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MA’QUD ALAYHI: SUBJECT-MATTER OF CONTRACT

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Presentation on theme: "MA’QUD ALAYHI: SUBJECT-MATTER OF CONTRACT"— Presentation transcript:

1 MA’QUD ALAYHI: SUBJECT-MATTER OF CONTRACT
Prof. Dr. Zainal Azam Abd. Rahman Islamic Contract3-2

2 THE CONCEPT OF SUBJECT MATTER: MA’QUD ‘ALAYHI
In barter trading both assets exchanged can be considered subject-matters of the contract Depends on whose perspective the assets are looked at In an economy where there is money as medium of exchange, money not considered as subject matter but price in sale contracts Contract needs subject-matter to be valid Islamic Contract3-2

3 CLASS OF SUBJECT-MATTER OR MA’QUD ALAYHI
Tangible assets Usufruct of asset Work/labour of individual Debt or receivables Rights and privileges Islamic Contract3-2

4 TANGIBLE/REAL ASSETS Moveable and non moveable Qimiyy and Mithliyy
Ma’sum and ghayr ma’sum Present or absent Ordinary goods/commodity or money Islamic Contract3-2

5 RIBAWI SUBJECT MATTERS
CHARACTERISTICS OF RIBAWI ITEMS Money/medium of exchange Foodstuff Items having standard weight, measures, units The rule of parity for exchanging ribawi items The cash/spot rule Contemporary issues Islamic Contract3-2

6 USUFRUCT OF ASSET Usufruct is similar to real/tangible asset if it is valuable can be considered mal/property according to the Majority Why usufruct is treated differently ( not as mal) by the Hanafi -element of control -element of durability -ownership/tradability -exception to general rule Islamic Contract3-2

7 WORK/LABOUR OF INDIVIDUAL/ANIMAL
Human being is not saleable except with regards to slaves Human parts are also not saleable The use of labour or works as subject matter in ijarah, jualah, istisna’, musharakah, mudarabah, muzaraah Nature of services that can be secured -as employeee (ajir khas) -as independant contractor (ajir mushtarak) Islamic Contract3-2

8 DEBT OR RECEIVABLES possible situations that can impact hukm:
Selling to the debtor Selling to third parties Debt can be either monetary sum or certain goods to be delivered In exchange for another debt or sum of money The price is paid in cash or deferred term (debt) Or in exchange for tangible asset/goods Islamic Contract3-2

9 DEBT… Whether debt is confirmed/certain or prospective/potential
Whether payment to buyer is certain or doubtful/gharar/uncertainty Whether (if ribawi in nature) sold at par or not/issue or riba Whether debt sold or to be sold is due or not Islamic Contract3-2

10 DEBT NOT DUE SOLD TO DEBTOR FOR DEFERRED (DEBT) OR CASH PRICE
Not permissible according to four schools Gives rise to al-kali’ bil kali’: debt for debt if payment is also deferred If payment is in cash still the relevant issues are not addressed -selling something not in one’s possession -as such doubtful as to capability of delivery/payment to purchaser -debtor not party to the sale contract -time of delivery not due yet -if sold at discount leads to giving value to mere time in ribawi transaction if the debt is a sum of money I/paymentslamic Contract3-2

11 DUE DEBT SOLD TO DEBTOR FOR DEFERRED PRICE (DEBT)
Not permissible as in the above situation View of Ibn Taymiyyah and Ibn Qayyim regarding al-Kali’ bil Kali’ in relation to sale by description for future delivery where the price is not paid in cash: whether it is prohibited and the issue of selling salam object for cash before taking delivery for a profit margin Islamic Contract3-2

12 DUE DEBT SOLD TO DEBTOR FOR CASH PRICE
Permissible according to the four schools Hadith Ibn Umar regarding sale of camels and collecting payment in different currency Not permissible in two situations In sarf or currency excahnge In paying for advance purchase price in salam contract Islamic Contract3-2

13 DEBT NOT DUE SOLD TO A THIRD PARTY FOR DEFERRED PRICE (DEBT)
Ijma’: not permissible as it leads to al-kali’ bil kali’- debt for debt -sale is for a transfer of ownership -it is a sale from Shariah perspective -selling something not in possession Islamic Contract3-2

14 DUE DEBT SOLD TO THIRD PARTY FOR DEFERRED PRICE (DEBT)
MAJORITY/FOUR SCHOOLS: not permissible due to 1. selling something not in one’s possession 2. selling something not capable of delivery 3. full of uncertainty: denial by debtor 4. very close to debt for debt NOTES: AYN IS READY ASSET THAT IS PRESENT IN FRONT OF THE PARTIES WHEREAS DEBT/DAYN IS SOMETHING NOT THERE IN PHYSICAL SENSE Islamic Contract3-2

15 DUE DEBT SOLD TO THIRD PARTY FOR CASH PRICE
VIEW ONE (Hanafi, Hanbali and the most obvious (azhar) among Shafi’I views): not permissible due to uncertainty/gharar of delivery like selling run away animals VIEW TWO (one view in Shafi’I school, a view attributed to Imam Ahmad that are said to be the correct view by Ibn Taymiyyah and Ibn al-Qayyim: it is permissible VIEW THREE (Maliki school): 1. debt of salam if not in the form foodstuff (to be delivered by the salam seller to the purchaser) for whatever price 2) other kind of debts are saleable with 8 conditions: -cash price -debt in the form of something allowable to be sold prior to taking delivery -not involving exchange of money for -to be sold for other than its genus that needs to in the form of goods/real asset not money -debtor is known (solvency/status) and residing in the jurisdiction -debtor has admitted being indebted/no denial -no enmity between purchaser of debt and the debtor -the purported sale is not to cause problems to the debtor VIEW FOUR (Shafi’i school as held by many of its jurists): allowable to self debt of whatever nature if due on conditions: -debtor had admitted his indebtedness -debtor is solvant -the debt is dayn mustaqirr/confirmed or established debt -the price is paid in goods or reals assets Islamic Contract3-2

16 GENERAL CLASS DISCUSSION
Conventional finance and commercialization of credit/lending Debt market and risk by own design Financial crisis as a result of market distortion Due to interference with the law of supply and demand because of such commercialization of lending The peril of riba finance is obvious to see THE QUESTION: IS ISLAMIC FINANCE EQUALLY INVOLVED?? Islamic Contract3-2

17 NATURE OF RIGHTS Rights of Allah, Rights of Man, Combined rights
Right granted by Shariah to avoid hardship or injustice to the person concerned, cannot be exchanged with price or tanazul for a fee Right granted by Shariah not for the above reason specifically -cannot be sold -cannot be inherited -cannot be given for free/hiba -can only be exchanged in sulh or tanazul for a fee Islamic Contract3-2

18 RIGHTS AND ITS CLASSIFICATION
Rights can be looked at as: Right of ownership (complete and incomplete) Right to acquire ownership (ownership will materialize at a later time when that right is eventually exercised Right of ownership compared to right to make use (haqq al-intifa’) Rights personal to the holder only not transferable freely Rights allowed to be sold for a price Rights not allowed to be sold but can be subject of sulh/tanazul -full complete right of ownership (al-milk al-tamm) compared incomplete right of ownership (al-milk al-naqis) al-milk al-tamm compared to beneficial right and haqq al-intifa’ -al-milk al-tamm give to holder full power of disposal and control and assumption of risk and gain of the asset -haqq al-intifa’ only gives right to use not power of disposal -beneficial right gives incomplete power of disposal and control to the holder Islamic Contract3-2

19 PRIORITY CAN NOT BE SOLD
Priority in ihya’ al-mawat case by tahjir Concession/alienation by government/iqta’ By being first to control abundant items/mubah By being the first to occupy open market space By being the first to be in the first raw in the mosque or other public spaces open for all Islamic Contract3-2

20 HUQUQ MA’NAWIYYAH: INCORPERIAL RIGHTS
Intellectual property rights -copyright -patent -license -trademarks goodwill Islamic Contract3-2

21 GENERAL CONDITIONS GOVERNING DEALING IN RIGHTS
The right must be fully established at that material time; not potential right It is granted not specifically for a particular holder for the purpose of avoiding injustice or harm to him personally Such a right is transferable to other person not personal to the holder It is possible to define the boundary or nature/attribute of the right such that intolerable uncertainty/gharar can be avoided That right is generally accepted based on customary practices/uruf Islamic Contract3-2

22 SPECIFICATION OF THE SUBJECT MATTER
Jins/genus Naw’/category Sifah/attributes Quantity Specifications needed to avoid possible dispute between parties If subject-matter is present, buyer has right of inspection Contemporary issues Islamic Contract3-2

23 DELIVERABILITY OF SUBJECT-MATTER
Must be in seller’s ownership and possession Meaning of ownership: complete and partial Implication of possession Possession of movable and non-movable asset The rationale for the ruling: uncertainty and issue of risk and avoidance of dispute The issue of frustration of contract when asset is destroyed before delivery to the other party Contemporary issues Islamic Contract3-2

24 EXISTANCE OF SUBJECT-MATTER
Non-existent can not be contracted as a general rule Ability to deliver is questionable The Hanbali view on this is peculiar to this mazhab Exception in the case of salam and istisna’ where sales are based on description Contemporary issues Islamic Contract3-2

25 PERMISSIBILITY/HALALNESS or LEGALITY OF SUBJECT-MATTER
Halal for Muslims to posses or acquire Recognised for non-Muslim to possess but not Muslims Impure things can not be acquired Permissible works Permissible employment of asset in ijarah Dealing with individuals whose assets are essentially of haram origin Dealing with non-Muslims Selling of goods likely to be used for illegal purposes Contemporary issues Islamic Contract3-2

26 SUITABILITY OF SUBJECT MATTER
Durability of the subject matter for rahn Life span of asset in ijarah/;leasing Asset that can be properly described in salam Specific object or an object fully described in some contracts Purpose of the contract and the likelihood of used of the subject-matters Islamic Contract3-2


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