Essential Elements Of A Contract

Essential Elements Of A Contract2. Subject-MatterThe second essential of a contract after sighah is its subject-matter.

Meaning of subject-matter

The term subject-matter applies to commodity, consideration, performance and object of contract.Conditions Of Subject-matterIslamic law has laid down the following conditions for the subject-matter.Legality of subject-matterSubject-matter of contract must be legal or halal. It is forbidden for a Muslim to acquire or transfer through contract any thing that Shariah has declared haram. Like wine, pig, blood or animals which have died naturally or have not been slaughtered according to Islamic teachings, intoxicants and prostitution.Adultery, obscenity and immorality are prohibited by Islam and any contract or transaction that promotes them in any way is also forbidden. Articles of public property are also forbidden. Thus, a mosque cannot become a subject-matter of sale among parties.The legality of subject-matter requires that the commodity should be owned by some one. Public property is excluded and cannot become subject matter of contract.Legality of subject matter also requires that there should be no encumbrance or right attached to it. Like sale of mortgaged property to which the rights of the creditor are attached.2. Existence of subject matter

The subject matter should either beIn actual existence at the time of contractOr it should be capable of being acquired and delivered to a prospective buyer in the future.Transactions which involve an element of uncertainty and risk with regard to the existence and acquisition of the subject matter are forbidden in Islamic law.Examples of such transactions are as under:Fruits on tree at the beginning of the season when their quality is yet to be establishedSale of fish still in water.Milk in the udders of an animalSale of standing crops( which can be spoiled)Fetus yet in the mothers womb.Muslim jurists in general, hold the view that the sale of non-existent object is invalid. They based their opinion on the tradition of Holly Prophet(P.B.U.H):Sell not what you do not haveThe only exception to this rule is Salam Sale. Where the purchaser pays the price in advance while delivery of the subject matter is postponed to a specified future date. The commodity of salam sale must be those things which can be determined in terms of quality and quantity.Thus, it may be concluded that future goods are not saleable or cannot become subject matter of a valid sale in ordinary sale.3. Certainty of DeliveryThe ability or capacity to deliver the subject matter of the contract at the time of entering into the contract, is an essential condition to make a valid contract. If such capacity is lacking then the contract is void. This condition is applicable to contract of sale, mortgages and pledges. Thus, in a contract of sale the purpose is that the buyer should be able to exercise the authority and benefits of an owner. If such a capacity is missing the purpose of contract fails. Therefore, the Muslim jurists prohibit the sale of fish which is still in the water or bird in the air.4. Precise description and determination of subject matterThe subject matter must be precisely determined at the time of the contract as regards its EssenceValueQuantity Indetermination related to genus, specie, quality, price and value rendered the contract invalid under Islamic law.Example of indetermination related to genus

If a seller says that I am selling you a dress from this bundle. Such sale is irregular(fasid) because particular dress has not been indicated by the seller.If price of an item is not fixed at the time of entering into the contract. This indetermination of price renders the contract fasid. The subject matter must be ascertained and known to the contracting parties in order to avoid future disputes.The subject matter becomes known and specified when parties to the contract see and examine it at the time of contract. If subject matter is present at the time of contract then its examination is necessary and failure to examine the subject matter while it is present, invalidates the contract.Another method of determination of subject matter is sale by description. It is description of subject matter e.g., highlighting its specification or characteristics. Seller has to describe genus, kind and quantity of goods.This method is applicable where goods are not present at the time of contract. Majority of jurists allow it. But Shafis do not allow it and stipulate actual examination as a necessary condition, at the time of contract.

Some jurists allow a sale even if the goods have not been examined or described. But in this case the buyer will have an option of sight or examination after the contract. The buyer can reject the goods on examination if those goods do not conform to the given descriptions.5. Legality of objectA valid contract requires that the object and underlying cause must be legal. Any agreement for commission of illegal activity or which promotes immorality or is against public policy or harmful to a person or property or which is forbidden by law, is also illegal or unlawful and deemed void and of no legal effect. Such asA contract for the use of property in commission of an offence.Selling a weapon with the knowledge that the buyer will use it for killing innocent people.Sale of grapes to a person, who will extract wine from them. Such contract of sale is invalid because the intention and motivating cause is unlawful.A contract of marriage to facilitate re-marriage between divorced couple is invalid, because such a contract does not intend to bear the consequences of marriage.A contract to sell something on credit say for example Rs.10, and buy it back for Rs.8/- with immediate payment. This kind of sale is invalid because the purpose of the parties is to conclude a usurious transaction which is prohibited in Islam. When a contract is declared invalid on account of its illegality. Islamic law stipulate that both parties to the contract must have knowledge of such illegality. Thus, ignorance of such a fact on the part of either of the contracting parties would not render the contract invalid. In such case innocent or aggrieved party will get compensation.3.The contracting Parties Contractual Capacity Of Contracting PartiesThe basic qualification or capacity which is required for concluding a contract is termed in Islamic law as capacity for execution or ahliyyay al-ada.Capacity of Execution or Ahliyyat al-AdaDefinition The capacity for execution is capacity of a human being for the issuance of words and performance of deeds to which the lawgiver has assigned certain legal effects.There are three kinds of capacity of execution.Capacity for Khitab JinaiThis means that capacity of punishment. Whoever possesses such capacity can acquire through his words and deeds a liability for punishment.2. Capacity for Khitab of IbadatIt is the capacity requires for fulfillment of ones obligation in the world . 3. Capacity for the Khitab of MuamlatThis is the capacity for the exercise of rights and fulfillment of obligations for contracts and other transactions. It may be called the capacity for transactions.

Complete and Deficient capacities of executionDeficient Capacity Of ExecutionDeficient capacity is assigned To a non-pubert who possesses some discretion, andTo the lunatic, who has attained puberty but lacks complete mental development. A person who possesses a deficient capacity is not subject to kitab al-jinai. He cannot be held criminally liable.Purely beneficial transactions like the acceptance of gift or sadaqah are allowed to a non-pubert, who can discriminate and has been permitted to do so by his guardian.Purely harmful transactions like granting sadaqah, qard, gift, waqf, wasiyyah etc, are not to be entered into by the sabi mumayyaz(minor possessed with discretion).Transactions equally likely to result in profit or in loss like sale, hire, partnership etc. such transactions are valid by sabi mumayyaz, according to Hanafis, if permission of guardian is grantedComplete Capacity Complete capacity is established for a human being when he attains full mental development and acquires the ability to discriminate.The requirement of this capacity isReason (aql)Discretion (rushd) Such a capacity has been associated with an external standard of puberty.In the absence of signs of puberty. It presumed to have occurred, according to the majority of jurists by the age of 15 in both male and female.At the age of 18 for a male and 17 for a female according to Imam Abu Hanifa (in the absence of signs of puberty).

only puberty is not sufficient for complete capacity but in addition to puberty possession of aql and rushd(maturity of action) is also deemed necessary.Circumstances which affect the legal capacity of a personThere are certain factors, which impairs legal capacity of a person and prevent him from concluding contracts and making dispositions in his property.Junun (Insanity) Junun is the mental derangement, prevents a person from entering into transactions .Insanity eliminates the legal capacity of an individual because legal capacity is based on intelligence and discrimination and insane is destitute of that.

Transactions of insane do not produce any legal effect. He is like a minor without discretion(sabi ghayr mumayyaz).Islamic law puts an insane person under a guardian who look after his affairs.2. Atah ( lunacy or partial insanity)Matuh is partial or temporary insane person who act sometimes like a sane person and some other times like an insane person.Matuh is treated like a minor possessed with discretion (sabi mumayyaz).He is not allowed to enter in those contracts, which are disadvantageous for him.He can conclude beneficial contracts.Transactions equally results in benefit and loss, his transactions will be considered valid subject to verification by his guardian.3. Forgetfulness Forgetfulness is defined as a circumstance that befalls a man without his volition causing loss of remembrance of something.According to majority of jurists a contract concluded by mistake or forgetfulness is not a contract at all. According to the Hadith of Prophet (PBUH): My Ummah is forgiven for that which they have done through mistake or forgetfulness or under coercion.

The Hanafis oppose the majority and declare that statements made by mistake or forgetfulness are valid for the formation of contracts. 4. Safah (Prodigality and weakness of intellect)Safah has been defined as:Safah is that weakness of intellect which urges a person to act with respect to his property contrary to the dictates of intellect with the non-existence of mental disorder.

Safah is opposite of the word rushd. Rashid is a person who can identify avenues of profit as well as loss and act accordingly to preserve his wealth.The safih may validly make waqf or bequest if the court authorizes him to do so.The court has the power to give him absolute or limited authorization to handle his affairs whether wholly or in part.The court may also restrain or withdraw his authorization if it sees just grounds for doing so. 5. Death-illness (marad al-mawt)Definition Death-illness is that form of illness from which death is to be apprehended in most cases, and illness which disables the patient from looking after affairs outside his house if he is a male, and affairs within her home if she is female, provided the patient dies in such condition before a year has passed. Transactions of Marid marad al-mawt Transactions undertaken by a person on his deathbed are of two types:Transactions without considerationA person seized with a death illness is prohibited from disposing of his property without any return within the limit of two thirds to protect the interest of heirs, because his dispositions without any return such as donation, waqf, alms are considered a bequest, which is permissible to the extend of one-third of the property only.If he is in debt, he is prohibited to donate his property for it is needed to pay his debt.b) Transactions for considerationIf his disposition are for consideration and are not in favour to any one as, like it is a sale at a fair price, such disposition will be valid and effective in the life time of a sick person. The creditor and heirs will have no right to nullify it after his death. Because right of sick person have priority over their rights.

Abu Hanifah having the opinion that if the disposition is made for any of the heir, the other have right to ask for nullification, even if it were at a fair price because rights of heirs are attached to it.Other dispositions of Marid marad al-MawtAcknowledgement of debt by a person with death illness is valid and effective, irrespective of the fact that it is in favour of heir or a stranger. According to Hanafi jurists if it is favour of any heir then it will be enforceable after its ratification by the other heirs.Marriage during death illness is valid provided the dower money paid by him does not exceed the amount of fair dower. If it exceeds the fair amount of dower then excess amount will be treated as donation in the meaning of will and which will be enforced by the permission of heirs within the limit of one-third of his estate.The divorce of marid marad al-mawt is valid and enforceable. If the husband dies before the expiry of her iddat she is entitled to inherit from him.A person on deathbed can enter into the contract of Musharakah and Mudarabah. Because they related to profit. The partnership comes to an end with the death of this person so it is no way harmful for the heirs.6. Intoxication Intoxication is a condition which overtakes a man on account of taking an intoxicant and along with it his intelligence remains suspended, being neither lost nor diminished.The drunken person is one who is in a state of intoxication due to the consumption of liquor and does not know what he is saying.According to majority of jurists a contract is established by a drunken person is valid and give rise to all kinds of rights and duties because he became intoxicated out of his own choice and he knew that drinking is prohibited . According to Hanabali jurists, the statements of an intoxicated person is not to be taken into account at all as he does not intend what he is saying. He is just like insane person. Some jurists distinguish between self-induced intoxication and one caused against his will.

7. Taflis (Bankruptcy)A person is considered bankrupt when his debt exceed his assets, and court on the demand of his creditors passes a prohibitory order restraining all alienation by him, and direct the sale of his property for the benefit of his creditors.The purpose of al-hajr is to restrict al-muflis (bankrupt) in the right of disposal of his property, is to safeguard and protect the right of creditors and to prevent him from caring out transactions detrimental to his creditors.8. Coercion/Use of powerCoercion is to compel a person, without having such a right, to do a thing without his consent or through fear. Contracts made under coercion are not valid according to majority of jurists.According to Hanafis, contract under coercion is valid but is suspended, on the extinction of coercion. Mukrah (coerced person) has right to ratify it or to revoke it.