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object of International Humanitarian law...

• To ensure the peace and security in the world. • Protection to civilians • Protection to women • Protection to child • Protection to national and cultural heritage • Military object • Stooping armed conflict • Protection to persons horse-de-combat • Providing service to conflict country • Protection to service holder • Protection to wounded • Protection to refugee • Special protection for women

These are the main object of international Humanitarian Law. For fulfill these object, international Humanitarian law is established.

Islamic commercial law....

Introduction: A contract intends to formalize an agreement between two or more parties, in relation to a particular subject. Contracts can cover an extremely broad range of matters, including the sale of goods or real property, the terms of employment or of an independent contractor relationship, the settlement of a dispute, and ownership of intellectual property developed as part of a work for hire. Definition of contract: Below The mentioned some prominent definition of law of contract.

1. In general, An agreement is enforceable by law is contract.
2. An agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration.
3. A legally binding agreement. In other words… “ A promise or set of promises which the law will enforce”. The agreement will create rights and obligations that may be enforced in the courts. The normal method of enforcement is an action for damages for breach of contract, though in some cases the court may order performance by the party in default.
4. Contract in Islam is an engagement and agreement between two or more parties in a legally accepted, impactful and binding manner.
5. According to Kharofa, the word ‘aqd (contract) in Arabic language means tying tightly, as in tying a rope. Arabs used the word to speak about firm belief or determination.
6. ‘an agreement which commits a person or a group of persons to give something, do something or refrain from something to another person or group of persons.’
7. An engagement and agreement between two parties in a legally accepted, impactful and binding manner or an agreement between competent parties, upon a consideration sufficient in law, to do or not to do a particular thing.
8. A contract is formatted between two competent parties for lawful consideration. The object of contract must be legal.

Reference http://www.slideshare.net/junaidmirza/introduction-to-contract-law-in-islam http://www.expertlaw.com/library/business/contract_law.html, http://www.slideshare.net/theacademist/introduction-to-contract-law, http://www.financialislam.com/islamic-commercial-contracts.html, https://cief.wordpress.com/2006/01/16/definition-of-contract

Elements of law of Contract : Below the mentioned elements of law of contract.

Offer and acceptance Intention to create legal relations Consideration Legal capacity Consent Illegal and void contracts Offer and acceptance A contract is formed when an offer by one party is accepted by the other party. An offer must be distinguished from mere willingness to deal or negotiate. For example, X offers to make and sell to Y calendars featuring Australian paintings. Before any agreement is reached on size, quality, style or price, Y decides not to continue. At this stage, there is no legally binding contract between X and Y because there is no definite offer for Y to accept until the essential terms of the bargain have been decided. An offer need not be made to a specific person. It may be made to a person, a class of people, or to the whole world. An offer is a definite promise to be bound, provided the terms of the offer are accepted. This means that there must be acceptance of precisely what has been offered. For example, a used car dealer offers to sell B a Holden panel van for $1,000, without a roadworthy certificate. If B decides to buy the Holden panel van, but insists on a roadworthy certificate being provided, then B is not accepting the used car dealer’s offer. Rather, B is making a counter offer. It is then up to the used car dealer to accept or reject the counter offer. A person can withdraw the offer that has been proposed before that offer is accepted. For withdrawal to be effective, the person who has proposed the offer must communicate to the other party that the offer has been withdrawn. To continue the example above, the used car dealer may say to B that he’ll check with his supervisor and maybe a roadworthy certificate can be provided. If, while waiting for a reply, B decides he does not want to buy the Holden panel van and he tells the used car dealer of his change of mind, then there is no binding contract. Acceptance occurs when the party answering the offer agrees to the offer by way of a statement or an act. Acceptance must be unequivocal and communicated to the offer or: the law will not deem a person to have accepted an offer merely because they have not expressly rejected it. Some modifications to the rules of offer and acceptance have been made to protect consumers by sections 18 and 41 of the Competition and Consumer Act 2010 (Cth) schedule 2 Australian Consumer Law (“ACL”); for example, invitations or offers to purchase cannot be misleading or deceptive (see Chapter 12.2: Consumer Guarantees). Intention to create legal relations A contract does not exist simply because there is an agreement between people. The parties to the agreement must intend to enter into a legally binding agreement. This will rarely be stated explicitly but will usually be able to be inferred from the circumstances in which the agreement was made. For example, offering a friend a ride in your car is not usually intended to create a legally binding relation. You may, however, have agreed with your friend to share the costs of travelling to work on a regular basis and agree that each Friday your friend will pay you $20 for the running costs of the car. Here, the law is more likely to recognise that a contract was entered into. Commercially based agreements will be seen as including a rebuttable intention to create a legally binding agreement. However, the law presumes that domestic or social agreements are not intended to create legal relations. For example, an arrangement between siblings will not be presumed to be a legally binding contract. A person who wants to enforce a domestic or social agreement will need to prove that the parties did intend to create a legally binding agreement. Consideration Consideration is the price paid for the promise of the other party. The price must be something of value, although it need not be money. Consideration may be some right, interest or benefit going to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other party. So long as consideration exists, the court will not question its adequacy, provided that it is of some value. For example, the promise to pay a peppercorn in return for the lease of a house would be good consideration. Of course, the consideration must not be illegal or impossible to perform. There is an exception to the rule: documents under seal (deeds) do not require consideration for there to be a binding contract. However, since few contracts between people are made in this way, it is not discussed further in this chapter. Legal capacity Not all people are completely free to enter into a valid contract. The contracts of the groups of people listed below involve problematic consent, and are dealt with separately, as follows: • people who have a mental impairment; • young people (minors); • bankrupts; • corporations (people acting on behalf of a company); and • prisoners. People who have a mental impairment Generally speaking, people are free to enter into contracts even though they may have a mental impairment, or are temporarily disabled by drugs or alcohol. They are, however, sometimes vulnerable to being bound by contracts they do not fully understand. The question of capacity to make the contract often arises only after the contract is in place. People with disabilities and their advocates will find some protection in the rule that a contract is not valid and enforceable unless there was genuine consent to its making. Capacity to give consent involves a general understanding of the nature of the contract (not necessarily its fine details). A person with a mental impairment, for example, may have the capacity to understand some contracts (e.g. buying a loaf of bread), but not to understand other, more complicated contracts (e.g. buying a car on credit). Where a person with a disability did not understand the general nature of the contract, a court can intervene to set aside the contract only if: • the other party knew (or ought to have known) of the disability or lack of capacity and it would be unfair for them to take advantage of that; and • the benefit received by the other person has not been sold to a third party who did not know the previous transaction might not be valid. Generally, to escape the consequences of a contract, the other party should be notified of the intention not to be bound by the contract within a reasonable time. Some people with disabilities (temporary or long-term) are assisted by an administrator appointed by the Guardianship List of the Victorian Civil Administration Tribunal (VCAT). For further information on the role of an administrator, see Chapter 16.6: Guardianship and Administration. People with disabilities who have an administrator appointed to act on their behalf are generally not free to enter into contracts, unless this is approved in writing by their administrator or an order of the Guardianship List of VCAT. A person with an intellectual or psychiatric disability will be liable to pay only a reasonable price for necessaries sold and delivered (s 7 Goods Act 1958 (Vic)). “Necessaries”, and the rules applicable here, are dealt with in “Young people”, below (because the definition is the same for both groups). Young people The term young person is used here to refer to anyone under the age of 18 years (s 3 Age of Majority Act 1977 (Vic)). Sometimes legal writing refers to minors or infants. The exact capacity of young people to bind themselves and be bound by contract is limited but also unclear, because no Act of Parliament completely covers this area of law. The Supreme Court Act 1986 (Vic) in sections 49 to 51, “Contracts of Minors”, is the most useful reference on this question.

Binding contracts and young people Contracts for the supply of “necessaries” will generally be binding. There are no hard and fast rules to identify what is “a necessary”, but it does include the sorts of things the young person needs to live a reasonable lifestyle. It includes basics such as: • food; • clothing; • a place to live; • medicine, and so on. It will also include any contracts relating to the young person’s education, apprenticeship or something very similar, if it can be shown to be of benefit to the young person. While a court has not yet considered the issue specifically, mobile phones are probably not necessaries. The young person contracting in this situation will be held bound to pay a reasonable price (although that may not be the contract price) for necessaries actually sold and delivered. (“Delivery” is a technical term. Generally, delivery takes place when the seller has given the buyer the power to take the goods away.) Where necessaries have been sold but there has been no delivery, the young person does not have to take delivery or pay for the goods. Non-binding contracts and young people Two classes of contracts are not binding on a young person, namely: • contracts that are not for necessaries; and • contracts for the repayment of money lent or to be lent (that is, any form of credit contract). Where a young person has already paid money under a non-binding contract, that money will not be recoverable unless no benefit has been received by the young person. The young person can, however, refuse to make any further payments under the contract. It is not certain who then owns goods that are not necessaries. It appears that they become the property of the young person unless the young person has fraudulently misrepresented their age. Even after turning 18, a person cannot confirm a prior contract and then become bound by it. Any money paid by a young person under such circumstances may be recovered. Bankrupts Bankrupt people are not deprived of their general capacity to contract. However, there are provisions of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) that relate to dealings and contracts by bankrupts. For example, obtaining credit of $3,000 (as at 20 May 2013) or more without disclosing your bankruptcy is an offence and liable to penalty under section 269 of the Bankruptcy Act (see “The effect of bankruptcy on debts”, in Chapter 8.3: Bankruptcy). Corporations A corporation is an artificial body created by law. The corporation has a legal existence separate from the individual people who comprise it. However, a company has the legal capacity of a natural person and therefore has the capacity to enter contractual relations (see s 124 Corporations Act 2001 (Cth)). This is so even if there is an express prohibition contained in the company’s constitution. Such transactions are not deemed void and beyond the company’s powers simply because the exercise of such powers is in breach of the restrictions placed in the company’s constitution (s 125(1)). A company has the capacity to enter contractual relations, but such relations are only binding on the company if those acting on behalf of the company do so with the company’s express or implied authority (s 126(1)). The courts have been quite liberal in their interpretation of implied authority. It has been found that in cases where directors with express authority have acquiesced and allowed a director with no authority to frequently enter contractual relations on behalf of the company, that such directors have implied authority and therefore can contractually bind the company. Prisoners During their imprisonment, prisoners may enter contracts, including contracts to buy and sell property. The usual restrictions about supervision and censorship of anything coming into the prison still apply, so that the permission of Corrections Victoria is required before a prisoner may sign for, deliver or receive any document. (For further information, see “Employment and money” and “Communication with prisoners”, in Chapter 4.5: Prisoners.) Consent Entering into a contract must involve the elements of free will and proper understanding of what each of the parties is doing. In other words, the consent of each of the parties to a contract must be genuine. Only where the essential element of proper consent has been given is there a contract that is binding upon the parties. The ultimate consequences of establishing that no proper consent was given to enter the contract are matters dealt with when considering remedies for breach of contract (see Chapter 12.4: Consumer Remedies). Proper consent may be affected by any of the following matters: • mistake; • false statements; • duress; and • undue influence or unconscionability. Mistake Only a few types of mistakes will cause the contract to be non-binding on the parties to it: they must be mistakes that go to the very basis of the agreement. For example, where there is a contract for the sale of a car that both parties assume to exist, although in reality it has been destroyed by fire, this contract is non-binding on the parties. By contrast, where the parties are only mistaken about the model of the car, then this contract would be binding. Another example is when a person signs a written document mistakenly believing that it relates to something entirely different from what in fact it does relate to, in this case the person will not be bound by it. This means that if X is told to sign a document that X reasonably believes to be something like a character reference to assist Z to obtain a loan from a finance company, and the document is later discovered to have been a guarantee of the loan contract, then the guarantee will not be binding on X. A third example is when Y cannot read, due to blindness or illiteracy or other disability. Someone else tells Y what is in the document and Y signs it. The document Y signed is not what Y was told it was. The document Y signed would not be binding on Y. By contrast, if a person who signs a document believing it to be a contract does not read the terms and conditions that person will be bound by the contract and will not be entitled to plead mistake. Other factors may also be relevant to a successful plea of mistake. For instance, whether or not the defence of mistake will be allowed often depends on whether an innocent third party will be adversely affected by a decision that the contract is non-binding. Again, if the signer was careless and failed to take reasonable precautions, the defence will not be allowed to succeed. For these reasons, it is wise to seek legal advice about whether or not a court would hold the contract binding on these grounds. False statements There are serious false statements and minor false statements that might be made by parties contracting with each other. Different consequences flow, depending on the seriousness of the false statement made. False statements might be made where either: • the parties come to agree and contract because one of them has been motivated to agree by a statement of fact (something said or written) that is not true. Commonly, these types of statements have not actually been included in the contract itself but were an encouragement to enter into the contract. For this reason, they are viewed as though they were part of the contract; and/or • the parties have agreed and there is a contract, but the statements or terms in the contract exist only because one of the parties has made a false statement. False statements affect the question of whether or not a contract exists. Very serious false statements mean a court would view the contract as void (see Glossary) and unenforceable. The consequence is that monetary damages sufficient to place the wronged party back to their original position must be paid. In other (less serious) instances, the court will find the contract valid but the wronged party will be entitled to reject the contract or to treat it as at an end. Here, monetary damages sufficient to place the wronged party in the position they would have been in, had the contract been properly completed, must be paid. Where a false statement has put the wronged party at a disadvantage or caused some loss, but not enough damage has been done to justify ending the contract, then the contract will be valid and the wronged party will be bound to the contract, but entitled to sufficient monetary damages to make up for the loss suffered as a consequence of the false statement. The two most important factors considered to determine the level of seriousness at which a false statement will be viewed are as follows. The false statement: a condition or a warranty? “Conditions” of a contract are so important that without them one or other of the parties would not enter the contract. If a false statement amounts to a condition of the contract, the wronged party is entitled to rescind (see Glossary) the contract. A court may view the condition so seriously that without it the contract is void; that is, with the false statement taken out of the contract, there is no contract. Less important statements are called “warranties”. Where the false statement amounts to a warranty, the wronged party will only be permitted to receive sufficient monetary damages to make up for any loss suffered; the contract will continue to exist and the parties will continue to be bound by it. For further details about conditions and warranties, see “The terms of a contract”, below. What type of false statement was made? There are three types of false statements: • fraudulent misrepresentation; • innocent misrepresentation; and • negligent misrepresentation. Fraudulent misrepresentation To prove fraud, it is necessary to show that the person making the statement knew it was false, had no belief in its truth, or knew it might be false and recklessly went ahead and made it anyway, not caring whether it was true or false. It is very difficult to prove fraud. Once proved, however, the innocent party can rescind the contract, sue for damages for deceit, or both. Innocent misrepresentation An innocent misrepresentation will be made where the false statement is made with no intention to deceive. An innocent misrepresentation could nevertheless be a serious false statement (being a condition of the contract), or a breach of warranty. The level of seriousness will be determined by an appraisal of all the circumstances of the contract. If innocent and without negligence, the only available remedy is rescission (see Glossary for meaning). Negligent misrepresentation A negligent misrepresentation will arise where a party to the contract is under a special duty of care to the other party. This special relationship will be held to exist where the person making the false statement claimed to have some special skill not generally possessed by an ordinary member of the community, and where that person was prepared to exercise this special skill on behalf of the person to whom the false statement was made. The wronged party must be able to show that: • the person making the false statement could reasonably be expected to foresee that the false statement would be relied upon; • in the circumstances it was reasonable to rely on the statement; • the statement was made without due care; and • the statement was false. Once again, the level of seriousness of a false statement made in these circumstances can vary. Where there is a serious breach, the innocent party can rescind the contract and recover damages for negligence. Duress Proper consent may be affected by duress. Duress is held to have occurred where there has been actual or threatened violence either to the other contracting party directly or to their immediate family, near relatives or close associates. The duress may be made by someone acting under the instructions of the party to the contract. The net effect, though, will have been that a party has been forced into the contract by being deprived of their free will to act. Duress now extends to contracts entered into as a result of threats to a party’s economic well being, that is, a threat to a person’s business or trade. This form of duress is called economic duress. The consequence of establishing duress is often that the contract is voidable at the election of the wronged party. Where the wronged party elects to have the contract declared void, monetary damages sufficient to place the wronged party in their original position must be paid. Where the wronged party elects to continue with the contract, monetary damages to cover any loss suffered because of the duress must be paid. Undue influence or unconscionability Proper consent may be affected by undue influence. Undue influence is exercised by taking unfair and improper advantage of the weakness of the other party, to the extent that it cannot be said that that party intended voluntarily to enter into the contract. The main reason for the rule against the use of undue influence is to correct abuses of trust and confidence. It is applied where the parties are in a relationship where one party may be able to exercise considerable influence over the other party. There are two categories of undue influence. The first is where no special relationship exists, but the stronger party will have used some fraud or wrongful act expressly to gain an advantage from the weaker party. The weaker party will have to prove that undue influence was actually exerted. The second is where the parties are in a confidential relationship; most cases of undue influence fall into this category. A confidential relationship exists when one party’s position towards the other’s involves a dependency or trust, in the form of authority or an expectation to give fair and independent advice to the weaker party. Where a confidential relationship is found to exist, a presumption of undue influence will arise. It is then necessary for the stronger party to show that the contract was not the result of any undue influence. A confidential relationship and the presumption of undue influence can be established in either of two ways. First, the parties may be in a well recognised special relationship, for example, solicitor and client, doctor and patient, religious or spiritual adviser and devotee. Second, the confidential relationship, although not falling within any well recognised relationship, is such that the complaining party is able to show that the other party was in a position of influence. For example, it could be the relationship between a ban

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k and its customer, because of a special position of trust that the bank had come to occupy in connection with the conduct of this customer’s affairs. (It has been stressed, however, that in ordinary circumstances no presumption of undue influence arises out of a banker-customer relationship.) See, for example, Commercial Bank of Australia v Amadio [1983] HCA 14 (for a summary of Amadio’s case, see “Unconscionable conduct”, in Chapter 12.3: Consumer Protection Legislation). The consequence of establishing undue influence is that the contract may be held voidable at the election of the wronged party. For details of complaints of undue influence in relation to some types of loan contracts and related complaints of unjust contract, unconscionable dealings, harsh and oppressive contracts, etc., see “Unjust contracts, changes and charges”, in Chapter 13: Credit and Finance. Corporations are prohibited from engaging in unconscionable conduct in relation to the provision of goods or services by virtue of sections 20, 21 and 22 of the ACL (see “Unconscionable conduct”, in Chapter 12.3: Consumer Protection Legislation). Unfair contract terms and standard form contracts The ACL regulates unfair contract terms. A term is unfair when it: • causes a significant imbalance in the parties’ rights and obligations arising under the contract; and • it is not reasonably necessary to protect the legitimate interests of the supplier; and • it causes detriment to another party. In determining whether a contract term is unfair, a court must consider the transparency of the term as well as the operation of the contract as a whole. For example, certain highly advantageous terms might need to be counterbalanced against other disadvantageous terms. Certain terms cannot be determined to be unfair, for example the price of a good or service or the main subject. Unfair contract terms are discussed in more depth in Chapter 12.3: Consumer Protection Legislation (see “Unfair contract terms”).

Illegal and void contracts The law will not enforce all contracts. There are some categories of contract to be wary of. Where a contract is illegal, this may affect its enforceability. Contracts that are illegal by statute will be regulated as to enforceability by the statute; thus the statute will need to be read and interpreted. Contracts absolutely prohibited by statute will be void, whether the parties know of the illegality or not. However, where one party performs an otherwise legal contract in a manner that breaches legislation, the other party, if having no knowledge of the facts giving rise to the illegality, can still enforce the contract or recover damages for breach of it. They may also recover money or other property transferred under the contract. Contracts made void by statute are treated differently; while they remain valid contracts, the courts will not enforce them. Again, the precise extent of the enforceability of, or the recovery of any money paid under, a void contract will depend on the particular statute. Certain types of contracts are illegal at common law, because they are contrary to the public good. These include contracts: • to commit a crime, a tort or a fraud; • that are sexually immoral; • that prejudice public safety, including good relations with other states or countries; • that prejudice the administration of justice; • that tend to promote corruption in public life; and • to defraud the revenue.

Illegally formed contracts are generally void and unenforceable by either party at common law. Therefore, property or money transferred cannot be recovered.

Where legally formed contracts are performed in an illegal manner (i.e. the illegal conduct was not an intended or required part of the contract but merely incidental to the way it happened to be performed) then the contract is not void, but: • no remedies are available to the guilty party; and • the innocent party retains all rights and remedies (provided they did not know the contract was to be performed illegally). Certain types of contracts are void at common law, being contrary to the public good. These include contracts: • to oust the jurisdictions of the courts; • prejudicial to the status of marriage; • in restraint of trade (unless the restraint is reasonable both between the parties and in the public interest). The courts here will look at the relative bargaining power of the parties. Restraint imposed between equals is viewed with more favour than, for instance, a contract between an employer and employee in unequal bargaining positions. The general rule is that the contract is void only so far as it is contrary to the public good; it is not void entirely. That is, the offending part can be removed provided that the rest of the contract continues to make sense. However, contracts illegal at common law are not “severable”; that is, the “illegal” parts of the contract cannot be removed or severed from the “legal” parts. Money paid or property transferred under a contract that is void at common law may be recoverable because the effect of the contract being void is that there is no contract, so that the parties should be put back to their original position. Other kinds of conduct that might or might not affect the enforceability of a contract are covered by the ACL, which include prohibitions against: • misleading or deceptive conduct; • unconscionable conduct; and • misrepresentation in particular matters.

Reference http://www.lawhandbook.org.au/handbook/ch12s01s02.php

Elements of a contract under Islamic law: Below the mentioned elements of a contract under Islamic law. The first element of valid contact in shariah law is offeror and offeree. As for the parties to a contract, they must be legally competent to enter into a contract. The competence to transact in Islamic law is measured largely by two aspects, namely prudence and puberty as revealed in surah al-Nisa’ verse 6 "Observe the orphans through testing their abilities until they reach the age of marriage; then if you find them capable of sound judgement, hand over to them their property ". The most important part of each party is the possess capacity. It has been describe with capacity (ahliyyah) according to Shari‘ah ’Islamiyyah. Therefore, the Islamic scholar defined the capacity as a quality, which makes a person qualified for acquiring rights and undertaking duties and responsibilities.

The second element of valid contact in shariah law is offer (‘ijab) and acceptance (qabul). Offer means a specific action that reflects consent or willingness of its maker that presumed from the word first uttered by one of the contracting parties. Offer may be verbal or in writing. Under shariah law, word qabul (acceptance) is used to represent a statement uttered indicating assent to the ‘ijab(offer). Muslim Jurist takes two different approaches interpreting qabul. The majority view is that qabul is made by the buyer or the person to whom the subject matter of the contract is addressed regardless as to whether this comes first or later. Whereas the Hanafi school holds a more flexible approach when qabul is defined as the word uttered later corresponding to the terms of a subsisting later. And it may be expressed by either the seller or the buyer. This is somewhat similar to common law. Offer and acceptance also may be concluded by means of representatives or modern communication systems such as the telephone, telex, fax, e-mail and letter.

The third element contract in the shariah law is subject matter (mahal al-‘aqd). Mahal al-‘aqd must be mal (property or wealth) mal is defined as something which can be secured for use at the time of need. The term mal here is generally translate as property and the word property is applicable only to objects which have a perceptible existence in the outside world that is to say things sold which is a thing fixed and individually perceptible as designated at the sale. A contract has to have a place or reference (mahal al-‘aqd) which is the subject matter of the contract. The place of reference in contract is its subject matter which is the place of application of its rule and which does not go against its purpose. Islamic law focused on the lawfulness, existence, deliverability and precise determination. Lawfulness requires that the object must be lawful, that is something, which is permissible to trade and must be of legal value that is, its subject matter and the underlying cause “sabab” must be lawful. The parties to a contract must legally own the object “qabd”.

The issues of existence presuppose that the object of a contract must be in existence at the time of contract. The object must be capable of certain delivery and it must be determined precisely as to its essence, its quantity and its value.

According to Islamic jurisprudence, the subject matter of a contract could be corporeal property as in granting sale and mortgage and benefit as in rent. In case the subject’s nature was not of the kind that admits this kind of transaction, then the transaction and the contract are nullified. Thus, a contract involves sale of endowed property is nugatory, albeit a contract involving rent of such property is correct and acceptable. There are several conditions for subject matter; (i) the subject matter must exist, (ii) the subject matter can be delivered, (iii) the subject can be ascertained, (iv) suitability of the subject matter. As for the consideration of price, Islamic law does not restrict it to a monetary price, but it may be in the form of another commodity. The Islamic prohibition against uncertainty requires that the price must be in existence and determined at the time of the contract and cannot be fixed at a later date with reference to the market price, nor can it be left subject to determination by a third party. The fourth element of valid contract in syariah law is legal capacity (ahliyyah). Capacity is one of the elements of a contract for the purpose of acquiring legal rights and mutual benefits and to facilitate the imposition of the obligations on the parties. The right to contract and the obligations can only exist where there is capacity to contract. In syariah law, no person can validly conclude a legal transaction without first having attained physical and intellectual maturity that being the equivalent of majority to enjoy full capacity, a person, should attain physical puberty and enjoy sound judgment known also as prudence in his or her judgment.

Based on the requirements for a valid contract that had stated earlier, there are some examples of cases that related to sharia law.

Reference http://www.lawteacher.net/free-law-essays/contract-law/requirement-for-valid-contract-to-shariah-law-contract-law-essay.php

Types of contract in Islam: In accordance with Islamic law (sharia), Islamic financial products are based on specific types of contracts. These Sharia-compliant contracts support productive economic activities without betraying key Islamic principles as some conventional financial products do. Sharia-compliant contracts cannot create debt, cannot involve the payment of interest, and must provide for a sharing of risk and responsibility between the involved parties.

To be valid, an Islamic contract must feature subject matter that is lawful, has value for a Muslim, and is specific enough to avoid uncertainties. The service or asset described in the contract generally must exist when the contract is being created, must be owned by the seller (hence prohibiting short sales of stock, for example), and must be deliverable.

Here are some of the most commonly used contracts in Islamic finance: • Contracts of partnership allow two or more parties to develop wealth by sharing both risk and return: o Mudaraba: One party gives money to another party, which invests it in a business or economic activity. Both parties share any profit made from the investment (based on a pre-agreed ratio), but only the investor loses money if the investment flops. The fund manager loses the value of the time and effort it dedicated to the investment. (However, the fund manager assumes financial responsibility if the loss results from its negligence.) o Musharaka: This contract creates a joint venture in which both parties provide investment capital, entrepreneurial skills, and labor; both share the profit and/or loss of the activity. • Contracts of exchange are sales contracts that allow for the transfer of a commodity for another commodity, the transfer of a commodity for money, or the transfer of money for money: o Murabaha: In this cost plus contract, an Islamic financial institution sells a commodity to a buyer for its cost plus the profit margin, and both parties know the cost and the profit in advance. The buyer makes deferred payments. o Salam: In this forward contract, the buyer (or an Islamic financial institution on behalf of the buyer) pays for goods in full in advance, and the goods are delivered in the future. o Istisna: This second type of forward sale contract allows an Islamic financial institution to buy a project (on behalf of the buyer) that is under construction and will be completed and delivered on a future date. • Contracts of safety and security are often used by Islamic banks; these contracts help individual and business customers keep their funds safe: o Wadia: A property owner gives property to another party for the purpose of safeguarding. In Islamic banks, current (checking) accounts and savings accounts are based on the wadia contract. o Hiwala: Debt is transferred from one debtor to another. After the debt is transferred to the second debtor, the first debtor is free from her obligation. This contract is used by Islamic financial institutions to remit money between people. o Kafala: A third party accepts an existing obligation and becomes responsible for fulfilling someone’s liability. In conventional finance, this situation is called surety or guaranty. o Rahn: A property is pledged against an obligation. A customer can offer collateral or a pledge via a rahn contract in order to secure a financial liability.

Types of contract in general Law: Contracts can be classified into five broad divisions namely 1. The method of formation of a contract 2. The time of performance of contract 3. The parties of the contract 4. The method of formalities of the contract 5. The method of legality of the contract 1. The method of formation of a contract Under the method of formation of a contract may be three kinds • Ø Express contract • Ø Implied contract • Ø Quasi contract

Express contract: Express contract is one which expressed in words spoken or written. When such a contract is formal, there is no difficulty in understanding the rights and obligations of the parties.

Implied contract: The condition of an implied contract is to be understood form the acts, the contract of the parties or the course of dealing between them.

Quasi contract: There are certain dealings which are not contracts strictly, though the parties act as if there is a contract. The contract Act specifies the various situations which come within what is called Quasi contract.

2.The time of performance of contract Under the method of the time of performance of contract may be two kinds • Ø Executed Contract • Ø Executory Contract

Executed Contract: There are contracts where the parties perform their obligations immediately, as soon as the contract is formed.

Executory Contract: In this contract the obligations of the parties are to be performed at a later time. 3. The parties of the contract Under the method of the parties of the contract may be two kinds • Ø Bilateral Contract • Ø Unilateral Contract

Bilateral Contract: There must be at last two parties to the contract. Therefore all contracts are bilateral or multilateral.
 Unilateral Contract: In certain contracts one party has to fulfill his obligations where as the other party has already performed his obligations. Such a contract is called unilateral contract.

4. The method of formalities of the contract Under the method of the method of formalities of the contract may be two kinds • Ø Formal contract • Ø Informal contract

Formal contract: A formal contract is a contract which is formatted by satisfied all the essentials formalities of a contract.
Informal contract: An informal contract is a contract which is failed to satisfy all or any of the essentials formalities of a contract.

5.The method of legality of the contract Under the method of the method of legality of the contract may be five kinds 1. Valid Contract 2. Void Agreement 3. Void able Contract 4. Unenforceable Agreement 5. Illegal Agreement

Valid Contract: An agreement which satisfied all the essential of a contract and which is enforceable through the court is called valid contract.

Void Agreement: An agreement which is failed to satisfied all or any of the essential element of a contract and which is not enforceable by the court is called void agreement. An agreement not enforceable by law is said to be void. A void agreement has no legal fact. It confers no right on any person and created no obligation.

Example: An agreement made by a minor. Void able Contract: An agreement which is enforceable by law at the open of one or more parties of the contract but not at the open of the other or others is a void able contract. A void able contract is one which can be avoided and satisfied by some of the parties to it. Until it is avoided, it is a good contract. Example: contracts brought about by coercion or undue influence or misrepresentation or fraud.

Unenforceable Agreement: An Unenforceable Agreement is one which cannot be enforcing in a court for its technical and formal defect. Example: (1) An agreement required by law to register but not resisted. (2) An agreement with not satisfied stamped.

 Illegal Agreement: An illegal agreement is one which is against a law enforcing in Bangladesh.

Reference http://www.dummies.com/how-to/content/islamic-financial-products-based-on-shariacomplian.htmlrence http://www.assignmentpoint.com/arts/classification-of-contract.html

Prohibited Subject Matter Of contract under Islamic Commercial Laws:

INTRODUCTION Quran & Sunnah are the main sources of Islamic commercial Law’s. It was revealed at the time when both Makkah & Medina were blooming commercial centers of Arbia. The Quran and the sunnah did not totally abolish the pre-islamic commercial practices. They approved all those transaction that did not conflict with the practices of Shariah, corrected modified some other transaction by eliminating unjust & prohibited elements from them and prohibited some other business practices that had usurious elements or suffered from gharar and. fraud Every commercial transaction that is not specially prohibited or does not contain prohibited elements is permissible.. From Islamic perspective, commercial ethics depend primarily on the principles & rules of the Islamic faith & the Shariah. Ethics are an integral part of the Shariah which has certain foundation and principles on which the ethical values are based. The basic Shariah foundation for commercial ethics may be characterised as follows

1.Integrity

2.The principle of stewardship of humanity on earth 

3.Sincerity 4.Piety 5.Righteousness and perfection at work

We have structured the essay into three categories and put the prohibited elements in these categories according to the level of their effectiveness. These categories are as following: 

1.Primary:

This category consists of elements which are prohibited from the beginning of the contract. There is no debate on the legitimacy of such elements. The moment their presence is found the product becomes prohibited. Elements that fall under this category are:

i.Riba (Usury)
ii.Gharar 

iii.Maysir iv.Prohibited sales (Haram Goods)

2.Secondary:

This category consists of elements which are prohibited if proved to be. Threre are discussions on the legitimacy of such elements.

Elements that fall under this category are:

i.Duress (Ikrah) 
ii.Mistake (Ghalat)
iii.Inequality (Ghubn)
iv.Deception (Taghrir) 

v.Prohibition of Exploitation (Istighlal)

3.Tertiary: 

This is the third category and consists of elements which are prohibited depending on the situation of use. Elements that fall under this category are:

i.Monopoly ii.Prohibition of Hoarding iii.Price Control

1. RIBA (USURY) Literally means ‘EXCESS’ Technically it refers to an extra guaranteed amount paid or received (over and above the principal in a loan transaction) or in exchange of a commodity. “

Allah has declared buying & selling lawful and usury unlawful” 

(Quran Verse 2:275) The Quran has warned that those who practice usury are at war with Allah & his Messenger . the word Riba denotes increase, addition, or excess. Riba

refers to a stipulated increase over and above the loan amount that a debtor agrees to pay to his creditors in relation to a specific period of time. Charging an extra amount for the time, irrespective of the outcome of the enterprise is considered injustice. The borrowed money would have to be invested and combined with efforts and there could be the possibilities of profit/loss. A fund provider cannot claim a certain fixed rate of interest irrespective of the performance of the investment. The quran & the ahadith have forbidden Usury(RIBA) in the strongest terms During the time of PROPHET (PBUH) riba was charged in several ways. Two main kinds of Riba at that time are 

1.RIBA AL-NASIAH 2.RIBA AL-FADL

Riba Al Nasiah
(also known as Riba Al-Quran / Riba Al-Jahiliyyah) Literally means Delay or Deferment Technically it refers to an excess amount claimed over and & above the principal amount should the borrower feel to repay the principal on the due date. It is defined as excess resulting from predetermined interest which a lender receives over & above the principal amount it has lent out. This is considered the primary form of Riba. The Quran has expressly prohibited this kind of Riba “

O ye who believe ! Devour not Usury, doubled & multiplied, but fear from allah, that ye may (really) prosper ” (AL-QURAN 3:130) The islamic prohibition of Riba al-naseeyah is similar to the prohibition in other religions. The prohibition of RIBA has been established in the quran , sunnah of prophet(SAW) and by the consensus of the muslim community. Riba Al-Fadl

(also known as Riba Al-Hadith/Riba Al-Byuoo) The prohibition of this type has been established from Sunna , for this reason it is also called Riba Al-Hadith. Riba al-Fadl is defined as excess c (Placeholder2)ompensation without any consideration (eg monies passing between parties ) resulting from an exchange or sale of goods. 

Riba al-fadl actually means the excess compensation which is taken in exchange for specific homogenous commodities and encountered in their hand to hand purchase and sale. This is explained in the following famous hadith narrated by Ubadah Ibn Al-Samit & reported by the hadith narrator Muslim in the chapter related to Sari on the sale or exchange of gold for silver. The messenger of Allah (PBUH) said “Gold for Gold , Silver for Silver , Wheat for Wheat , Barley for Barley , Dates for Dates , Salt for Salt, Like for Like in equal weights from Hand to Hand. If these species differ then sell as you like as long as it is from hand to hand. When parties exchange commodities of similar value and one party pays an excessive compentation to the other party, this is considered as Riba. The above mentioned hadith specifically talks about six commodities which Muslim jurists refer to as Ribawi Commodities.

2. GHARAR

Lexical meaning to deceive , cheat, delude, lure, entice, & overall uncertainity. Gharar is whose consequences are hidden. Sale of probable items whose existence or characteristics are not certain, due to the risky nature that it makes it similar to gambling. The main reason for prohibition of gharar is the existence of vagueness in rights and liabilities that can be exploited to deceive people into thinking that they are getting a better deal, which in reality is not the case. Ambiguity in a contract may arise when its pillars & conditions are not clearly defined. Gharar also arise when certain product is sold without label.

HOW DOES GHARAR OCCUR 

When the subject matter itself is unknown unless:

1.The buyer has the option to choose the subject matter 2.The parties to the transaction select the subject matter by mutual consent 3.The subject matter is one of many things of the same kind and value

When the specification are unknown: 

1.The goods are described in an ambiguous way 2.The goods are simply pointed out 3.An option to choose the goods is provided 4.The goods are specified by taking a sample.

Some examples of GHARAR are

i.Sale of an unborn camel’s baby still in the mother’s womb 

ii.Sale of flowers before they appear on the plant iii.Sale of milk in the lactose glands iv.Sale of fish caught in one throw of a net

3. MAYSIR Literally means “a way of easily obtaining something without any effort”. The term maysir applies to all activities in which a person wins or loses mere chance. It includes all kinds of gambling. In gambling the winner and loser win or lose by mere chance. The winner does not lawfully earn what he has won, and the loser loses his money without a fair compensation. Gambling allows the winner to consume others property unlawfully and unjust because in gambling there is no exchange of counter values between the parties. Islam encourages people earn their living through honest effort and prohibits appropriating others property by chance. Consequences of maysir

•Gives rise to hostility & hatred •Enmity between the winner and the losers.

Some examples of maysir are i.Betting on horsesrasing

ii.Soccer matches
iii.Lotteries 

4. PROHIBITED SALES: HARAM GOODS

Allah SWT (Subhanahu wa Ta'ala) has created human beings to be in a state of dependence, i.e. each person is in need of one another. For example, one may not have the need for certain equipment, but he may sell it to those whom need it. Mutual benefit relationships between people are encouraged in Islam. Allah commanded that exchanging goods and services should be done via transactions such as buying and selling because it enables our economy to run more efficiently and encourage people to be more industrious (Al-Qardawi, 1997). At the spur of the Prophet’s mission, various types of transactions and exchanges of property were common among the Arabs. He had approved and confirmed types of transactions in which did not conflict with the principles of the Shari'ah, and had disapproved or prohibited those business practices in which were against the Shari'ah. Trading goods which are normally used to commit or encourage sins is haram. Examples of such include swine, intoxicants, generally prohibited foods, as well as idols, crosses, statues, and the like (Al-Qardawi, 1997). Permitting the sale or trade of such articles implies promoting and propagating them among people, and consequently encouraging them to do what is haram. The most general confusion in the society is working for marts and established supermarkets in which alcohol is traded everyday.

Prohibiting haram goods to a greater extent will prevent people from indulging in them. As an effect of this prohibition, they therefore pave the route to purely halal industries and products.

The Prophet (peace be upon him) once said, "Surely, Allah and His Messenger have prohibited the sale of wine, the flesh of dead animals, swine and idols," (Al-Bukhari and Muslim) and also “when Allah Prohibits a thing, He prohibits (giving and receiving) the price of it as well ." (Ahmad and Abu Daoud) “Surely drinking alcohol, gambling etc thing impure and deeds of Satan. Therefore, you should not commit them” (Al Mai’dah : 90) Islam is a very consistent and persistent religion. When something is deemed bad and forbidden, therefore Muslims should avoid it at all costs in order to preserve harmonious society. If a Muslim sells Haram goods/services, he is not only being inconsistent in his behavior, but also mocking the laws of Allah and having the inability to differentiate between right or wrong. Thus, this will have a big impact towards his business and the society.

Fraudulent Misconduct

Fraud literally means a deception practiced to secure an unjust gain or agreement. Logically and in accordance to civil and criminal law, fraud is immorally wrong. In Islam, the Prophet Muhammad (peace be upon him) has forbidden najash. An example of An- Najash is when a person comes and bids for an item in an auction, but has no intent on buying it; only wanting to raise the price for customers. That in all extend has the intention of deceiving  people and therefore is an act of dishonesty (Al-Fawzaan, 2003). 

Tadlis Al-‘Aib, also another act of dishonesty, in which the flaws and defects of the goods are hidden from the common eye. Al Khilabah an act of deception or cheating a party to enter a contract. It involves misleading acts or statements to persuade the other (innocent) party to enter into a contract, in order to maximize profits. Lastly, Al Khiyanah is also an act of fraud that deceives people by stating the incorrect amount of capital utilized in purchasing goods. The usage of false weights and measurements, plus the incorrect exchange of different kinds of coins was another matter that elicited condemnation from the Qur’an. This depicts that the Arabs, or others, were guilty of fraudulent dealings in every day trade transactions. The condemnation indicates that all Muslims are prohibited from involving in any unjust business transactions. The following early verses on this subject are found in the Qur’an as a warning to Muslims and non-Muslims alike (Hassan, 1994).

In the surah entitled Al Mutaffin (those who deal in fraud), the Qur’an uses strong words against such offenders and against short measures and weights: 

“O to those that deal in fraud, those who when they have to receive by measure from men, exact full measure, but when they have to give by measure or weight to men, give less than due. Do they not thank that they will be called to account?” “On a Mighty Day, a Day when (all) mankind will stand before the Lord of the Worlds”

“O, that day, to those that deny the day of judgement, and none can deny it, but the Transgressor beyond bounds, the sinner! When our signs are rehearsed to him, he says, “Tales of Ancients!” By no means! But on their hearts is the stain of the (ill) which they do! Verily, from their Lord, that day will they be vield. Further, they will enter the Fire of Hell. Further it will be said to them: ”This is the (reality) which ye rejected as false!” Surah 83:10-17 Al Mutaffun (The Dealers In Fraud) (Ali, 1989)

Other Elements:

Jahala

The literal meaning of Jahala is ignorance, and when applied to a sale, will cause the sale to be defective.

Jahala may lead to Gharar. 

For example, if the object of sale or price was unknown to the buyer due to a buyer’s ignorance, it would be impossible to deliver or receive the price or object of the sale. This sale would thus be invalid due to

jahala. 

Jahala sales are invalid because of information asymmetry, either party is not privy to all the information; there is an unfair advantage or injustice (Al-Zuhayli, 2003). Frequent Swearing The sin of cheating and dishonesty is greater especially when the seller supports it by swearing falsely. The Prophet (peace be upon him) urged merchants to avoid swearing in general and, in particular, in support of a lie (Al Qardawi, 1997), saying, "Swearing produces a ready sale but blots out the blessing." (al-Bukhari) The Prophet (p.b.u.h.) disapproved of frequent swearing in business and financial transactions because firstly, it is most commonly used to manipulate and trick people (consumer) into buying the product, and secondly, because it is disrespectful to Allah the Merciful.

5. DURESS (Ikrah)

A legal contract might be subjected to impair in existence of duress (ikrah), in Islamic  jurisprudence duress is exampled in an event where one had been forced to do something that he dislikes, alas, against his desire he have to come in, in order to avoid harmful consequences. Here a contract can be deemed void, as there is no mutual/free consent on behalf of one of the contracting parties. In literal terms ikrah
is derived from the root word ka ra ha which is constructed as akrahahu meaning, “to force someone to do something against his desires” Duress according to Hanafi can be divided into the following:
i Constraining/complete duress (mulji) ii.-constraining/ incomplete duress ( ghayr mulji)  

Hanafi and Maliki schools agreed that the duressed party has the right of revocation, however, question arises as to whether the person exerting duress also enjoys the right to revoke.

Maliki explains that the person exerting duress may revoke it only with the approval of the duress victim
, and Hanafi agree on this matter provided that subject of the contract (item sold) has exchanged hands, if exchange is yet to be done then the party exerting duress have an equal right to revoke the contract.

6. MISTAKE (Ghalat ) Misunderstanding or erroneous belief about a matter define the concept of mistake ( ghalat ). While in Islamic jurisprudence mistake is an inaccurate assumption derived from the brain of a human. According to Sharia Law, ghalat is a negative element which can invalidate the ‘aqd

(offer and acceptance) of a contract, which emphasizes on the utmost importance of right (hagg ) and rule (hukm). In an event of Ghalat , victim of such element had the choices of:
i.Khiyar Wasf  – if a buyer finds that the features of the item purchased differ from what have been described by the seller, he has the right to revoke or maintain the contract 

ii. Khiyar Aib – a defect (‘aib) identified on the item purchased or the payment entitle a buyer to cancel the ‘aqd and the right of return of his money iii.Khiyar Ru’yah – an ‘aqd done without the actual item but through a catalog entitles the buyer to either maintain or revoke the contract if it happens the item received is different from the one shown in the catalogue.

7. INEQUALITY (Ghubn) Ghubn in Islamic jurisprudence is inequality on the sell or buy price and the subject matter of a contract of exchange, the concept emphasized on the diminishing value of a contract’s subject. Ghubn can be divided into two:

i.Ghubn Yasir – refers to small/minor differences in contracting subject’s price, where its effects are small ghubn yasir tend to be waived 

ii.Ghubn Fahish – refers to major loss due to a misinterpretation, fraud or deception practiced by another party. In an event of a bread loaf, sold to a man at the price of $1.70 but intead actual selling price should be of $1.10, then the inequality flls under Ghubn Yasir . However when this situation occurs to a grocery store replenishing stocks for his business at quantity of one thousand loafs, then this is a case of Ghubn Fahish.

8. DECEPTION (Taghrir ) Inducing a contracting party to think that the subject matter is in his interest whereas it is actually not. As reported by al-Hakim and al-Bayhaqi, the Prophet pbuh once said: “It is not permissible to sell an article without making everything (about it) clear, nor it is permissible for anyone who knows (about its defects) to refrain from mentioning them” Deception can be categorized into two

i.Taghrir Qawli (Deceptive Statement) – deception by a contracting party or his/her representative in order to persuade the other party to close into an unequal contract
ii.Taghrir Fi‘li(Deception Related to Deeds) –engagement of an activity towards a subject matter to present a condition contradicts to the reality .

9. THE PROHIBITION OF EXPLOITATION (ISTIGHLAL) There are at least two forms of trade exploitation, which have attracted Muslim jurists to debate. One is the business transaction concluded between the town tradesmen and the rural tradesman outside the town. Such transaction is known as ‘talaqqi al – rukban’. The other is the excessive price, which is termed as “ ghabn al – fahish”

10. MONOPOLY The Prohibition of Monopoly: In an Islamic system, all forms of monopoly and exploitation are eliminated. Prosperity of a commercial system to some extent is related to the quantity and velocity of money in circulation. In the Islamic commercial system too, the market is to be subjected to the to the economic rule of supply and demand. “A perfect Monopoly means a single firm being the only producer of a commodity of which there is no close substitute available in the market”. If an external force interferes in the market, the prices of the commodity rise due to decrease in availability of the commodity. If, however, there are any artificial forces such as monopolizing the raw materials by certain individuals or agents, the market mechanism and the freedom of enterprises will be affected, and the public interest becomes a friction of greed. Islam does not allow the individuals or companies to control the supply of commodities and food or services. Saves the majority of the people from the hardship and suffering they may sustain through the practices of monopolies. Muslim jurists are unanimous that monopoly that increases the price of goods is prohibited. There are a number of Quranic and hadith injunctions in this issue. The Quran states to the effect: “Whoever seek the wrongful partiality therein him we shall cause to taste a painful doom”. Al- Qurtubi when interpreting this verse, mentions that Abu Daud reported from Ya’la bin Umayyah that the prophet said to the effect: “Monopolizing foodstuff during the sacred months is wrong”. Al - Qurtubi, al – jami’ Ii Ahkam al – Qur’an; (vol XII)

Al- kasani has quoted a hadith, which states: “ The monopoliser shall be cursed”. He added that “the curse shall not be inflicted except on the one who has committed what is prohibited, because it is cruel, and what is sold in the town is subject to the right of the public, if the buyer is denied of the goods at time when he is in need of it he is denied of his right. The denial of right from a rightful one is a cruelty and is therefore prohibited whether the time of monopoly is long or short”. Al- Tirmidhi reported that the prophet (s.a.w.) had declared: “ He who monopolizes is not but a wrong doer”. For any commodity or goods or services when it is related to the need of the society in general can become subject of the sanction of monopoly.

11. PROHIBITION OF HOARDING (IKTINAZ)

Islam encourages a Muslim to earn living through lawful means. The range of lawful earning is very wide in Islam. Man is permitted to use nature to earn wealth, as long as it causes no harm to others. It is also within the limits imposed by shariah. The duty of an individual to take care of his physical needs, through his own effort, the wealth he owns should be used for the objective for which it has been created and for the benefit of the community. One of the main objectives of wealth in Islam is to remain in circulation and to be useful. Thus Islam is against the hoarding of wealth, money and other things – gold, silver and important commodities – preserved for further use and more profit has been strictly prohibited and condemned in Islam. “ And those who hoard gold and silver and spend it not in the way of Allah: announce unto them a most grievous penalty – on the day when heat will be produced out of that (wealth) in the fire of hell, and their backs, “This is the (treasure) which ye boarded for yourselves: taste ye then, the treasure ye hoarded. Qur’an, Surah al – Taubah, (Verse 34,35)

Hence, it is improper that a man squanders his things. Instead he should use it properly. Therefore, every act of hoarding hinders the smooth running of business and the exchange of commodities and causes hardship to the people. It is what is known as property, which depends on the increasing production on the one hand and, on the other, the prompt consumption of the object produced. Herein lies the secret of the general material of property. The payment of zakat does not absolve those who hoard their wealth from other obligations, which they owe to their society. It is a unique clue which connects abstention from participating in the states economic productivity with punishment of god. The prophet said: “He who hoards with the intention of raising the price for a Muslim is a sinner”.

The Muslim jurists are unanimous that hoarding with the intention of profiteering is rejected on any ground ethical or economical and this general prohibition pervades the whole of the commercial law in the modern Muslim countries. 

12. PRICE CONTROL

There are two issues in this question, which attracted Muslim jurists to discuss: under – selling and price ceiling. When the supply of goods is limited, traders are obviously inclined strongly towards raising the price and when there is surplus of goods in the market they are inclined towards under selling. UNDER SELLING: There are two views of the ‘fuqaha’ on this issue. The Shafi’is and the Hanbalis allow under selling and disagree to restrain it. The traders should be allowed to sell their goods at any price below market value. This view is based on the hadith of the prophet (S.A.W.), which says to the effect: “ Leave people to receive the bounty of Allah from among them ”. In supporting the view of Imam Malik, Abu al – Walid al – Baji says:

“ That to which anyone who goes below it must be ordered to conform to the rate quoted by the majority. If an individual or a few people go their own way and cover the rate, then they must be ordered to conform to the rate of the majority”. For the criterion is the condition of the majority, and sale must comply with it. No one disputes that the rule applies to the traders in the market. As for importers, we read the book of Muhammad that the imported is not barred from selling in the market below the current rate. Ibn Habib, another supporter of Maliki School says: “ Except for wheat and barley they must sell at the market price or else move on. The importer of wheat and barley may sell as he wishes, through among themselves the rules of the market applies. If a few of them sell cheap they must leave, while if many are selling cheap the rest must be told to conform to the general rate or move on. This applies to any commodity that is sold by measure or weight, whether foodstuff or not, though not to anything that is not sold in this way because price control is impossible here due to the lack of exact equivalence”. What ever it may be both View seem to be concerned with the interest of the small traders and the public. Both agree that their views are not of general rule applicable to all types of goods, situations or classes of traders. In the final analysis, the differences of opinions are technical.