrated that Umar ibn al-Khattab
gave verdicts in many cases that differed from
verdicts that Abu Bakr al-Siddiq had issued in similar
cases, however, Umar did not reopen the cases
already settledby Abu Bakr to repeal Abu Bakrs
verdicts. Likewise, Umar ibn al-Khattab gave ruling
on an issue of inheritance in which he revised his
previous ijtihad and stated:

That was what we judged previously, and this is


what we have decided (in the present case)

had is not set aside by another Ijtihad

Legal sources of the maxim

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Applications of Maxim in Fiqh:

A person prays in a location


that is new to him and makes
ijtihad to determine the direction
of the qiblah. When the time for
the next prayer begins, he
decides that the qiblah is really in
different direction. According to
the majority of scholars, he does
not need to repeat the prayer
because it would mean
overturning his earlier ijtihad.

had is not set aside by another Ijtihad

Application in Fiqh

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Application of Maxim in Islamic Banks:

The Shariah supervisory board of a stock


exchange listed a company as Shariah
compliant. Later the Shariah supervisory
board, based on new evidence, change its
ruling and deemed the company to be Shariah
non-compliant. Any transaction involving
shares of the company prior to the new ruling
are deemed valid, and the shareholders have
the right to profits acquired during that period.

had is not set aside by another Ijtihad

Application in Islamic Ban

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2ND MAIN LEGAL MAXIMS DEALING WITH PEOPLES


RIGHT




ACTS OF THOSE WITH AUTHORITY OVER PEOPLE
MUST TAKE INTO ACCOUNT THE INTEREST OF
PEOPLE

Acts of those with authority over people


must take into account the interest of people

Definition

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This maxim relates to:


Public service
Politics
Management
Organization
Particularly in managing and organizing the State
It gives guidance to any party responsible for managing the
affairs of others
The maxim denotes that the action of anyone who is
guardian over something or someone should be subject to
fulfilling the legitimate interests of those for whom they are
responsible

Acts of those with authority over people


must take into account the interests of the people

Definition

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The concept was articulated by Sayydina Umar bin al-Khatab when he was
the ruler of the Islamic state:
I consider myself, with regard to the wealth of Allah (public funds),
-as having the same status as the guardian of an orphan;
-if I have a personal need, I take from it;
-then, when my financial situation eases, I return it;
-and if I am not in need, I refrain [altogether].
This is probably the inspirations for Imam al-Shafii statement:
The status of a leader vis--vis his citizens is like the status of a guardian
vis--vis an orphan
Imam al-Subki expressed the principle in broader terms:
Anyone who acts on behalf of another should act based on the[rules of]
maslahah(benefit)

Acts of those with authority over people


must take into account the interest of people

Definition

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ISF 2102

WORDS

MEANING

Raiyyah

To graze because grazing animals need


to be watched and protected
To tend (a flock of animals) and
To guard , protect or take under ones
wings
Literally:
Subjects or citizens because they are
supposed to be under the care and
protection of the ruler

Tasarruf

To act independently, to dispose freely, to


administer(freely)
Action, behavior or conduct

Acts of those with authority over people


must take into account the interest of people

Explanation of the Maxim

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The general meaning of this maxim is that those who have authority over others,
either public or private, their actions and decisions should create benefit for those
in their care and secure their best interests.
Types of authority:
1) Public (ammah) involves legislations &decisions to manage the affairs of
the community as a whole
2) Private (khassah) authority which allows the holder to dispose of an asset &
or manage the affairs of another person.

Acts of those with authority over people


must take into account the interest of people

Explanation of the Maxim

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Conditions for the authority to act on behalf of others:


1) To exercise authority over a Muslim, a person should have the following
characteristics:

Islam
Puberty
Sanity
Independence
Knowledge of the relevant Shariah rules
The ability to achieve the objectives of the authority one is supposed to
exercise

2) The actions and decisions of the authority should bring benefit to those
who are under that authority

Acts of those with authority over people


must take into account the interest of people

Explanation of the Maxim

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1) Al-Quran : Surah Hud 11:88


Allah quotes Prophet Shuayb, who tells his people:

He said, O my people! Have you considered, should I stand on a manifest


proof from my Lord, who has provided me a good provision from Himself?
I do not wish to oppose you by what I forbid you. I only desire to put things in
order, as far as I can, and my success lies only with Allah: in Him I have put
my trust, and to Him I turn penitently.

Acts of those with authority over people


must take into account the interest of people

Authority of the Maxim

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2) Sunnah : Sahih Muslim 6:9 hadith no. 4834


As for Sunnah, Allahs messenger s.a.w said:

.

if any slave [of Allah] whom Allah makes responsible for the

care of citizens dies on the day he dies misleading them, Allah


will prohibit him from Paradise

Acts of those with authority over people


must take into account the interest of people

Authority of the Maxim

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If a number of individuals are eligible to become


the guardian of an orphan, the judge should give
priority to the best qualified among them
If an agent sells a good for a price clearly lower
than the market price, he is liable for the difference
because he has not acted in the interest of his
principal
It is not permissible for the authorities to appoint
an unqualified person to be the leader of prayers
(imam)

Acts of those with authority over people


must take into account the interest of people

Application of the Maxim in Fiqh

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In distributing money from the public treasury


(baitulmal), the authority should prioritize giving
assistance to the needy

The central bank should issue policies and


guidelines that will boost the development of the
Islamic banking and finance industry
The takaful fund should be covered by re-takaful
in order to share the risk and avoid the expenses
of an unexpectedly large number of claims
causing a deficit in the fund

Acts of those with authority over people


must take into account the interest of people

Application of the Maxim in Islamic Finance

3RD MAIN LEGAL MAXIMS DEALING WITH PEOPLES RIGHT



IT IS IMPERMISSIBLE TO DISPOSE OF ANOTHERS
PROPERTY WITHOUT AUTHORIZATION

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3
It is impermissible to dispose of
1
anothers property without authorization
5
1 This maxim highlight the Shariahs strong endorsement
of the concept of private property, but it also lays down
that it is not unlimited right as it may be overridden by
2
the requirements of the Shariah.
0

m 33: It is permissible to dispose of anothers property without authorization


Title

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(Tasarruf)

Means: Free disposal
More generally : action, behaviour or conduct.
Technically: the willing acts of a person that provide
the basis legal rulings.

m 33: It is permissible to dispose of anothers property without authorization


Explanation

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(Milk)

Originally an infinitive of the verb malaka/yamliku


To possess or own
To take possession or acquire
Also common noun meaning: Property, possessions or
wealth
Islam recognizes that individuals have the right to own real
estate and movable property and that ownership gives them
the exclusive right to enjoy the usufruct of their property
and to dispose it.
However, human ownership is a transitory and limited
phenomenon. The ultimate owner is Allah

m 33: It is permissible to dispose of anothers property without authorization


Explanation

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(Idhn)
Permission or authorization
The fact that idhn is mentioned in the maxim
without the possession pronoun (His) expand the
meaning of authorization to include not only
permission of the owner but also the authorization of
the Lawgiver.
General meaning of the maxim is: no one has the
right to use the property of another without the
permission of the owner or the permission of the
Lawgiver

m 33: It is permissible to dispose of anothers property without authorization


Explanation

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Rule in disposing of anothers property


Owners permission
-Basic rule in disposing of

anothers property is that the


owners permission must be
sought and attained
- Authorisation may be
expressed orally, in writing,
by gesture or any other act
that signifies his consent
-If the customary practice of
people in such situation is
that silence indicates
consent, the silence, too, is a
way for the owner to affirm
the contract

Authorisation that provided by


Shariah
-Based on the concept that all wealth
ultimately belongs to Allah and He
thus has the right to lay down rules
about the way wealth acquired and
spend.
Example: If a Muslim owes zakat but
refuses to pay it in a situation in
which the State collects it, the view of
many Scholars is that the Muslims
State should take it by force and
distribute it among eligible recipients

m 33: It is permissible to dispose of anothers property without authorization


Explanatio

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1 Disposal by Speech (Tasarruf


qawli)
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1
5
1 Disposal by act (Tasarruf fili)
2
0

Verbal disposal is done by conducting a contract such as selling anothers property,


giving it as a gift, or leasing it.
Example: The dominant opinion in contemporary application is that its validity is
contingent upon the owners permission. If he permits it after the fact, the contract is
deemed valid, otherwise is not. If disposal is done without the owners permission and is
followed by delivery of the property, it becomes disposal by act and is considered
usurpation.

Minimal level of disposal by act to take


possession of the property.
-Can also involve making physical
changes to it.

Example: If either is done with the


previous permission of the owner, the
disposer is an agent and his act is valid. If
it is done without the owners permission,
the disposer is regarded as a
ghasib( usurper) and is held responsible for
any damage caused.

permissible to dispose of anothers property without authorizationTypes of Dispos

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AUTHORITY OF THE MAXIM

Surah al-Baqarah (2):188

Do not usurp one anothers property by unjust means


nor offer it to judges so that you may devour knowingly
and unjustly a portion of the goods of others.

permissible to dispose of anothers property without authorization

The authorit

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Musnad Ahmad, 5:72, hadith no. 20714

1
3 Listen! Do not wrong one another! Listen! Do not wrong one
another! Listen! Do not wrong another one another! No ones
1 property is lawful [to another] except with his freely given
consent
5
1
Listen! If anyone oppresses a non-Muslim living peacefully
2 among Muslims, or deprives him, or requires of him something
beyond his capacity, or takes anything from him without his
0 freely given consent, I will argue against him on the Day of

As for the Sunnah, Allahs Messenger said, during a sermon at the


Farewell Pilgrimage:

Sunan Abu Dawud, 3:136, hadith no. 3054; graded sahih by al- Albani
in Sahih Sunan Abu Dawud

judgment.

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The authorit

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APPLICATION OF THE MAXIM IN FIQH

A number of heirs inherit a valuable piece of land. It is not allowed


for some heirs to force the other heirs to sell their share of the land
because this would be tantamount to dispose it without their consent

The lessee of a house is not allowed to make changes to the building


without the owners approval because he would be disposing of
anothers property without authorization

If one person loans a car to another on condition that he may drive


it, the borrower is not allowed to let anyone else to take the wheel
because to do so would be disposal of anothers property without
authorization.

permissible to dispose of anothers property without authorization

Application

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APPLICATION OF THE MAXIM IN ISLAMIC FINANCE

Islamic banks are not entitled to


use wealth placed with them by
depositors for safekeeping
( Wadiah yad al-amanah)

If the rabb al-mal imposes


restrictions on the way the
mudarib uses the mudarabah
capital, the mudarib is obliged of
anothers
property
without
authorization, which would make
the mudarib financially liable
for any loss to the capital

The board of directors of an


Islamic bank is not allowed to
make charitable donations from
the banks income without the
shareholders approval because
the banks profits belong to
shareholders

permissible to dispose of anothers property without authorization

Application

MAXIMS DEALING WITH OTHER


FORMS OF MUAMALAH

1ST MAXIMS DEALING WITH OTHER FORMS OF


MUAMALAH






IF PERMISSIBILITY AND PROHIBITION COINCIDE,
PROHIBITION PREVAILS

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DEFINITION
Important guideline for resolving situations of uncertain validity
where an act is valid or not because of the conflict between
permissibility and prohibition.
Halal

: anything that has been permitted


: encompasses wajib(obligatory)
mandub(recommended)
mubah(permissible) and makruh( disliked )

Haram : anything that has been prohibited


Ijtamaa : to gather, combine, collect, unify
Things can be halal/haram in consideration of the act associated
with them
(carrion, blood, and the flesh of swine have been made haram =
haram to eat)

permissibility and prohibition coincide, prohibition prevails

Definition

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Doubtful/Ambiguous
when it is difficult to determine if a given act is lawful or unlawful
Causes Of Ambiguity

Apparently conflicting evidence (different opinions)


Mixing the substances that are Halal with substances that are h

1) Inseparable : impurity like urine that fall into clean water and
its characteristics
: impurity like urine that fall into clean water a
changes its characteristics (remain pure if su
2) Separable

: mixing of animals
: the meat that have been properly slaughte

with

the meat killed by electrocution is unlawful

permissibility and prohibition coincide, prohibition prevails

Definition

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2
What is lawful is clear, and what is unlawful is clear, and
the two there are doubtful matters (shubuhat) which
1 between
many people do not know [the rule for]. Whoever avoids
doubtful matters maintains clarity and assurance in practising
8 the religion and protecting his honor; but whoever falls into
doubtful matters falls into the unlawful; like the shepherd who
his flock around a preserve, letting it graze almost,
2 pastures
but not quite, inside the boundary. Truly, every king has a
Abu Hurayrah (RA) quoted Allahs Messenger (SAW) as
saying :

preserve that is off-limits to others, and truly Allahs preserve


permissibility
prohibition coincide, prohibition prevails
Legal sources of the maxi
is His and
prohibitions.

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Allahs Messenger (SAW) said :


Leave that which causes you doubt for that which causes
you no doubt

permissibility and prohibition coincide, prohibition prevails


Legal sources of the maxi

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APPLICATION OF THE MAXIM IN FIQH


1) If a person sells a combination of the known and
the unknown in a single transaction, the sale is
invalid.
(selling the bull and the fetus in the womb of
pregnant cow at once)
2) A muslim is not permitted to marry a woman if it
is not clear whether she is mahram or nonmahram to him.
3) If a pastry is made with shortening that contains
lard, it makes the pastry haram.

permissibility and prohibition coincide, prohibition prevails

Application in fiqh

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APPLICATION OF THE MAXIM IN


ISLAMIC FINANCE
1)If a bank offers some products that are Shariah
compliant and others that are not. It cannot be
called an Islamic Bank until it gets rid of the
haram elements
2)If a company produces a variety of leather
goods, some made from the skins of halal
animals and some from pigskin, it is not
permitted to purchase its shares

3)Takaful operator cannot extend takaful coverage


to a company with mixed halal and haram
permissibilityactivities.
and prohibition coincide, prohibition prevails
Application in Islamic Bank

2ND MAXIMS DEALING WITH OTHER FORMS OF


MUAMALAH


m harum akhdhuhu, harum ithu
WHAT IS PROHIBITED TO TAKE IS ALSO
PROHIBITED TO GIVE

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(m harum akhdhuhu, harum ithu)


/

(verb) to be or become forbidden, pro

Hram

an adjective derived from the verb

What is prohibited to take is also prohibited to give.

Definition- Arabic tr

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Explanation of the Maxim

In Sharah terminology, it applies to every act that Lawmaker


has strictly demanded to be avoided.
Avoidance of the prohibited carries a promise of reward
While committing a prohibited act carries a threat of
punishment
Rib
Is clearly prohibited in Al-Quran
Although all of the Quranic prohibition of riba focus at
taking it,
Sunnah also makes it clear that the giver, preparer
and the witnesses of the contract are all sinful.

What is prohibited to take is also prohibited to give.

Explanation

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The Exceptions

Exceptions are for acts done for legitimate purpose and to


protect legitimate rights recognized by Shrah.
Exeptions are

1. A person confronted with a dire need of financing for


medical treatment is allowed to take a loan in which he
pays rib if he does not find anyone willing to give him
charity or an interest-free loan.
2. Iit is unlawful for persons in official positions, who receive
salaries to perform their duties, to demand or accept bribes
to do their jobs. However, scholars allow an a case by
case basis ; a person in urgent need to give such an official
a present if this is the only way to secure his legitimate
right on the condition that it is not done at the expense of
anyone elses legitimate right.

What is prohibited to take is also prohibited to give.

Exceptions

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1. Al-Quran
Allah S.W.T says in Surah Al-Midah verse 2 :
ISF 2102





Help one another to do what is right and good;
do not help one another towards sin a nd hostility

What is prohibited to take is also prohibited to give.

Sources of the Maxims

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2. Hadith
:
:

Anas ibn Malik related that Allahs Messenger (pbuh) cursed 10 people woth
rrgard to wine : the onw who squeezes the juice [from the grapes], the one for
whom it is squeezed, the one who transports it, the one to whom it is
transported, the one who pours it, the seller, the one who consumes its price,
the buyer, and the one for whom it is bought

What is prohibited to take is also prohibited to give.

Sources of the Maxims

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Application of the Maxim in Fiqh

Some Muslims cultivate poppied, which yeild opium that is


processed to make heroin. They would never think of using
the drug themselves, but some of them argue that it is
excusable ro produxw because it os exported to non-Mualim
users. However, since it is prohibited to use it, it is
prohibited to provide it to others.
A muslim is not allowed to deliver a bribe, pork, alcohol or
any non-halal item because it is prohibited to ise them,
therefore, it is prohibited to help others to use them.
It is prohibited to lie, likewise, it is prohibited to ask another
to lie on ones behalf.

What is prohibited to take is also prohibited to give.

Application in Fiqh

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Application of the Maxim in Islamic Finance

As an Islamic bankis not allowed to accept interest-bearing


deposits, it is also not allowed to extend interest-bearing
loans.
The basic rule is that a takful operator cannot underwrite
Sharah noncompliant companies, likewise it is not allowed
to seek reinsurance
with a conventional reinsurance
company.

What is prohibited to take is also prohibited to give. Application in Islamic Financ

3rd MAXIMS DEALING WITH OTHER FORMS OF


MUAMALAH

What is auxiliary (to something in fact) is auxiliary (to it in ru

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Definition of Tabi


The active participle of the verb tabaa / yatbau which
means to follow, to adhere, to comply, to pertain, to be
subordinate, to be under someones authority.
If tabi is refer to a person, it means a follower.
If it refers to a thing, it means subsidiary, subordinate,
secondary, auxiliary.

What is auxiliary (to something in fact) is auxiliary (to

Definition of Tabi

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Islamic jurists divide tabi (auxiliary) into several categories.

1. Dependent and part of


the principal.
(i.e: the organ of an
animal)

2. Can be separated from


the principal.
(i.e: fruit on a tree, fetus
in the womb)

Categories of
tabi
3. Auxiliary to another due
to the necessity
(i.e: key to a lock)

What is auxiliary (to something in fact) is auxiliary (to

4. The dependency is a
contingent relationship
(i.e: delivery of a
purchased asset)

Categories of Tab

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Definition of the maxim


Something that is auxiliary to something either in reality
(haqiqi) or in legal (hukmi), will follow its principal in its
ruling.
A thing that is attached to another thing cannot have a
different Shariah ruling from the thing that it is attached
to.
Referring to Article 48 of the Mejelle:
Judgement cannot be given separately for that which is
auxiliary of another.

What is auxiliary (to something in fact) is auxiliary (to it in

Definition

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Examples:
1. Selling a lock would include the sale of keys as well.
2. The fetus in a pregnant animal is included in the sale
of the animal.

What is auxiliary (to something in fact) is auxiliary (to

Examples of the Maxim

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Authority of the Maxim


The legality of the maxim relies on the Sunnah of the Prophet
(pbuh), ijma (consensus) and logic.
Refer to the hadith of the Prophet Muhammah (pbuh),

1.

Ibn Umar narrated that the Prophet (pbuh) said, If


someone sells a fertilized date palm to another, its fruit belongs
to the seller unless the buyer stipulates otherwise.

The fertilization took place while the tree belonged to the seller.
If the fertilization took place after the sale of the tree, the buyer will
have the right ownership on the fruit.

What is auxiliary (to something in fact) is auxiliary (to

Authority of The

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2
8

Another hadith of the Prophet Muhammah (pbuh),

Do not suspend the milking of a sheep or camel before


selling it. One who buys such an animal has two choices after
milking it. If he is satisfied with it, he may keep it. But if he is
dissatisfied, he should return it along with sa of dates.

Abu Said al-Khudri r.a related that they asked Allahs


Messenger (pbuh), We slaughter a camel or cow or sheep, and
we find a fetus inside it. Should we dispose of it, or [can] we eat
it? He told them, Eat, if you wish, for its slaughtering [occurs
by] the slaughtering of its mother.

What is auxiliary (to something in fact) is auxiliary (to

Authority of The Maxim

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1 Application of the Maxim in Fiqh


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1. A person who buys real estate has the legal title over all the
fixtures on the land, such as trees, crops, wells, etc. as well as
the easements, unless the contracting parties exclude some of
the items in the contract.

2. It is not allowed to conclude a contract for the sale of wool by


itself while it is still on the sheep nor of milk while it is still in
an animals udder.

What is auxiliary (to something in fact) is auxiliary (to

Application in Fiq

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1Application of the Maxim in Islamic Finance


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1. In sukuk and shares, if receivables are less than a percentage


stipulated by the standard-setting bodies, it is permissible to
trade them in the secondary market because the receivables
are considered auxiliary to the prevailing non-receivable
assets.

2. It is permitted for a takaful operator to underwrite the risk of a


company whose core business is halal but borrows from
conventional banks.

What is auxiliary (to something in fact) is auxiliary (to

Application in Islamic Financ

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3. If the core business of a company is Shariah compliant, but it

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has some Shariah non-compliant activities below the threshold


stipulated by the standard-setting body of that jurisdiction, it is
permissible to trade its shares because the impermissible
activities follow the ruling of the core activities, which are lawful.
Corollaries of this maxim:
1.
If the principal is dropped, the auxiliary is also dropped.
2.

The auxiliary does not take precedence over the principal.
3.

Issues may be excused in auxiliaries that are not excused in other

What is auxiliary (to something in fact) is auxiliary (to

Corollaries

4TH MAXIMS DEALING WITH OTHER FORMS


OF MUAMALAH


Idha batala al-shay batala ma fi dhimnihi

WHEN A MATTER BECOMES VOID, WHATEVER


WITHIN IT IS ALSO VOID

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Idha batala al-shay batala ma fi


dhimnihi
WHEN A MATTER BECOMES VOID,
WHATEVER WITHIN IT IS ALSO VOID

When a matter becomes void,


whatever within it is also void

Definition

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EXPLANATION OF THE MAXIM

if

: become null, invalid, inoperative, ineffective or


become abolished

: included in it or falling under it


definition : if a thing becomes invalid, anything associated
with it or
contained in it becomes invalid too
: things that are included in a main thing will be void
the main
thing is ruled to be void
Everything embedded in a sale contract is deemed invalid
when the sale contract itself is rendered invalid due to
prohibited elements that included in it.
For example, if a sale is concluded for something that
doesnt exist, whatever that is associated with the sale
agreement should not take effect.

When a matter becomes void,


whatever within it is also void

Definition

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EXEMPTION TO THE MAXIM


1. Trading in intoxicants : it is invalid in nature. But in case a
Muslim purchased liquor from a non-muslim, then he realized
the sale contract is invalid because of this maxim, he has no
right to demand a return of payment from the non-muslim
seller.
2. Purchase an asset on credit : when someone purchase an
asset on credit and pledged another asset with the condition
that the seller should indemnify any damage and loss after the
seller take possession of the collateral asset. In this case, the
invalidity of the sale contract does not invalidate the mortgage
contract associated with it.
3. Sold commodity : after the sale of commodity, the seller took
possession of the price and delivered the commodity to the
buyer but then discover that the money paid is counterfeit, he
has no right to reacquire the commodity back from the buyer.

When a matter becomes void,


whatever within it is also void

Exemption of the Maxim

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LEGAL SOURCES OF THIS MAXIM


Yahya related to me from Malik from Zayd ibn Aslam that Ibn
Wala al-Misri asked Abdullah ibn Abbas about what is squeezed
from the grapes. Ibn Abbas replied, "A man gave the Messenger
of Allah, may Allah bless him and grant him peace, a small
water-skin of wine. The Messenger of Allah, may Allah bless him
and grant him peace, said to him, 'Don't you know thatAllah
has made it haram?' He said, 'No.' Then a man at his side
whispered to him. The Messenger of Allah, may Allah bless him
and grant him peace, asked what he had whispered, and the
man replied, 'I told him to sell it.' The Messenger of Allah, may
Allah bless him and grant him peace, said, 'The One who
made drinking it haram has made selling it haram.' The
man then opened the water-skins and poured out what was in
them ."- Al Muwatta

When a matter becomes void,


whatever within it is also void

Legal Source Of The Maxim

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APPLICATION OF THE MAXIM IN FIQH


1- If a non-muslim is forced to declare himself as a Muslim, his
declaration cannot be considered as valid

The coercion exercised on the non-muslim will invalidate his


declaration
The thing included in
a main thing

The main thing

When a matter becomes void,


whatever within it is also void

Becoming a
Muslim

The act of
declaring Islam

Application of the maxim

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ISF 2102

APPLICATION OF THE MAXIM IN FIQH

1
2- If, after a sale, it turns out that the purchased good
3 did not belong to the seller and the actual owner did
not wants to sell the good, the sale contract is void
2
Buyers ownership of the property and his obligation to pay
4 the price are also null and void
The thing
Ownership of
2
included in a
the good
main thing
1
The main thing
The act of sale
8
When a matter becomes void,
whatever within it is also void

Application of the Maxim

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APPLICATION OF THE MAXIM IN ISLAMIC


FINANCE
1. a client enters into murabahah contract with an
Islamic bank to purchase a property. It turns out the
property sold to the client is located on a land that
is marked as illegal to sale. Because of that, the
sale transactionThe
is void.
The thing included
legality of the

in a main thing

land

The main thing

Murabahah
contract

When a matter becomes void,


whatever within it is also void

Application of the Maxim

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APPLICATION OF THE MAXIM IN ISLAMIC


FINANCE
2- A bank enters into a transaction without referring to
its shariah advisory board. It turns out that the
transaction is not permissible in islam. In this case, the
transaction is null and void.
Non-shariah

The thing included


in a main thing

The main thing

When a matter becomes void,


whatever within it is also void

compliance
transaction

The transaction

Application of the Maxim

5TH MAXIMS DEALING WITH OTHER FORMS OF


MUAMALAH


WHAT HAS ALREADY BEEN
ENGAGED CANNOT BE ENGAGED
BY ANOTHER

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WHAT HAS ALREADY BEEN


ENGAGED CANNOT BE ENGGAGED
BY ANOTHER
Shagala /
yashghulu
to keep busy
to occupy, fill,
hold
to engage

Mashghul
Engaged
Occupied

Maxims Dealing With Other Forms of Muamalat : What Has Already Been Engaged
Cannot Be Engaged By Another

Definition

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Explanation of the MAXIM


When a legal ruling has been passed on a
particular case, another legal ruling regarding
the same issue cannot apply to it
- because a single object cannot
accommodate two different legal ruling on the
same issue
For example : It is impermissible to enter into a
second contract on the same subject matter of
an existing contract.

It is because, when the asset is engaged with


the legal rulings and effects of one contract , it
Maxims Dealing With Other Forms of Muamalat : What Has
cannot take the legalAlready Been Engaged
ruling of another
contract
Explanation
of the
Cannot Be Engaged By Another

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Inclusion of one contract into another is of TWO types :

1. A contract that has not


yet become
binding
For example : a sale with an option period. If
the seller sells the asset
to a third party
during the option period (zaman al-khiyr), the
second contract terminates the first because
the initiative for the subsequent contracts
comes from the seller.
2. A contract that has become binding

l
Classified into TWO subcategories :
a) The second contract is executed with a
third party rather than the second party.
Means : a person pledges his asset to his creditor
Maxims Dealing With Other Forms of Muamalat : What Has Already Been Engaged
Explanation of the
Cannot Be Engaged By
butAnother
then sells it to a third party
without

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a) The subsequent contract is executed with


the same party as the first contract.
Means : If the contracted subject matter is the
same, the second contract is not valid

Maxims Dealing With Other Forms of Muamalat : What Has Already Been Engaged
Cannot Be Engaged By Another

Explanation of the maxim

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ISF 2102

Authority of the MAXIM

1 The legal authority of this maxim is derived from


the Sunnah and from logic.
3
Sunan Ab Dwd, 3:290, hadith no. 3463
2
The prophet ( ) was quoted as saying :
3

1
whoever sells two sales in one sales, he
the right to the least advantageous of
3 hasthe
two; otherwise [ it will be ] rib
0
Maxims Dealing With Other Forms of Muamalat : What Has Already Been Engaged
Cannot Be Engaged By Another

Authority of the

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Application of the Maxim in FIQH


1. It is not possible to make ihrm (intention) for
umrah while one is at Mina performing Hajj. That
is because each intention requires the person to
perform deeds different from those of the other
intention, and each set of deeds is done in a
different place.
2. It is not possible to make intention to fast a naf
fast during
Ramadhan because the obligatory fast extends
throughout
every minutes of the daylight hours.
3. It is not allowed to fast during the Eid because

Shariah has designated the Eids to be days of


festive gathering, which include eating and
drinking.

Maxims Dealing With Other Forms of Muamalat : What Has Already Been Engaged
Cannot Be Engaged By Another

Application in

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Application of the Maxim in ISLAMIC


FINANCE
1. Based on this maxim, it is impermissible to combine
two contracts at the same time upon the same object.
Hence, it is deemed illegal to combine ijrah and
mudrabah contracts in one transaction over the same
object-matter. Thus mudrib (entrepreneur) is not
permitted to receive a wage for his duties as a mudrib
because the mudrabah contract entitles him to a
share profit of the enterprise.

2. Most of the products offered by Islamic financial


institution combine at least two different contracts. To
ensure that the combination of contracts in a new
product is in line with shariah principles and does not
contradict with this maxim, the combined contract
must established separately, and hence, their legal
Maxims Dealing With Other Forms of Muamalat : What Has Already Been Engaged
Application
in Islamic
consequences should take effect one
after another,
Cannot Be Engaged By Another

6TH MAXIMS DEALING WITH OTHER FORMS OF


MUAMALAH

CONDITIONAL PROMISES ARE


BINDING

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Meaning
One who makes performance of his promise
conditional on
the fulfillment of a condition by
another party must fulfill
his promise when the
condition has been fulfilled. The
condition that
triggers fulfillment of the promise could be
either
performance of an act or abstention from an act.
Mawaid/Mawid

Taliq

To promise
Pledge
Engagement
Appointment

To hang
Suspend
Attach
To make one thing
conditional, dependent or
contingent upon another.

Lazimah
Inherent
Intrinsic
Imperative
Indispensable
Binding

Fiqh Terminology
When applied to contracts, it means legally binding

onditional Promises Are Binding

Definition

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MAJORITY OF SCHOLARS
The basic ruling on a promise to perform a lawful but non-obligatory act is
that fulfilling it is highly recommended and failing to fulfill it is highly
disliked.
Failure to fulfill a promise falls short of being sin.
If that is the case, then a simple promise is not legally binding.
HANAFI SCHOOL
When a promise is made contingent upon a condition, the promise becomes
legally binding when the condition is fulfilled.
MALIKI SCHOOL
If a promise is linked to a cause, and the promisee commences the action
which the promisor identified as the cause of the promise, the promisor is
legally bound to fulfill the promise.
The maxim does not apply to any promise to do an act that is not
legitimated by Shariah.
According to Al- Zarqa, the scope of the maxim is limited to sales and
guarantees.

onditional Promises Are Binding

Explanation Of The Maxim

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AUTHORITY OF THE MAXIM


The authority for this maxim is derived from the Quran &Sunnah:

Al-Quran

O you who believe, why do you say what you do not do? Surah Al-Saff (61):2
Hadith

The signs of a hypocrite are three: When he speaks he lies; when he promises he
breaks his promise; and when he is entrusted he betrays the trust. Sahih al-Bukhari

onditional Promises Are Binding

Authority of The Maxim

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APPLICATION OF THE MAXIM IN FIQH

Party A sells a property to Party B for a price slightly


higher than the market price. Party B regrets the sale and
Party A promises B to cancel the sale if B can find
someone who will pay the same price instead of B. If B
can find alternate buyer, Party A must honour his promise
A 3rd Party says to the creditor, If the debtor does not pay
his debt to you, I guarantee that I will settle it. If the
debtor fails to pay, the creditor can then claims his right
from the guarantor
If the seller promises the buyer that he will refund the
price of the sold asset if it is discovered that the asset
belongs to a 3rd party, he is obliged to honour the refund
in case it is established that the seller is not the actual
owner

onditional Promises Are Binding

Application Of The Maxim In Fiqh

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APPLICATION OF THE MAXIM IN ISLAMIC FINANCE


MURABAHAH
The customer promises to buy a particular commodity from the
bank after the bank has purchased it. The International Islamic
Fiqh Academy has ruled that the customer has a legal obligation
to honour his promise once the bank has completed the
purchase.
TAKAFUL
If Takaful subscribers promise to share any surplus from the
underwriting fund with the takaful operator at the end of the
year, they are obliged to honour the promise in case a surplus is
realised
AITAB HOME FINANCING CONTRACT ( IJARAH MUNTAHIYAH
BI AL-TAMLIK)
The bank promises the client to transfer the ownership of the
asset at the end of the contract period. If the client satisfies all
the condition and pays the rent regularly, the bank is obliged to
sell the property to the client

onditional Promises Are Binding

Application Of The Maxim In Islamic Finance