E-Sale Contract From an Islamic Perspective Essay

Abstract

This research is a crucial one that investigates and evaluates the formulation of the e-sale contract under the laws of Islam. The project aim is to study the legal changes in this contract under the studies and guidance of four Islamic Sunni Schools which have been selected for this research.

The current research report is a comprehensive study that involves a thorough study of the objectives and rules about the formation of the e-sale contract. These are examined in light of the general principles of contract laid out by the Islamic law (Shariah) which form the basis of contractual dealings between individuals and businesses. For a sale contract to be established, it is imperative that a minimum of two parties are present out of which one puts forth an offer which the second party then accepts. The sale contract becomes binding once acceptance of terms formulating the deal is achieved.

The current research examines similar arrangements of the sale contract in the electronic environment where parties enter into a contract to exchange products or services via the web. The legal contract binding sales or e-sale contracts over the internet are usually in the form of email, EDI, etc.

Thus, through this research, a comprehensive understanding is developed by studying and presenting a whole range of vital literature which would help in presenting the main elements of e-sale contracts under the general rule of Islamic law. Such dealings through the internet and eventual e-sales may involve different legal consequences which may be difficult to comprehend by those lacking sufficient understanding. This research would help in increasing the awareness by providing a much study of issues related to the basic phases of the formulation process involving contracts and respective obligatory requirements under Islamic law.

The current report is structured chapter wise where each chapter provides important information regarding the topic and important conclusions are presented in the final chapter supported by a crucial literature review and findings from the current research.

Introduction

Islamic law today is the product of almost fourteen centuries of continuous development commencing early in the seventh century AD. The understanding of the general term ‘law’ used in English is only a small part of a much wider concept in the Islamic teachings – Shariah. The term Shariah is relatively comprehensive and has a much wider scope which is not possible to be rendered the use of a single word in English. The term Shariah may be complemented and closely approximated to the term ‘religion’ where Shariah could be considered as the prescriptive side of religion.

Shariah not only covers various aspects of human life in this world but also guides life hereafter. It, therefore, deals with providing reasoning for particular human behavior and expectations of human beings from following a particular way of life. It consists of teachings from the Islamic Holy Book and Hadith regarding preferred culture, principles of religion and ethics, code of law, and other disciplines of life which are considered an integral part of human life helping humans to develop their beliefs, intelligence and perform different acts of life which help them in building relationships with God and other human beings.

In the last two decades, the internet and e-technology have contributed tremendously by shaping up how communications are taking place and have turned the face of the world around where distances have become meaningless and tons of information is easily and freely available on the net. The trend of the use of information technology has not been limited to certain countries but it has been spread without boundaries. In the Islamic world, the technology had been till recently used mainly to spread Islamic education and propagation, defending negativities against the religion and other religious purposes. In addition to these, there has been limited application of technology for commercial and entertainment purposes.

The Qur’an is considered to be the most revered of books in Islam and is frequently regarded as the Holy Book. It serves to guide Muslims in all walks of life and all ages. Analogical expressions allow the book to be more than productive and far more than adequately adaptable for all modern innovations.

Since modern-day knowledge has become increasingly integrated with innovations in Information Technology, it comes as no surprise that the Quran advises its followers to pursue knowledge regardless of the hurdles that come forth. The very first verses of the Quran called the follower to read in the name of his Lord and Cherisher and to acknowledge his Lord’s uniqueness by acknowledging the fact that He is the supreme creator and He created all mankind from nothing more than a congealed clot of blood.

As information technology represents a shift to new areas of knowledge, by implication, it is an area that is important for Muslims to learn about, and explore its potential for good purposes.

The Qur’an encourages its followers to engage actively in work that is productive to them. In this regard, the Quran gives frequent references to elements such as business and other commercial activities as well as direct references to trade on numerous occasions. According to the Quran, engaging in productive activities should be perceived as a duty and no doubt remains when the Holy Prophets Mohammad’s (PBUH) saying is considered in which he has clearly stated that a person seeking knowledge is a person who God will lead to heaven and to do so, He shall make sure that there are angels by the individual’s side to guide him.

In another instance, the Prophet referred to the return of seeking knowledge as a reward that would be far more than what the individual initially had in mind when he began his pursuit of knowledge but if the individual did not manage to make it through, the person would still be rewarded.

We can infer from these verses and numerous other verses that the Quran and the Sunnah of the Prophet Mohammad (PBUH) that there is an extensively high degree of importance given to the pursuit of knowledge in Islam and this leads us to concur that no part of Shariah denounces the pursuit of knowledge in any way. It is essential to note that this understanding does not exclude the use of technological innovation as a means to facilitate the process of the pursuit of knowledge since Shariah has not distinguished between any specific means or technologies that can be used. Hence, by doing so, Shariah gives room to the use of all forms of technology, including those that are generally brought into use in the case of e-commerce transactions. Hence, if this particular perspective was considered to be empirical, Shariah approves the use of technology that is generally brought into use during e-commerce transactions.

However, the development of information technology has led us to one of the most significant revolutions in our lives in the form of a close-knit society based on the internet. This has had a direct implication on the methods through which businesses are conducted in everyday life and elements such as competition commerce and businesses, in general, are perceived. In fact, the global presence of the Internet serves to stimulate buying and selling through the E-Commerce platform. E-Commerce here is being regarded as the actual process through which electronic buying and selling are carried out through multilateral use of networking, digital technology, and the internet.

However, it is essential to highlight at this point that even though e-commerce has taken on the form of a global phenomenon, it is still one that many Muslims do not make use of in light of a deficiency of information on the subject of the Islamic perspective on transactions made through e-commerce.

Since little has been done to regulate this phenomenon according to the Islamic legal system, the main aim of the thesis is to establish that the general principles for ordinary sale contracts in Islamic law are appropriate to govern the formation of electronic sale contracts. The second aim is to provide a resource for all readers, researchers, interested individuals, and organizations doing business by e-commerce contracts under Islamic law, whether they approach it from a business, information technology, or legal background.

Issues of the legality of the formation of e-sale contracts in Islamic law shall be considered and shed light upon in an attempt to reflect on the benefits that e-commerce holds for Muslims across the globe and to elaborate on the legality of the use of e-commerce in the frame of reference of Islamic principles. Regarding transactions via e-sale contract, the issues of offer and acceptance through the internet will be studied to clear Muslim doubts as to the Islamic law’s approach to the valid formation of the e-sale contract. Countless seminars and conferences have been held alongside even more books on the subject. With the challenge to fulfill this gap, the thesis shall take on a perspective through which it shall elaborate on the e-sale contract in light of Islamic perspectives and the potential hurdles that can come forth in the development of the same.

It is beyond the scope of this thesis to examine all kinds of contracts recognized in Islamic law. The center of attention in the case of this thesis shall be the sale contract. The part of the thesis constituting the legal framework shall relate to the laws of sale contract as the contract par excellence in Islamic law. A model shall be used in the form of the fundamental principles of the e-sale contract in Islamic law. It shall be considered that this contract is one upon which other contracts rely as per Islamic law. Moreover, the sale contract is dealt with much more extensively in fiqh (the science of the Shari’ah) writing than other contracts, which are presumed to be regulated by analogy to it where appropriate.

The thesis will examine and analyze the relevant literature and legislation. It will argue that the following legal issues may arise when forming sale contracts in an electronic environment under the general principles of ordinary sale contracts in Islamic law:

• Has a valid offer and acceptance been formed in the e-sale contract?
• With whom has the e-sale contract been formed (legal capacity)?
• When and where was the e-sale contract formed?
• Are there legal uncertainties when determining the precise point in time that an e-sale contract has been formed?
• If an offer to enter into an e-sale contract specifically requires acceptance to be communicated in a certain form, whether an electronic communication of acceptance will be effective to form an enforceable contract?
• How can we identify the object and consideration in the e-sale contract?

Each of these issues will be discussed in the thesis relying on the general principles governing the formation and validity of the ordinary sale contract in Islamic law.

As such, the thesis presents an aspect of the ongoing research by Muslim scholars from around the world aiming to analyze the status of e-commerce from an Islamic perspective. However, our thesis will be limited to and rely on Fiqh cases from the jurists in the four major Sunni Islamic schools (the Hanafi, the Maliki, the Shafi’i, and the Hanbali). These schools have greater common features between themselves, which frequently makes it easier and more correct to write our thesis, by way of generalization, on these schools.

The thesis will start in chapter 1 by familiarising readers with the background of Islamic law principles. The thesis shall initiate by putting forth an elaboration on Islamic law and shall proceed from this foundation onwards. This foundation is meant to serve as an outline and a highlighting of the specific relevance of this research and therefore it should not be considered to be anything along the lines of an extensive delving into Islamic Law. We will describe the main contract principles under Islamic law, to clarify the scope of this thesis. We will note the important basic features of Islamic law regarding contracts, highlighting the way they facilitate the sale contract.

In chapter 2, the thesis discusses the validity of the e-sale contract from the Islamic point of view. At this stage, the initiation of the e-sale contract between both parties begins through a check of the binding pillars of the contract. Offer and acceptance are the most commonly found constituting pillars in this regard along with the two contracting parties and the exact expression mode. The most important point that we will discuss at that initial stage is that these pillars in the e-sale contract must meet the Islamic requirements. Moreover, in this chapter, we will analyze the different kinds of Contracts that can be classified as Islamic Commercial Contracts. It is imperative to note that these incorporate those that relate to ordered sale (bay’ al-Salam), manufacturing sale (bay’ al-Istisna) as well as Deferred Sale (bay’ Muajjal).

Chapter 3 will cover basic notions relating to the formation of e-sale contracts under Islamic law and is divided into four sections. The first section deals with basic features of psychological elements. The second section will treat the exteriorization of psychological elements, making reference to subjective and objective, or consensuality and formalistic approaches in Islamic law. The third section will review various means of expression, being the word of mouth, writing, sign and conduct, and silence. The fourth section will examine the efficacy of these means of expression in the internet environment under Islamic law.

Chapters 4 and 5 will be the common analysis of an agreement in terms of offer and acceptance or, conversely, the treatment of offer and acceptance as the commonest mechanism for reaching an agreement. This entails a separate examination of various aspects of the mechanics of offer and acceptance in the formation of the e-sale contract, including their correspondence, and the nexus between the mechanism and the related agreement under the principle of Islamic law. Our discussion in these chapters first deals with an offer, and second with acceptance (including its correspondence with the offer) and the import, or contents, of an e-sale contract comprising its terms and conditions and interpretation.

Finally, chapter 6 will be the conclusion of the thesis and its implications.

An Introduction to the Study of the E-sale Contract Under Islamic Law

Islamic law (Shari’ah) is considered by Muslims to be the expression of the will of God, representing his final law governing men’s behavior in this life and the hereafter. It is also regarded by some as an eternally valid and immutable standard of law. This is revealed in classical Islamic legal theory, which declares that no man has the right to interfere with Shari’ah or to change its rules. “It is comprehensive, universal, eternal, and not susceptible to change; its contents are set out in the authoritative codices of the orthodox schools.”

Changes, therefore, can only be effected by the word of God through his revelation, to which men have had no access since the death of the Prophet Mohammed. Moreover, since God alone is the lawgiver, and the right of law-creation is possessed by him alone, it follows that man does not have the right to create law. Man’s involvement is thus confined solely to the application of Shari’ah.

However, some modern Muslim scholars have defined Shari’ah in an alternate way. They believe that this approach is no longer sufficient, and have thus resorted to a number of different methods to overcome this predicament. For example, Maududi distinguishes between the part of the Shari’ah which has a “permanent and unalterable character and is, as such, extremely beneficial for mankind, and that part which is flexible and has thus the potentialities of meeting the ever-increasing requirements of every time and age.”

Another well-known example is the opinion of Fazlur Rahman, who, although he defines the Shari’ah to include “all behavior – spiritual, mental and physical”, also recognizes that the legislative provisions of the Qur’an have to take into account the attitudes and beliefs of the then existing society. This view, therefore, entails the acceptance by scholars that people do have the right to enact change to legislation, as long as it falls into the broad parameters of Islamic understanding.

Scholars of this new understanding of Shari’ah believe that law-creation, which is the right of God alone, should not be confused with the comprehension and discovery of God’s law. Therefore, they do not doubt that Shari’ah should develop and evolve continuously with the advancement of human beings’ thought and civilization. They believe that it is a gross mistake to assume that Shari’ah of the seventh century is still suitable, in all its details, for application in the twenty-first century. The perfection of Shari’ah lies in the fact that it is a living body, growing and developing along with the continuous progression of human beings, guiding their steps and directing their way towards God, stage by stage. Human life will continue on its way back to God inevitably.

Thus, in order to help the Shari’ah accommodate the ever-changing and ever-developing human beings, Muslim jurists devised Usul al-Fiqh. By doing so, the difference between the changeable and the constant and the reason for the classification of the same is brought forth along with any new debate that has to be subject to the Quran test which will be explained later in the chapter. In the event that a clear and undoubtedly approval from the Quran is acquired, the change is integrated into Muslim society. Otherwise, it is tested for the Sunnah of the Prophet Mohammed (P.b.u.h). If there is not a clear sign of approval in the Sunnah, then the approval will then lie on the shoulders of other Islamic sources.

This chapter will therefore be divided into five parts, the first dealing with the classical structure of Islamic law, the second with the progressive concept of Shari’ah and Fiqh, including a study of Islamic jurisprudence, its methods of interpretation, the authority of the jurisprudential rules and the development of such jurisprudence. The third part of this chapter will examine the modernization and possible future of Shari’ah. The future of Islamic law is discussed here, in light of its present authority and the ‘heated’ debates that occur in the contemporary Muslim world. The fourth part addresses the Islamic perspective of e-commerce, taking into account its legality, Islamic business ethics, and e-commerce sale contracts. The fifth part deals with the general principles that apply to sale contracts.

The Classical Structure of Islamic law

The structure of Islamic law is rooted in the Qur’an and the teachings of Prophet Mohammed and the interpretations of these sources of revelation by his followers. Islamic law serves as a provider of the right Shariah and governs the relations between mankind and Allah. It would therefore be reasonable to consider it to be nothing less than divine law established by Allah and communicated through the Quran.

Therefore, the sources are put at four: the Qur’an and the Sunnah, which are primary, and the Consensus (Ijma) (sources in common between Sunni and Shi’ah schools) and reasoning by analogy (Qiyas) for Sunni or ‘Reason’ for the Shi’ah, which are secondary. There are other sources of lesser importance that will govern the sale contract in the absence of any rule in the primary and secondary sources such as custom (urf), necessity (darura), and judicial contribution.

Since Islamic law is our main subject, a look at some of its general characteristics would show how it compares in this regard with other legal systems such as Common law and Roman law. The first point which deserves to be emphasized in my thesis is that Islamic law comprises two main divisions based on the relations between men and between humans and Allah. The first, the acts of worship (Ibadat), deals with purely religious matters (these include recitation of the ‘shahadah’, Prayers ‘salah’, Fasts ‘sawm’, Charities ‘zakat’, Pilgrimage to Mecca ‘hajj’), and the second, the transactions (al-Mudumalai), deals with all those subjects which comprise the only content of other legal systems, which include judicial matters, warfare, peace, drinks, punishments, penal, inheritance, marriage, divorce, and financial transactions.

Primary Sources

The Qur’an and the Sunnah are considered to be primary sources in Islamic law. Also, in light of the consideration of the fact that their rules are penned down, they are also generally regarded as verses (Nusus) which may be translated as Script or Text, forming the written authority.

The Qur’an

The Qur’an is considered to constitute the essence of Islamic Law and is therefore regarded as the most significant Holy Scripts of the Muslims. It is composed of 114 chapters; each chapter presents different verses and sheds light on numerous subjects. It is however imperative to note that the Quran does not address specific legal prescriptions. Approximately 80 of the 6000 verses constitute the Quran pertaining to law. The arrangement of the Qur’an in its present chapters and verses was made under the Third Caliph, Uthman.

The Qur’an contains, among such matters as historical narrations, fables, ritual observances, and what pertained to the Prophet’s life, specific principles that can be generalized along with numerous elaborative discussions on legal matters. These are scattered through various chapters and are far from being comprehensive. Some earlier verses were abrogated by later ones, while some others are in apparent contradiction with each other.

All verses, however, have been retained and form part of the whole body. Broadly speaking, earlier verses handed down in Mecca, thus known as the Mecci verses, are more general in import, tolerant in spirit, and of an ethical nature. Those revealed later in Madinah, thus known as the Madani verses, are more detailed, and make up the majority of the legalistic rules, imposing specific commandments and abrogating certain (Mecci) precepts.

In the early period of Islam, the Qur’an as the Word of God was not open to comment. As time went by, as an outcome of the opposing views of different dogmatic segments across Islamic history, many commentaries, both Sunni and Shi’ah, have been produced which greatly help its understanding; but no matter how scholarly some may be, none is considered a binding authority.

The Sunnah (Tradition)

While the Prophet (P.b.u.h) was living, he would answer the queries of his followers, adjudicate their disputes, and pronounce rulings which were considered, next to the commandments of the Qur’an, rules of law. The Sunnah is the performance and methods of the Prophet Mohammed. In the start, following his death, litigation would be dealt with through reference to Qur’anic verses; in the event that none was found to provide a solution, the Sunnah was brought into use.

The Sunnah constituted the tradition, speeches, and actions of the Prophet Mohammed (PBUH). The Sunnah, therefore, appendages, illuminates and elaborates the provisions of the Qur’an. However, it is significant to realize that even though the modus operandi of verification of authenticity and recording of Sunnah was undertaken by a large number of Muslim scholars of the second century of Islam, only the compilations of six scholars have come to be accepted by the majority of Muslims as containing the sound of genuine Sunnah.

Thus, since then, the Sunnah has become a definite source of Islamic law. However, the Sunnah is still considered a supplementing source and cannot be considered to supersede the Quran. In the event of such a contradiction, it is implied that the alleged Sunnah is weak or false.

however, based on the definition of Sunnah, it is indispensable to highlight the reasons why the Sunnah is multipurpose and therefore adaptable in a form such that it can handle present-day problems and issues coming forth as a result of the increasing intricacy of life. In a modern-day community, moral tension exists in the form of a range of legal as well as administrative intricate problems. The theological and moral dimensions of expanding Islamic society have given way to numerous controversies. Even though new material was considered and incorporated, the ideal Sunnah was kept intact as a consideration source.

This particular process of interpretation began with the comrades of the Prophet explicitly as well as tactically resulting in the deducing of numerous norms with practical applications in modern-day society while keeping the rules of the Quran in performance.

Secondary Sources

The reason behind Shari’ah as a system that is religious and legal brings it to a point where there is no doubt left that it is to be inferred from no source other than the Qur’an; second from the Sunnah. In case the primary sources (the Qur’an and Sunnah) are silent on the issue, then the consensus (Ijma) and reasoning by analogy (Qiyas) will follow as a source of Shari’ah according to the four Sunni schools.

Consensus (Ijma)

In the event that the Sunnah does not provide the required level of clarity in guidance with regard to the subject issue, the third source for Islamic Law is present in the form of Ijma. It is a combined agreement across Islamic scholars of a particular age group regarding the rule of law that is most appropriate to the issue. It is imperative to note that the Ijma is an inference derived from independent legal reasoning on areas where the Ijma has to be resorted to. It is only permitted in areas where the Quran and the Sunnah provide no definitive instructions. The jurists represent the Muslim community in this regard and seek to reach agreements on issues. Once an agreement is reached, the resolution to the issue becomes integrated into Islamic jurisprudence.

The Ijma comes into action only in cases where there is a no directly or indirectly applicable testament in the Qur’an and the Sunnah but it is important to note that it should not under any condition contradict them.

Ijma was found in its most profound form in the beginnings of Islamic law during times when the community used to be of a form such that it would be fairly small and very few eminent jurists existed. This allowed the views of all the jurists to be acquired.

Reasoning by Analogy (Qiyas)

In the event that the Ijma also does not serve as an adequate Muslim judge, the Qiyas is referred to. It is only resorted to in the case when no legal authority on an issue exists and in this case, the ruling of the Qiyas is generally based on an accepted principle and is considered to be “from the explicitly known to the explicitly unknown” would fit such a particular rule in relation to an issue at hand.

Principles of reason, effectively used for practical purposes as logical devices for the inference of detailed rules out of primary sources and the Qiyas, which are placed last in the formal hierarchy of conventional sources, have in fact made a contribution, at least in all Islamic schools, no less impressive than the other sources. Muslim jurists’ views and opinions expressed and employed in numerous expositions and commentaries under each school or trend have also contributed to contracts in Islamic law.

Other Informal Sources

The other sources of Islamic law consist of

• custom, which has through the ages influenced the development of the detailed rules of Islamic law;
• compendia, commentaries, and religious rulings which, according to all Islamic schools, have shaped, supplemented or influenced the respective law; and
• reconsidered thoughts and writings from Muslim scholars in the late nineteenth century onwards, which put a fresh interpretation on the age-old rules of Islamic law to bring them into line with modern needs, and subsequent legislative formulation in certain areas of Islamic law in the respective Muslim countries.

Progressive Concept of Shari’ah and Fiqh

A part of Shari’ah more concerned with the actual behavior of man in this world is termed Fiqh which consists of detailed rules and is closer than Shari’ah to the concept of law, though often the two original terms are used as synonyms. Fiqh, in spite of having a narrower ambit than Shari’ah, covers a much broader area than law by including such rules as those on purely religious observance. A substantial part of Fiqh, however, correlates to the present-day notion of law.

For convenience, Shari’ah or Fiqh is often rendered in English by the term ‘law’ and sometimes by the term ‘jurisprudence’, though the latter is apt to generate confusion because of its particular use in English for a branch of jural study on the theoretical basis and philosophical aspects of the law.

Faqih (sing: Fuqaha) is a scholar who is versed in Fiqh and, being religious, is required to be pious and observant. He is a religious jurist, sometimes referred to in Western literature as a ‘jurisconsult’. In the following research, we shall generally employ ‘law’ for Fiqh, which itself is a part of Shari’ah and not infrequently equated with it, and shall utilize ‘ religious jurist’, or simply ‘jurist’, for a Fuqaha.

Another clarification to be made concerns the concepts of ‘school’. Islamic law is not a uniform or unitary system. It consists of subsystems according to various schools. A ‘school’ refers to a particular Islamic faith and the related subsystem of law, each a system in itself, and not to a trend of jurisprudential doctrine or thought.

There are five major Islamic schools today of which four are Sunni and the fifth is the Shi’ah, itself divided into several branches of which the most important is the Twelve (Ithna Ashari). Depending on the level of comparison, these schools present differences that distinguish them from each other and similarities that bring them together. There are notable differences in methodology and detailed rules between these schools. Our reference to the particularity of Sunni law in this research is exclusive to the four Sunni schools, Hanafi, Maliki, Shafi’I, and Hanbali.

It may, therefore, be said, as a first categorization, that there are Sunni schools and Shi’ah schools, albeit that each is divided into individual branches. In a broader context, all the schools, whether Sunni or Shi’ah, have a common core in history, sources, classification, methodology, and so on, which makes it possible (notwithstanding variations and disunity in details) to treat Islamic law as a comprehensive system on its own, distilled from the general features of its various schools and branches.

All the four Sunni schools developed from the beginning of the second/eighth century. They were founded by, and respectively named after, pious and learned men, each referred to as ‘Imam’. These schools are the Hanafi, founded by Imam Nu’man Abu Hanifah (d.150/767); the Maliki, founded by Imam Malik ibn Anas (d. 180/796); the Shafi’i, founded by Imam Mohammed ibn Adris al-Shafi’i (d. 204/820); and, the Hanbali, founded by Imam Ahmad bin Mohammed bin Hanbal (d. 240/855). Each, particularly the Hanafi school, was subsequently further developed by the respective disciples of the founding Imams who were themselves eminent jurists in their own right.

The Traditionalist and the Rationalist schools of thought are two schools that have come forth as a result of the evolution of Islamic law through these two approaches. These are associated with their respective differing views on the law sources. However, considering Quran as the empirical source, the former trend tends to restrict itself to Traditions (Sunnah), the words and deeds narrated from the Prophet Mohammed (P.b.u.h) as a source of the law, while Rational Principles (Aqli) are supplemented with the latter trend. The paragraphs to follow shall shed more light on the subject of the sources of these elements.

Of the four Sunni schools, the first two (Hanafi and Maliki) developed almost concurrently, and the third came about just after the first two and partly overlapped in time with the fourth. The Hanafi school, adopting a Rationalist approach, allowed the greatest latitude for ‘free reasoning’ (ra’y), while the Maliki school was Traditionalist. The Shafi’i school was eclectic, trying to reconcile the first two, for which reason its founder was accused of being a Traditionalist by the Rationalists and of being a Rationalist by the Traditionalists.

He was in fact both, but predominantly a Rationalist. He placed greater stress on Traditions than did the Hanafi but organized, for the first time, a set of Rational Principles (Usul al-Aqli’ah) for the inference of detailed rules out of primary sources which brought order to, and restrictions on, the application of reason. These principles were in due course further refined and developed into a separate Islamic methodological discipline called the Science of Principles, or Roots, of the law (Ilm Usul al-Fiqh).

The Hanbali School instituted a vigorous reversion to Traditionalism which was much later revived with a puritan austerity by the Wahhabi movement in the twelfth/eighteenth century, originated in Arabia by Mohammed ibn Abd al-Wahhab. Since the establishment of Saudi Arabia in 1926, the Hanbali faith has been revived and has been made the official school of Saudi Arabia.

The respective context of the development of these schools, together with their pairing off according to the said two tendencies, is significant. The Maliki and Hanbali, both Traditionalists in approach though different in degree, developed in Madinah, the city of the Prophet Mohammed (P.b.u.h) which is located in Saudi Arabia, after his death gradually lost its economic and political importance. Both schools, and their conservative approach, are therefore referred to as Madani, ‘of Madinah’. The Hanafi and Shafi’i developed in Iraq (the latter also partly in Egypt) which became at the time the economic and political center of the Muslim world.

When the formation of these four schools was completed in the second half of the third/ninth century, a conviction gradually grew and was formulated in a maxim which held that the ‘gate of Ijtihad (independent juristic reasoning for inference of detailed rules out of primary sources) is closed’ and the subsequent generations had to follow the respective teachings of the early masters of the four schools. This caused a millennium of virtual stagnation of Sunni law till the latter part of the nineteenth century. Generations of jurists, of course, kept working within each school, but mainly elaborating on the works of the respective masters and with a little original contribution.

Western writers such Gibb and Schacht have attributed this supposed abandonment of Ijtihad to the mood of uncertainty in the Muslim community brought about by the Tartar invasions and the sacking of Baghdad by the Mongols in 1258. This, they say, made the Muslim scholars more inclined towards conservatism and less willing to accept innovation in religious thought. This view locked the Shari’ah into a fixed and inflexible mold and prevented it from adapting to modern times, contributing to its decline.

The idea persists today, in some quarters, that there must be no variation from the interpretations of Shari’ah laid down before the 11^th century, and that this is the only “correct” version of Shari’ah. There is still considerable resistance to new ideas. The leaders of some conservative Islamic movements appear to want to return their societies to an imagined past “Golden age” of Islam where life was lived according to the example of the Prophet’s time. Interestingly, proponents of this view are usually very happy to reimpose medieval restrictions on women and ban cinemas and satellite dishes, but they see no contradiction in riding around in jeeps rather than riding camels or using rocket launchers and grenades to fight their wars, rather than the swords and bows and arrows the prophet’s companions used.

During the period of Western expansion between the 16^th and 20^th centuries, most Muslim countries came at some time under the commercial and political domination of one of the major European colonizing powers. The British ruled India and Malaya and at various times exercised political mandates in the Middle East; the Dutch controlled Indonesia, and the French ruled North Africa, and also exercised a sphere of influence over countries in the Middle East after the fall of the Ottoman Empire.

In these countries, the Shari’ah was replaced with European-style legal systems, except for areas of law such as family law and inheritance which were of little significance to the colonial powers. Even in countries that were not directly colonized by European powers, such as the Ottoman Empire, there was a tendency to “modernize” by adopting Western Legal systems. By the middle of the 20^th century most Muslim countries had a “mixed” legal system, with Turkey – where Kemal Ataturk had completely abandoned the Shari’ah – at one extreme, and at the other extreme, only Saudi Arabia which retained an almost complete and traditional Shari’ah legal system.

The idea of “closure of the gate of Ijtihad” was never accepted by the Shi’ah schools, nor was it accepted by many influential Sunni Muslim thinkers, such as Ibn Taymiyah in the 14^th century, Fazlur Rahman (d.1988), Mohammed Iqbal in Pakistan (d.1938), Hasan al-Bana (d.1949) and Mohammed Abduh in Egypt (d.1905), who maintained that despite the decline in the fortunes of Islamic civilization, which continued under Western colonialism, Ijtihad was still possible and still continued to be exercised. They argue that the four Sunni schools never claimed infallibility or finality for their interpretations of the Shari’ah and that it is a necessity and a duty for qualified Muslims to exercise Ijtihad in the present time. They hoped to develop a “new fiqh” that would modernize the laws within established parameters for the purposes of the emerging nation-state. Contemporary Muslim writers such as Abdullahi an-Na’im also accept this view.

Patrick Bannerman says that there are four main trends in modern Islamic thought. These are the:

1. Orthodox conservatives who adhere strictly to the doctrine of taqlid;
2. Quasi-orthodox conservatives, who hold views similar to the above but are forced to deal pragmatically with Western influences in their countries;
3. Modernising reformers, who seek to interpret the fundamentals of Islam in the light of existing and constantly changing circumstances; and
4. Conservative reformers, who hold that taqlid is wrong but set limits to the exercise of ijtihad.

Modernization and the Future of Shari’ah

As various Muslim countries attempted to modernize and “Westernise” their legal systems, it was clear that some of the traditional interpretations caused hardship and injustice – for example, the Hanafi rule prevalent in the Ottoman Empire and India that a woman could not obtain a divorce without her husband’s consent – and a solution in Shari’ah had to be found to alleviate this kind of problem. Islamic modernists proposed three complementary methods of alleviating hardship through Takhayyur and Talfiq, re-interpreting the Shari’ah text and the doctrine of Siyasa Shari’ah.

Takhayyur means making a choice from the variety of legal opinions offered by the eminent jurists of the past. It means that if a satisfactory solution to a problem can not be found within the opinions of the Islamic school predominant in a certain area, a solution may be adopted from the opinion of another Islamic school. Similar to this is the doctrine of Talfiq, which means combining part of the juristic opinion of one school with part of the opinion of another school or jurist in such a way as to establish a new legal rule.

Muslim scholars further demand the right to be free from the doctrine of taqlid and to be allowed to exercise ijtihad to formulate new legal rules from a new interpretation of the Qur’an and Sunnah. This means going back to the sources and considering whether interpretations other than the traditional ones are possible. For example, the Quranic verses on polygamy have traditionally been interpreted to give a Muslim man the right to have up to four wives at the same time. Some modernists contend that the Qur’an in fact effectively prohibits polygamy through the requirement to be just and fair to each wife, and if this is not possible, then to marry only one. The verse on polygamy is followed by a later verse which says:

“You will never be able to be fair and just between women even if it is your ardent desire”

Since fairness and justice are impossible, a man must therefore restrict himself to one wife.

Not surprisingly, the differences in opinions have led to differing interpretations of the law. Let us take, as an example, the lawfulness or otherwise of music and art in Islam. In some Islamic countries, there is a firmly held view among many Muslims that music is forbidden (haram). The proponents of this view rely on certain texts and ahadith which forbid “vain talk” and which mention only certain pursuits such as archery and horse breaking as being suitable for a believer.

Likewise, drawing, painting, and sculpture are held to violate the Quranic ban on making images and so open the path to idolatry. The Taliban in Afghanistan and some extremist Muftis in Saudi Arabia, on coming to power in these countries, but their extreme version of this opinion into practice, banning not only music but television, destroying audio and videotapes and new technology, and forbidding photography which was deemed to be forbidden as the making of images contrary to God’s law.

Opponents of this view distinguish the text and reject the ahadith relied on by these people as doubtful, and hold that according to the Qur’an, what is not expressly forbidden is permissible. They rely on certain other ahadith in which the Prophet approved of the musical entertainment of the Ansar. Thus they allow singing accompanied by musical instruments so long as the lyrics are not un-Islamic and neither the performer nor the audience is tempted into sin by the music.

Certain modern music with sexually suggestive or obscene lyrics would be outlawed under both views. Some hold that in art, the only sculpture is forbidden. Some impose conditions on what is allowable in art as in music. Consequently, the emphasis of traditional Islamic art has been on calligraphy and geometric design, although human and animal figures have sometimes been used in a secular setting.

In recent times, substantial political, economic and technological change has made urgent the need to find solutions in Islamic law to new problems and to re-assess some old rulings in the light of new knowledge.

Moreover, there are specialized areas where a religious scholar alone would not have sufficient technical knowledge to be in a position to give a proper opinion. In these cases, there is a necessity for collective ijtihad, which may be obtained through the formation of councils of religious and secular scholars who are specialists in their chosen fields. Such councils have already been formed in many Muslim countries, and even in Europe, where a “European Council for Fatwa and Research” was formed with its headquarters in London in March 1997.

As an example of this new ijtihad, until recently the only choice of infertile couples was to reconcile themselves to childlessness or to adopt or foster someone else’s child. Nowadays, artificial insemination, donation of eggs and sperm are all new medical possibilities to overcome infertility. Which of these, if any, are acceptable in Islamic law? There is no possibility of relying on the opinions of the classical scholars as they had certainly never heard of any such things, nor is there any mention in Qur’an or Sunnah. So the religious scholars needed to find new solutions through their own ijtihad.

Many of them agreed that the correct Islamic opinion was this: marriage is an essential foundation of an Islamic family. It is beneficial for a Muslim husband and wife to have children of their own, therefore there is no objection to using modern medical technology to that end. However, the means used must not violate Islamic tenets by using donated eggs or sperm: the husband’s sperm is used, but not that of a donor. Surrogate motherhood is not allowed because it also requires the intervention of a person outside the marriage.

Another example of contemporary ijtihad can be found in the field of finance. Islam prohibits the giving and taking of interest, therefore Muslims should avoid taking loans from ordinary commercial banks or investing their money in them. Islamic banking has evolved as a means of overcoming the practical difficulty of obtaining finance in the modern world without becoming involved in interest-based transactions.

Among the many modernist-reformist voices that have proposed to bridge the gap between the Qur’an’s extra historical, the transcendental value system of equal rights and its actual application in Muslim legal tradition riddled with discriminatory practices is the Sudanese jurist Abdullahi An-Na’im, a disciple of Shaykh Mahmoud Mohammed Taha (d.1985), founder of the Sudanese Republican Brothers movement. Taha’s approach to the problem, as outlined in his book, had been to differentiate between the Qur’an early (Meccan) message (tolerant and egalitarian) and it’s later (Medinan) message (seen at least in part as an adaptation to the socio-economic and political situation of the Prophet’s Medinan community).

An-Na’im has since developed his mentor’s general principles into a framework for the radical reform of Islamic law and legal institutions that invalidates the established historical institution of ijtihad in favor of a new “evolutionary principle” of Quranic interpretation; which reverses the historical process of Shari’ah positive law formation (which was based on the Qur’an’s Medinan verses) by elaborating a new Shari’ah law (based on the Meccan revelations). This modernist approach, which reflects a sort of revival of the beliefs of the early Muslim jurists in the close relationship between law and culture in Islam, denies all normative powers to the Shari’ah as presently formulated but maintains the essential validity of the concept.

The problem regarding the position and ongoing normative powers of the Shari’ah in contemporary Islamic societies has continued to exacerbate polarization between secularist and traditionalist points of view. Secularists have argued that the Shari’ah has lost its normative power and is no longer applicable. They have argued that the Shari’ah laws relating to business and economy are outdated; other laws, such as those regarding slavery, are no longer valid, and the remainder “is largely contrary to international human rights and individual liberty laws.”

In diametrically opposed fashion, Islamists are likewise focused on the normative power of the Shari’ah (as presently constituted) by upholding it in essentialist terms. This means that when the law and social practices diverge, it is the law that is a valid and social practice that must change in order to achieve conformity with it. The less society conforms to God’s law, the more urgent is the Islamists’ demand for change and purification. As exemplified by Sayyid Qutb (d. 1966), chief ideologue of the Muslim Brother in Nasser’s Egypt, Islamism has defined sovereignty largely within a framework of law and authority where the sovereignty of God is synonymous with the sovereignty of the Shari’ah within an Islamic state.

When Islamists, therefore, call for a “return of the Shari’ah” they do not mean to bring back the traditionalist fiqh (tainted by centuries of ulama-state accommodation), such as the Taliban regime has done in Afghanistan; rather, they envisage an alternative Shari’ah based on the Qur’an and, especially, the restoration of the Prophet’s Sunnah that prominently involves the building of a new state structure and new political institutions under Islamist leadership.

By contrast, when the traditionalists, especially now given a voice by conservative clergy and legal experts, call to restore the Shari’ah, their demand is generally for the restoration of Islamic fiqh to replace the legal norms and institutions that were created during the colonial period or by the post-colonialist nation-states. So far, only a few of the establishment’s religious scholars have used their professional credentials and legalistic expertise to develop innovative opinions within the legal methods of traditional fiqh. A prominent example is Yusuf al-Qaradawi, who arrived at new formulations of Muslim women’s social and political rights during the 1990s by way of the established fiqh: indigenous methods of law finding.

In addition, the general public has to some degree begun to participate in the civilizational debate on the role and meaning of Islamic law in their modernizing societies. By way of the new media, especially the new electronic means of communication, non-specialist Muslim individuals, including women and the young, are beginning to create what may perhaps one day turn out to be a groundswell of scripture-based individual opinions on legal issues that they derive largely from a personal study of the Qur’an.

Is the Shari’ah as a legal system now defunct? While there is a clamor by Islamists in the Islamic world for the restitution of the Shari’ah and an affirmation of its efficacy and eternal validity, Wael Hallaq, in his opinion, argues that the Shari’ah is “no longer a tenable reality, that is has met its demise nearly a century ago, and that this sort of discourse is lodging itself in an irredeemable state of denial.”

Although sympathetic to the desire of the Middle East to distinguish itself from the West, Hallaq is firm in his assertion that the concept of nationalism and the creation of modern nation-states have negated the possibility of living by any comprehensive system of Shari’ah. He supports his opinion by analyzing the nature of reforms currently underway that he refers to as the “cobbling together” of interpretations of Shari’ah borrowed from various historical legal schools and other legal-theological traditions. Spurred on by international pressure to create a body of laws that will adhere to the conditions of a modern constitution, lawmakers in the various nation-states are now creating hastily constructed legal templates that will satisfy both international organizations and popular ideologies.

The only way to achieve such a precarious balance is to adopt the most lenient laws offered by the various inherited legal traditions, laws that will receive the support of the population. The only sector of law maintaining any uniformity under these conditions, Hallaq argues, is personal status law. it may, however, be precisely the latter’s more Islamic uniformity, as opposed to the heterogeneity of the rest of state law, that will eventually serve to accentuate the larger legal system’s incoherence and thus contribute to strain “the intricate connection between the social fabric and the law as a system of conflict resolution and social control.”

The root of the problem, according to Hallaq, is the modern state control of waqf (the wealth amassed by centuries of private unalienable property contributions formerly administered by representatives of the clerical establishment), the loss of which has undermined the ability of Islamic schools of law, institutions, and officials to function independently of the political establishment and thus has destroyed their tradition of legal innovation and adjustment that informed the formulation and practice of Islamic law in the past.

We agree with the argument of Islamic modernists such as Fazlur Rahman, Abdullahi An-Na’im, Mohammed Iqbal, and Abdullah Saeed that the interpretation of the ethical-legal content of the Qur’an and Sunnah needs to take social change into account in order to sustain the close relationship between the primary sources (Qur’an and Sunnah) and the Muslim today. The Qur’anic interpretation up to now, which has been to a large extent philological, needs to give way to a more sociological and anthropological exegesis in order to relate it to the contemporary needs of Muslims today.

However, a search for acceptable methods in the modern period should not neglect the classical Islamic exegetical tradition entirely. On the contrary, we should benefit from the tradition and be guided by it where possible without necessarily being bound by all its detail. Contemporary scholars must be informed about the ways in which the texts have been interpreted throughout history. That understanding can be helpful in our formulation of new interpretations in the light of new circumstances and challenges.

Challenges and Opportunities of Business and E-Commerce under Islamic law

Internet closes the distance in the physical world. With the existence of the internet, the world is actually borderless. People can buy clothes, books, and electrical appliances through the internet and also can gather information and learn about other cultures and climates from the internet. With the development of the internet, it has not only become a way of communicating or information gathering but also of getting products sent to our home. This era is called the E-Commerce era. Many conferences and seminars have been held pertaining to e-commerce but only a few have brought up matters about e-commerce from the Islamic perspective. With the challenge to fill this gap, the thesis will highlight the framework of Islamic E-commerce (E-sale contract) and the challenges that Muslims would be facing.

In the world commerce industry, the way we communicate and do business has changed as a result of the impact of the internet. As we can see the changes are taking place rapidly in our daily life. We do not have to personally go to the hardware and supplies shops to buy materials required for building a house. What you have to do is to switch on your computer with an internet connection. While connected to the internet you are able to browse the online supermarkets and click on every single item that you want for the house construction in your virtual shopping cart. In a few days, all the items ordered through the internet will be delivered to your doorstep. What you must have are a debit/credit card number and a postal address.

Islamic business can be established as an amalgamation of business organizations that function under the guidelines of the Shariah and do not engage in any of the following activities.

1. Operations involving Riba or Interest as it is commonly referred to as.
2. Maisir or Gambling involving operations.
3. Operations involving the manufacturing of non-halal products such as Pork or liquor.
4. Operations involving gharar or elements of uncertainty such as those found in modern-day insurance banking.

According to Yusuf al-Qaradawi (a modern Muslim scholar from Egypt), there is no prohibition of trade in Islam in any circumstances other than those that involve the promotion or encouragement of cheating, exorbitant profiting, or the engagement in activities that are classified as haram.

The goal of Islamic business will be two-fold: maximizing the profit margin while ensuring social welfare maximization alongside.

Not only are trade activities the major economic activities at present, but they are also the main economic activities of our ancestors. The traditional way of doing trade however is changing rapidly with the introduction of the internet. Physically, the internet is nothing more than an unregulated network of computers mostly linked either by telephone lines or broadband connections. It is different from our traditional way of doing business or trade. The internet development is so rapid, that no business, conventional or Islamic, could afford to be left out in order to be able to compete in the free market.

Therefore Islamic businesses must take part in internet development to be at par with all other businesses. However, studies need to be conducted in the E-commerce area to adjust Islamic business needs in order to ensure that they are in line with Shari’ah guidelines.

There are three basic things that should be considered in Islamic e-commerce contract formation over the internet as well as the buyer, seller, and the product. They are offer, acceptance, and consideration. If all these things have been observed and implemented, e-commerce is permissible because the Shari’ah use Ibahah, which is a presumption in Shari’ah that everything is permissible in the absence of specific Qur’anic injunctions.

The basic principle is that something which is not forbidden is deemed to be lawful based on the maxim “lawfulness is a recognized principle in all things.” In other words, everything is presumed to be lawful, unless it is definitely prohibited by law.

Doing business according to the Islamic perspective is not difficult since it promotes justice for sellers and buyers as long as it adheres to Islamic principles. However, avoiding riba or gharar seems almost impossible for Islamic businesses since almost every transaction will directly or indirectly involve the riba elements. These are the major challenges that Islamic businesses have to encounter. The other two prohibitions such as Maisie and selling prohibited products are normally adhered to by Islamic businesses. Even though matter and selling prohibited products are deviant for Islamic businesses, these two prohibitions should not be ignored completely. They should be managed by Islamic businesses in order to achieve the goals of profit maximization and welfare or success maximization.

Gharar and riba are the two prohibitions that are ignored by Muslim businesses due to our own ignorance. Riba is interest or any addition resulting from the lending process. It is predictable that riba is widespread in the business system in any company including Islamic businesses as the conventional financial system survives from it. This situation would encompass the problems that an Islamic business would be facing in avoiding the prohibition of riba in order to uphold equitable economic justice principles under Islamic law.

Riba is clearly prohibited from the Qur’anic perspective:

“Those who devour usury will not stand except as stand one whom the Evil one by his touch hath driven to madness. That is because they say: ‘Trade is like usury,’ but Allah hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge), but those who repeat (The offense) are companions of the Fire: they will abide therein (forever)”.

The challenge for Islamic e-commerce in fighting riba would be choosing a payment and banking system which is Shari’ah compliant. This is important because the operational backbone of e-commerce is in its payment and banking system. In our present system, most of the domestic and international trades use conventional financial systems that are connected and related to riba.

So if Muslim entrepreneurs want to sell their products by e-commerce, they have to ensure that they do not become involved in riba transactions in their deposits, financing, and payment system. To avoid riba at any cost, Muslim businesses must ensure that they utilize the Islamic banking or Islamic financial system. The products which are currently offered by the Islamic banks are competitive with a product range covering deposits, financing, and other services.

Products such as Mudarabah, Musyarakah, and Murabah as we will explain further in the next chapter, are examples of the most common products of the Islamic banks. The support from the Islamic banker to Islamic commerce is inevitable and it is expected that Islamic bankers provide facilities that are on a par with the conventional system in terms of its services, range of products, and reliability.

Since the introduction of the Islamic banks, Muslims have had the opportunity to avoid unscrupulous conventional financial systems and use the Shari’ah-compliant financial system. With this opportunity, the development of e-commerce must abide by the Shari’ah prohibition of interest, and therefore the payment systems selected must also be Shari’ah compliant.

The next challenge is to avoid the gharar elements in buying and selling contracts. Numerous hadiths can be found on the subject of gharar and many of them refer to specific scenarios. A commonly cited hadith is that quoted by Imam Ahmad, Imam Muslim, al-Tirmidhi, Abu Dawud, Ibn Majah, and al-Nasa’i, all of whom do so upon the authority of Abu Hurayra that:

“The Prophet (P.b.u.h) prohibited the gharar sale”.

The Shari’ah established that in order to ensure fair dealings between parties in contracts, any case in which uncertainty leads to an unjustified enrichment in the contract is prohibited. According to Kazi Mortuza Ali in his paper “Introduction to Islamic Insurance”, Gharar can be found in all the business dealings in which a party involved in the contract has no perception or idea about what the party shall receive upon the conclusion of the bargain. Yusuf al-Qaradawi defines gharar as an action in which something is sold with clear incorporation of uncertainty and can be expected to lead to the generation of conflict or unjustified enrichment.

If gharar is to be avoided, the parties must ensure that

1. the prices along with the subject of the sale are in existence and can be delivered,
2. the specific characteristics of the items and the counter value can be established,
3. attributes that are fundamental such as quality, quantity and delivery date are predetermined.

If any of these prohibitions, riba, and gharar, can be avoided along with other prohibitions, the Islamic business can achieve the two goals of profit and Falah (success) maximization.

E-commerce does have a place in the Islamic perspective; however, whenever it takes place, certain requirements of the Shari’ah should be complied with and adhered to. This is to ensure that the goals of the Islamic business, which are Falah and profit maximization, could be achieved. By achieving these goals the Muslim can be successful in business and also in the days of the hereafter. Falah maximization could be achieved by abiding by the Shari’ah and the four major prohibitions outlined are the prohibition of riba, Maisie, gharar, and of selling prohibited products such as pork.

On the other hand, profit maximization of Islamic e-commerce could be achieved by differentiating products, fair price, quality, and services offered to the customers through e-marking mix and networking. In adhering to Islamic principles, the Islamic business must have the products, full information or description about the products, and the ability to deliver the products. As far as e-commerce is concerned, it is permissible from an Islamic perspective as long as it abides by the Shari’ah guidelines. The Prophet (P.b.u.h), through his sayings and action, encouraged the form of trade that considers merchants to engage in honest trade so that they may be considered with Martyrs on the Day of Resurrection.

The Islamic Sale Contract

In the absence of a general theory of contract in Islamic law, the study of the e-sale contract should lead us first to begin with several observations and a deeper understanding of the traditional sale contract in general, and then consider the e-sale contract in particular. It is imperative to note that Qur’an and the Sunnah, in their dictation of Islamic Law, present general rules about the law of contract which is unique when compared to the laws of individual contracts. The Qur’an addresses rules pertaining to commercial contracts at over forty different instances. Aside from the specific verse on performing the contract, Quran 5:1, and the three on the necessity of keeping a promise, a few other verses also shed light on advanced commercial contracts dealing with selling and hiring.

The Prophet Mohammad (PBUH) himself was a merchant and engaged in commercial practice, however, he forbade some and permitted other activities in commercial practice. Most of these guidelines can also be found in the Qur’an and can therefore be considered to be nothing less than Divine Commands that are to be applied at all times. Other guidelines can be found in the Sunnah as well as in authenticated references dating back to the actions and words of the Holy Prophet.

However, the Muslim jurists from the four Islamic Sunni schools have devoted by far the greatest part of their scholarly writing to specific contracts such as the sale contract. Businesses in Islamic law are faced with the same set of financial challenges.

My confidence in the Qur’an and the traditions of Prophet Mohammed and all supplementary imperative alternates, the Islamic law will be wide enough to accommodate the needs of e-sale contract requirements, without however going against the general principles of Islam.

Prior to discussing the formation of the e-sale contract under Islamic law, it is essential to deal, in this chapter, with the general fundamental rules and principles governing the traditional sale contract. It is hoped that an exposition of these general principles and rules will assist in the clarification of the more detailed discussion on the formation of the e-sale contract under Islamic law which will follow later.

In Islamic law, there are various definitions of contract in general, and the sale contract in particular. The contracted word in Arabic (Uqud) covers the entire field of obligations, including those that are social (like marriage), political, and commercial, and also deals with the individual’s obligation to God (Allah). However, the most well-known definition of the sale contract, in particular, came in the initial contemporary establishment of Islamic law of obligations and contracts, Mejella al-Ahkam al-Adliyyeh article 103: “contract is an obligation between two persons or contractors about a lawful act in a good manner” or “exchange of offer and acceptance with real intention”.

However, if the contributions made by the jurists of different Islamic schools of thought were considered, it is observed that differing definition of a sale contract and it is dealt with much more widely in fiqh writings than other contracts. A sale contract for Abu Bakr al-Kasani, the Hanafi author of Badaa’i al-Sanaya (d. 587/1191), purports the exchange of a coveted article against another coveted article; such an exchange takes place either by words or by deed. For al-Kassani the binding effect of the sale contract and the conferring of immediate possession of the counter values intended to be exchanged are its two main effects. Muwaffaq al-Din Ibn Qudama, the Hanbali author (d. 620/1223), sees a sale contract as an exchange of property against another property conferring and procuring possession.

As we look at these early definitions, any definition suffers from an inherent inadequacy. Linguistically, words have different shades of meaning. Technically, terms and expressions evolve and frequently change over the course of time, albeit imperceptibly. Therefore, we find any definition involves a high degree of abstraction which, when applied to the instances meant to be covered by it, may fail to achieve its intended ambit. At best, a definition may be considered as a proposition for the explanation of the scope, or an initiation to the exposition, of the subject concerned. This approach to the definition of the sale contract is perhaps more suitable to a jurisprudential treatment of the subject than to a normative formulation of it.

As a result, we may prefer to define the sale contract the way some authors define it, as the relocation of possession of legal goods for a set price (money or other assets), with both standards established and conveyed without delay. However, impediment in reimbursement of a counter-value is considered a unique case in Islamic law. The title of both counter values transfers immediately at the time of sale, even if actual payment or delivery of property is delayed by stipulation or otherwise.

In the Islamic legal system, like other legal systems of the world, certain formalities and substantive elements are essential for juristic acts to become legally binding on the parties. Classical Muslim jurists developed a clear concept of juristic acts which produced a legal effect on all commercial contracts. The sale of contractual transactions, whether written, unwritten, or by correspondence, constitutes the vast majority of juristic acts. That being so, Muslim jurists of the four Islamic schools stipulated a clearly defined idea of the conditions and requirements of validity for a binding sale contract.

These essential conditions and requirements of substantive and procedural law now provide the criteria for the void, valid, binding, and enforceable elements of all contracts in general and the sale contract in particular. Muslim jurists from these schools laid down a set of criteria for distinguishing between essential conditions on which the valid conclusion of the sale contract depended, and those which are regarded as less fundamental and which might affect its binding force on only one of the parties in the sale contract.

Furthermore, Muslim jurists went further and spoke of the non-existence of goods in the sale contract as a radical form of nullity under which the contract was considered as if it had never taken place. They also recognized, in contrast to the above category, contracts the effects of which were merely suspended (mawquf ala al-ijazat), depending on the choice of the party whose intention was not validly expressed, and for whose protection the nullity was prescribed.

Principle of Freedom in the Sale contract

Islamic scholars from different schools seem to differ in their opinions regarding the degree of freedom contractors have to conclude a contract. However, a closer examination of their opinions reveals that they agree on the major rules and principles relating to the freedom of contracts and they only differ on some details. The first view, which is the view of the Hanbalies and Malikies, explains that contractors are totally free to conclude whatever they wish, provided that it complies with Islamic rules and principles. This view believes that the root principle of contracts in Islamic law is the freedom of contracts except where they are explicitly prohibited by a provision or an injunction. Proponents of this view base their argument on some provisions from the Qur’an, and Sunnah and reasoning. Of particular importance here is:

“O ye who believe, fulfill pledges….”

“… but Allah hath permitted trade and forbidden usury.”

“O ye who believe! Eat not up to your property among yourselves, but let it be amongst you traffic and trade ….”

“How can men stipulate conditions that are not in the book of Allah? All conditions that are not in the book of Allah are invalid, be it a hundred conditions. Allah’s book is more trustworthy and his conditions are more worthy to obey.”

The second view is that of the Hanafis and the Shafi’ies, which have established a middle course concerning the issue of freedom of contracts. Their handling of the subject of freedom to include conditions in contracts shows, as will be seen later, that they are, in principle, not as liberal as the Malikies or the Hanbali.

Regarding the conditions which can be included in sale contracts, jurists categorize the conditions that can be valid and legally sound as follows:

The Stipulation Inherent in the Nature of the Sale Contract (al-Shart al-ladhi Yaqtadih al-Aqd)

The requirement of a circumstance that pertains to the nature of the sale contract is superfluous. Thus, to affix a section to a trade contract according to which the purchased object eventually becomes the property of the buyer is tautological, as this stipulation follows without a doubt from the fundamental characteristics of sale as such. Also, similar common attributes of sale – such as compensation of the price and taking ownership of the sold article – the Hanafi and Shafi’i schools also consider conditions from the explicit nature of the sale. The condition that is inherent in the nature of the sale contract does not invalidate the sale contract.

Thus if an object is bought on the condition that he acquires its ownership, or if an object is sold to be paid a price for, or if an object is bought to take possession of it, or if a garment is bought with the intention to wear it, the sale is permitted since the sale requires that these supplementary conditions are met even if they are not stated. It is imperative to note that their consideration as conditions does nothing more than establishing the nature of the contract and does not make the contract invalid in any manner.

The Stipulation Appropriate to the Sale Contract (al-Shart al-Mula’im li al-Aqd)

All the Classical Islamic Schools allow no more than two natures of clauses to be attached although the condition to do so is not mandatory in the terms of the contract. In fact, at this point, it becomes essential to mention rahan and Kafala, also referred to as the pledge clause and suretyship clause that exist in concordance with the purpose of the sale and the legal structure. Accordingly, pledge and suretyship are admissible stipulations under all Sunni Islamic Schools.

The condition that is not inbuilt in the transaction, but is fitting to the contract, does not annul the sale contract as it is in accordance with its necessary connotation and verifies it; so it enjoins the requirement which is a prerequisite of the transaction. In the event that one sells an item on the stipulation that the consumer pledges security (rahan) as a counter-value to the value, or on the stipulation that the buyer has an underwriter (Kafil) who is willing to stand as safekeeping for the value: in these cases, the sale is legal and is permitted by virtue of juristic predilection.

Analogical inference (Qiyas) restricts the sale because any condition which is in contrast to the primary contract serves to annul it. Pledge and suretyship clauses are superfluous to the principal terms of sale and therefore have an annulling implication on the contract. However, these stipulations have been juristically opted to declare because though officially different from the primary terms of the contract, they, all the same, agree with its indispensable denotation: the assurance of security as a counter-value to the worth is a consolidation of the value and the very same concept holds for suretyship.

Both the conditions strengthen the right of the seller and therefore do not nullify the sale contract. Nevertheless, the sale contract is permissible since the idea of the pledge is to receive a return: its legal approval lies in its confirmation of the right to return, which verification is a specification that is fitting to the sale contract. The editing of legal logic in the course of obliging practice results in considering the pledge of security and suretyship of an underwriter clause as officially valid.

The Stipulation that is Customary Practice (al-Shart al-ladhi fih Ta’amul)

All the four Islamic Sunni Schools agreed that under the allowable type of stipulation styled “the conventional stipulation” such clauses being a constituent of local custom (Urf) are allowed to be lawfully obligating despite the fact that they are peripheral to the fundamental terms of the sale contract. Also, article 321 of Murshid al-Hayran has allowed this kind of stipulation, so a condition which is neither hinted toward in the primary contract nor suitable to it, but which is an ordinary application, is permissible.

This exists if one buys a sole on the stipulation that the vendor fixes it to the shoe. Reasoning by analogy (Qiyas) Hanafi jurists do not allow such a requirement as the added clause is not necessary by the principal contract and is of advantage to only a single party, as in the following section. As a result, the clause annuls the contract, similar to the case in which one buys a cloth on the stipulation that the vendor tailors it into a shirt.

The Stipulation of Benefit to One of the Parties

The Maliki and Hanbali schools provide the text-based reasoning for the rejection of the Hanafi scruples about annexed clauses that profit one of the parties involved in the sale contract, and, derivatively, for the freedom of stipulation. That the Maliki and Hanbali ruling with regard to the sale contract conditions is formulated in mindful resistance to the Hanafi is apparent from Ibn Qudama’s rejection of the Hanafi ruling in opposition of added clauses that benefit any one of the parties involved in the contract. Therefore, jurisprudence in accordance with Maliki and Hanbali validates similar sale contracts whose annexed clauses were evaluated for their authenticity by Hanafi jurisprudence as invalidating the whole contract. The Maliki and Hanbali jurisprudence affirms

“The legitimacy of the stipulation of an additional benefit by one of the parties such as inhabiting the house for one month before its delivery to the buyer. Also, the sale is valid if the buyer stipulates an additional condition to his benefit in the object, such as the transport of the firewood or the tailor of the cloth….”.

The advocates of this opinion claim that:

“It is not true that the Prophet (P.b.u.h) forbade the sale containing a stipulation. What he forbade was the sale containing two stipulations: he did allow the sale contract with the single stipulation.”

The Maliki and Hanbali jurisprudence meets the Hanafi opposition through a multifaceted appeal to the authority of master conservatives. The Hanafi School’s Hadith is canceled out in two aspects: first is the absence of credible hadith collections; second is the adherence to a version of the hadith according to which only sales with two annexed clauses are forbidden, the sale contracts with one additional condition – opposing to the Hanafi ruling – are considered lawfully obligating. The Hanbali reaction to Hanafi conservatism on condition application on the two main causes of constraint:

• the Prophetic saying in opposition to “sale with annexed stipulations”; and
• the addition of gainful prerequisites under illegal gain (riba).

Furthermore, the worth assigned to the parties’ self-sufficiency in the sale contract is idiosyncratically improved in the Maliki and Hanbali law, which raises the parties’ assent to the position of an adequate situation for the legality of the sale contract. But the Hanafis rule that shared assent by the parties to the provisions of the contract is only a compulsory circumstance of legality and not adequate to legalize the contract, the Hanbali jurist Ibn Taymiyya considers things differently:

“The principal rule in contracts is the consent of the parties (al-asl fi al-unique Rida al-muta’aqidin), and the legal effect is what the parties obliged themselves contractually…. Since Allah (God) does not command for commerce except mutual consent, mutual consent validates commerce…; thus if the parties agree together the sale contract is valid, except if it contains what God and his Prophet forbid such as trading in wine and similar forbidden objects.”

Ibn Taymiyya’s legalization of the sale contract based entirely on the accord of the parties marks an extensive move forward for the autonomy of business in Islamic law. The parties are liberated, in principle, lawfully to specify whatsoever terms they judge to be in their notice, autonomous of traditions, norms, and analogous limitations hypothesized by Hanafi law. Ibn Taymiyya draws extensive inferences from these sayings, conclusions that are in accordance with Islamic legality on contracts and dealings of non-Islamic cultures and epochs:

“Muslims agree that pre-Islamic Contracts that were concluded by infidels are valid after Islam if they are not specifically forbidden for Muslims …. So what people consent to in transactions is not nullified by the lawmaker except what comes under prohibition …. If Muslims conclude amongst themselves contracts without knowing whether they are licit or illicit, the generality of jurists, as far as I know, would validate these contracts if they do not believe that they are specifically forbidden.”

Another matter that causes a rift in the freedom of conditions in Islamic sale contracts is the occurrence of usury restriction on prerequisite substantiation – the Maliki and Hanbali claim on the lawful consequence of subjective and motivational states such as the parties’ assent and their factual intention (niyya) allows for the identification of clauses leading to a benefit to a party included in the contract and beyond that inscribed in the principal stipulations of the sale contract.

The occurrence of usury prohibition can be found notably in the reflection of the Hanafi jurists, contributing to the establishment of the intricate view of the impression of usury (shibh al-riba), an impression that is very damaging to the greater part of annexed clauses. The Malikies and Hanbalis’ perspective to this complicated dilemma can be observed to be motivated by their primary set of principles regarding the underlying motivation or actual purpose (niyya) behind lawful acts: in Hanbali jurisprudence, the validity of a transaction is thoroughly associated with the licitness of the drives of the parties involved in the contract. Therefore Ibn Taymiyya’s well-known disciple highlights the licit/ illicit nature of the genuine purposes in the wake of lawful transactions, which character is crucial for the validity of the transaction:

“Should the law take account only of the manifest meaning of expressions and sale contracts even when the aims and intentions appear otherwise? The evidence of the law and its principles confirm that intentions must count in the sale contract and that they must determine the validity and invalidity of the sale contract …. Thus if one sells a weapon to someone whom he knows would be using it to kill an innocent person, then the sale is null and void as it promotes crime and aggression. But the sale is valid if he sells the weapon to someone to protect himself from wild animals.”

It is evident that only if the intention present behind a particular requirement in a contract is interest-based or earning with no counter-value would that provision invalidate the transaction. Distinctive from the Hanafi school, the Hanbali school does not statute that non-customary clauses that are of advantage to one of the contracting parties are usually prohibited. As long as the objective of the parties is not an unwarranted achievement – an issue that could be established from the conditions and matter of the contract – the annexed clauses are permitted, and so is the whole contract.

The Invalid Stipulation

The majority of Islamic schools jurists are generally justified by a rather liberal outlook in issues of contracts, and conditions in particular. They seem to stand for the regulation that a lawful act that is licit in its own frame of reference as an object of compulsion (Mahall al-Aqd) remains so in segregation or when annexed as a clause to a principal lawful act. When considered with regard to contract provisions, the rule indicates that a stipulation annexed to the principal provisions does not avoid the contract as long as the stipulation is not supplemented with a precise prohibition found in the Qur’an or Sunnah. This accommodating character receives precise formulation as a common belief in Ibn Taymiyya:

“Regarding contracts and stipulations,… there are two positions. The first states that the rule in contracts and attached stipulations are prohibited unless the contract is specifically permitted by law…. Many of the principles of the Hanafi school exemplify this position…. The second position is that the rule in contracts and stipulations is admissibility and validity, unless specifically forbidden and invalidated by text or analogy…. Our judgment is that the rule in contracts and stipulations is admissibility (al-asl fiha adam al-Tahrir), so they are admissible unless there is a proof of prohibition.”

In accordance with his broadly applicable corroboration of contract conditions, Ibn Taymiyya limits the category of untrue prerequisites (al-shurut al-fasida) to two types:

• clauses that contradict the lawful rationale of the contract – for instance when the seller instructs that the purchaser must not put up for sale or take into service the sold object; and
• clauses that defy a clear Qur’anic or Prophetic ruling, for instance restricting the taking of interest.

His clarification of these kinds of unacceptable clauses does not identify the principles of the earlier Hanafi school jurists in opposition to numerous conditions in a solitary contract such as two sales in one sale (Bay’atan fi Bay’ah), for example, if a buyer bought goods from a seller for either ten dollars in cash or fifteen dollars on credit, one of two prices was imposed on the buyer. This is a scenario into which Islamic Law does not permit engagement since the postponement of payment causes credit to come to fifteen dollars whereas the payment made would be ten dollars. The Prophet (P.b.u.h.) is reported to have forbidden two sales in one sale because it is a kind of usury. There is one tradition (Hadith) restricting these kinds of stipulations:

“Illicit is a loan and a sale (salaf wa-bay‘), or two stipulations in a sale, or sale of what you do not have.”

The messenger of Allah forbade two sales in one (bay’atan fi bay’ah).

However, if the seller asked for the cheapest sale the sale is valid. Another situation of multiple stipulations in a single contract, two conditions in one sale contract (Shartan fi Bay’), is when the seller sells goods to the buyer for ten dollars in cash and for fifteen dollars on credit, where it may be presumed that the seller made two conditions, not one on the price or any other aspects in the sale contract since the Prophet disallowed it. These boundaries on the number of permissible clauses count no longer in the philosophy of Ibn Taymiyya:

“If the stipulation negates the legal purpose of the contract, the contract is empty; and if it negates the purpose of the lawmaker, it is opposed to God and His messenger. So if the stipulation does not comprise one of these two, if it were not empty nor does it contain what God and his messenger forbid, then there is no reason to prohibit it. On the contrary, it (the stipulation) should be legitimized because it is an act done by people out of need, as they would not have done it if they were not in need of it…. Since the act is not forbidden, it is valid, as the Qur’an and the Sunnah enjoin the alleviation of hardship.”

Therefore any evaluation of the progress of Islamic contract law with regard to the identification of contractual independence cannot fall short to take account of three main important sources of limitations on individual motivation in contracts: those originating from the prohibition of usury (riba), of ritually and ethically illegal objects of business, and of annexed stipulations. It can therefore be inferred that substantiation of growth toward more capacity for the exercising of individual motivation in lawful acts, whether in a particular school of fiqh or between schools, requires a prerequisite as to its import. It might well be that a school that authorizes more liberty in annexing stipulations to contract in common and sale contracts in certain is exposed to be more traditional in its prevention of interest on non-fungible assets.

Consequently, the Hanbali jurists criticize as unlawful the customary lawful devices that intend to bring about the circumvention of the usury prohibition; in comparison, the Shafi’i’ school considers no account of the implied aim of such transactions, bearing in mind only their letter and treating them as perfectly permissible. Such conservatism on interest- charging is distinctive of Hanbali law when compared to the supplementary three schools is in order.

The above examination supports the vision that the Hanafi jurists’ inclination to authorize predetermined clauses in financial interactions is detained by their attachment to the principle, “No sale with a condition”. The Hanafis understand this (Prophetic) prohibition as concerning usury, that is, to generate revenue with no counter-value in return. In fact, the plain resemblance of unfair gain (shah al-riba) is in their eyes adequate foundation for invalidating any contract that includes an annexed clause that is not part of the tradition and is profitable to one of the parties. This unforgiving restraint of liberty of business – clear in the theory of the annulling clause (al-shart al-faced) – constitutes the foundation of the Hanafi school and appears as the fundamental cause of its exclusion from the original Mejella al-Ahkam al-Adliyyeh.

Nevertheless, the Mejella al-Ahkam al-Adliyyeh article is at loggerheads with that marked by the favorite jurist’s school of the Ottoman state: a sale contract with an annexed clause that is gainful to one of the parties is legitimate. No doubt the Hanbali-inspired modification was a reply to the customary Hanafi decrees excluding sale contracts with annexed stipulations in favor of one of the contracting parties. A verdict that annuls a sale contract since it contains an annexed stipulation in the interest of a party to the business is surely at odds with the necessities of modern commerce. With its extensive restriction of contractual independence, the Hanafi School’s prohibition of this type of prerequisite posed a problem for modernist Ottoman jurists. Hanbali jurisprudence provided the desired solution.

From the viewpoint of the development of Islamic contract law, the assessment of the contemplation of the Maliki and Hanbali schools on the subject of conditions with that of the Hanafi reveals substantiation of actual doctrinal changes in Islamic contracts law. Such progress in the Islamic theories of annexed clauses evinces a specific tendency of liberalization that is both doctrinal and diachronic. Already the Hanbali School, prosperous a century later than the Hanafi School, opts for a more broad-minded view of a prerequisite than the latter.

The later jurists of the Hanbali school (Ibn Qudama and Ibn Taymiyya) show the way to a more developed law of condition in the Islamic sale contract law in the 14^th century, in which liberty of specification in the sale contracts acquires its utmost acknowledgment in Islamic law. For the last two jurists, in particular, nearly any annexed stipulation is permissible as long as its tangible content is not the subject of an unambiguous prohibition in the Qur’an and Sunnah. Consequently, with the beginning of the late Hanbalis, Islamic law makes major developments toward the acknowledgment of the freedom of the sale contract.

The persisting question which we must ask here is: how do we reconcile the foregoing facts and realities with the restrictive views of some Islamic schools regarding the freedom of the sale contract? The answer is simple. Any reader of those large encyclopedic volumes written by Muslim jurists from different schools would come to only one conclusion. That is, none of the four Islamic schools have, in practice, restricted the commercial activities of the businessmen and traders of their day simply because they were the first to foresee the legal problems and find a proper solution to them. The jurists were Islamic scholars and philosophers, some were businessmen, and on top of that, they were judges. They were ready to give legal advice wherever they were.

This is the reason why their books have been full of detailed answers to innumerable questions where they have not bothered too much to conceptualize a rule or principle. To them, the rules and principles were already laid down by God and his Messenger, and their function was to search for, interpret, philosophies, and deduce the relevant rules and principles of Shari’ah using their reasoning, and apply them to concrete cases and questions.

The variety of opinions and solutions the jurists have provided evidence that their restrictions were cautious rather than restricted, insisting on the primacy and supremacy of Shari’ah rules and principles.

Those who advocate the freedom of the Islamic sale contract believe that the restrictions and prohibitions of Shari’ah are exclusive categories beyond which freedom is the rule, whereas the advocates of the restrictive viewpoint believe that Shari’ah has already established the exclusive categories of legal conditions beyond which freedom is restricted. In reality, it is apparent that there exists no opposing difference when the two views are considered, especially if one takes into account the fact that the application of their restrictive views has, to a large extent, resulted in almost the same outcome.

The majority of legal systems in Islamic countries have adopted a quite flexible regime regarding freedom of conclusion of sale contracts as well as the inclusion of conditions therein. The major restrictions on the making of sale contracts in such countries relate either to public order or to special regulations relating to a particular sector or activities or Shari’ah rules and principles with various degrees of emphasis. A reader of the civil laws of such countries will very often come across certain provisions regarding the validity of the conditions to be included in the sale contract. Typical examples here are that such conditions must be possible, certain, and not contradictory.

Ibn Juzy – a scholar of the Hanbali School – provides a list of ten cases which in his opinion constitute a forbidden gharar. These cases are described as follows:

1. Difficulty in performing the delivery of the subject matter, such as the sale of a stray animal or an unborn fetus;
2. Lack of sufficient knowledge (Jahl) regarding the type of the price or the subject matter, such as the seller saying to the potential buyer: “ I sell you what is in my bag”;
3. Lack of sufficient knowledge regarding the characteristics of the price or of the subject matter, such as the seller saying to the potential buyer: “ I sell you a piece of cloth which is in my house”, or the sale of an article without the buyer inspecting it or the seller describing it;
4. Lack of sufficient knowledge with regard to the quantum of the price or the quantity of the subject matter;
5. Lack of sufficient knowledge with regard to the date of future performance;
6. Two sales in one transaction;
7. The sale of what is not expected to revive;
8. Bay’ al-hasah, which is a type of sale whose outcome is determined by the throwing of a stone;
9. Bay’ al-mulamasah, where the bargain is concluded by touching the subject of the sale without examining it;
10. Bay’ al-munabadhah, is a sale that is performed by the vendor literally throwing a cloth at the buyer and bringing the sale transaction to a close without having given the buyer the opportunity to adequately consider the item in question.

As a result of our discussion in this chapter, the parties to sale contracts are entitled to establish any kinds of agreements according to the freedom of contract in whatever manner they see fit and do not oppose these principles and legality under Islamic law. These principles maintain a policy of freedom of contract where any agreement between the parties themselves will take precedence whether the agreement is formed electronically, orally, or through paper-based communication under Islamic law. However, as it is impossible to agree upon something totally unknown under the general principle of Islamic law, it is usually successfully argued that conditions do not bind the buyer if he has not been familiar with the contents of them prior to the agreement.

Validity of the E-sale Contract Under Islamic Law

Introduction

This part of the study is an attempt to present briefly the controlling rules for a valid e-sale contract to take place under Islamic law. The background of Shari’ah as the root principles of Islamic law must be kept in mind for analysis and understanding of e-sale contract formation in Islamic law.

Modern Muslim scholars have tried to define the e-sale contract according to the principles of Shari’ah. For example, Professor Osamah Mojahad defines an e-sale contract as an exchange of offer and acceptance on the internet, and the process of the exchange of the offer and acceptance gives the effect to the agreement. Another Muslim writer has defined the e-contract as a connection between the offer and acceptance of a certain object by means of an electronic device.

In the concepts of Islamic Business, Faith and Fear of God should be exercised by Muslims in all forms of business and trade. As stated in the Qur’an:

“O, believers! Keep faith with contracts…”

“O believers, take not doubled and redouble interest, and fear Allah so that you may prosper. Fear the fire which has been prepared for those who reject faith, and obey Allah and the Prophet so that you may receive mercy.”

“O believers, fear Allah and give up the interest that remains outstanding if you are believers.”

Hence, as a rudimentary stipulation, the Qur’an refers to a lawful business as one that provides benefits to society as well as to the individual. Fairtrade is not only recommended but also encouraged and exhorted by the Qur’an in this regard. In the Traditions (Sunnah) the act of the Prophet (P.b.u.h) preached quality values such as flexibility, accuracy, contract standardization, veracity, convenience, effectiveness, cost, and speed. The Prophet Mohammad (PBUH) said:

“Allah showers his mercy and compassion upon the one who is tolerantly flexible, both when buying and selling.”

These principles have been accepted as forming the basis of conventional transactions. However, from the foregoing views, the electronic age raises the question of whether electronic sale contracts are required to perform the same function and meet the same requirements as conventional traditional sale contracts? Out of the basics of the sale contract and contracting process described in Islamic law, the legal requirements that follow can be considered as a summary of the standards that an electronic sale contract should incorporate.

• Transparent classification of the contracting parties;
• Transparent recognition of the electronic sale contract language (Seaghat al-Aqd);
• Transparent recognition of the subject upon which the electronic sale contract is being carried out;
• The electronic sale contract has to have consideration;
• An intention and genuine consent to create legal relations; and
• The contract has to have a valid offer and acceptance of the involved parties.

These issues might lead to avavoidingvoidable or enforceable cocontractsTherefore, I will discuss the first four issues in this chapter under the four Islamic schools each of which has a set of conditions without which the validity of all commercial contracts in general and the sale contract, in particular, becomes questionable under Islamic law. The last two issues will be discussed in detail in the rest of the thesis.

Conditions Relating to the Contractors (Offeror & Offeree)

In order to enter into a contractual relationship under Islamic law the contractor must

1. be a person; and
2. have the required legal capacity.

Legal capacity can be either natural personality or juristic personality. Natural personality corresponds to the living status of a human being and, generally speaking, it starts at birth and ends at death. However, natural personality can be a presumed legal personality that might, exceptionally, be present before birth or after real death. Every human being, therefore, is a person regardless of sex or age or any other form of discrimination. Juristic personality in all Islamic schools is a presumed personality in entities that have a separate existence from the individuals who establish them but do not have human qualities.

In fact, Islamic law recognizes the concept of juristic personality based on the Islamic practice and treatment of certain Islamic institutions rather than on their explicit mention of the term. Accordingly, entities such as commercial companies, schools, hospitals, and orphanages can have such a presumed personality and can enter into a contractual relationship provided that such a relationship is carried out by their representatives. The vast majority of Islamic countries have recognized this concept in their legislation.

However, in order to conclude a valid sale contract, the contractor, either offeror or offeree, must satisfy the requirement of legal capacity of natural personality: he or she must have attained a certain age and have a certain level of mental ability. Although the exact age of maturity is not identified in Islamic law, Islamic scholars tend to treat every case on its own merits identifying the criteria according to which such age can be identified.

These criteria depend on the attainment of the age or signs of puberty and also on the attainment of the defect-free physical and mental maturity with which the person can attain a reliable standard in transactional matters. Islamic jurists differ in identifying such criteria; some restrict them to reliability in transactional matters, whereas others add that the person should also enjoy a good religious character. In Islamic countries, the age of majority varies from one country to another; some such as Saudi Arabia refer it to Shari’ah rules and principles, according to the Hanbali school; others identify it at 18 years such as Syria and Jordan or 21 years such as Egypt, Kuwait, and the United Arab Emirates.

It is important to note here that according to Islamic law discerning children can be allowed to enter into a contractual relationship as part of the process of training them, provided that such a contractual relationship is not detrimental to the child. Accordingly, the sale contract may be allowed, in certain circumstances, to be executed by a discerning child. However, such actions in the sale contract are not valid or able to produce their legal effect unless they are approved in advance or subsequently by the guardian or the discerning child upon attaining maturity. It is also important to note that guardians are allowed to conclude contracts on behalf of their discerning wards provided that:

1. The guardians for children have full legal capacity;
2. They are not subject to interdiction; and
3. The contract is not detrimental to the child.

Regarding juristic persons, their representatives must conclude all their legal activities on their behalf, provided that the representative:

1. Has full legal capacity;
2. Satisfies the legal requirement to be a representative to the entity; and
3. Satisfies the requirement of the regulation of the entity itself (he/she must have the required credentials and conduct the transaction within their legal authority).

In an electronic environment, it will be important to ensure that a party who purports to enter into a contractual relationship via electronic communication has the full legal capacity to enter into the e-sale contract. A person who is a child, drunk, insane, or bankrupt does not have legal capacity. What happens, for example, when the sellers discover that the buyer at the other end of an e-sale transaction is a minor? This is a classic legal problem, of which a brief overview will suffice here.

As regards the traditional sale contract discussed earlier, all the four Islamic schools and Islamic countries jurisdictions have rules that set the age of majority at 18 years to make a binding transaction or exclude transactions that are binding on a child only if they can be shown to be for the child’s benefit under the Hanafi and Shafi’i’ schools. If no such benefit exists (such as with a contract to buy an expensive car, which a child could not possibly complete), then the contract is not binding on the child, in the view of all four Islamic schools.

But in such a situation in the e-sale contract, it is important to have a clear understanding of the differences between a paper environment and an electronic environment in each transaction in which the parties cannot meet face to face. While the site’s owner can control the disclosure of identity, those engaging in commerce with that person over that site may not correctly or truthfully identify themselves.

It is always a risk for the seller and therefore up to the seller or service provider to check the status of the buyer. Hence, it is easy to understand the popularity of requiring a credit card or digital signature, as the possession of a credit card or digital signature automatically means not only that your buyer is of age, but as well as some kind of guarantee of economic independence. Another means to certify the identity of the customer is the requirement of registration. Only a registered member can use all services of a certain site. The registration process is nevertheless useless if the service provider or seller does not check the credibility of the given information.

After registration, the potential buyer is given personal codes and passwords. When such codes and passwords are used, the presumption is that the person to whom they were granted is indeed the person who has behaved according to the log-information of the site, for example, ordered certain goods or behaved according to the rules. There are numerous possibilities for supervising the use of a site for misuse of services and all those are compatible with the rules of Islamic law, but these issues are outside the scope of our thesis.

However, for example, let us assume that we have checked the opposite party’s credit card information and we know therefore that this contracting party is of age and in possession of his property and faculties. We have been sufficiently cautious. But there is no way to check whether the other party is sober or possibly under the influence of some drugs or a third party. Neither do we know if the party is a minor using his or her parent’s credit card and sending in supplementary information known to the minor in order to create an image of an adult.

If the parent or guardian has not taken sufficient care to keep that kind of material out of the reach of a minor, in effect, we would adopt the legal fiction that the parent or the owner of the computer is bound by the contract under the fiqh principle of the guaranteed (al-Daman). Thus, Islamic law will treat the computer as a machine. Therefore, the owner or the guard of the computer will be responsible for any damage to others.

In the electronic environment, one of the main issues relating to inter-systemic contracts concerns the obvious fact of whether the electronic agent has a legal personality or capacity. Briefly, regarding the previous conditions under Islamic law, our opinion is that computers totally lack legal personality, as is the case under most of the western legal systems. Therefore, referring to our discussion, the computer’s owner will be bound under the principle of the guaranteed (al-Daman) in Islamic law for any mistake or fault of the computer.

In Islamic law, a sale contract is permissible between Muslim and non-Muslim parties as there had been many cases of the Prophet Mohammed (P.b.u.h) selling and buying from non-Muslims. However, our opinion is that the non-Muslim party should be aware of all Islamic principles regarding contracts.

The Fundamental Elements of the E-Sale Contract

The cornerstone elements of the sale contract are the offer and acceptance and the consent of the parties. Briefly, the offer and acceptance, which are termed by Islamic scholars as to the form of the sale contract (Seaghat al-Aqd), are supposed to satisfy the following requirements which will discuss in detail in the following chapters:

1. They must be clear to reflect their intention;
2. They must be serious;
3. They must match and concord with each other; and
4. They must be conclusive.

Islamic scholars from the four schools differentiate between two kinds of contracts, namely, contracts that are concluded between contractors present in a meeting (Majlis al-Aqd), and contracts concluded by writing or correspondence. Article 69 in Mejella al-Ahkam al-Adliyyeh stated: “the stipulation by writing is the same as the oral stipulation”. However, the general view of Islamic scholars is that the sale contract is said to have been concluded when the acceptance made by one of the parties matches and concords with the offer of the other provided that either:

1. The meeting sessions have ended (khayar al-majlis) (negotiability during the meeting session/s); or
2. One of the parties gave the other a final and conclusive option as to whether to accept or reject the conclusion of the contract, and the other explicitly accepted the final offer.

Contracts by correspondence can also, generally speaking, be said to have been concluded when the offer has reached the other party who accepted immediately or within the time limit set by the offeror, provided that the offeror has not revoked his offer before it has reached the second party.

Another fundamental element of the sale contract is the defect-free consent of the parties. In order to define such consent Islamic jurists identify certain defects the presence of which is a contract may cause it to be invalid. These defects as we shall further amplify in the following chapter under defect in consent (Uyub al-Rida) are:

1. Coercion (ikrah); is defined as the “threat of something disagreeable for getting an act done by the person without his consent”.
2. Fraud (Tadlees or Gharar) is “a statement by which one party is induced to enter into the contract with the expectations that he could get profit or gain out of the contract; but unfortunately, it was otherwise” such as the sale of fruit not yet ripe, or sale by touching the subject without the possibility of examination, or sale by throwing the subject from seller to buyer without specifying that one was in exchange for the other, trusting to luck;
3. Error (Ghalat)
4. Gross inequality between the benefits of the parties (ghabn); therefore, the seller can have an action for a supplementary price to oblige the buyer to complete it at the normal price of its value at the time of the sale; and
5. Any element of gambling which is a game of chance such as the sale with an exception (Bay’ al-Thunya); the Prophet has forbidden any transaction with an exception of other goods of the same kind until the buyer knew the quantity and quality of the goods.

The conditions above are clearly intended to show the real intentions of the contractors which are supposed to be beyond doubt. In order to facilitate this, the sale contract under Islamic law must be formed in clear terminology reflecting the exact intention of the parties and clarifying all the key terms and provisions of the sale contract. In an attempt to show how serious this stage of forming the sale contract is, with regard to the structure of the sale contract, attention must be given to the order of its paragraphs, ideas, and provisions, with them formed into groups that have similar contents or are relevant to each other.

The particular structure of the sale contract must be in a clear, simple, confusion-free, and easy to follow format. In addition, the contents of the sale contract must be clear, unambiguous, unconfused, convey the exact intention of the parties and be free from unresolved matters. The parties must ensure that they understand all the contents of the contract.

As previously mentioned, while under the traditional sale contract these elements have to be met, in the e-sale contract under Islamic law, when the buyer has found a promising site or a marketplace, it is up to this buyer to find out all the information concerning the tempting goods or services as well as the conditions for the possible sale contract. If after all this work the buyer makes a decision to buy, the buyer must fill up all the required information and send this information to the net seller.

The Subject of the E-Sale Contract

Islamic law has laid down a series of rules concerning the subject of the traditional sale contract. The main purpose of these imperative rules is to forbid the sale of subjects that religion considers impure, and therefore excluded from commerce, and to maintain a strict and perfect balance between the reciprocal benefits, as well as to avoid any element of hazard that might be the occasion of illicit gain. Allah stated in the Qur’an that one should not consume his/her property with vanity but should engage in trading performed in an atmosphere of goodwill.

It is for this reason that most Muslim jurists affirm that the subject of obligation is licit, that is to say, valid in the eyes of the law if the following requirements of the subject in the traditional sale contract are fulfilled:

1. It must be present or able to be present in the future because impossible subject matters are invalid;
2. It must be licit (mubah). The Islamic jurists have drawn up a list of things prohibited, which fall into two groups. Some are prohibited for essentially religious reasons such as alcoholic liquor and pork, and others for strictly moral reasons such as air;
3. It must be identified or able to be identified, as known features of the subject might constitute a serious defect which, in certain circumstances, is a cause for invalidating the contract;
4. It must be owned by the contractor or his/her principal in the case of an agent; and
5. It must have a determined value.

All these requirements will apply under Islamic law to all sale contracts regardless of whether they are formed electronically, orally, or through paper-based communication.

However, in a sale contract in the electronic environment, the subject matter of the e-sale contract is in a non-present position, thus the important question is whether the non-presence of the subject in an e-sale contract at the time of the sale is concluded necessarily invalidates the e-sale. A substantial majority of scholars (Hanafi, Shafi’i, and some Hanbali) stipulate that the subject matter must be in existence and present at the time the sale is concluded, as an essential ingredient of the validity of the sale. They base their view on two primary proofs. The first proof is Abu Hurairah’s report that the Prophet (P.b.u.h) has forbidden the sale in which uncertainty (gharar) exists or is present.

The second proof is that the Prophet (P.b.u.h) “has forbidden the Muslim to sell goods, he does not have it”. Other Muslim scholars (Maliki, and new Hanbali) challenge this view and they have been able to defeat the majority opinion, simply because the majority fail to base their opinion on a wider perspective that takes into account a deeper analysis of legal texts and the evolving nature of technological innovations.

Their view is that there is no indication in the book of Allah or in the Sunnah of the Prophet (P.b.u.h) that the sale of what is non-present or not existent is prohibited. What was narrated was the prohibition of the sale of some particular not-yet-existing articles such as the sale of a stray animal or an unborn fetus, in as much as there was also a prohibition of selling some other article under Shari’ah which actually was already in existence or present.

As there was no injunction in the Qur’an regarding this matter, the proponents of the first view, which requires that the subject matter must be already in existence and present at that time the sale is concluded, base their view on two primary proofs. The first is Abu Hurairah’s report that the Prophet (P.b.u.h) has forbidden the sale in which uncertainty (gharar) exists. The second is the claim that there is a general consensus (ijma) that has materialized on the invalidity of the sale contract of non-existent subjects (bay’ al-ma’dum). As these two proofs are the focal point of debate between the various scholars, it is necessary to analyze and assess their weight and implication regarding the requirement of the existence of the goods at the time the sale is concluded. Let us evaluate their authenticity.

Various versions of Abu Hurairah’s report have been narrated by a number of companions, amongst whom are Ibn Abbas and Abu Hurairah who declare that the Prophet (P.b.u.h) has forbidden the gharar sale (bay’ al-gharar). Imam Malik in his book (al-Muwatta) has reported another version of the hadith where its final link reaches Sa’id bin al-Musayyib. The Hadith as narrated by Ibn Abbas is considered weak (da’if) as mentioned by al-Busayri.

However, Abu Hurairah’s hadith as reported by Muslims, Abu Dawud and Ibn Majah carry a high standard of authenticity because it bears a reliable chain of transmitters (sanad) in its narration. The hadith that was originally narrated by Ibn Umar and reported in al-Bayhaqi and Ibn Hibban also, according to al-Hafizi’s comments, possesses a good quality with respect to its chain of transmitters (sanad). In fact, a thorough examination of the books of hadith reveals that none of the scholars of hadith questioned the authenticity of the hadith that meets Abu Hurairah in its chain of transmitters (isnad). al-Tirmidhi further points out that as far as the learned scholars are concerned, they all have confirmed the authenticity and applicability of the hadith under discussion.

As for the availability of ijma on the invalidity of the sale contract of a non-existent subject, as claimed by Yahya bin Sharaf al-Nawawi, al-Nawawi referred to Ibn al-Mundhir, who was supposed to be the scholar who transmitted the ijma on the prohibition of the sale of fruits prior to their cultivation for several years ahead (bay’ al-sinin). This type of ijma, i.e., bay al-sinin, is not directly relevant to the case in point because there is no doubt that the prohibition of dealing in such transactions has been specifically regulated by a different provision, though one should admit that the subject in this kind of sale does not exist at the time the contract is concluded.

The fact in question, however, relates to the availability of ijma, which is said to have materialized on the invalidity of sale of a not-yet-existing subject. Referring back to Ibn al-Mundhir’s original work that consists of up to 766 reports on ijma, none of its reports offers evidence to support the claim of ijma under discussion. In sharp contrast, there is clear evidence that ijma has materialized on the validity of some sales that violate the requirement that the subject must be in existence, as we shall further amplify in the following section under the valid modern sale contracts in the case of the advance purchase (bay’ al-salam). This suggests that the claim of ijma on the invalidity of the sale of non-existent subjects is unrealistic and cannot be reliable evidence.

Thus, they propose that the sale of a subject that does not exist or is not present at the time of the contract is not always invalid. The discussion in their arguments proves that the non-existence or non-presence of the subject matter does not necessarily invalidate the sale.

The argument, however, found that the absence of uncertainty and doubt regarding the qualitative and quantitative description of the subject matter as well as the safe availability rather than the existence of the subject matter is the prime concern for the validity of the contract of sale. Therefore, in our opinion, if the parties provided in their contract sufficient parameters and criteria that can eliminate the effect of uncertainty about the price and the quality and quantity of the subject matter as well as their future availability, then the contract should, in principle, be valid. If the lack of such parameters and criteria is curable by reliance on the available technology or on usage or custom then the contract of sale may also be valid. If such uncertainty is incurable then the contract of sale is invalid.

Another key question in considering the subject of the e-sale contract is whether the buyer would have the right to return the defective goods or services under Islamic law. In order to answer the question briefly, our opinion is that if a seller can afford to create an exclusive website and he can make an announcement on his website about different goods or services with adequate price information, and the seller has defended his right to accept the buyer’s order as an offer which they can turn down or accept since there is a need for consumer protection in online transactions, a possible solution would give the buyer sufficient time to inspect the goods or services and decide whether he/she would like to retain the goods or the services, the first based on the hadith, Abu Hurairah’s report on the prohibition of gharar sale, and the second based on the principle of guaranteed (al-Daman) and option by Sight (Khiyar al-Ru’ya) in Islamic law which we shall further amplify in chapter 5.

The Cause or Consideration of the E-Sale Contract

A “sale” consists of the transfer of the general property of interest in goods from the “seller” to the “buyer” for a consideration called the “price”. The consideration can take the form of money, a service rendered, property, or individual rights. The consideration shall be lawful (halal) in Islamic law. On the other hand, cause (sabab) is defined as the immediate contractual purpose as indicated in the contract itself. This section is meant to provide an answer to the question of whether a sale contract, which otherwise meets all the conditions of validity, will be canceled in case its cause or consideration is proven unlawful.

The assessment of whether something can be the subject of a sale contract can be carried out in the light of Islamic rules (Shari’ah) and principles. The majority of Islamic jurists advocate the maxim that: “Everything is allowed unless it is explicitly prohibited by a provision or an injunction”. The maxim seems to clarify the fact that a contractor should be aware of prohibited subject matter in order to avoid involving his/her contract with it. As clear as such a maxim may be, the list of prohibited actions cannot be said to have the same clarity.

This is because, although the list of prohibited subjects is exhaustive and clear per se in Islamic law, the list of prohibited actions and transactions regarding the subject of the contract is neither exhaustive nor uncontroversial. In fact, the biggest problem here is in the identification of the legal nature of a given action or transaction and testing it against those provisions and injunctions that identify the list of subjects prohibited per se.

This problem has been complicated even more by the introduction of other elements, such as the cause and consideration of the contract and the motives of contractors. The best example I can give here is selling unprohibited commodities such as grapes. There is no doubt that selling grapes is as valid as selling any other fruits or unprohibited commodities and, therefore, is a valid subject matter for a sale contract or gift, etc. However, the presence of the possibility of transforming grapes into alcoholic products has caused Islamic jurists to be cautious should the buyer have such an intention.

On this particular issue, Islamic jurists have several viewpoints: the first view is that grapes are a valid subject matter and therefore every contract which involves such fruit is also valid regardless of the motive of either of the parties. Another view argues that although grapes are valid per se, the contract that aims at producing prohibited material from unprohibited material is invalidated because of its illegitimate consideration, whether this consideration is mentioned in the contract or not.

And the only prerequisite to take such consideration into account is that the seller must have known, or it was possible for him to know from the available circumstances, that the buyer is definitely going to produce prohibited material from the subject matter. The argument here is based on the maxim that “Everything which leads to a forbidden thing is forbidden”. A third view is that such a contract is invalid if, and only if, the invalid purpose is explicitly or implicitly mentioned in the contract.

It is important to note that jurists who consider the motives of the parties as an effective factor in the contract consider such a motive from an objective rather than a subjective viewpoint. That is why the motive is only taken into account when it is known or can be known from the available circumstances by another contractor.

The foregoing example illustrates that it is not always easy to judge whether certain contracts are valid or not unless the person is familiar with Islamic rules and principles and at the same time familiar with the legal system of the particular Islamic country he or she is dealing with, taking into account the following:

1. The adoption of Shari’ah rules and principles varies from one Islamic country to another;
2. The adoption of a particular Islamic school by certain countries might, and most probably will, influence the legality or illegality of certain legal actions or transactions;
3. The legal system of the Islamic country itself might introduce more prohibited actions and/or transactions such as the Israel Boycott Law or restrictions relating to oil production, public properties, or public orders.

The particular conditions relating to the cause or consideration of a contract in many Islamic countries are that every sale contract must have a valid cause and consideration (usually it is considered valid unless proven otherwise) and it must conform to the law, public order, and decency or morality.

The Valid Modern Sale Contracts and Stipulation Options

As a result of the foregoing discussion, both the traditional sale contract and the re-sale contract define the valid contract (sahih) as the connection of an offer emanating from one of the contracting parties with the acceptance of the other party in a lawful manner which marks its effect on the subject-matter of the contract and includes all these conditions (shurut), otherwise, it would be a null contract (batil). However, the concern of modern Muslim jurists is to reconcile the ever-evolving practical needs with the prescriptions of Shari’ah in face of economic development, and it is necessary to find solutions case by case without going against the Islamic principles.

As a result, several doctrinal approaches have been formulated to make various new valid contracts. Among these new contracts are contracts such as Advance Purchase (Salam), Commissioned Manufacture (Istisna), and Credit Sale or Deferred Sale (Bay’ Mu’ajjal). We will briefly explain these three types of Islamic contracts which can be used in e-sale.

The Advance Purchase (Bay’ Al- Salam)

The advance purchase or future delivery has been defined by the Muslim jurists as the forward purchase of generically described goods for full advance payment, and the described goods will exist at a pre-determined time in the future and will be delivered to the buyer. The price must be paid at the moment of the conclusion of the contract under pain of nullity. The advance purchase sale was implied authorized by the Prophet (P.b.u.h). A Tradition (Sunnah) was reported that Abdull al-Rahman ibn Abza al-Khuza’I and Abdullah ibn Awfa al-Aslami said:

“We used to share the booty (or the spoils of war) in the lifetime of the Prophet when the peasants of al-Sham (Syria) came to us, we used to pay them in advance for wheat, barley, and raisins to be delivered within a fixed period.”

Besides, there is another Hadith narrated by Abdullah Ibn Abbas that stated:

When the Prophet came to Madinah the people used to pay in advance the price of the ordered sale (Salam) of the future harvest of their fruits (within one, two, and three years). The Prophet then Said:

Whoever wants to make money in advance or salam sale (for fruit) to be delivered later, do so upon specified weight and for a specified duration of time.

‘Abdullah Ibn Abbas said: “I witness that the sale by advance which is guaranteed to a certain period was permitted by God (Allah) in his Book, and he allowed it in the verse: “O ye who believe! When ye deal with each other, in transactions involving future obligations in a fixed period of time, put them in writing”

Muslim jurists have laid down a number of conditions for the validity of the advance purchase, in order to limit as far as possible the application of this exception and the risk of fraud (gharar) which might upset the balance of the benefits. However, if the goods delivered are specifically different from what the seller was promised, the buyer has two choices: either take back his price or take any other goods becoming available later in place of the goods previously advanced, with no compensation permitted for the delay.

The Commissioned Manufacture (Bay’ al- Istisna)

The commissioned manufacture contract or sale on order is an exception to the application of the need for the present existence of the object at the time of contract, as mentioned in our earlier discussion of the fundamental elements of a valid sale contract under Islamic law because the principle of necessity (darurat) has led the Muslim jurists to validate this sale contract by appealing to Istisna, meaning that the derogation has been accepted out of equity, for clearly practical reasons. It differs from the advance purchase contract only in the fact that the goods which are the object of the commissioned manufacture contract remain to be manufactured and will not exist materially until the actual time of sale.

It exists only in the Hanafi school while in other schools, the manufacture of goods was secured either by the advance purchase contract (Salam) or a contract of sale (of the raw material) combined with a contract of hire (Ijara) by which the seller agrees to process the raw material into a finished product.

The majority of Hanafi jurists have required one condition on the commissioned manufacture contract, that is, it binds neither party until the object of the contract is made or exists and is accepted by the buyer.

The Credit Sale (Bay’ al- Mu’ajjal)

The credit sale is the closest Islamic analog to interest finance. It is made on a credit basis rather than cash. The main feature of this technique consists in the procurement of goods at the request of the client and selling them to him on credit. In other words, it is a contract under which in the event that the buyer chooses for the goods to be delivered but is not able to pay for them in cash, the seller will then offer a price that is higher than the cash price.

It is then upon the buyer to choose whether or not he is ready to procure at this price, the sum of which is to be paid over an arranged phase of time. Again, the incapacity to compensate clause applies where appropriate, therefore this contract and the former one hold opposing views from the interest-based contracts, where defaults in reimbursement allow for additional interest to be charged based on the buyer defaulting in his obligations. Therefore, the following rules govern credit sale under Islamic law:

1. The focus of the contract must exist;
2. The subject of the contract must be held and owned by the seller;
3. The sale must be immediate and complete, not on an upcoming date;
4. The price is firm;
5. No stipulations are annexed.

Therefore, e-sale contracts may be one of the three types of new Islamic contracts mentioned above, depending on the manner of communication and the type of trade being carried out. When a vendor or business conducting sales online first takes the money and then afterward delivers the merchandise, it is advance procurement. If the vendor or the corporation established an agreement with the buyer to produce or manufacture the product ordered and take payment from the buyer once the product is made, it is a commissioned manufacture sale. And if the vendor or the corporation agrees to sell the product to the buyer and the payment of the price is to be deferred or the price is to be payable in installments, then it is a credit sale.

Stipulation Options

The subject matter of the sale contract may be known for its genus, species, attributes, and quantity, and it may also be in existence, and deliverable, and yet, for some Muslim jurists, it may still be subject to uncertainty (Gharar) because one of the contracting parties cannot see it: either it is not present at the site of the sale contract, or is present there but unseen placed in a container. This is what is known as the sale of the absent object. What is meant here is that the subject, owned by the seller, is present outside, but not seen by the buyer.

Muslim jurists from the four Islamic schools have different views regarding the sale of the absent object. Hanafi, Maliki, and Hanbali jurists have held it permissible to sell the absent object on the basis of description because this is the customary manner in the sale of absent objects. However, they have laid down certain conditions for the validity of such a sale that are designed to remove uncertainty (Gharar). Also, they have found that the sale is binding on the buyer if he found the object corresponding to the way it was earlier described to him. But if he found it different, he has the option either to ratify the sale or to revoke it.

Therefore, the sale contract in Islamic law may also include a stipulation option (Khiyar). Literally, this denotes a choice on the part of the holder of the right of option, who may either confirm the act or render it void. This option, which can be stipulated by one or both parties in the sale contract, is legitimated in several Traditions (hadith):

Al-San’ani recorded a Tradition that was related by Ta’us. In this Tradition, the Prophet P.b.u.h is said to have bought a camel from a Bedouin, before his prophethood. After the transaction, the Prophet said to the Bedouin: “Take your right of the option (Khiyar).” he looked at the Prophet and said: “ may God perpetuate your life. Who are you?” After his prophethood, the Prophet instituted the law of Khiyar after the sale.

The main option in Islamic business contracts is the option of the meeting place (Khiyar al-Majlis), which is the period during which the contracting parties devote themselves to the business in hand and is terminated by any event, such as physical departure from the place of business, which indicates that negotiations are concluded or suspended. In addition, the right of option of the meeting place (Khiyar al-Majlis) is the inalienable right to repudiate unilaterally a contract concluded by both parties, so long as they have not yet separated when the contract is a bilateral transaction. The four Islamic schools had figured kinds of other options (Khiyar), as is discerned from the Tradition of the Prophet (P.b.u.h) as follows and the four Islamic schools:

Option by Stipulation (Khiyar al-Shart)

In an option by stipulation, the contracting parties may reserve the right of conventional option by special stipulation, the faculty of canceling the sale contract within a certain time. The four Islamic schools agreed generally that the buyer has a period of three days with respect to the sale contract. However, Hanbali and Maliki jurists agreed that the period can be more than a period of three days if the contracting parties agreed. The four Islamic schools’ cooling-off period of three days is based on the Tradition of the Prophet Mohammad (P.b.u.h):

“The Prophet (P.b.u.h) said to one who has bought goods, take your right of the option (Khiyar) within three days.”

A stipulation may be made either by one of the contracting parties or by both. A stipulated and agreed period of time during which either one or both parties may revoke the contract stands as a valid stipulation according to general principles because it strengthens the basic purpose of certainty of contractual commitment.

However, if for example, the buyer in the sale contract does not later cancel it by the exercise of the right of option, the buyer of the goods is considered to have been the owner from the time the bargain was concluded; if, on the contrary, the contract is canceled, the seller’s ownership is considered to have been uninterrupted. The Prophet (P.b.u.h) is reported to have said:

“Both the buyer and the seller have the option of canceling or confirming the bargain as long as they are together. They separate or one of them gives the other the option of keeping or returning the goods and a decision is reached in that case the bargain is considered as final. If they separate after the bargain and none of them has rejected it, then the bargain is rendered final.”

Option by Sight (Khiyar al-Ru’ya)

This option ensures the achievement of certainty by giving the buyer an unqualified option by Shari’ah to revoke the contract upon sight and inspection of the transacted goods. This is considered a unilateral right for the buyer to rescind. For this option the Prophet is reported to have said:

“Whoever purchases goods, and he has not seen it, he has the right of option whenever he sees it.”

Option by Defect (Khiyar al-Ayb)

The option by defect implies a latent fault, flaw, or defect which exists in the goods or services at the time of the contract, and which is material to the purpose of the contract, and substantially impairs the value of the goods or services to the recipient. For this option, the Prophet (P.b.u.h) said:

“If a Muslim sells goods to another Muslim and it included defective, the seller must declare it to the buyer.”

Therefore, the buyer has the right of option on account of defects of which he has become aware only after taking possession of the commodity which he bought, but which existed previously in the commodity, which allows the buyer to return the defective goods and have the price back. If, on the other hand, the buyer is aware of the defects when buying the object, then he has no right of option. There is no direct rule attributed to the Prophet on this option.

Summary

As we have seen, the fundamental teachings of Islam are derived from the main four sources: the Qur’an, Sunnah, Ijma, and Qiyas. The Qur’an viewed the life of a human as a continuous process. Each human has to work for success and comforts not only for this world but also for the hereafter. Shari’ah strongly recommends the search for knowledge. We have a number of examples of such prescription in many Surats of the Qur’an.

This inference, based on certain Surats of the Qur’an and the Sunnah cited, is also affirmed by one of the most important principles of Shari’ah, that everything is permitted except those things that are expressly forbidden (al-Asle Al-Ebaha).

However, there are numerous grave legal downsides that are likely to occur in the area of electronic sale, mainly short selling, and the shortage of concrete (hand to hand) delivery, uncertainty (Gharar), and juridical validation. According to the opinion of Mohammed al-Alfi, there is no doubt that Islam has accepted e-commerce as an innovative technology to aid financial dealings. He also considered and expressed that Islam does not oppose e-commerce but encourages e-commerce as an innovative way of carrying out trade. He further clarified that convention trade was carried out verbally and more than often in a face-to-face setting, but today the two contracting parties are coupled together via computer.

In Islamic law, both contracting parties in any contract have to be sincere, true, and clear-cut in all their trading and protect the weaker party. There is no scope for dishonesty, lying, and fake advertisement in the Islamic outline of business. Even in one Hadith of the Tradition (Sunnah), the Prophet said:

“He who has reinforced the truth with his tongue, his reward will continue growing until the day of Resurrection where Allah will pay him his full reward.”

Also, in accordance with the Muslim Jurists there are four requirements of the sale contract exist that have to be met, which are: First, the two contracting parties must have legal capacity. Second, off the ronal and acceptance (Seaghat al-Aqhavehave to be mandatorily understood by both parties. Thirdly, the subject matter has to be halal (lawful in Islam) at all costs. Fourth and lastly, there is the origin or deliberation of the sale contract.

However, based on our earlier discussion (in 1.5 The valid Modern Sale Contracts and Stipulation Options) there are different types of contemporary Islamic trade contracts and some of them pertain to e-commerce, namely advance purchase (Bay’ al-Salam), the Commissioned manufacture sale (Bay’ al-Istisna) and the credit sale (Bay’ al-Muajjal).

Furthermore, based on the discussion in this chapter, the most important thing for valid e-sale contract formation under Islamic law is that the contract will be nullified unless it complies with the absence of the following elements: usury (riba), gross inequality (ghabn), fraud (tadlees), misconception (ghalat), and any element of gambling (maisir).

In the case of e-sale, avoiding these elements is essential to gain buyer confidence to deal and stipulate through the internet. On the other hand, if the seller by practicing these elements ensures all the principles of Islamic contract are met, for example by clearly defining the conditions and removing the ambiguous situation, indirectly the buyers will gain confidence in buying the products from the seller.

Basic Notions Relating to the Formation of the E-sale Contract Under Islamic Law

Introduction

The Hanafi, Shafi’i, Maliki, and Hanbali schools in Islamic law assign a role to some psychological elements in the formation of any contract in general and the sale contract in particular. Such elements relate, obviously, only to natural persons.

In Islamic law there are differences between intention (qasd), consent (rida), will (iradah,) and choice (ikhtiyar), and further distinctions between an ‘intention to create a contract (qasd al-insha), an ‘intention to pronounce words’ (qasd al-lafz) and an ‘intention as to the meaning’ of the words used (qasd al-ma’na).

The legal imports of these notions are to be treated beyond their respective lexical meanings, and their respective roles in the formation of a sale contract are to be compared in theoretical and functional terms.

This chapter will deal with basic features of the psychological elements in the formation of contract under the four classical Islamic schools. We will discuss the exteriorization of psychological elements, making reference to the subjective and objective, or sensualistic and formalistic. We will review various means of expression, namely the word of mouth, writing, sign, conduct, and silence. And last, we will examine the efficacy of these means of contractual expression over the internet due to the classical contract principles in Islamic law.

Range of Psychological Elements

Intention to Create Legal Relations

All the four Islamic schools require a primary process of decision-making, whether its motivating factor is termed ‘intention’ (or qasd); an accompanying willingness, whether it is termed ‘consent’ (or rida ); and freedom from external pressure, deceit, or other adverse influences – all in order to conclude a valid and binding sale contract.

These elements, depending on their respective roles, contribute to demarcating, first, a legally valid sale contract from an ethical agreement and second, a legally binding contract from a legally avoidable sale contract.

Islamic law shows at times an appearance of consensual but it has, in fact, a formalistic approach to the formation of contracts. The formalities are not in the performance of certain ceremonial acts, or related to the enforcement of a sale contract, but in the utterance of appropriate words in the right way for the formation of contracts. Thus, a trend of thought in Islamic studies holds that there is no ‘formalism’ (shakliyyah) in Islamic law but a ‘verbalism’ (lafziyyah) which is based, first, on the preference of word of mouth over all other means of expression and, second, on strictly logical and grammatical analysis of various modes of declaration of intention and consent.

The underlying psychological notions consist of intention and consent which provide, prima facie, a consensual basis for the conclusion of contracts while, this notwithstanding, verbalism retains its dominance. The intention is necessary for the valid conclusion of a contract and consent for giving it a binding force.

Relation to ‘Freedom of Choice’ and ‘Will’

In all the Islamic schools, intention (qasd) and consent (rida) are frequently used together as joint elements required for the validity and the binding force of a sale contract, but the difference in their function emerges where certain vitiating elements adversely affect the contract. As we shall shortly see, the term ‘will’ (iradah) often means ‘intention’. In other words, ‘will’ and ‘intention’ are generally interchangeable as synonyms in Islamic law.

However, in freedom of choice, there is then ikhtiyar which, for practical purposes at the moment, maybe translated as ‘choice’. In Islamic law, it is at times loosely used as a synonym for consent and, as such, a condition for making a contract binding. The more precise meaning of the term is ‘the choice in giving or withholding consent, that is, from our earlier discussion in chapter two – the validity of e-sale contracts under Islamic law – the freedom from any external pressure, which does not obtain if the consent is extorted by duress. In other words, the consent of the party will be considered lacking if he contracts under duress because he has no freedom to withhold it. Consequently, the contract, though concluded, will be avoidable. Only when the pressure is removed, that is to say, after the victim of duress has regained his choice (ikhtiyar) and given his consent, will the contract become binding.

Therefore, when the term ‘intention’ is used alone, without being accompanied by the term ‘consent’, as a condition for the conclusion of a valid and binding contract, it must be presumed that ‘consent’ is implied and ‘intention’ in this context is to mean ‘an intention which is the result of an internal willingness’ or consent.

In the presentation of the four Islamic schools ‘will’ (iradah) is frequently used as comprising all three elements of ‘intention’, ‘consent’ and ‘choice’. ‘Will’ in Islamic law, says al- Sanhuri:

“Is composed of two elements: choice (ikhtiyar) and consent (rida). If the will perishes, both elements perish together …. In duress …, according to Islamic law, the element of rida is lacking but the element of ikhtiyar exists …”

Choice (ikhtiyar), in this context, may either be equated with or be taken to comprise, the classical Islamic schools’ notion of intention (qasd).

However, under all the four Islamic schools, the elements of consent (rida) and choice (ikhtiyar) may be considered to be the same. Therefore, if the person is independent in his intention, his ‘choice’ is valid; but if not, it is corrupt. In other words, if a person is independent, free from duress, informing his intention, he has his ‘choice’ and consequently, his contract is valid and binding; but if he is not independent and free from material external pressure, then the element of ‘choice’ is lacking and his contract is voidable under Islamic law.

On the significance of these three elements al-Zaraqa states, in the context of all Sunni schools, that:

“Iradah is the mere volition for an act and the directing (of mind) towards it, while ikhtiyar means the power to prefer doing or not doing an act, and rida is the desire to do an act and the contentment with it.”

“Intention, being a part of ikhtiyar in all Sunni schools, exists, as in Shi’ah law, even in the case of duress; but maybe or maybe not accompanied by the element of ‘choice’ (which in all Sunni schools is directly connected with intention, whereas in Shi’ah law it is more closely linked with consent). Or, as it is put for Sunni schools, Iradah is more general than all the rest. Ikhtiyar is a particular instance of irada because a person who has iradah may or may not have the power to choose otherwise, that is, he may be free or forced. Rida is a particular instance of ikhtiyar because a person may be free in doing an act, namely, he may have the power to do otherwise, but may not have consent in doing it, that is, may not desire it or be content with it, such as a person who does not wish to kill, but kills in self-defense.”

It will be noted that rida in the latter part of this exposition is used more in its literal, rather than in a technical, sense and signifies contentment or desire.

Technically, what is meant by rida in the Islamic schools is a ‘contractual or transactional willingness’, which may or may not be coupled with real and internal contentment. A person under personal distress may have to sell a thing at a price much lower than its real value and maybe not be content with his bargain, yet he is held to have a ‘transactional consent’ (rida al-mu’amali) and to have concluded a valid and binding sale contract.

Differentiation of ‘Intention of Word’ (Qasd al-Lafz) and ‘Intention of Meaning’ (Qasd al-Ma’na) in Islamic law

For a sale contract to be validly concluded, either a traditional sale contract or an electronic sale contract, the parties to the sale contract should have the ‘intention to create’ (qasd al-Insha) the contract, which expression may, loosely, be equated with animus contrahendi. But certain distinctions made by the Islamic Schools between different kinds of intention reveal its strongly objective approach through verbalism. Such distinctions produce certain anomalies which fall back on the function of intention such as the following:

Exposition of Differentiation

The primary distinction made by these jurists is between two types of intention: the intention of words and the intention of their meaning. A lunatic, for example, has no intention even of pronouncing the words he happens to utter; they pour uncontrolled from his mouth without his knowledge. By contrast, a person under duress has the intention of pronouncing the words but, according to these jurists, not the intention as to the meaning of his words. They hold that in the formation of a contract no more than an intention to pronounce the words is required. For a sale contract to be validly concluded, “It is enough to have only the intention as words, which is inferred from the words used”.

Therefore, a sale contract for which the party has only the intention to pronounce the words, but not the intention to create what those words mean, will not be void ab initio. It will only be voidable by the person who has thus made it.

Ensuing Anomalies

A distinction between the instance where a person pronounces words consciously and where he pronounces them unconsciously, and the fact that his words are taken to have legal effects in the first instance but not in the second, entails certain anomalies:

1. Discerning infants – from our earlier discussions in chapter 2 about infants, even in the case of those old enough and ‘discerning’ (mumayyiz) to understand what they say, jurists state that their purported contracts are void not only as a result of their lack of capacity but also because of the absence of intention unless they are approved in advance or subsequently by the guardian or the discerning child upon attaining maturity. This seems to be a fictitious proposition since the presumption that infants in the age of discernment lack intention do not usually conform to reality. Thus, we find a boy of eight years old, for example, who goes to buy a toy, cannot be said to have any intention as to the words he pronounces in the same way as a sleepwalker who just mutters sounds and words without knowing or realizing what he is uttering.
2. Utterance in jest – when a person is making or accepting an offer of a contract in jest, though he does not mean, in a legal context, what he is saying, he is fully conscious of what he says and has, employing the terminology of the aforementioned jurists, the intention as to the words he uses. His words, following this distinction, should therefore produce the same result as those of a person under duress, in other words, a contract should ensue but its binding force should depend on his subsequent ratification in earnest. Jurists, however, reject such a conclusion and argue against it in two alternative ways: either his words constitute only a ‘form’ (surah) devoid of any content based on an intent to enter into a contract and, thus, the case resembles that of a liar in giving information; or he is not using the words for their proper ‘referents’, that is, not in the sense for which such words have been devised. Of these answers to the criticism concerning the case of a jester, the first is, as can be seen, of a consensual nature whereas the second has a verbalistic basis. These jurists, while principally giving weight to words, cannot fail to regard them at some point as being the expression of intention.
3. Slip of the Tongue – in the case of a person making a slip of the tongue, he is rightly held to have no intention as to the words nor, a fortiori, as to their meaning. Similarly, no contract will be concluded if words are used in a way that is contrary to the intention of creating a contract (qasd al-insha), such as the case where a person utters the words by way of posing a question or for the purpose of providing some information.

From our foregoing discussion, the parties to a sale contract must intend to enter into a legal relationship. It will be generally easy to conclude this from the surrounding facts of the matter particularly where one is on a site offering goods or services for sale. Nonetheless, it would be as well to make this clear, particularly in the internet environment where many special offers are made to encourage internet users to visit a site. Essentially, your customers should be under no misapprehension as to the point in time at which they become liable to purchase goods or services from you through your website. However, there are methods that can identify the intention of contracting parties and the approval of the e-sale contract, which we will discuss in the following sections of this chapter.

Defects in Consent (Uyub al-Rida) and ‘Options’ (Khiyarat)

In Islamic law, coercion or duress (Ikrah) is the chief cause of defect of consent that the Muslim jurists agree to treat as affecting the will when adopting the subjective theory. This is not the case with error (Ghalat) or fraud (Tadlees or Gharar), which the Muslim jurists analyze very objectively. These two causes of defect of consent are given only subsidiary consideration by the Muslim jurists.

The reasons leading to this differentiation between the three kinds of defect of consent are to be found in the way contract is understood in Islamic law and in its close interdependence with morality, for these affect both the drawing up of the contract and its efficacy. Indeed, the adoption by the Muslim jurists of optional clauses constitutes proof of the intervention of morality in any contract, in order to protect the parties against any danger of disturbance of the equivalence of the benefits. Another form of protection, which is secondary, is provided by the rules relating to defects of consent.

The Muslim jurists in Fiqh have considered these protective rules not merely for safeguarding the will but for considerations of morality and equity, in order to ensure for both parties the best conditions for making their contract while fully aware of what they are doing.

As we have discussed in previous chapters, apart from the optional clauses made available to the contracting parties, option by a defect (khiyar al-Ayb), effective by annulment by a defect of consent, constitutes second protection for the contracting party assured by Islamic morality in Islamic law.

We shall first consider coercion or duress (Ikrah) since it constitutes in Islamic law a real interference with the contracting will, then we shall consider the two other defects of consent, error (Ghalat) or fraud (Tadlees or Gharar):

Coercion or duress (Ikrah)

coercion or duress can be defined as follows: “By coercion, one designates the action of one person against another suppressing the consent of this latter person or vitiating his free will”, or is “that action directed against a person which supposes his consent”. All the definitions of coercion or duress gave by jurists of the other schools will be found to be almost identical to those just given.

However, defect through coercion or duress is the only defect of consent that has a strictly subjective basis in Islamic law. To judge the coercion or duress it is necessary in each case to take into consideration the physical strength of the person threatening and the impression he makes on the consciousness of the person threatened in order to determine whether this coercion or duress causes a defect destroying consent and so annulling the juridical act.

Moreover, it is also desirable to determine the conditions demanded by the Muslim jurists for coercion or duress to be a cause of annulment of the contract. All the Islamic schools are unanimous in declaring that there are three causes constituting coercion or duress by reason of their influence on the free will of the parties. The coercion of duress should be legally unjustified.

The Muslim jurists consider that coercion or duress is justified when the means of coercion, used by a person having a legitimate right, helps to impose respect for this right or for the law by using it, for example on a debtor to sell his chattels to pay his creditors, or his land to allow the widening of a road; secondly, it should come from a person who has the power to carry out his threats, for example, those persons empowered are understood to have the means of carrying out their threats; thirdly, it should be of such a nature as to make an impression on its victim – one may take the example of a person being forced to sell some of his possessions to pay money to somebody who is threatening him.

The four Islamic schools had accepted more or less the same doctrine concerning the conditions and the basis of coercion or duress, but they differ as to the effect of the coercion or duress and its repercussions on the validity of the juridical act.

Hanbali jurists, holding the theory of al-Iradah al-Batina, internal will with its implication of a psychological search for the intention (Iradah) of the parties necessary in juridical acts, quite logically consider that an act extracted by force is an absolute nullity (batil), that is to say, that it does not exist since the essential condition of the juridical act, the will, is vitiated in its very being. It follows that this act, being fundamentally null and void, can never be confirmed; even if the constraint is removed, the contract must be made anew. The Shafi’i jurists have taken the same position as the Hanbali jurists.

The Maliki school jurists consider that the juridical act which has been extorted by coercion or duress has been underwritten by its author, meaning that the will to subscribe to this act basically exists, but is not free. For this reason, the Maliki jurists consider that this act, although basically valid (sahih), is not binding, which means that the person forced has a choice between a cancellation of the act (faskh) or its confirmation.

However, Hanafi jurists, whose point of view is similar to the Maliki jurists, have decided that coercion or duress suppresses freedom of the will while at the same time leaving the will itself.

But the consequences of this point of view are peculiar to the Hanafi jurists. The opinion prevailing among exegetes of this school is that the act extorted by force is not binding (ghayr lazim), but is fasid, null, and void. Nullity by coercion or duress is to be distinguished from the fasid nullity of common or customary law.

In principle, nullity which is fasid cannot be corrected, whereas an act that is null and void due to coercion or duress may be confirmed by its author if the latter chooses to give his confirmation once the coercion or duress has been removed.

After a sale contract which is null (fasid), if the buyer has disposed of the article by an act which may be canceled, such as sale or donation, the first seller cannot reclaim the article which has now been sold into the possession of a third party.

On the other hand, where it is a question of nullity for coercion or duress, the seller in either the traditional sale contract or the e-sale contract will be able to reclaim his property in whoever’s hand it may later be. Even if the property was destroyed while in the possession of the third party, the person who was compelled to sell it has the right to demand its value. As for nullity which is fasid in common or customary law, if the buyer has disposed of the article by an act which cannot be canceled, for example by the constitution of a waqf, no claim is possible. But it is a matter of nullity which is fasid because of coercion or duress, then the victim may lay claim to the value of the article from the buyer who used coercion or duress.

A judge may in his official capacity invoke at any time the fasid nullity of common or customary law. But only the victim of the coercion or duress may either demand the annulment of the act extorted from him by force or if he wishes its validation, confirm it.

Error (Ghalat)

The concept of an error invalidating consent exists in the spirit of the fiqh only in a very subsidiary way and its importance as an instrument for protecting the free will of a contracting party is entirely secondary in either traditional sale contracts or e-sale contracts.

The reason is that the Muslim jurists, eager to preserve a balance of equity and justice between any two parties, have built up a whole edifice relative to the object of obligation, with certain options for which one finds exclusive requirements particular to Islamic law and which reduce to a minimum all risk of error for the contracting parties.

The concept of error appears only very occasionally in the books of fiqh of all the Islamic schools. The allusion is made to it in a few scattered dispositions relating to defects of the object, to the option of inspection, and to objects of contract in general. It should incidentally be noted that these occasional rules covering cases of error are to be found in books of fiqh in the framework of details of the conditions particular to the object of sale.

In Islamic law, parties to a contract have the right admitted by all four schools to impose an option by stipulation (khiyar al-shart) which we amplified in the previous chapter. This is in fact a delay for reflection allowed them by the Islamic law lest they fall into any trap as a result of a too hasty decision. In this way the option of inspection allows the party to acquire an article not before him when he makes the contract to annul the purchase when he sees his acquisition for the first time if he feels himself to be cheated. The same applies to the option for latent defect, which is a roundabout means of correcting the consequences of the error. Finally, Islamic law concerning the object of an obligation constitutes a measure to prevent any error.

However, Muslim jurists have considered as nonexistent (batil), any act concluded under the influence of error either in the traditional sale contract or likewise the e-sale contract as a result of the similarity between these two contracts; consent may be rendered null and void in certain extreme cases, with the intention of protecting the will of the contracting parties who have been led into putting themselves under an obligation, for their consent may well have been given because of a false presentation of facts. In Islamic law, the error is conceived as a false representation by the contracting parties of the facts relative to the object of obligation or to one of the substantial qualities of the object.

We shall confine ourselves to an examination of the basis for error which is nullified when it bears on the substance of the matter since the interest of our study lies in the sale contract.

Error considered as such by Muslim jurists is any error bearing on a substantial quality of the thing. The act is then considered to be nonexistent (batil); such is the case when the quantity of something stipulated and what is presented are different. The classical example proposed by the Muslim jurists is that of corundum (yagut). If a stone is sold as being corundum but turns out to be only glass, the sale is null and void, the reason being that between glass and corundum there is a difference of genus, in the very substance of the stone. Other examples of difference of substance are that between a garment dyed with saffron and another dyed with cardamom, or between a sack of sugar and a sack of flour, or between a garment of silk and a garment of another material.

The substitution by the seller of any one of the above for the other substance, stipulated in the contract, nullifies the act, which is considered void for lack of the object. However, the criterion taken for the substantial-quality used by the jurists is not a formal one. They base themselves sometimes on the utility, that is to say, the user normally made of the article, and sometimes on the properties which the purchaser had principally in his mind and which decided him to make the contract.

However, all the jurists of the four schools agree that in the case of an error concerning a description (wasf), a non-substantial quality, the sale is valid, but leaves the buyer a choice between the cancellation of the sale and its confirmation. To take for example the case of the corundum sold in the dark as rose-red (ruby) and revealed in the light of day as yellow (topaz), both forms being precious, the buyer may cancel the purchase.

The difference lies solely in a non-substantial quality, or (wasf). Likewise, if somebody buys a book online stipulating it should be by a particular author, and the book turns out to be by another author, then the same Islamic legal principles will apply irrespective of whether the sale contract has been formed electronically, or through paper-based communications: the sale contract is valid, but the purchaser may cancel the purchase since the identity of the author is important to him. However, the quality, substantial or non-substantial, the absence of which will render the act nonexistent (batil), or allow its termination because of an option, according to whether this quality is substantial or not, should be stipulated in the contract itself.

Fraud (Tadlees or Gharar)

The Muslim jurists have always been concerned that the right balance should exist between the parties in the contract. In other words, it is the harm which is caused and which gives rise to a great disproportion between the parties to the contract which has held the attention of the Muslim jurists and led them to annul contracts; unless there is a lesion, fraud has had no practical consequences in Islamic law even when it has been the determining factor for the will of the contracting party. Only the prejudicial fraud caused is taken into consideration.

Some authors have adopted the Hanafi School conception in which fraud is taken into consideration only if it is found at the conclusion of one and the same juridical act. This requirement is found in a less apparent way in the teaching of the other schools, but even their fraud is operative only if it results in the concealment of a defect in the article which, if excessive, would mean cancellation of the contract.

However, in the teaching of the four Islamic schools, one can find no text clearly defining fraud or affirming that any fraud, has weighed heavily on the will of the contracting party and had decided him to conclude the contract, is alone sufficient to annul the contract. All the Muslim jurists fix their attention on the more or less injurious consequences of the fraudulent maneuvers or of the lying allegations. What is important for them is to safeguard justice between the two contracting parties and to take measures against any illicit profit.

Carrying on from this point, we come to the defect that one is supposed to extirpate when one wishes to suppress fraud. The jurists wish to preserve the right balance between the contracting parties to the contract and opt for annulment of the contract for fraud when the lack of equivalence between the benefits is only too obvious and constitutes a breach of social justice. This is excessive fraud (ghabn fahish) which is penalized. This position of the Hanafi school is to be found in the teaching of the other schools.

In their approach to the subject of fraud, the Muslim jurists of the different schools study objectively, case by case, the tricks, and fraudulent maneuvers that have decided a contracting party to make an agreement and that give him the right to annul the contract because of the fraud done to him. Fully resolved to keep watch over contractual justice, the exegetes have built a juridical structure around fraudulent lesion based sometimes on reasoning by analogy and sometimes on equity, and in consequence there is no investigation of any supposed psychological influence on the consent of the parties.

What is essential for the Muslim jurists is the material result caused by any prejudice which would be to the profit of one of the parties, enriching him illegally at the expense of the other. This is the original feature of Islamic contract law, essentially religious and moral, which can not be linked to any other legal system.

Taking the example of fraud, we find that the classical Muslim jurists have retained the use of the fraudulent maneuvers that decide the contracting party cause cancellation of the contract on account of fraud, and this is why the Hanafi jurists, followed by the exegetes of the other schools, consider that two conditions are necessary if the fraud is to affect the binding force of the contract:

1. The fraud should have been committed by one of the contracting parties or by the broker who acted as an intermediary. If it was the work of any other person, it will have no effect.
2. Unless there have also been fraudulent maneuvers, the lesion caused to the victim by the fraud must be excessive.

These conditions have led the jurists from the four schools to choose two kinds of fraud resulting from fraudulent maneuvers, fraud by action (Fi’li), and verbal fraud (Lafzi):

Fraud by Action (Fi’li)

The jurists have based themselves on a tradition (Sunnah) of the Prophet (P. b. u. h) in order to give substance to this kind of fraud which is the result of fraudulent maneuvers. According to Abu Hurairh, the Prophet said:

“Do not tie the teats of the she-camel. By doing this milk of the camel is made to accumulate and the future buyer will be deceived about her yield of milk. Whoever buys the beast will have the choice between two solutions, keeping the beast or returning it with a measure of dates.”

The jurists from all four schools agree as a matter of general principle that fraud by action is the result of going as far as an actual lesion. The classical example is the kind of sale known as tasriyat (the animal which is musarra) that has just been alluded to. However, in the example of sale alone (tasriyat) jurists hold different opinions as to the effects involved in the penalties for such a sale. The Hanafi jurists consider that in the case of such a sale the buyer has no right to cancel the sale because there is not properly speaking any latent defect, meaning any defect inherent in the object sold that the fraud was meant to hide, nor even any serious lesion that the fraud helped to cover up. In this case, the buyer will have a right only to compensation.

In contrast, the other three schools, while basing themselves on the same tradition (hadith), admit that in the necessary sale (musarra), there can by way of exception be fraud without lesion capable of annulling the contract. However, in all the other cases of fraud by action, the jurists are unanimous in considering that fraud by action, however serious the fraudulent maneuvers, does not open the way to any option in favor of the buyer unless there is also a lesion which incidentally need not be excessive. Any raising of the price, however slight, will when it is the results of such maneuvers give the buyer the right to cancel the sale. But this cancellation will be made through the option of the defect (khiyar al-ayb) as we have explained before, which fact is yet another proof of the absence of any idea of autonomy in the notion of fraud.

Verbal Fraud (Lafzi)

There is verbal fraud when without any maneuver the seller attributes to his merchandise qualities which it does not possess or speaks highly of some imaginary perfection. However, it is inevitable in business that a seller should vaunt his wares to obtain from them all the profit he can, even when he lies to exaggerate their value. As Islam has great respect for commercial activity, the jurists were shy of penalizing such verbal fraud as might be the consequence of a little lie and so of paralyzing all business. Only verbal fraud entailing excessive damage prejudicing the buyer can lead to the annulment of the sale contract, the jurists being unanimous on this subject.

The Muslim jurists are not generally concerned with the psychological impact of fraud. What counts for them are the effects of the fraud in the form of the injury caused, so that the equivalence of the benefits may be maintained. This means that unless there is a lesson, even if it has been the deciding factor for the will of the contracting party, it has no effect on the validity of the juridical act. However, it remains to determine the extent of lesion beyond which the injured party may cancel the sale contract. Profit is permitted by Islamic law and it is even necessary for these contracts to have profit, for it is only with the intention of some gain or other that the seller and buyer make the agreement.

In conclusion, the jurists have adopted a very particular point of view, peculiar to Islamic law, to ensure double protection for the contracting party who might have committed an error concerning the quality of something. In Islamic law, everything turns on the notion of correct proportion between what is exchanged, of just profit, of equity, and of justice, even in what concerns the supposed defects of consent – coercion or duress, error, fraud. The role of will and consent is eclipsed by these moral concepts which underlie all contractual law.

To sum up, the intervention of the rule of morality in Islamic law in the domain of the practical problems of life, to which contracts belong, is the basis of the opinion that considers this law to be a meta-juridical system. However, the coexistence of law and religion, not considered in systems of secular law, is assured in a system of religious law (Islamic law) by the submission of the law to a system of general precepts drawn from the Shari’ah, which governs the business world as well as the economic and financial sectors. For example, purchase and sale are licit, whereas interest is illicit.

Justice and equality between believers from the basic precept recommended by Islam, on which is based the whole juridical structure of the Muslim jurists. As for morality, it provides the bond between all the juridical elements particular to Islamic law.

The impact of morality on contractual law in classical jurisprudence is felt at every stage of the contractual process, limiting freedom in the making of contracts in favor of perfect equivalence in what is exchanged. The influence of moral directives in both the strict limitation of the object of obligation and the strict ban on ancillary conditions has meant great rigor in the structure of the contract in Islamic law.

However, in all the works of Muslim jurists on the fiqh, they have elaborated a whole series of options (khiyarat), as we explained in our earlier discussion on stipulation options in chapter two. The four Islamic schools agreed to give the buyer the right to cancel the contract within a period of three days under option by stipulation (Khiyar al-Shart) based on the Tradition of the Prophet, and thus we can use these stipulation options in Islamic law to govern the e-sale contract, in order to ensure great protection for the contracting party in this new sale contract. Their confirmation of the juridical act comes with a complete understanding of these clauses.

Moreover, Islamic schools share a fairly sophisticated approach to psychological elements in the formation of contracts which can be used practically in the e-sale contract. However, the overall function and role of psychological elements have to be considered together with certain other juridical institutions peculiar to the Islamic law of contracts either in the traditional sale contract or e-sale contract, such as the doctrine of ‘options’ (khiyarat).

Psychological elements determine, within set patterns, the formation of a contract, but the binding force of a contract or its validity is determined by the operation of both psychological elements and ‘options’. The rules pertaining to the capacity of contracting parties also have their function, as in any other system of law, though not as an element of the contract itself but as a prerequisite to the formation of a valid and binding contract.

On the other hand, consent and will are more problematic in the electronic environment than in a paper-based world. The most obvious reason is that the internet is an open network, and therefore, it is not as secure as other channels of business communication. Thus, computer error is more often than not caused by human errors, or by practices and processes designed with little understanding of the internet, but they leave the impression that the internet is unreliable.

Furthermore, the following factors also can affect trust in which may call e-consent in the e-sale contract:

• Business entities can change their public facades quickly and easily on the web. A site that was there yesterday maybe not be there tomorrow or it may be hosted on another server.
• Electronic transactions take place between wider varieties of people, with a larger proportion being one-off purchases.
• Electronic transactions take place more quickly, and the opportunities to investigate fraud or errors do not arise to the same extent as in the paper-based world.
• Business is becoming more international, and problems associated with cross-border transactions will multiply.

From our discussion regarding e-consent and will under the rules of the four Islamic schools, even the e-sale contract that satisfies the requirements and principles of contract may be unenforceable in some circumstances where one of the following factors arise in which the e-sale contract may be vitiated and there is a defect in e-consent :

1. Where the e-sale contract was induced by duress or undue influence. This involves a party (such as a doctor or lawyer) using their position or relationship to dominate the independent will of a weaker party to obtain some undue benefit.
2. Where there is an error about the basis of the agreement.
3. Where the e-sale contract was induced by a material misrepresentation of fact.
4. Where the e-sale contract is illegal or against the principles of Islamic law or public policy as well. An extreme example would be if the subject of an e-sale contract is alcohol.

Exteriorization of Psychological Elements

Introduction

Inner psychological elements, residing within the mind of a human being, can never be known to anyone else unless they are exteriorized, expressed in some communicative way. Even when they are so expressed, it can never be verified that the expression of such elements corresponds to what was in the mind of the person concerned.

Some legal systems pay greater attention to what is considered to be the inner element, however, it may be expressed, and others pay greater attention to the expression of the inner element, whatever the actual state of such element may inwardly be. The difference in approach is only a matter of emphasis since all legal systems have to work with exteriorized indications of inner psychological elements in order to appraise and evaluate their legal effects.

A purely internal process of mind, related to a psychological element required for the formation of a contract under any legal system, is, first, beyond the reach of the law and, second, not a concern of the law. The law does not, and can not, look into the state of mind of a person in the same way as a philosopher or a psychologist may attempt to do in order to comprehend, analyze and categorize it. Consideration of psychological elements in the formation of a contract is a different matter. It is directed towards a socio-economic end in regulating the legal relations of the people in a community.

Thus, abstract inner psychological elements are never at issue in any legal system; it is always an outward appearance of them and the significance to be given thereto, but in a narrower or in a wider spectrum of the behavior of the parties to the contract. The outward appearance consists not only of what is explicitly conveyed by a person as being the expression of his internal state of mind but also of all other factors surrounding such an expression.

It is at this level that legal systems differ from each other. Some systems allow a person to claim and, if he can, prove subsequently that what appeared to have been an expression of his state of mind was not actually so, while other systems hold him bound to what was expressed and outwardly understood and deny him the possibility of going back on it after it has been made. In neither case is the question considered in isolation, but is weighed in the light of other external tangible factors. Under the former approach, the person concerned may produce his version of his inner state of mind while under the latter the general and common understanding, geared to some social parameters such as the test of reasonableness or the criterion of custom and usage, is taken into account.

It is only in such a context that a legal system may be referred to as being ‘subjective’ or ‘objective’, as being ‘sensualistic’ or ‘formalistic’, and so on. Such labels have no precise or uniform or universal significance, however. They denote only the generality of a trend. While some legal systems which share some common traits may be termed ‘subjective’ or, conversely, ‘objective’, it does not mean that their approaches are necessarily alike. The subjectivity or the objectivity of two systems that resemble one another may well be different from one another in essence.

For example, French law may be said, in broad terms, to have a subjective tendency towards allowing a subsequent expression of the inner psychological elements to be considered against its primary expression in the formation of a contract, whereas Islamic law and common law may, at different planes, be said to have an objective approach either by denying a subsequent reversion to inner psychological elements running counter to their outward expression or by adhering to the outward signs of contractual statements made. However, all legal systems are not the same, for example, the objectivity of common law is not in any way similar to that of Islamic law. Each system has its own particular features.

In the next section we will deal with such general tendencies in contrasting the weight of inner psychological elements and their expression in the formation of an ordinary sale contract in general, and the electronic sale contract in particular, pointing out the particular traits of Islamic law.

Exteriorization of Psychological Elements under Islamic law

With regard to the juridical value of intention, will or consent and their expression, the four Sunni schools have, as was mentioned in our previous discussion, two different approaches which are, though not clear-cut or comprehensively formulated, discernible through the mass of legal writing on detailed questions. One trend gives predominance to real and inner intention over the manner in which it is expressed. This we may call a subjective or voluntarist approach, which has a consensus coloring. Another trend attaches much significance to particular forms of expression of intention and maintains the words of the parties to be of paramount importance.

This we may style an objective or formalistic approach with a verbalistic hue, which is the prevalent one in Islamic law. It is difficult to classify individual Muslim jurists into the exponents and opponents of one or the other approach, since almost all of them make use of both in different contexts, in varying degrees, according to the nature of the issue at hand. In arguing different topics, Muslim jurists from different schools, and frequently one and the same jurist, may invoke Qur’an verses and certain Traditions (Sunnah). Some of these verses and Traditions are often cited as maxims, and a general saying giving effect to intention has also taken shape. The most important of such texts and maxims are as follows:

Qur’an Verses (Ayat)

The sensualistic argument is mainly based on the (Surat Women), verse 29^th of the Qur’an which says:

“O, believers! Devour not your assets among yourselves in vanity, except in trading by your consent”

In subjectivistic terms, it is argued that what is meant in this verse by “consent” is the inner readiness to enter into a contract, without any necessity for the consent and intention to be expressed in a particular manner. It is likewise reasoned that the 27^th verse (Surat the Cow) of the Qur’an, which says:

“… God made a sale (Trading) licit…”

Is of general application and embraces all cases in which the parties to the contract have the intention of trading, regardless of the way in which they choose to express their intention. There is also the 1^st verse (Surat the Nourishment) of the Qur’an:

“O, believers! Keep faith with contracts…”

This is the most significant among such verses in enjoining that contracts should be performed and promises kept, whether they are contracts properly so-called (Aqd ) or an engagement or obligation created by any means other than word of mouth. This is supported by the 34^th verse (Surat the night Journey), which ordains:

“… keep faith with the covenant (or pact) since (pact) begets responsibility”

And there are two other verses where keeping faith with a covenant (or pact) towards God is commanded.

Tradition (Sunnah)

There are some Traditions to the same effect, of which the following are often cited:

“Acts are determined by intent (or motives)”

“A man is taken by his intent (or motive)”

“The property of a Muslim is not licit for others to enjoy unless by his consent”

“Contract is the law for Muslims”

Maxim

From the said verses and Traditions a general maxim has evolved which is frequently proffered to support a consensus interpretation. The validity of contracts is to be tested by this maxim to see whether what has been concluded was in fact intended. If not, the attempted contract will be void, according to a formula derived from the above-mentioned maxim.

How is this inner intention to be gathered? No doubt, through outward expression; but such expressions have no juridical value in themselves, according to this trend of thought, unless in so far as they correspond to the real intention of the parties. In the interpretation of the said texts, the intention is sometimes equated with motive.

However, according to the view of the Hanafi and Shafi’i schools, it is the words that are the essence of a contract. The same verse of the Qur’an which says, “keep faith with contracts” is invoked but interpreted in formalistic terms so as to establish that a contract (Aqd) will not come into existence unless proper words are used to create the ‘ knot’ or ‘tie’ denoted by the term contract ‘Aqd ‘.

The adherents of this thought are in fact numerous, for nearly all the eminent jurists of the schools subscribe to this trend of thought. The further we get away from the early period of Islam into the classical period, the more we see a sort of sanctity attributed to words. In the science of ‘Usul,‘ a considerable space is dedicated to words (lfaz), their meaning, and their value in different contexts. Jurists from these schools have held that there will be no valid contract unless the offer and acceptance are pronounced in a particular language, and in a particular way.

The development of specific contracts such as the sale contract and the absence of a law of contract, together with the predominance of word of mouth as the expression of contractual intention, have driven Muslim jurists to devise precast patterns for the formation of various contracts. This is particularly noticeable, as we shall see in the next chapter, in the conceptions of offer and acceptance and their respective predetermination. When it comes, therefore, to detailed rules of formation, it is not only the outward expression but what amounts to formulated ways of expression that count.

Islamic law lends itself to both a sensualistic and a formalistic approach. Historically, however, the latter has prevailed in spite of textual materials stressing intention, consent, and motive. The main reason appears to be the absence of a general theory of contract and the development instead of nominating contracts, which facilitate the formulation of specific approaches to the formula (seaghah) of each contract.

Both the sensualistic and the formalistic attitudes under Islamic law correspond, roughly speaking, respectively to the ‘theory of will’ and the ‘theory of the declaration of will’ which are usually discussed in modern legal systems, mainly those with a civil law background such as French Civil Code. It is to be noted that the predominant formalistic approach of Islamic law, having regard to its verbalized nature and its particular conception of offer and acceptance, is essentially different from the objective approach of modern legal systems, such as English law, which in different ways lays emphasis on the expression of psychological elements but without requiring any particular form for it.

Means of Expression of Psychological Elements

Introduction

The inward existence of will and consent, not being sufficient in the eyes of the law to produce an agreement, must somehow be outwardly manifested by such means for the declaration of intention and consent, namely, the evolution of various expressions which may constitute a valid offer or acceptance.

In this part, we will deal with the classification of the means of expression, and the divergent approaches to such means, adopted by the four Sunni Islamic schools. Next, we will examine in detail various means of expression under Islamic law because of basic problems involved in the recognition of some of such means.

However, the classification of legal concepts is generally reflective of the basic approach of the legal system concerned. These may be words of mouth, writing, gesticulation or signs, conduct, or silence. Islamic law does not have a formal classification of such means of expression. However, Islamic law lacks a categorization of the means of expression parallel to that in other systems such as French law but deals, instead, with individual means of expression in the context of various nominate contracts.

Primary Classification under Islamic Law

In Islamic law the primary classification of the means of expression is into spoken words, writing, gesticulate signs, conduct, or silence. This will soon be discussed in more detail; suffice it here to mention that a general pattern based on intention or on the type of expression in a contractual context is lacking. The reason may be twofold: first, the absence of a general theory of contract necessitates separate treatment of individual nominate contracts; and second, verbalist considerations of the formula of each contract provide a rule-orientated pattern that essentially escapes factual analysis. As a result, expressions will always, at least according to the classical prevalent view of classical Islamic schools, have to be expressed.

Yet it may be useful to consider a parallel treatment of two similar instances for the present purpose: first, nullification or ratification of an unauthorized (fuduli) contract or of a contract which is subject to an option (khiyar) that may be affected by words or acts, that is to say, by explicit (sarih) or implicit (dimni) manifestation. Second, abrogation of an earlier Qur’an verse or a Tradition by a later one is, likewise, held to be either explicit or implicit: explicit abrogation of an earlier rule takes place by direct reference to that effect in the later rule, while implicit abrogation arises out of the incompatibility of the two rules over the same subject.

In the contractual sphere, such a distinction between explicit and implicit expressions could be of use only when the requirement for concluding a contract exclusively through the pronouncement of a predetermined formula may be set aside, that is, when conduct may be admitted to constitute a valid expression. Thus, as we shall see, it is along such a course, as against the classical background, that a classification of the means of expression in line with that adopted for unauthorized transactions and options or for the manner of abrogation as aforesaid will become meaningful. Otherwise, the basic differences will remain between the word of mouth and all other expressions, to which we will revert under the next heading.

Predominance of Words of Mouth (Lafz)

Many modern systems require in some cases, under the sanction of unenforceability or nullity, that the agreement of the parties be put into writing or evidenced thereby. It is obvious that any written document is less likely to be misinterpreted than an agreement orally made or reached by conduct; and, in the event of a dispute, a written document facilitates the task of the court in deciding the terms of the agreement.

It puts the judge one step ahead in the process of settling the litigation, as he will have only to determine the interpretation of the document at hand without having to go first into the question of establishing the facts contained therein, which would be the case if the agreement were made orally or by conduct, and then interpret them. Besides, even if not legally bound to do so, parties normally prefer, particularly in more important transactions, to frame their agreement in writing in order to derive greater protection for their respective interests should a dispute arise in the future.

This development has taken place alongside the growth of commerce with its increasing complexities and the diffusion of education which has provided a greater opportunity to many more members of societies to learn how to read and write. But when and where literacy has not been widespread, writing has not been significant in legal transactions but, owing to other particular reasons under some legal systems, has been relegated to an inferior position.

Islamic law, under the classical Islamic schools, for a combination of historical and technical reasons, has attached great importance to word of mouth for the conclusion of contracts almost to the exclusion, up to recent times, of other means of expression.

Historical Reasons

Historical reasons for the predominance of words are part of a general nature and partly special to the faith. A thorough review of such reasons would require an extensive study cutting across several disciplines, including theology, sociology, and economic history, which fall beyond the scope of the present work. The following factors, however, may be mentioned.

• Clerical Literacy Privilege: Islamic doctrines have flourished under the hands of the clergy. Proportionately, they formed only a small part of the vast number of believers living in lands where, and through periods when, commoners had the little facility, or felt little need, for learning even to the least degree about reading and writing. The clergy, together with courtiers, had the privilege of learning. The layman had no urge for such a luxury. His religious leaders could answer his problems both in temporal and spiritual matters and solve his doubts. Under these conditions, and because of the relative simplicity of economic relations, the commonest and most natural way of establishing legal relations was the spoken language.
• Religious Significance of Words: this socio-cultural aspect has been coupled with a religious significance of words, which gives rise to two reasons. The main reason is that in Islamic jurisprudence, as in some other religious systems of law, all the affairs of believers are governed by precepts of the faith, and the essentially secular character of some business transactions does not exclude them from its fundamental tenets. The second is that words, as we have already mentioned, are ascribed a divine origin: they are created by the Deity either directly and taught to early humankind or indirectly through bestowing upon humanity the faculty of inventing and using them. These two factors, the first more and the second less general, may account in part for the formalistic approach of Islamic jurists.
• Miracle of Qur’an: another particular reason has also contributed to the importance of verbal expressions. We know that the Qur’an has been held to be the singular miracle of the Prophet in proving his divine mission. Its verses were orally recited by the Prophet as they were ‘revealed’ to him, and memorized by his companions. Its sublime literary beauty in the original version has been a cause of marvel and admiration for all Muslims, who believe that every word has been so placed in the text that even the slightest fault in pronunciation will change the whole meaning of the Holy Scripture. It must be read with the utmost care, lest one should commit the sin of changing God’s Word. This may be regarded as the starting point for the discussion of the sanctity of words. But the stress placed upon the Word and its significance vary in degree in different schools of Islam.

Technical Reasons

Technical reasons are due in part to linguistic considerations and in part to particular religious precepts.

Linguistic considerations are a common phenomenon under various legal systems but the approach to linguistic requirements differs from one system to another. It appears that Muslim jurists from the four schools have less rigidity in dealing with the formulae (seaghah) of contracts and seek fewer formalities. Their attitude is said to be altogether a formalistic one only to the extent of taking into account the outward expression. Al-Sanhuri, the contemporary Egyptian jurist, writes “The principle is that the expression of the intention should be clear and unequivocal …. But if the expression is not clear, then the intention, the inner will of the parties, will be taken into account.” The classical Islamic schools’ belief found its support in lands where the language of the Qur’an and Traditions, Arabic, was or became after Arab domination, the native tongue of ordinary people in the street. The linguistic problems in the formation of contracts did not call for too much attention by jurists beyond the bounds of an objective treatment.

Views of the Four school Jurists

The view of all classical four schools jurists, persisting up to a century ago and with vestiges surviving in the period of revived Ijtihad up to the present time, has predominantly affirmed the necessity of word of mouth for the conclusion of various ‘binding’ contracts.

Other Means of Expression

Means of expression other than word of mouth may be subdivided into the following categories:

Sign (Isharah)

By sign probably is meant anything except word of mouth which signifies the purpose. From the generality of this statement must be excluded conduct (in other words, the tacit non-gestured behavior, as distinguished from gesticulative expressive physical signs) which is, as we have mentioned and shall shortly elaborate, subject to a separate lengthy treatment by jurists. The reason for such a distinction is to be found in causes (sabab) of concluding a contract that falls back on the notion of offer and acceptance. Verbal offer and acceptance undoubtedly constitute the prime ‘causes’; and conduct in such a contract as sale, where there is ‘the giving and the taking’, may replace (according to the views of later jurists) verbal offer and acceptance. Sign lacks the characteristics of either. The category of signs, therefore, comprises only physical gestures.

Gesticulate Signs: these are any movement of hands, head, eyes, or lips (without the utterance of intangible words) meant to constitute offer or acceptance. In a majority of Islamic schools (Hanafi, Shafi’I, and Hanbali) such signs are generally held insufficient in the case of those capable of speaking but are regarded as being effective from those unable to talk, whether such an inability is permanent, as in the case of mute persons, or temporary, as in the case of some people who are ill.

In fact, this is the only allowance made by the majority of classical Islamic schools for the substitution of words by non-verbal signs. It may be taken as an instance of the application of another widely acknowledged principle, the rule of “negation of distress” (La haraj), which is based on a Qur’an text and embodied in the maxim “hardship begets facility”. The sign in such cases must be sufficiently expressive, understandable in the circumstances, and intended for the conclusion of the proposed contract.

A suggestion is raised in certain treatments of the subject to the effect that if the incapable person can find a proxy to speak and utter the formula on his behalf, then signs are not acceptable and he must appoint a proxy to act for him. Some jurists also pose a question whether it is necessary for a valid sign to be made by the fingers, or accompanied by the moving of the tongue, on an analogy with the case of prayer where a mute, to have his prayer religiously accepted, has to move the tongue.

Here again, a negative answer is given on the grounds (it is interesting to observe) that the rule in the conclusion of a contract is to establish consent, while in prayer the rule is not the same; and thus here anything will suffice which may signify consent. This argument supports the view which we have already put forward that the formalistic or consensus approach is not the definite and universal line of this or that jurist, but may also constitute the attitude of the same jurist in dealing with different problems, albeit that the tendency may vary in dealing with different hypotheses.

In all the classical Islamic schools, the rule on this point is similar, except in the Maliki School where a sign, if indicative of consent, is permitted for the conclusion of a contract; the basis of the Maliki jurists’ argument is said to be the sufficiency of consent regardless of the way in which it is expressed.

Writing

This symbol occupies, in theory, a better position than that of the physical gesture. In Fiqh, the view of the majority of jurists in the Hanafi, Maliki, and Hanbali schools put writing on the same footing as word of mouth or gesticulate signs by holding that they equally appear to constitute sufficient ’causes’ for the conclusion of a contract of sale. They quote their opinion from the Qur’an:

“O you, who believe when you contract a debt for a fixed period, write it down. Let a scribe write it down in justice between you. Let not the scribe refuses to write as God has taught him, so let him write. Let him (the debtor) who incurs the liability dictate, and he must fear God, his Lord, and diminish not anything of what he owes. But if the debtor is of poor understanding, or weak, or is unable himself to dictate, then let his guardian dictate injustice. And get two witnesses out of your own men. And if there are not two men (available), then a man and two women, such as you agree for witnesses, so that if one of them (two women) errors, the other can remind her.

And the witnesses should not refuse when they are called on (for evidence). You should not become weary to write it (your contract), whether it be small or big, for its fixed term, that is more just with God; more solid as evidence, and more convenient to prevent doubts among yourselves, save when it is a present trade which you carry out on the spot among yourselves, then there is no sin on you if you do not write it down. But take witnesses whenever you make a commercial contract. let neither scribe nor witness suffers any harm, but if you do ( such harm); it would be wickedness in you. So be afraid of God; God teaches you. And God is the all-Knower of each and everything.”

As the principal source for the approval of written documentation, this Qur’anic passage was supplemented by other less pointed passages and a series of Traditions (Sunnah) indicating that writing was used for a number of purposes by the Prophet (P.b.u.h). Among the latter is a Tradition in which the Prophet is reported to have used a written document in connection with a sale contract in which he was the buyer. Together with the Qur’anic passage, al-Tahawi an early jurist was deeply concerned with the problematic status of documents. After the mention of the chain of transmitters, the gist of the Tradition “text” (matn) is that a Companion of the Prophet shows a document (kitab) that the Prophet either wrote himself or had written to embody his purchase of a slave from the Companion.

However, the jurists of the Shafi’i school revealed that writing only takes the place of word of mouth in the same kinds of situations where gesticulate signs are allowed in substitution for spoken words, as a visible behavioral expression, and even here “if making a sign is possible”.

The Shafi’i jurists have reservations about reducing contracts to writing because of the possibility of misunderstanding and mistakes in a community where most of the people were illiterate. This possibility is expressly admitted by some jurists and given as an ancillary reason in support of their arguments. Such a position becomes more readily understandable when the note is taken of the fact that some classical Islamic jurists require the terms of offer and acceptance to be in Arabic, though this was not the mother tongue for the majority of believers, as a result of which they were more easily liable to misunderstand or misconstrue written documents.

Conduct (Mu’atat)

A great controversy rages between Islamic schools on the validity and effect of conduct in the formation of a contract, with particular stress on a contract of sale. Jurists through their positions, glosses, and commentaries indulge in lengthy discussions on this subject, which are not always systemic or pruned of circumlocution.

The cleavage of opinion is mainly due to two factors, both already expounded throughout this work: first, the lack of a general theory of contract in Islamic law whereby the mere agreement of the parties, if not clothed in the form of specific contracts, could still be validly recognized; and, second, the formalistic notion of contract whereby, according to the historically prevalent view, only word of mouth, to the exclusion of other means, can constitute offer and acceptance.

In all irrevocable contracts such as sale contracts, most Shafi’i jurists do not recognize conduct as a valid means for the conclusion thereof, though some later jurists have taken exception to the predominant view.

In contrast, in contracts such as the sale contract, the great majority of classical jurists do recognize conduct as a valid means for the conclusion thereof. Therefore, most jurists from the Hanafi, Maliki, and Hanbali schools of earlier eras agree that a contract can be concluded by conduct, but disagree as to the effect of conduct when parties in practice employ it.

Silence

Silence as an expression of contractual intention presents great difficulties, as well as interesting features in conceptual and practical terms. In all the classical Islamic schools, there is a maxim which says: “No statement is to be attributed to a silent person” because the silence may or may not signify “consent” or, in other words, is ambiguous enough to be interpreted either way.

Thus, all the four Islamic schools (generally speaking) equally hold silence to be in principle ineffective and commonly attribute its inefficacy to the inherent ambivalence of its significance.

However, some of the exceptions made under Islamic law to the general principle of the inefficacy of silence related to the silence of the acceptor rather than to the silence of the offeror. In Islamic law, the maxim on the inefficacy of silence is supplemented by a qualifying sub-maxithatch that says: “Silence amounts to a statement where there is a need to speak.” It is said by an eminent jurist that silence, in exceptional cases where it is considered effective, concerns acceptance.

It is our submission that such a proposition, influenced as it appears to be by modern thought, constitutes a superimposition on cultural rules of Islamic law rather than reflecting its actual position. The application of the sub-maxim to contract formation is in fact limited due to a twofold reason. First, cases of the efficacy of silence generally concern contracts inter absents the validity of which under Islamic law is, to say the least, in doubt in the most important categories of ‘binding’ (lazim) contracts even when intention may be expressly manifested.

Secondly, in contracts, inter-presented, formalistic verbalism classically obtained under Islamic law requires the pronouncement of formulae to the degree of questioning the validity of conduct, let alone silence. Even in ‘facultative’ (ja’iz) contracts, where there is generally some latitude on the rules of formation, silence in place of acceptance, as distinguished from conduct, is not directly considered. Despite the fact that there are several instances under Islamic law, including some contractual ones, where silence, or in fact inaction, produces legal effects, none relates to the formation of a contract, except one to be noted below.

Means of Expression in the E-Sale Contract

Faced with present-day developments, the internet is merely another tool of communication and does raise unique technological issues when examining sale contract formation under Islamic law. It is these technical issues that all too often cloud our analysis of the e-sale contract. In our earlier discussion about the traditional contract, it was said that a contract is formed when all parties agree on its essential terms. If there is no agreement between the parties as to the terms of the contract, no contract is concluded. The agreement is reached only when both parties assent to the intention to create a legally binding relation as to the terms of the contract.

If we look at our earlier discussion of the Muslim jurists and the different schools of thought of Islam, we will find a large number of different opinions as to the means of expression in contracts, but none of them requires only one way, such as a written document or word of mouth, as requisite for the validity of the contract. Thus, all schools of Islam consider valid any form of the agreement that fully reflects the consent of the parties involved in the transaction as an instrument to express the will of the contracting parties. Under the law of the four Islamic schools, the consent can be expressed orally, by a written agreement, sign, silence, or with conventional practice (conduct), that can without a doubt express its existence. Expression of the intention must be without coercion or duress (ikrah), error (ghalat), or fraud (tadlees or gharar).

Now the question regarding the main subject of this chapter is whether a sale contract entered into electronically by the contracting parties is valid and therefore binding upon the parties and can be governed by the same classical contract sale principles of intention to create legal relation under Islamic law. With regard to e-sale contracts, under the opinion (fiqh) of the majority of Muslim jurists in our earlier discussion, since the e-sale contract can be mostly formed electronically by oral agreement (such as in chat rooms) and written agreement, this means the answer is that the e-sale contract can be valid, compatible and enforceable as a result of our discussion comparing it with the traditional sale contract.

In the electronic environment, there are three main modes of electronic contracting, each with its own distinctiveness, and each with a need to be treated independently. Each of the three means, as a result of the above discussion, can be compatible and acceptable under the principles of Islamic law which classified them as writing or oral means:

1. Electronic Email (e-mail): Exchanging e-mail communications is the digital correspondent of a letter. A person types it out, occasionally attaches supplements to it, addresses it, and sends it to the recipient. E-mail is capable of doing all the things that real mail can do. It can be brought into use to make an offer or to communicate acceptance. It can be used for advertisements and circulars and can even be a source of junk mail. E-mail is even sent and received like real mail. The sender puts it in his outbox, the digital equivalent of a post-box, and this is then collected by the mail server, which forwards it to the recipient’s mail server which then delivers it to the recipient’s inbox, which may be seen as the equivalent of his letter-box. This process, although usually very quick, is not instantaneous, just as in actual reality written letters can be delayed or even lost in the post.
2. Web Site Forms: The click-wrap means of contracting used on the World Wide Web. In many cases, a website operator will offer goods or services for sale, which the customer orders by completing and transmitting an order form displayed on the screen. When the seller receipts the order, an e-sale contract is formed. The goods and services may be physically delivered offline. For example, the website may carry an advertisement for a book, where the operator offers to supply it in exchange for a certain sum of money. On this webpage will be a hypertext order form that the customer or the buyer will fill out. At the end of this form will be a button saying “Submit”, “I Accept”, or something similar. When the customer clicks this button, they submit their order to the website operator. This is like taking the goods to the cash register in a shop, except the cashier will usually be a computer instead of a person. Like communication between a customer and a cashier in a shop, communications across the Web are instantaneous.
3. The third mean is through chatting rooms: – this is made when the contracting parties engage in negotiations online (this is not a compulsory phase in the sale contract formation process). The parties negotiate every detail of a sale contract orally or using the written word and simply end negotiations by making an offer to sell or buy goods or services. Thus, the offer by this method can be through oral or written means.

Approval of Will and Consent in the E-Sale Contract

In the previous sections of this chapter, we discussed the means of expression of will and consent with entering traditional and electronic contracts. We have seen that in Islamic law a contract will only come into being if the parties intend to create a legal relationship. This intention must comprise three elements: the will to act at all, the consciousness of making a legally binding declaration, and finally, the will to engage in this particular transaction. Offeror and offeree must express their willingness to be bound explicitly or it must be implicit in their actions.

In this section, we will focus on the approval of the will and consent of the parties in the e-sale contract. We will examine the traditional Islamic law of writing as a method for contractual approval. We will then consider whether the data message and the digital signature will be legally acceptable to prove the will and consent under Islamic law.

Imagine you are browsing on the web and you come across an interesting offer to sell a book. You exchange several e-mails with the seller, finding out more about it. You eventually decide to buy it. Without prior clarification, you would be the first to test whether a sale contract entered into electronically using a symmetric or asymmetric system satisfies the requirements AND is acceptable in Islamic law.

One of the most revealing Muslim doctrines about writing concerns the rather mundane and narrow genre of legal documents. From our early discussion, there is no particular requirement for a contract to be formed in writing under the Islamic general contractual principles. As articulated by early jurists from the Hanafi and Shafi’i schools, the doctrine held that such writing as contracts and other private legal documents had no evidential value.

According to the classical rules of evidence in Islamic law, written documents could not be brought forward in legal proceedings as proof of a claim. Evidence, as defined by the jurists, was exclusively oral, anchored in the spoken testimony of present, upright witnesses. This nonrecognition of the evidentiary value of written documents is remarkable both because it went against the prevailing (and continuing) practice of routine use and reliance upon documents and also because it ran counter to explicit confirmations of this practice found in each of the two authoritative sources of Islamic law, the Qur’an and the Tradition (Sunnah).

Maliki jurists, and Abu Yusuf and Mohammed bin Hassan from the Hanafi school, by contrast, rely on the same sources we mentioned in section 3.4.2. B Other Means of Expression (writing), authorized that writing can be evidence of a contractual relationship, and the legal document can be formally acceptable evidence. Also, Mejella al-Ahkam al-Adliyyeh article 1736 accepts the written document to be approved evidence in the contract.

It is now well known that, in electronic commerce, the traditional documentation of transactions on paper is being replaced by the novel method of electronic documentation. Correspondingly, traditional hand-written signatures are being replaced by a variety of methods that can be included under the broad category of electronic signature.

These electronic documents and electronic signatures are expressly recognized in e-contracts for purposes of concluding contracts. These two main ways can face the problem of consent and will bring an end to any uncertainties that may have existed with regard to consent in electronic communications.

In conclusion, our opinion is to accept the electronic document or the electronic signature to be approved evidence of consent in an e-sale contract. However, from our early discussion in this chapter, and previous chapters due to the broad characteristics of these subjective criteria from our debate, it is essential to highlight other more objective criteria.

Jurisprudence and principles have attempted to propose objective criteria, such as the substantiation of contractual conditions before contracting, the lucidity of the clauses, the broad contractual producer, the supervision of the illustration space, and the buyer’s acceptance. In fact, these objective criteria allow us to realize one last subjective criterion, namely the effort put forth by the seller to make the content of the contract known. Mutually these criteria lead us to draw a provisional structure under Islamic law for practices in an area that requires better harmonization.

1. It is significant that the buyer is able to go through the contractual clauses before the e-sale contract is actually produced. It should be unattainable to access the goods or services that one wishes to buy before viewing the contractual clauses. Furthermore, contractual clauses must be effortless to interpret; signifying that the use of hyperlinks must be evaluated critically and, for example, that it must be probable for the buyer to print the e-sale contract. Finally, access to the e-sale contract should also be possible once the contract has been “signed” to make sure of the full consent of both contracting parties.
2. The arrangement of contractual clauses must be of high quality, be tailored to the applicable medium, and be traditional to recognized requirements such as those governing writing or signatures.
3. Permission must be clear. This can be acquired in many diverse ways. It may be useful to put an “I refuse” icon next to the ‘I accept” icon. If the consumer clicks the “I refuse” icon, he or she will be rejected access to the goods or services. The icon should also be apparent and clear-cut. Again, it is significant that the procedure used to demonstrate one’s will be unequivocal and not resemble behavior usually used to “surf” a website. In an even more unambiguous behavior and in order to put aside all risks, it might be advisable for buyers to manifest approval by filling out a textbox with the buyer’s name or other identifiers.
4. The contractual procedure must permit the buyer to cancel the contract such as in case of a mistake.
5. It is significant that rationally enduring confirmation of the e-sale contract is accessible. This can be done either by promoting the buyer to print the terms of sale or by the seller taking it upon himself to do the same.
6. Finally, we find the purpose of an EDI link, for instance, will be inter alia the formation of contracts. Thus, the parties clearly intend to be bound by the ‘declarations’ exchanged between their computer systems. Interactive Web pages which are designed for commercial reasons are put on the World Wide Web in order to create binding agreements. Similarly, messages produced by a supplier’s computer and communicated via videotex have to be seen as his declarations of intention. Therefore, as in the cases of automatic machines, it is of no legal consequence that the contract is completed by a computer program.

Mechanism of Formation of an E-sale Contract Under Islamic Law: Making an Offer Using Electronic Means

The doctrine of Offer and Acceptance

The idea of offer and acceptance suits different systems at different levels, depending on their respective approach to the law of contract(s) and the basis thereof: it suits best a formal system of contracts, like Islamic law, where the order of pronouncing contractual formulae is set by the law. Next, a consensual system based on the ‘will theory’ such as English law lends itself, in most cases though not all, to an analysis of ‘agreement’ in terms of offer and acceptance as the respective expressions of the wills of the parties.

In this chapter and the following chapter, we are concerned with detailed rules relating to the mechanism of making a sale contract. We will examine the manner of and problems involved in the determination of ‘offer and acceptance as a primary notion in analyzing the formation of a sale contract under the principles of Islamic law of the four Islamic schools, and then we will examine these principles as they apply to a sale contract in the electronic environment.

In Islamic law not only do ‘offer and acceptance’ constitute the only way of making a contract, but also there is a particular conception of offer (ijab) and acceptance (qabul), whereby the offeror (mujib) and offeree (qabil) are predetermined in any given type of contract. Based on an analysis of detailed rules, this chapter aims to show that there is an underlying principle geared to the concept of ownership which determines the position of the offeror and the offeree in each nominated contract.

The proprietary position of the parties with respect to the subject matter of the sale contract or the immediate or eventual effect of the contract on their respective patrimonial positions determine, a priori, who should make the offer and who should make the acceptance. We will also discuss in this chapter the distinction between an offer and an invitation to make an offer under Islamic law.

The concept of offer (ijab) and acceptance (qabul) in Islamic law has developed alongside the development of its nominate contracts. It is, therefore, almost as old as the law of contracts itself. ‘One of the most distinctive features of Islamic law’, undoubtedly, is ‘the juridical construction of contracts’ which is suggested to be possibly derived from ancient Near Eastern law and might have come to the Muslims through the medium of commercial practice in Syria and Iraq.

This construction is essentially formal since both the offer (ijab) (literally, making a positive statement, or making a statement to beget a ‘necessary’ or ‘binding’ relation) and acceptance (qabul) is to be pronounced in a given order. The four Islamic schools may differ in detail, but the general outline of their basic approaches to offer and acceptance is similar.

Essentially, all discussions of the four schools’ jurists center on and around the role of words in the formation of contracts, with almost all earlier eminent jurists adhering to the necessity of words and some later jurists of the 20^th century dispensing with such necessity. Complete volumes are at times devoted to the validity or invalidity of a contract by conduct (mu’atat), particularly in respect of a contract of sale which is the intellectual field for Islamic jurists to exercise their power of reasoning. As we have already dealt with the linguistic requirements for the formulae of a sale contract and the arguments for and against a contract by conduct in the last chapter, here and in the forthcoming chapter we will concentrate on the basic notion and mode of determination of offer and acceptance and will expand on its particular trait according to the dominant view of the classical jurists from the four Islamic schools which hold the offeror and the offeree in the sale contract to be predetermined.

The majority of classical schools’ view on offer and acceptance, like many other Islamic doctrines, as has already been mentioned, is that the offeror and offeree may be predetermined by the law in various contracts, that is to say, the law decides in advance for every kind of nominate contract which party is to make the offer and which party is to make the acceptance, rather than letting the offer and the acceptance be determined in each case as a question of fact. This is due partly to the absence of a general theory of contract, partly to the prevalence of verbalistic formality in Islamic law and, we believe, mainly to the significance of private ownership. Even when, in certain nominate contracts, either party is left free to make the offer and the other the acceptance, it is the law that, in line with certain principles, specifically permits it.

In a series of important contracts, whether in terms of commercial or private relations, such as the sale contract, one party is invariably required to make the offer and the other party to make the acceptance. The chronological order of offer and acceptance, therefore, becomes a consequence of the rule of the law according to the facts of individual cases. The possibility of a factual reversal of the preset chronological order of offer and acceptance becomes, as a result, a logical-juridical polemic giving rise to extensive arguments on the permissibility or otherwise of an offer subsequent (ijab al-mu’akhkhar) and an acceptance precedent (qabul al-muqaddam) which is possible by the majority classical schools’ view as we will further amplify in the section on the conformity of acceptance to the offer in chapter 5.

In a limited number of nominated contracts, such as partnership (shirakah), either party may make the offer and the other the acceptance. But, even in such contracts, the offer and the acceptance should, according to the classical Islamic school’s view, be made in their linguistically logical sequence. In another word, it is not purely the construction of the parties’ respective pronouncements in a factual chronological order which establishes which one constitutes the offer and which one the acceptance, but the verbalism significance of the respective utterances.

Thus, in such contracts, too, despite the freedom of either party to pronounce the offer, the basic notion of adherence to a precast formulation of offer and acceptance does not, in its essence, cease to be applied. Therefore, the rules may appear to vary according to the type of contracts at issue. Yet an analytical review of such rules reveals a universal principle working at the root, which is geared to the concept of ownership and linked to the verbal formalism of Islamic law.

The Maliki, Shafi’i and Hanbali view on the question of offer and acceptance suggests that in a sale contract, where a thing or the possession thereof is to be transferred, the statement made by the owner of that which constitutes the subject matter of the contract is the offer and the one made by the other party (buyer) is the acceptance. These jurists believe that the determining factor is the concept of ownership and the formula of the contracts in Islamic law is required to establish its transfer from one person to another. Therefore, the idea of transfer of ownership through verbalization formality appears to constitute their principle.

One significant result of this approach, as we shall see at different junctures of this work, is that contracts are identified with offer and acceptance and, owing to verbalize requirements, terms, and conditions are normally considered outside the strict scope of offer and acceptance. Therefore, we find that the difference between the Hanafis and the other classical Islamic schools in determining the offer and acceptance is that mere formality is otherwise not essential, and the consequence is not different. Thus, the four Islamic schools agreed to provide for the validity of acceptance even if it comes before the offer, and that does not make the contract defective, nor does it lead to nullity, since the aim is the intended meaning, and that happens in both cases.

In the next section, we shall first present our detailed study of the subject by taking note of the position of the offer according to the traditional rules of the Islamic schools; however, we shall defer the comparative treatment of the traditional offer under Islamic principles and the sale contract in the electronic environment to the last part of this section.

Making an Offer Using Electronic Means

Established Position in Islamic Law

The common analysis of an agreement in terms of offer and acceptance or, conversely, the treatment of offer and acceptance as the commonest mechanism for reaching an agreement, entails a separate examination of various aspects of the mechanics of offer and acceptance in the formation of a sale contract. As we have already seen, Islamic law traditionally confines the mechanism of contract formation to verbal offer and acceptance and, particularly in the case of binding (lazim) contracts, identifies the offer and acceptance with the related contract.

Under all the four Islamic schools, the form of an offer is usually not defined. However, from our previous discussion regarding the principle of offer and acceptance in Islamic law, we can describe the offer from the Hanafi school’s view as an expression by one person (seller or buyer) to another (seller or buyer) of his or her willingness to enter into a contract. By contrast, the other classical Islamic schools (the Maliki, Shafi’i, and Hanbali view), defined the offer as an express or tacit indication of contractual intention from the seller to be legally bound if the other party (buyer) adheres to it as it stands.

As a general principle, for a statement to constitute an offer as an expression of contractual intention, it should be defined enough and cover the basic terms sufficient for it to ripen into a contract upon simple acceptance. In a case where an offer is inferred from conduct or is considered as having been tacitly made, its definiteness is more an assumption than a concrete fact.

Attributes of offer provide the criteria for the important distinction between an offer and an invitation to make an offer in non-formalistic systems. Islamic law contains explicit rules which require an offer to be categorical and immediately effective and definite (munajjaz). A conditional statement which is, by its very making, to take effect on the happening of a (suspensive) conditional expression (mu’allaq), is not a valid offer, whether the contingency is certain to happen, or only probable, such as, respectively, an offer to sell a thing ‘if tomorrow the sun rises’ or ‘if tomorrow it rains’, for what is taken into account is the genus of the condition and not the species thereof. A statement that is definite in its form as an offer, though it may be conditional in substance, will therefore be valid as a formula.

However, it must be noted that the condition mentioned above means, primarily, a suspensive condition; and what is under discussion is the conditionality of offer or acceptance and not the obligation which arises under the contract. A contract, when made by unconditional offer plus acceptance, may contain conditions, in the usual meaning of the term, namely, what the party is bound to do under the contract.

As previously mentioned the contract is defined by the Islamic jurists in terms of offer and acceptance rather than in terms of an agreement or the ensuing obligations. It is the very formulas that beget the vinculum Juris, the ‘tie’ or the ‘knot’, namely the contract (Aqd) in its etymological sense. It may be said, therefore, that in every contract the statements of the parties reduced to offer and acceptance are, by the very nature of the contract so defined, conditional in a sense. An offer, in however absolute a form it may be framed, does not produce a contractual relationship unless and until accepted.

The offer under Islamic law therefore always contains in itself a condition, notwithstanding the fact that it is required to be categorical. When a person, observing the rules of the Islamic law, makes an offer to another by saying, for example: ‘I sold you these goods for 50 dollars’; this statement is categorical only in form but conditional in substance. It means, in effect: ‘I shall have sold it to you at the moment you buy it if you buy it. This ‘conditionality’ is obviously inferred from the fact that the offeree is not bound, and cannot be made bound, to accept the offer.

Similarly, when the other party says: ‘I bought it’ this means ‘I shall have bought it if you shall have sold it.’ The conditionality of the acceptance on the offer is not at first sight so easily discernible as the conditionality of an offer on the acceptance because, once the acceptance is made in its categorical form, pursuant to the offer, the contract will be concluded and there will remain no choice for either party to reject the proposal of the other party, even if the concluded contract may be set aside by either party due to certain other legally recognized factors. This, however, does not negate the conditionality of acceptance. While, for the purpose of creating a contract, the offer is conditional on acceptance, which is to take place at a later time, the acceptance is conditional on the offer which has already come into existence.

The mutuality of the conditionality of offer and acceptance does not involve a circle, for each condition has a different content. The content of the one is, say in a sale contract, the ‘selling’, and the content of the other is the ‘buying’. These notions of selling and buying, though only the complementary facets of the same unitary concept of sale/purchase, differ from each other through the difference in standpoint.

The conclusion which obviously follows with respect to this example is that, by pronouncing the formulas, and contrary to the significance which the verbs employed may literally convey, the offeror ‘sold’ not solely by the offer, without acceptance, and the offeree ‘bought’ not solely by his acceptance, without the offer. The reciprocal conditionality of these proposals lies in their interrelation and interaction and, thus, ‘conditionality’ in this context becomes synonymous with the ‘interdependence’ of offer and acceptance in begetting the sale contract.

Because jurists from the four Islamic schools attach great importance to the form of expression, the requirement of definiteness becomes mainly syntactical and concerns the formulas of the offer and acceptance. The contract must be entered into by means of categorical formulas, though when made in an absolute form, the reciprocal conditionality of offer and acceptance is, as some jurists have noted, inherent in their substance.

The crux of the matter is that, as we have already explained, the determination of offer, or acceptance, is under Islamic law a question of law, thus, it is immaterial in Islamic law to argue that a condition is expressed in a categorical statement. It is equally immaterial that what the parties actually say in their conditional offer and acceptance is no more than what is inherent in the statement when made categorically. The Islamic law considers a categorical pronouncement to be the best vehicle for conveying the presence of an absolute contractual intention and maintains a (suspensive) conditional expression to be insufficient to produce legal effects.

The Electronic Offer

With regard to a discussion presented in section 1.3 and the explanation of the contract of sale presented in chapter 1, should we choose to accept that a contract of sale takes place as an implication of the presentation of an offer and an acceptance of the very same offer, an offer presented over the internet can be regarded as a suggestion of engagement into a contract by an individual to a second party.

Even more imperative is the fact that the terms constituting the offer are presented clearly and are transparent in nature as is the prerequisite according to the discussion in section 2.3 the basic constituents of the e-sale contract as elaborated in chapter 2, in order to permit the establishment of a contract through un-negotiated and the intent of the offeror to commit to the terms of the offer have to be mandatorily clear and unambiguous. Therefore, there is no reason why an electronic offer would have less validity than the offers mentioned above.

Therefore, the offer is the first part of the contract, and it has been preceded by negotiations or a contract, or an invitation to the declaration. These are not included in the contract unless there was a positive expression of the will of the certain elements as we will discuss in section 4.3 the requirements of making a valid electronic offer.

It is clear from the foregoing that the electronic offer can be subject to the same general principles that govern traditional offers under Islamic law, but it has some privacy concerning its nature. Because it is made through the electronic environment:

1. The electronic offer is remote: – Based on this subject, a remote offer should be subject to the rules of consumer protection, so imposing on the offeror a duty to provide consumers with information about his name, address, Head Office, and information on the goods and their descriptions, price, means of payment and the method of delivery, the warranty, conditions, and other information.
2. The electronic offer requires an internet service provider.
3. The electronic offer is often international: – the electronic offer uses electronic media and is made through an international network, so it does not abide by the limits of particular countries. There is no reason to restrict the offer to a specific geographic region, such as the decision in the United States of America to ban direct offers because of the economic sanctions such as Cuba and North Korea.

As we have already discussed in section 3.5 Means of Expression in the E-Sale Contract, there are three methods of making an offer in an electronic sale contract, each with its own characteristics (Electronic Email, Web Site Forms, and chat rooms). Whatever the method, whether the offer is expressed orally or in electronic writing, the Internet is only a means to deliver an offer in writing to another party, thus, it is acceptable under Islamic law, as we have seen in discussing the Islamic jurists in section 3.4.2 Primary classification under Islamic law in chapter 3.

The Requirements of Making a Valid Electronic Offer

From our foregoing discussion, in order to constitute a valid offer to sell or buy goods under Islamic law in the internet environment, as we have already discussed in section 2.3 The fundamental elements of the e-sale contract in chapter 2, a proposal to make an offer must meet certain minimum requirements under Islamic law. The offer is a party’s proposal for concluding a contract addressed to a specific person. Such a proposal must contain all essential terms of a sale contract. If not, it is considered merely as an invitation to make an offer as we will further amplify in the next section.

The jurists of the four Islamic schools agreed as we have discussed in the previous chapter and under section 1.4 Freedom of the sale contract in chapter 1, and section 2.3 The fundamental elements of the e-sale contract in chapter 2, that the parties must declare their intention and consent of making an offer or acceptance. Therefore, a proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. Regarding the conditions that can be included in the offer in the e-sale contract, as already discussed in chapters 1 & 2, Muslim jurists categorize the conditions that can be valid and legally sound as follows:

1. conditions and principles that are already considered valid by Islamic law: these are unanimously agreed on by all the jurists;
2. conditions that emphasize and strengthen the essential elements and the expected legal effect of the contract: these are unanimously agreed on by all the jurists;
3. conditions that comply with the essential elements and the expected legal effect of the contract: these are also unanimously agreed on;
4. conditions that are not repugnant to Islamic rules and principles;
5. conditions that are not repugnant to the essential elements and the expected legal effect of the contract: these are advocated by the Maliki and Hanbali schools; and
6. Conditions that are recognized by valid custom: this has been advocated by the Hanafi School.

Furthermore, in Islamic law’s view, a proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price. Therefore, the key components of an offer are specificity, definiteness, and an indication to be bound. As far as the element of specificity is concerned, it appears to make no difference what form of communication one uses. In respect of this substantive feature of the offer, there are, in other words, no more problems intrinsic to electronic forms of communication than to other forms of communication.

This is basically also true in respect of the required intention to be bound as we mentioned in chapter 3, which distinguishes an offer from an invitation to make an offer. Some kinds of transactions involve a preliminary stage in which one party invites the other to make an offer; this stage is called the invitation to treat. The law of many Muslim countries distinguishes between an offer, which binds the offeror, and an invitation to make an offer that has no such binding effect.

In most cases, an offer will be made to a specified person. However, offers can be addressed to a group of people or even to the general public as we will further amplify in the following sections. Such a proposal is considered an offer unless the circumstances of the case or legally recognized custom dictate something else. A proposal not addressed to one or more specific persons is interpreted merely as an invitation to treat.

However, one who clearly indicates an intention to be bound by such a proposal will be treated as having made an offer. For example, the offer is always sent to a specific person if sent by e-mail, and so such a proposal is considered as an offer, not an invitation to treat. By contrast, catalogs, advertisements, and price lists can also be sent per e-mail; generally, advertisements, catalogs, and price lists are considered invitations to treat. However, the sender of such an invitation is liable for prejudice caused to offerors, if he does not accept the offer without substantiated reason. The same interpretation might be extended to websites through which a prospective buyer can buy goods: an advertisement on a website should be considered as an invitation to treat.

The doctrine has also included an opposite opinion. Catalogs, advertisements, price lists, etc, could be considered as an offer if they contain all essential terms of a future sale contract. They should contain a precise description of goods, price, time, place and method of performance, etc. However, in our opinion to avoid problems whether a message is an offer or invitation to treat, it is recommended that in a case of doubt there should be a clarification stipulating that a message sent is not considered as an offer.

Offer and Invitation to treat

It is important at this stage, to distinguish between what we would regard as an offer that is capable of acceptance and a proposal which may on the face of it seem to be an offer but which is really an invitation to treat as we see in the following figure:

An offer as we mentioned before is a projected set of terms that can form the foundation of a contract. The key attributes of an offer are that it considers acceptable and is competent of being accepted. Sometimes, although, statements which look like offers are not competent in forming the foundation of a contract as they do not consider acceptance. These statements are usually referred to as invitations to treat as their function is to invite the supposed offeree to put forth an offer, thereby giving birth to the conciliation procedure.

It is vital to be able to discriminate between these invitations to treat and true offers, as acceptance of an offer generates a concluded contract while ‘acceptance’ of an invitation to treat is merely an offer. To assist in the identification of such an invitation the legal systems of different countries have significantly evolved presuppositions as to whether certain general statements or actions lead to an offer or are simply an invitation to treat. Therefore in the real world, we can affirm with some level of assurance that shop displays are invitations to treat as they are revealing items for sale at auctions and advertisements.

Applying these values to virtual reality we find that advertisements on websites may be considered in a parallel approach to their tangible reality counterparts. Web-advertisement may, in fact, be nearer to shop displays than to advertisements in magazines or on television due to the enhanced nature of the activity of websites. On the web you may almost inspect the goods, some goods such as software may even allow you to sample the goods, and you may then offer to buy the goods straight away without exiting the virtual store. It has been said in other places that web advertisements ‘fuse the advertising and the shop”.

It is not obvious why a virtual shop should combine advertising and the shop any more than a real shop but the consequence is obvious: a web advertisement will be an invitation to treat except if it undoubtedly specifies that the web-advertiser aims to be bound upon acceptance. Therefore, the agreement between the contracting parties for concluding a contract addressed in the negotiation process contains an offer if it is adequately exact and designates the purpose of the offeror to be bound in case of acceptance. And a proposal is adequately specific if it specifies the goods and expressly makes stipulations for determining the quantity, the price, the parties, and the way of delivery.

Likewise, the procedure of contract compromise over the internet is the same as in genuine authenticity: an invitation to treat, offer and counter-offer, and final acceptance. The contract negotiation starts with an offer. As already elaborated, there are three primary methods of communication brought into use in the contract construction phase: electronic mail, web page, and chat rooms. These methods of contract negotiation can be dealt with by applying modern rules if we bear in mind the methodological difficulties the internet possesses. Remember the internet is nothing more than a means of communication.

Islamic law has known the invitation to treat which is called negotiation (msawamah) which takes place between the parties to the contract in one meeting or more at the beginning of the contract formula, and it is not a condition to end the invitation to treat by the conclusion of the contract. While an offer in the technical sense of the term is, as stated above, a definite expression of willingness to be bound upon simple acceptance, an ‘invitation to treat in the present legal parlance means, borrowing some historically earlier epithets where the term ‘offer’ is used in the non-technical sense of a proposition, an offer to negotiate, an offer to receive an offer(s) or an ‘offer to chaffer’.

Muslim jurists did not make the process of negotiating the provisions part of the contract and did not consider the negotiating a stage of the contract unless there was true intention to be bound by the offer as already discussed in section 3.2.3 Differentiation of ‘Intention of Word’ and ‘Intention of Meaning’ in Islamic law in chapter 3.

In comments on the negotiation al- Sanhuri says:

“a binding offer usually comes after a period of negotiations for either a long or a short time such as the negotiations come before the offeror’s offer to the offeree to do something, but negotiation must not contain conditions or supply details or conditions.”

So we can summarize the Islamic law by saying that the contract negotiation or an invitation to treat should not be accepted and should not be addressed as an offer, but must be answered with an offer if a contract is to be established. This offer must be accepted by the originator of the invitation to treat in order to create a legally binding e-sale contract. It is probably better in e-commerce practice to ensure that, when you make available goods or services over the internet, you do so on the basis that it is an invitation to treat or an offer. This will give you the opportunity of rejecting an offer made by a customer if, for example as a result of a mistake on the website, the price is not correct or if, for example, you have run out of stock and are unable to procure more supplies.

Variety and Communication of Offers

In most cases, either in the classical contract or in the electronic environment, an offer may be made to a specified person, to a class of persons, or to the public at large. It may also be indivisible or divisible which, in certain ways, gives rise to the question of a ‘standing offer’ and cuts across the question of a definite offer and its differentiation from an invitation to treat as already discussed. Furthermore, for a statement or expression to qualify as an offer, it should, in principle, be brought to the notice of the offeree, i.e. be communicated.

The rules pertaining to an offer generally relate to a single offer made to a given person calling for a promise in order to enter into a contract. Variations in this general pattern are presented by an offer made for the performance of an act by a given person, an offer made to unspecified persons, being the public at large or a group of persons, and a proposal involving either more than one contract (‘standing offer’) or for multiple performances as against a single performance.

Islamic law has known and recognized a variety of offers as valid which announce a reward or remuneration to indefinite persons to perform some act, such as finding and returning a lost object. This doctrine is known as (ju’alah). However, Islamic law also has known divisible offer and /or acceptance with regard to combining a lease and a sale contract such as when an owner of the property offers to lease out premises for a year and sell the fruit already on the trees in the property for a specific sum covering both the rent of the promises and the price of the fruit. In this case, there are, in effect, two offers while the acceptance, pronounced in one word, is taken to be single.

In the opinion of Islamic jurists in the four Islamic schools, in dealing with this example, a different criterion based on what is called the “social aspect” of the twin subjects of the offer or single contract comprises, in reality, two contracts of lease and sale: if they are not category-wise compatible, such as the material line and the proprietary relation in, respectively, marriage and sale, then two contracts are concluded rather than one; but if they are compatible, such as transferring the usufruct in a property and the ownership of the fruits thereon through the exchange of a single offer and acceptance for a contract of composition (sulh) covering, in effect, both the lease and the sale, then there is only one contract.

Moreover, the premises of the example given – with the introduction of the medium of the contract of composition which is in itself an independent nominate contract – transform the question it is supposed to answer: there are no longer two distinct contracts of lease and sale at issue through a divisible offer, but a single contract of composition through the effects of it are those close to a lease and a sale combined.

Whatever the juridical Islamic schools’ niceties or the objections involved in these examples, the point relevant to our subject is the possibility in the electronic transaction of an apparently single offer being considered, depending on its construction, as constituting multiple offers which may produce, when accepted as it is made, one contract taking the place of more than one or multiple contracts.

On the other hand, it is not enough under Islamic law for an offer to be definite and precise as we have mentioned. It must also be communicated, brought to, or received the notice of the offeree – hence its close connection with the question of acceptance. Under Islamic law, the requirement of communication of offer is to be deduced from certain other rules relating to the formation of a contract.

According to the classical trend of thought, which maintains that for each nominated contract words signifying in the offer the type of the proposed contract are to be used, and the acceptance is to be made in response thereto, there is no need to stress the necessity of communication since without it the whole mechanism of offer and acceptance would fail. It is, therefore, in borderline cases, such as when a party does not know the language in which the offer is made, or through discussions by Muslim jurists as already discussed on the use of metaphor or euphemism in the formula of the sale contract or on the validity of signs by a mute person made for the conclusion of a contract, that indications are to be gleaned as to the necessity of communication.

The key concept from an Islamic law perspective in contracts in such cases is comprehension (fahm) to make the offer understood and to understand the offer. Obviously, an offer cannot be understood if it is not communicated in the first place.

As examples of this underlying rule, we may refer to the following instances. Metaphors and euphemisms constitute a valid means provided they are understood to signify as we mentioned an ‘intention to create’ (qasd al-insha) the contract since, otherwise, “the addressee will not comprehend what he has been addressed to”. Signs are allowed for a mute person to make an offer or acceptance provided they are “understandable signs”; or a response to be given by way of acceptance in a proposed sale of contract should come from the addressee of the offer, the person to whom the offer was made and communicated.

Likewise, if a person does not know Arabic, according to those jurists who stipulate the use of this language for the validity of the formulas of contracts, he must either learn the formula and understand what he is going to communicate or employ an agent to pronounce the formula on his behalf as we shall further explain in the following chapter under the subject of conformity of acceptance to the offer. Thus, an offer, or an acceptance, which is not heard and understood is not valid.

On the other hand, some legislation such as the French Civil Code 1994 article 2 requires the use of the national language in the expression of the offer, but a global internet and international supply environment make it difficult to respond to this requirement, as there is a chance to make a bad faith manipulation via the internet.

Duration and Revocation of Offer

May an offer, once made indefinite terms be at any time revoked before acceptance is made under Islamic law? The answer recognizes a binding force in an offer. Islamic law (with the exception of the Maliki school) denies such a force to an offer. In Islamic law, according to the majority of the classical Islamic schools (Hanafi, Shafi’i, and Hanbali), the governing principle is the revocability of the offer.

Only under the Maliki School does a contrary view seem to be embraced in an exceptional situation. The option of the meeting place (khiyar al-majlis) is not recognized in this or in the Hanbali school. They hold that the meeting place breaks up as soon as acceptance has been made. But as to whether an offer may be revoked before acceptance, the schools differ. The Hanafi school agrees with the Hanbali and Shafi’I schools in considering the offeror free to withdraw his offer at any time before it is accepted, while the Maliki school maintain that “when a party makes an offer of sale to another, it is necessary that the other party should accept it in the same ‘meeting-place’, and the offeror cannot withdraw it before this (before the ‘meeting-place’ breaks up).

If the party making the offer, however, withdraws it before the other party answers, the revocation will not avail him if that other party subsequently accepts the offer in the same ‘meeting-place’ ”. This rule is held by a modern jurist to be based on the efficacy in the Maliki school of ‘unilateral will’ (iradah al-munfaradah) to produce an obligation.

In the electronic environment, we find there is no difference between an offer made in the traditional sale contract or over the internet. Therefore, the offeror can at any time revoke his offer before acceptance is made under the view of the majority of the classical Islamic schools. However, our opinion is that to revoke the offer made online would require the offeror to withdraw the offer advertised on the internet, which provides evidence that the offeror has declared his intention to revoke his offer, but there is an exception to this where the offer is accompanied by a binding deadline for acceptance.

Thus, for the purpose of deciding when the time for acceptance begins to run, a decision should be made as to whether the electronic message should be compared to a means of instantaneous communication rather than to a letter or telegram. Our opinion is that we should deal with e-mail messages as being more like regular mail than a phone call because an e-mail is more like one-way communication. The offeror sends his offer to an offeree who is usually not going to read it at once and consequently delays in responding. In contrast, other electronic methods of communication are without a doubt two-way communication allowing the information systems involved to instantly respond to each other’s messages.

Termination of Offer

The formation of a contract, either in the traditional sale contract or the electronic environment, may be adversely affected not only by the offeror’s revocation or the offeree’s rejection of the offer but also by also either passage of time or the death or incapacity of a party before the contract is finally concluded.

Passage of Time

Certain aspects of the passage of time have been already treated in the previous section, mainly under the discussion on the binding force of an offer. Here we confine ourselves to what pertains, essentially, to the effect of the passage of time on an offer before it is accepted or an acceptance thereof is attempted.

The time concept involved in this question is to be distinguished from the time frame pertaining to the revocability of an offer, though they are, in certain respects, interrelated. An offer may be revocable in different legal systems as of a particular moment, or after the passage of a certain time from the date it is made, but may actually be left standing by the offeror for some time. How long after an offer is made will the offeree be entitled to accept it? The point is best illustrated where the offer is in principle revocable, but if not revoked, may be accepted with a certain delay.

Thus, while the question of the revocability of the offer relates to the obligation of the offeror to leave the offer open for a period of time and to the binding force of the offer in general, the present discussion relates to the time-frame beyond which the offer will altogether lapse and the offeree will no longer be in a position to effectively exercise his power of accepting the offer. However, we will analyze the place of acceptance in e-sale contracts in the following chapter.

The four classical Islamic schools have a requirement known as the ‘unity of the meeting-place (ittihad al-majlis), whereby offer and acceptance should be made in the same majlis, literally the ‘seat’ or the ‘meeting-place’. A contractual ‘meeting-place’ refers to the setting in which offer and acceptance are exchanged.

There is no formal requirement for the meeting or its setting, but the requirement of its ‘unity’ is a result of verbalizes formalism of offer and acceptance to be ‘promptly’ exchanged, as strengthened by the understandable fact that, throughout the centuries of their development, contracts were made inter presented, where it is imperative for the formation of a ‘binding’ contract that acceptance should be made at the same time ‘meeting-place’ where the offer is made or, as idiomatically phrased, there should be the ‘unity of meeting-place.

However, the length of the time of the ‘meeting-place’ depends on the span of time allowed for acceptance after the offer has been made, which span determines, in turn, the length of the time in which the offer will be standing and its termination upon its expiration.

The time which is allowed under Islamic law to elapse in the ‘meeting-place’ between an offer and its acceptance is in fact extremely short. As a rule, an offer should be ‘promptly’ accepted if the requirement of the ‘unity of the meeting-place is to be satisfied.

The requirement produces under the majority of classical Islamic schools two interrelated ancillary rules: ‘promptitude of acceptance’ (fawriyyah al-qaboul) and the uninterrupted ‘sequence’ (muwalat or tawali) of offer and acceptance. This requirement, however, should not be mistaken for the ‘option of meeting-place (khiyar al-majlis) in a sale contract whereby either party has a right, an ‘option’ to rescind the contract after it is concluded but before the ‘meeting-place’ breaks up, to provide a reasonable time for both parties to consider the terms before committing themselves to the contract in its final binding form.

However, the rule is stringent in ‘binding’ (lazim) contracts, but relaxed in the case of ‘facultative’ (ja’iz) contracts, as we shall explain under the discussion on acceptance. Suffice it here to deal with the lapse of the offer.

Two elements appear to be at work and they are very useful in our research. First, from a formalistic point of view, the formulas being interdependent, they will not be considered to ‘tie’ together if they are not exchanged in an uninterrupted ‘sequence’ (muwalat) due to the lapse of time, or a party falling asleep or the introduction of a different subject. Second, on sensualistic grounds, it is maintained that there should be a ‘concurrence of intention’ (taqarun al-qasdayn) between the parties to produce the contract, which concurrence will not exist if the offer is not ‘promptly’ accepted. The same reasoning is encountered also in the discussion on the effects of an intervening incapacity, as we shall shortly discuss.

In the electronic environment, our opinion is that, if the offer is addressed to the general public by widespread dissemination across a website, and the offeror appointed a positive validity period for this offer by saying that the offer is valid until a certain date, then the offer remains valid until that certain date. By contrast, if the offeror did not assign a positive deadline for his offer on the Web page, we believe that the offeror is entitled to withdraw the offer only as long as the goods or services disappear from the web page. Therefore, if the offer disappeared from the web page, the presumption is that this is the end of the offer, and therefore, if the customer requests the commodity later, we consider this request as a new offer and it needs acceptance from the supplier.

However, if an offer has been addressed to a certain person by e-mail, and the offer is limited to a certain period, the offeror is bound by his offer until the expiration date, but if the offer is not limited to a certain period, then our opinion is that the offer must be accepted immediately unless the circumstances indicate otherwise. Moreover, we find the offeror can revoke his offer if it has not yet been transferred to the offeree.

Death or Incapacity

The Islamic law provides that the offer will certainly lapse on the death or incapacity of either party. Taking the present context, the concept of incapacity is much wider under Islamic law. Under the main principle of formation of a contract in Islamic law, as we have previously discussed in section 2.2 Conditions relating to the contractors in chapter 2, both offer and acceptance shall be made when both parties are in a position to make a valid proposal. This state ceases to exist either if a party is no longer capable of negotiating, as in the case of his death, insanity, unconsciousness or, perhaps, even when asleep, or if the consent of a party is no longer legally valid, as in the case of supervening interdiction due to insolvency, prodigality, slavery if assumed, or illness ending in death.

The primary reason in all such cases is that the concept of the contract will not materialize. This reasoning fits in both with a sensualistic argument, as at times put forward by all Islamic schools in terms of intention and consent, and a formalistic approach, which is predominant among them. In sensualistic terms, it can be said that in such events there will be no valid link between the respective intention and consent of the parties, while with a formalistic approach it may be said that the respective formulas of the parties fail to be made within the pattern prescribed for that purpose by the law in order to produce a sale contract. Both arguments are equally used to explain the brevity of the time in which the offer stands and the problem of the validity of contracts inter absences as we will further discuss in the following chapter.

Acceptance of an Electronic Offer on E-sale Contract Under Islamic Law

Position in Islamic law

Acceptance, as we have already discussed at the beginning of chapter 4, according to the Hanafi School is a definite response to the offer intended to conclude the proposed contract from either of the parties. However, the Maliki, Shafi’i and Hanbali view on the question of offer and acceptance suggests that in a sale contract, where a thing or the possession thereof is to be transferred, the statement made by the owner of the thing which constitutes the subject matter of the contract is the offer and the one made by the other party (buyer) is the acceptance.

In a definition from a recent Muslim jurist, acceptance of an offer means an unconditional agreement to all terms of that offer.

Thus, offer and acceptance, being complementary elements from opposite sides in producing a contract, share in part a common ground while differing in what is peculiar to the nature of the one or the other. As a result, a number of questions pertaining to the formation of a sale contract cut across both elements and may be treated either under offer or under acceptance, such as rejection of the offer, and the duration for which the offer may be accepted.

Moreover, in certain sophisticated areas of sale contract formation, such as where the mechanism of formation differs from the common pattern of offer and acceptance, or where more than two parties are involved, or where acceptance is inferred from conduct or is assumed to incorporate terms implied in the offer, other considerations equally come into play which strains the arrangement of topics.

When treating the subject in a comparative context, further complications arise in respect of such matters as contracts inter absences, to which the four Islamic schools here under review have radically different approaches. In Islamic law, where the offer and acceptance are predetermined in a set pattern and where the more important categories of nominated contracts are classically required to be concluded inter presented, certain issues become simple through elimination, but otherwise, the whole discourse develops in a universe of its own.

As we have already discussed, Islamic law does not, due to its determined pattern of offer and acceptance, go beyond certain elementary questions but, in more recent works, scattered references to some newer problems may be found.

As already discussed under chapter 4 dealing with the mechanism of formation of offer and acceptance, certainty of acceptance may, in a broad sense, be considered either intrinsic or extrinsic. By intrinsic certainty we mean here the unequivocal, categorical, and present existence of acceptance without its efficacy being made dependent on any future event; in short, a definite acceptance. But an acceptance that is intrinsically definite may become ineffective due to extrinsic elements, such as failure of a condition or the destruction of the subject matter of the contract, which fall beyond the scope of the present study.

A grey area in between concerns cases of acceptance by conduct, ranging from silence to performance, where the principle of certainty assumes in practice the nature of a presumption. It is, in reality, an imputed certainty in borderline cases which determines the efficacy of acceptance, and the process of this imputation differs according to the attitude of the legal system concerned.

Definiteness of acceptance, which constitutes its intrinsic certainty, is in part related to the contractual intention to be bound and in part to the mode of its expression. As a basic principle, the Islamic law here under review maintains that an acceptance must, like an offer, constitute a definite and unequivocal expression of contractual intention, though the stress on the inner or outward intention varies as we have already discussed in chapter 3.

Under Islamic law, the requirement of definiteness (tanjiz) is not, in a like manner, confined to the offer but is equally applicable to acceptance, though the definition of acceptance varies, due to the verbalize approach if the Islamic schools, according to the category of contracts at issue.

Therefore, the requirement that acceptance should be definite is subject to certain modalities which vary in degree depending on the construction of the facts taken to constitute acceptance, as we will discuss in the following sections.

Conformity of Acceptance to the Offer

All the classical four Islamic schools here under consideration agree on the basic principle of conformity of the acceptance to the offer.

The primary principle under the four Islamic schools is that an unequivocal and certain acceptance either in the traditional sale contract or the electronic sale contract should also be unqualified, and fully conform, or correspond, to the offer without any material variance.

Under the four Islamic schools, the significance of correspondence (mutabaqah) as we have already discussed relates to the verbal formula (sighah) of the type of the contract concerned, and for the post-classical perspective, it may still fall short of embracing such terms beyond the latitude allowed in making the formula through any means of expression.

The basic principle requiring full correspondence appears to be taken for granted under many legal systems such as English law:

“Acceptance must be absolute and unconditional, and must indicate a willingness to contract on the exact terms put by the offeror.”

Article 89 of the Egyptian Civil Code stated:

“The contract shall be formed by full correspondence of the parties’ expression of their intention …”

The statement of the principle looks, at first sight, to be the same under Islamic law:

“Offer and Acceptance should necessarily correspond; otherwise the contract will not be concluded.”

The reason, however, differs: alteration of the offer by the offeree in his purported acceptance, according to the classical Islamic schools, will run counter to the verbalized requirements pertaining to the formula (sighah) of the contract; according to some Islamic schools jurists, this will not constitute a response to what the offeror had consented to.

By correspondence is generally meant a ‘correspondence of meaning’ between the formula of the acceptance and that the offer. Nevertheless, this is a different thing from correspondence in the substance of the terms of offer and acceptance, also required under English law, since the formulas of offer and acceptance are under Islamic law distinct from the terms of the contract except perhaps for the most essential terms such as the price and the thing to be sold in a sale contract, as we have discussed. The gist of the formula in a sale, for example, is the pronouncement of the words ‘I sold’ and ‘I bought’ by the seller and the buyer respectively.

However, in the application of the principle of conformity of acceptance to the offer, Islamic law allows a certain latitude concerning variances between the acceptance and the offer, depending on the respective approach adapted to the significance of correspondence. We may, therefore, classify such variances into two categories: immaterial and material, noting in the meantime that the range of statements that are neutral in conveying a contractual intention does not constitute a variance to be considered, material or not.

Immaterial Variance

An immaterial variance may be defined as a variance that does not change the substance of the offer, either because the variance is only in appearance or because there exists a variance but on such matters as to leave the import of the offer intact.

Seeming Variance

From our discussion in chapter 3 seeming variance may be said to consist of a difference in the semantics of the expression of acceptance when compared with that of the offer but without changing its substance. This may occur in various ways such as:

• Verbal Variance – a purely linguistic variance between the acceptance and the offer will not denude the acceptance of its efficacy. As to Islamic law, the requirement of the correspondence of the formula of the acceptance with the offer is generally held to be satisfied when the respective expressions mean the same thing even if different words are employed, as we have already mentioned above, with the result that the use of synonyms in offer and acceptance is not taken to produce a variance. For example, if in an e-sale contract, the seller says: “I sell the book” and the buyer answers: “I accept” the contract will be validly concluded according to the general principle. But some jurists go to extremes and say that the requirement of correspondence will not be satisfied unless a derivative of the same word is used in the offer and acceptance: in the above case the man should say “I accept to buy the book”. They believe that if correspondence is not carried out to the letter of the offer, the offer and acceptance will not meet. The great majority of Muslim jurists, however, do not agree with this rigorous view. This mitigates to a limited extent the rigor of the classical rule on correspondence. For the post-classical jurists who dispense, in large measure, with the strict verbal requirements and/or adopt a sensualistic approach to the formation of contracts, correspondence of the meaning of offer and acceptance will suffice.
• Wishful Expression – expressing the desire in an acceptance which is otherwise unqualified, without making the acceptance conditional on the fulfillment of that desire, does not render the acceptance ineffective, nor does a statement of a lawful motive. Its application to the formalistic trend of Islamic law may not be free from doubt since such expressions if pronounced as part of the formula, may be taken to render it ineffective due to the introduction of a subject alien to the formula, but the sensualistic trend, not being strict with verbal requirements as we have already mentioned, may have room to accommodate it.
• Meaningless Statement – perhaps the case of a meaningless statement in the acceptance may be appended to the category of seeming variances. Under principles of Islamic law, acceptance would be held ineffective, either for its conditionality, however vague, rendering it indefinite or due to the absence of correspondence arising out of a real difference in the import and significance of the acceptance when compared with that of the offer.

Expressing Terms Implied by the Law

According to some legal systems, such as the English analysis, a variation from expressing a term in the acceptance not specified in the offer but implied by the law is treated as an example of verbal variance. We believe, nonetheless, that expressing implied terms constitutes a separate category and is open to a different analysis, though the result may be the same. While a purely verbal variance is only a linguistic form, without changing the meaning of the offer as it stands, the express statement in the acceptance of an obligation imposed by the law, but not specified in the offer, constitutes a genuine variance.

These two kinds of variances differ in their semantics. Yet, despite such a semantic difference, their effects are similar; namely, legally and in so far as the substance of the obligation is concerned, both kinds of variances are equally inconsequential in affecting the validity of the acceptance.

For example in French law the efficacy of acceptance, when it spells out an obligation not stated in the offer but applying due to the operation of the law based on the provisions of article 1135 of the French Civil Code, also binds the parties to what ensues from “equity, usage, and the law”.

However, the Islamic law of contracts consists in fact of such type patterns as we have already discussed. Once for any given nominated contract such as the sale contract, the formula is pronounced, incidences thereof (ahkam) as laid down by the law will follow. Whether or not stating some such incidences by the offeree would be taken as varying the formula of the acceptance and affecting its correspondence with that of the offer will depend on the strictness of the trend concerned. The rigid formalistic approach may consider such a statement as introducing a variance of or a condition in the formula, and thus hold the purported acceptance ineffective.

Inquiry and Acknowledgment, No Variance

The requirement that the response to an offer has to be unequivocal, definite, and an expression of contractual intention to constitute an effective acceptance leads to the logical corollary that a mere inquiry or a pure acknowledgment, not yet embodying an intention either to accept or to reject the offer, should not enter into the question of variance at all. What pertains to this question is in effect a problem of construction of fact rather than the formulation of a rule.

Whatever rule, therefore, may emerge under a given legal system on the effects of an inquiry or acknowledgment is only a particular rule of interpretation which is to be applied, as a guideline, to cases in which a question of this nature may arise. It is in such a context that a seeming inquiry or acknowledgment may be considered an attempted acceptance or, conversely, a seeming acceptance may be considered an inquiry or acknowledgment. Obviously, a note should be taken of the circumstances surrounding the statements made, the overall relations of the parties, and the related parameters of interpretation if developed under the legal system concerned.

Enquiry

The position of Islamic law is that acceptance should, according to the majority of the classical view of the Hanafi, Maliki, and Hanbali schools, take place ‘promptly’ (fawri) during the ‘meeting–place’ (majlis). An inquiry posed after the offer is made will interrupt the ‘sequence’ (tawali) of offer and acceptance and therefore prevent the formation of the contract.

Even if a post-classical trend with a sensualistic leaning is taken into account, the problem is not certain to be resolved. The informality allowed by adherents of this trend, such as admitting writing as a valid means of expression, does not altogether eliminate the requirement of promptitude (fawriyyah) of acceptance as we will further analyze in section 5.4 of this chapter dealing with communication of acceptance, nor does it change the basic formalistic structure and conception of offer and acceptance. Yet it is only under this trend and in line with a certain view which is tolerant on the question of ‘sequence’ of offer and acceptance and the ‘promptitude’ of acceptance, that an intervening pure inquiry may be considered to leave the offer intact and susceptible of subsequent acceptance.

Acknowledgment

If in logical terms, an inquiry is of an interrogatory nature, acknowledgment is, by definition, of a purely informative, as distinct from creative, nature. It lacks, therefore, a reference to the element of intention (whether objectively or subjectively ascertained) to enter into a contract as we have further analyzed in the section on the communication of acceptance.

On acknowledgment, it is an American law that provides, out of a number of litigated cases, certain general guidelines. The courts have taken into account such factors as “the nature of the business relationship to be consummated” and, more often, “previous dealings between the parties and subsequent behavior” to help interpret an ambiguous statement as constituting acceptance rather than acknowledgment. In the absence of such factors, it is stated that the “offeree’s simple acknowledgment of receipt of an offer does not constitute acceptance rather than acknowledgment”.

The position of Islamic law in this respect is the same as that stated under (1) above on inquiry, i.e. open to doubt, with the added element here that, since acknowledgment usually arises in contracts inter absences, it becomes much less relevant to Islamic law owing to the invalidity of such a way of contracting in the most important categories of contracts.

Material Variance

Any variance that goes beyond the semantics of the acceptance and contains a proposition that is not purely interrogatory or informative but conveys an intention to enter into the contract, while meaningfully introducing such changes in the content of the offer which would not have otherwise been read into it by the direct operation of the law or as provided under the law, will be a real variance and, as such, material in adversely affecting the process of contract formation.

Of the accounts so far given of immaterial variances and the manner of distinguishing them from a material variance, it transpires that any legal system such as Islamic law here under consideration views a case of variance with a strict approach, holding it prima facie to be a real variance unless the contrary is obvious or otherwise established. A real variance, being material, produces a number of effects that are noted, due to their importance and the complexities involved, under an independent heading.

Effects of a Material Variance

A real variance produces, at close scrutiny, three distinct effects: it prevents the formation of the contract proposed by the offer; it may cause the destruction of the offer so that the offer as made may no longer be capable of being accepted, and it may constitute in itself a fresh offer (counter-offer) capable of being accepted by the original offeror who at this stage becomes the offeree. In fact, Islamic law, with some notable reservations, agrees about the said three effects of an acceptance at real variance with the offer.

However, the first two effects are closely interrelated since both involve the rejection of the original offer. But the rejection of the offer resulting from a variance, while preventing the formation of the envisaged contract, may or may not, so to speak, ‘kill’ the offer by rendering it incapable of being revived. Customarily, it is this effect that is discussed under the rubric of ‘rejection of the offer’. We shall, therefore, defer reference to the rejection of the offer to the topic on the destruction of the offer.

Prevent Conclusion of proposed Contract

Any real variance will prevent the formation of the envisaged contract. This is a corollary (if not a restatement in a different guise) of the principle that acceptance should be ‘unqualified’. The approach to the rationale of the rule, however, differs from one legal system to another.

The Maliki, Shafi’I, and Hanbali schools hold that the criterion stated for the correspondence of offer and acceptance is that what is created by the offer should be exactly what is created by the acceptance, even with regard to a condition forming part of the contract. In other words, acceptance should exactly match the offer even with respect to any condition proposed by the offer. The Hanafi school jurists agreed with the other schools in general but they maintained that if the offeree agreed to pay a higher price than the original price, then the contract shall be concluded. For example, if the seller offered to sell a car for $ 1000, and the buyer agreed to buy it for $1500, then according to the Hanafi school jurists the sale contract shall be concluded.

Yet there is a view under some Islamic schools suggesting that the offer may be accepted without the proposed condition if, after the offer is made and before the acceptance is attempted, it becomes impossible of fulfillment; but this view is rejected and such a situation is held to prevent the correspondence of the (purported) acceptance with the offer.

Amount to Rejection of and may destroy the Original Offer

As we have already discussed in chapter 4, an offer may be directly rejected by an active but negative response of the offeree to the offer, be it made through express means or tacit conduct, or due to the passivity of the offeree and the lapse of time in which the offer could have been validly accepted. The effect of a straight rejection is generally, but not necessarily, extended to rejection resulting from a variance. When concerns us here is the effect of an attempted acceptance varying from the offer.

It should be noted that, where the envisaged contract fails due to a non-corresponding acceptance, it does not, simply as a matter of any logical necessity, follow that the original offer will altogether lapse so that it may not be met anew by a subsequent, conforming, acceptance. It all depends on the approach of the legal system concerned.

The issue is open to an argument between Muslim jurists under Islamic law due to the scarcity of materials directly bearing on the point. To clarify the matter, first, its position as to the straight rejection of the offer has to be considered.

The main principle from the four Islamic schools, as we have already discussed, maintains that the rejection of the offer by the offeree, like its revocation by the offeror, destroys the offer and prevents mutual assent, thereby concluding that an attempted ‘acceptance after rejection is of no effect’. We base our view on a rule pertaining to an unauthorized (fuduli) sale contract, which according to the majority of Islamic schools shall be effective if not preceded by rejection; otherwise, it shall have no effect.

An attempted acceptance varying the terms of the offer, however, is not, by definition, identical with an outright rejection. It may produce the same effect. However, the stress placed by Muslim jurists on the formula (independent of the terms) of contracts leaves room for treating a variance between the formula of offer and acceptance differently from a discrepancy in the terms. A problem posed by way of a question and its answer in our study may illustrate this point.

The question is to the effect that two conditions were made between the parties for the sale of goods by one to the other and the conditions were of a kind that if the buyer would not have accepted, the seller would not have sold the goods; but, in the course of making the offer and acceptance, reference to the conditions was forgotten and, after the sale contract, the buyer failed to fulfill the conditions; in this case, can the seller rescind the contract?

The answer first refers to the “meeting-place of the sale contract” and then distinguishes two hypotheses: first, if in the said “meeting-place and before uttering the formula” before making the formal offer and acceptance, the parties had agreed and concluded the sale on the basis of those conditions but forgot to stipulate the conditions while making the formula, then it is sufficient, the conditions are as if stipulated, and the buyer’s failure to stand by the conditions will entitle the seller to rescind the contract; but, second, if those conditions were not made as a part of the agreement on the sale, then the conditions are not binding.

The answer is then concluded by a summary statement: the result is that if in course of making the formula, the parties had a prior understanding of the agreement on those conditions, the conditions are binding as if stipulated in the contract; otherwise not. The distinction, therefore, is clear between the parties’ agreement on terms and their utterances of the formal offer and acceptance.

As a result of Islamic law, as referred to above, if the acceptance varies in its terms from the offer, the contract may not be concluded. This may yet leave the original offer standing, the argument being that such a variation does not affect the original formula of the offer itself but proposes a modification in the terms accompanying it. Thus, if the proposed modification of the terms is not taken up by the original offeror, the offer, as a formula, may stand intact.

Furthermore, even if an analogy is to be drawn, in the guise of ‘unity of reasoning’, with the case of an outright rejection, it may be said, on the basis of the view which holds the offer still standing, that in the case where the acceptance is at variance with the offer, the offer will a fortiori stand. But if the prevalent view of the classical jurists on the lapse of offer upon rejection be extended to the case of the variance of acceptance with the offer, the argument being that a proposed modification in the terms is tantamount to the rejection of the offer as made, the proposal by the offeree to alter the terms of the offer will equally, in this case, be regarded as destroyed. The matter, therefore, is at least open to conflicting arguments under the four Islamic schools.

May Constitute a New Offer

A variance response purporting to be the acceptance of the original offer may depend on the legal system, constitute a counter-offer, which is not to be confused with cross-offers consisting of two distinct offers but without one being made in response to the other.

Under Islamic law, on the question of whether a variant attempted acceptance will constitute a new offer, some texts suggest that an acceptance varying the terms of the offer is not wholly ineffective; it operates as a proposal, but ‘the contract will not be concluded without a new corresponding offer’ on the part of the original offeror, which in fact means that the contract will be concluded in the normal way by the new offer of the predetermined offeror and the acceptance of the predetermined acceptor. This is to preserve the respective roles of the offeror and the acceptor as laid down by the law.

Correlation of Acceptance with the Offer

In Islamic principle, acceptance has to be made in response to the offer in order to be effective. But this principle, simple or logical as it may seem at first, is not universally applied or maintained. There are in particular two areas under the Islamic law under review which are to be noted: one relates to the question of acceptance emanating only from the addressee of the offer and not from anyone else, and the other concerns the problem of identical cross-offers.

Acceptance by the Addressee of the Offer

As a general rule, under the Islamic laws which are being considered, only the offeree (or a person duly authorized on his behalf) is entitled to accept the offer, as we have already discussed in section 2.2 Conditions relating to the contractors in chapter 2, but in certain situations, the question may arise as to how the offer was made or to whom it was addressed. The following examples or views expressed under the Islamic law serve as illustrations of various concerns in two distinct situations: one, where the common pattern of offer and acceptance is at work, and the other, where this pattern is not operative.

In Common Pattern of Offer and Acceptance

We may have to consider the question: who may accept an offer? The basic principle, however, seems to be clear: “the acceptance ought, in principle, to emanate from the offeree” if the offer was made to a determinate person. The question is doubtful cases, such as where A believes he is dealing with B, while it is C who accepts, is treated “as one involving a problem of mistake as to the person”.

According to the classical view of the four Islamic schools as to exchange of the formula of offer and acceptance, for validity, it is required that acceptance should be made by the addressee of the offer. This is to be inferred from the rule that the offeree is required to understand the offer before responding to it as we have already discussed in section 4.5 Variety and communication of offers in chapter 4.

Furthermore, the foregoing general rules concerning offers made to specific persons should not be extended under the principles of Islamic law to offers made to indeterminate persons where the identity of the offerees may not be an element or an implied term of the offer. Such offers may be made to the public at large or to a class of persons. When, for example, an offer to sell a book is addressed in the traditional way or over the internet to the members of a group or a club for a certain price, the identity of the would-be acceptor or his or her attributes become, in our submission, immaterial: an acceptance by any member of the public or of the class concerned will constitute a valid acceptance.

In all such cases, it may be alternatively said, all qualified addressees are offerees; and therefore each may accept the offer in accordance with the said principle, with the proviso that when it is accepted by the first, or the first set, of offeree (s) as indicated by the offer, the rest will no longer be entitled to tender an acceptance for the offer thus exhausted.

When No Offer and Acceptance Discernible

In certain cases when the technique of reaching an agreement defies the mechanism of offer and acceptance, the question may, depending on the approach of the legal system concerned, lose its significance or be posed differently. If, for example, C puts forward a proposal to A and B for them to reach an agreement, and A and B do in fact reach the agreement in, let us assume, a simultaneous response to C, neither of them may be considered to have made an offer, for the other to be considered to have made an acceptance in response to that offer. Both parties respond to the proposal of a third person who is, technically, alien to the agreement. A and B may be held to be dealing, through the intermediary of C, with each other, but it is not clear where the offer and acceptance lie for the latter to be considered a response to the former.

For a legal system that considers the mechanism of offer and acceptance to be the exclusive vehicle of making contracts such as Islamic law, the problem arises in principle and due to other more fundamental reasons. Therefore, Islamic law does not admit that a contract may be concluded in such a way owing to its inflexible requirement of sequential offer and acceptance. It is suggested by all Islamic schools, as we have already discussed, that offer and acceptance should be made as expressions of the respective intentions from two different directions and in alternative turns.

But, it sometimes happens that the parties do not express their respective intentions to create the contract in alternative turns. For example, a third person proposes a certain transaction to two persons and invites them to conclude it. In such a case, the (would-be) parties may together simultaneously say we accept. There is no offer and acceptance in this proposed transaction and pursuant to this analysis, no contract.

The problem of Acceptance in Identical Cross-Offers

Another issue that we should discuss regarding our study under Islamic law is that which arises when the parties make independent offers to each other on the same subject matter, neither of them knowing of the offer of the other party. Most often the terms of their offers differ and, thus, each proposition constitutes an offer of its own requiring acceptance by the other party. Assuming now that the two offers happen to be identical, though neither is made in relation to the other, will they supplement each other to generate a contract? This is a different case both from that of a counter-offer, which is made with the knowledge of the original offer and from that of an agreement reached through a third personating as an intermediary, where each party again acts with the knowledge of the contractual standing of the other.

To review the Islamic law with respect to the question of cross-offers, it is not at all amenable to holding a cross-offer effective. The main reason is the strict categorization of offer and acceptance in various contracts and the stress placed upon their predetermined sequence according to our discussion in section 4.1 The doctrine of offer and acceptance under Islamic law at the beginning of chapter 4. An added impediment is that cross-offers involve the use of writing in contracts inter absences, which is not recognized by classical Muslim jurists for the most important category of contracts as we have already discussed.

Even taking into account the latitude allowed by some post-classical jurists for the means of making the offer and acceptance, still, the exclusivity of this mechanism in producing a contract, to which all of them adhere, would require differentiation of offer and acceptance and their sequence. Any argument, therefore, for the efficacy of cross-offers under Islamic law will be unavailing.

Communication of Acceptance

Is it necessary for acceptance to be communicated in order to be effective? This is one of the most important questions of the formation of a contract since it depends on the determination of the time and may depend on the determination of the place, of the contract. To answer the question according to Islamic law, the case of contracts inter presented should be distinguished from that of contracts inter absents.

The line of demarcation between the two sets of contracts is not always drawn according to the physical presence of the parties at one and the same place; instantaneous communication from two different localities, such as through an internet website, is legally often treated as being temporal inter presented but spatially inter absents. As a result, general rules, which are often initiated in the context of contracts inter presented, are extended (or, it may be said, creep over) to certain aspects of contracts inter absents. These considerations primarily apply to systems that have for a long time enjoyed the facilities of technological advances and been exposed to sophisticated legal problems arising out of the expansion of modern means of communication.

The widespread use in everyday life of postal services has made them, due to the combination of low cost and facility of proof, a common vehicle for the conclusion of contracts inter absents in countries where such services have become part of social and business relations. This may explain why many features of offer and acceptance, though by no means theoretically confined to contracts inter absences, have in practice gained significance mainly in relation to this group of contracts.

Before embarking on a detailed examination of the requirement of communication of acceptance, some preliminary clarifications need to be made, as follows:

First, the expression ‘communication’ has an ambivalent meaning and may at times appear confusing: it is used in some contexts in a broad sense denoting an action taken by the offeree, for the transmission of the acceptance, to establish contact with the offeror, whether or not the offeror is to take notice thereof, such as when it is said that a letter of acceptance is ‘communicated’ when mailed or when received.

It is, in a narrower sense, used to denote bringing something to the actual knowledge of the offeror, such as when it is said that a letter of acceptance is ‘communicated’ when received and read. The expression has yet a different general significance denoting the device of contact, such as when reference is made to the ‘means of communication’ meaning such vehicles of communication as post, telephone, internet chatting room, etc. In contracts inter presented, the expression is generally used to denote actual knowledge, but otherwise, its significance has to be derived from the context.

Second, where communication of acceptance, in whatever sense, is required as a primary principle, it yet admits exception, including a waiver of the requirement either expressly made by the offeror or by implication attributed to him in certain cases. The waiver of the requirement of communication of acceptance, however, is a different thing from an attempted waiver of acceptance, since the former relates to the offeror’s right which he may unilaterally forgo but the latter may involve a unilateral imposition by the offeror of an obligation on the offeree either to answer or else be considered as having accepted the offer – something which he is not entitled to do.

We shall first treat here the individual position of Islamic law on the question of communication of acceptance. We shall then concentrate on the respective correlation of the time and the place of acceptance with those of the contract and with the practical consequences thereof.

However, the problem under Islamic law goes beyond the mere requirement of communication of acceptance. This is due to the difference not only in detail but also in essence between contracts inter presented and inter absences and, under the latter, between the so-called binding (lazim) and facultative (ja’iz) contracts.

Sale Contract Inter Presents: Actual Communication Required

In contracts inter presented actual communication of acceptance appears to be taken for granted as a pillar of contract formation through the exchange of the formulas of a contract.

The necessity of communication is to be gathered in earlier classical works from some references to the pronouncement of formula in Arabic or the validity of signs by mute persons as we have already discussed. It is said, for example, on a contract of marriage, that the formula should be pronounced in Arabic by a person who is capable of uttering it ‘provided that either party should understand, even if through two “just” interpreters, the words of the other.’ In the case of a mute person, her or his sign by way of offer or acceptance is held valid provided that ‘the purpose is understood’ thereby. In a sale contract, the parties should understand the meaning of sale and other components of the formula and have the intention to create it as we have already discussed.

Sale Contract Inter Absentees: Question of Validity

From our discussion, it is clear that contracts are divided under Islamic law into two basic categories of irrevocable or binding (lazim) contracts such as the sale contract which is the subject of our study, and which cannot be rescinded except by mutual agreement of the parties or due to a legally recognized cause, and revocable or facultative (ja’iz) contracts such as the contract of agency (wakalah), which can be unilaterally set aside by either party at any time.

In a binding contract such as the sale contract, there are two basic adverse requirements which according to the classical view prevent the formation of a binding contract inter absences, namely the invalidity of writing and the need for the presence of both parties at the same ‘meeting-place’ (majlis al-Aqd). The latter requirement has certain corollaries which create further hurdles. As we shall presently see, however, some of the four Islamic schools strive to find ways and means for the conclusion of such contracts.

Adverse Effect of Inefficacy of Writing

As already explained in section 3.4 Means of expression of psychological elements in chapter 3, the majority of the schools (Hanafi, Maliki, and Hanbali schools), according to the prevalent view of the jurists, recognize the validity of any means of expression for the conclusion of ‘binding’ contracts. Correspondence, therefore, can be a legal frame for offer and acceptance.

As to the opinion of the four Muslim schools, there is a difference between them. While correspondence is accepted in the Hanafi, Maliki, and Hanbali schools, it is rejected in the Shafi’i school. Thus, the Hanafi, Maliki, and Hanbali schools state that as regards writing it is as effective as oral utterance to form the binding sale contract as we have already discussed in subsection 3.4.1.2 Other means of expression in chapter 3.

By contrast, Abu Ishaq al-Shirazi from the Shafi’i school states:

“There are two opposite views on the permissibility of writing between absent persons. Those in favor of such permissibility stress the ‘necessity’ of correspondence between absent parties when they want to conclude a contract, to which al-Shirazi, who holds that the adverse view is the ‘correct’ one, answers that the necessity of contract formation can be met by appointing an agent to speak on behalf of the absent party.”

Based on the Islamic law appears to follow a more flexible approach, our opinion agrees with the majority of Islamic schools who, by contrast, do not regard oral utterance to be the exclusive means for making an offer and acceptance. It follows that sale contracts may be concluded between absent parties if the twin problem of the ‘meeting-place’ can be resolved, as we have referred to in the analysis in the section on the time and the place of acceptance of the contract.

Adverse Effect of the ‘Unity of Meeting-Place’

The other obstacle lies in the requirement of the presence of both parties at the ‘meeting–place’ (majlis). It is imperative for the formation of a ‘binding’ sale contract that acceptance should be made at the same ‘meeting-place’ where the offer is made or, as idiomatically phrased, there should be the ‘unity of meeting-place (ittihad al-majlis). This requirement, however, should not be mistaken for the ‘option’ of meeting-place (khiyar al-majlis) in a sale contract whereby either party has a right, an ‘option’, to rescind the contract after it is concluded but before the ‘meeting-place’ breaks up, and that is to provide a reasonable time for both parties to consider the terms before committing themselves to the contract in its final binding form.

The requirement produces two interrelated ancillary rules: the promptitude of acceptance (fawriyyah al-qabul) and the uninterrupted sequence (tawali) of offer and acceptance.

The criterion in the four Islamic schools for deciding the length of the time permissible for acceptance to be made for a binding contract is prima facie reasonable in so far as it provides for the promptitude of acceptance as we have already discussed, whereby ‘acceptance should not be delayed so that it could not be considered an answer to the offer’. But a statement usually made to the effect that ‘the interval of a moment, breathing or coughing will not prejudice’ the ‘unity of the meeting-place clearly shows the rigor of the rule and its strict significance and application. However, some Muslim jurists believe that ‘the sequence of offer and acceptance is to be left to custom’.

The requirements of ‘sequence’ and ‘promptitude’, in turn, will not be satisfied if ‘other subjects foreign to the contract are interposed’ or, perhaps, if a party may fall asleep in the interval between pronouncing the formulas of the offer and the acceptance.

An argument that partakes of a sensualistic analysis, but is in fact rooted again in formalism, maintains that unless the said requirements are satisfied the necessary concurrence (muqaranah) or connection (ittisal) of the parties’ intention will not obtain since the validity of either the offer or the acceptance depends on its meaning to stand in the soul (the mind) of the speaker from the beginning of the formation of the contract until the cause thereof. What begets the contract, being offer and acceptance, materializes whereby the meaning of mutually contracting of the contract will be completed.

Certain Latitude and Leeway

As we have already discussed, under the Hanafi, Shafi’i, Maliki, and Hanbali schools the requirement of the ‘unity of the meeting-place” must be satisfied, but the Islamic schools appear to have a more flexible approach based on the contemporary practices. Upon the admissibility of writing in certain schools as aforesaid, the requirement of the ‘meeting place’ is said to be satisfied where an offer emanates from the offeror and is accepted by the offeree.

Thus, when a person writes a letter or sends an oral message to another, the letter or the messenger carries the offer materially to the offeree. If the offeree reads the letter or hears the message and understands what it says when he receives it, the ‘meeting-place’ is formed whereupon if he accepts the offer there and then, the requirement will be satisfied and the contract will be created.

Likewise, it is concluded that when persons are connected by telephone or other means of instantaneous communication such as the internet, the ‘meeting-place’ will remain so long as the line is open or the contact is uninterrupted; and when an email is sent, the same rule as regards letters will apply: the ‘meeting-place’ will be the place where the offeree receives it as we will discuss in the following section.

In our opinion, this argument, artificial and extended as it may be, appears to be a good doctrinal device to soften the otherwise rigid effects of the rule.

Acceptance in E-Sale Contract in an Electronic Environment

As a result of our above discussion, under Islamic law, acceptance of an offer means an unconditional agreement to all the terms of that offer over the internet. The general principle in Islamic law under the four Islamic schools does not recommend any specific process for acceptance of an offer.

What will be a suitable technique of acceptance depends on the fact of each condition. Distinctive offline acceptances comprise written and oral communications, as well as acceptance by behavior. Their online complements comprise acceptance by e-mail or any supplementary means of electronic messaging, and by conduct such as clicking on a button or downloading content. We can expect that in an e-sale contract acceptance by e-mail will be allowed as a reasonable practice if all parties have the means to communicate with each other. If acceptance was made by another communication method, like a letter or fax, our opinion is that it should be treated as an acceptance by classic means.

However, acceptance via electronic means does not necessarily have to be sent in the same way as the offer. For the same reasons discussed above, in our opinion, acceptance should not be sent using a slower means of communication than the one used by the offeror. It is not opposed to the general rules of Islamic law where the parties communicate online or are permanently connected to their service provider.

Often, however, e-mail users will check their mailbox stored on the service provider’s computer only from time to time. Thus, there may well be a period of days before a message is actually read. It is submitted that this will not affect the general rule of Islamic law. If someone sets up an electronic mailbox and uses it for contract negotiations or includes an e-mail address on his letterhead he has to expect that it will be used for the communication of answers. If he collects his electronic mail infrequently he will have to inform recipients of correspondence not to reply by e-mail.

The acceptance by use of electronic means should follow generally the same rule of the traditional sale contract in Islamic law, even though there are different means of communication, therefore the result of the discussion above applies here as well. This means, for instance, that according to the Islamic view an e-sale contract is normally concluded when and where the offeree declares his acceptance of the offer (declaration theory). The time and place of e-sale contract formation can be essential in settling the question of whether an agreement is binding, and in order to decide the moment of the transfer of ownership and the risk, and for the consequences of the formation of the e-sale contract.

It has, however, been emphasized that the general rule in Islamic law may have to be modified in the face of technological development and that there is no obvious universal rule to cover all such cases. Regarding the above criteria, how are electronic acceptances to be dealt with? Some recent Muslim jurists suggest that electronic acceptance should be treated in the same way as writing (messenger). Thus, this approach will be simplistic.

As pointed out above, online communication where the parties are connecting over a direct link (chatting rooms) is an instantaneous means of communication. Here, in our opinion, the ‘unity of meeting-place (ittihad al-majlis) rule under Islamic law will apply: the contract is concluded when and where the offeree declares his acceptance of the offer in the same meeting place. In an EDI transmission – the most likely cause of a direct link – this will be upon when and where the offeree declares his acceptance of the offer from his computer. Such a virtually instantaneous communication should, therefore, be dealt with under the general rule of Islamic law as well.

If data is transmitted over one or more networks involving one or more service providers the situation is different. Compared to the face-to-face ‘unity of meeting-place (ittihad al-majlis), this is a non-instantaneous exchange of information. However, means of network transmission that are virtually instantaneous might have to be placed in the same category as telex and thus the general rule would be applicable.

Following this reasoning and analysis, it has been argued that in the case of electronic mail the general rule of Islamic law should prevail.

If we adopt the test that has been developed by the International Islamic Academy (Majam’a al-Fiqh al-Islami) in the telex cases, this would first require near-simultaneous dispatch and receipt of the e-mail. In many cases, an e-mail will, indeed, be delivered very quickly. The transmission speed cannot, however, be compared to telephone or even fax. Sending problems to arise even without computer hacking leading to an ‘internet crash’. A simple ‘tailback’ on the information highway may entail delay, or even prevent transmission. Thus, there is no certainty when or if an e-mail will arrive.

Furthermore, it is imperative that the e-mail message is placed in the responsibility of a network-based service provider that is solely responsible for nothing more than the sending and receiving of data. In normal circumstances, data constituting e-mails is stored away in the computers of the service provider in the service provider’s mailboxes from where it is retrieved by the addressee. This resembles letters sent by international post to PO boxes where they have to be picked up. Be this as it may, there is in no case a direct connection between acceptor and offeror comparable to telephone, telex, or fax. The parties actually have to rely on a recognizable third party.

Finally, it has to be asked whether the sender should bear the risk of transmission rather than the recipient. Some software enables the user to request confirmation of delivery or even for confirmation of reading to be automatically returned after sending an e-mail message. However, this works only if the software of the addressee is able to answer such a request. Even if such a receipt is returned, this confirms only that a message has been received by the addressee’s service provider (confirmation of delivery) or that it has been retrieved by the addressee (confirmation of reading). Furthermore, it may take a long time before the sender gets the confirmation and until then he cannot be sure whether his acceptance arrived complete or became garbled on the way.

These considerations clearly show that communication via e-mail cannot be regarded as virtually instantaneous. Therefore, the Islamic rule (declaration theory) will usually apply here and the e-sale contract is concluded when and where the offeree declares his acceptance of the offer.

But what amounts to ‘declaring’ in an electronic environment? Is it sufficient that the sender (acceptor) presses the enter button on his computer so that the contract is made at that moment and at the place where he is? Or does ‘declaring’ mean that the message has been received by the service provider’s computer system from where it is delivered to the addressee? We have discussed the general Islamic rule that the offeree has accepted the offer and the contract is concluded at the moment he declared his acceptance and says ‘I accept’.

Applied to network communication, this means, in our opinion, that the sender (acceptor) will declare his acceptance by pressing the enter button on his computer so that the contract is made in that moment and the place where he is according to the general rule in Islamic law even though the computer or the link malfunctions after the sender sends his acceptance but the offeror does not receive the message of acceptance.

It is submitted that the same general rule of Islamic law will also apply to EDI communications carried out using one or more service providers. Here, the situation will not be significantly different from e-mail use as outlined above. No direct link will be established between the parties and their communication cannot be seen as virtually instantaneous.

Finally, acceptances over interactive websites have to be examined. Unlike e-mail, the parties are here in online communication. Depending on the way in which the messages are transmitted and the time of day, there is likely to be some time lapse between dispatch and receipt. The user waiting for confirmation or some reaction to his message will also realize when the connection fails. Thus, in our opinion, this form of communication is close to the ‘unity of meeting-place (ittihad al-majlis) and it seems reasonable to apply the general rule: the contract is complete when the offeree declares his acceptance.

The Time and the Place of Acceptance in the E-Sale Contract

Determination of the time and the place of acceptance, in addition to presenting the complexities so far noted, require further consideration in view of a number of significant consequences it produces under many legal systems. It may help, for example, to determine the time and the place of the sale contract subject, however, to two provisos: first, the parties may decide a time and/ or a place for the sale contract different from those of the acceptance; and second, the place of the sale contract may not, in certain circumstances, be the same as that of the acceptance (or correlated to the implication arising out of the determination of the time of the acceptance).

However, as we mentioned earlier, our study deals exclusively with the formation of e-sale contract from Islamic law’s view, without going to the case of conflict of laws such as the time and place of the e-sale contract, when the contracting party has accepted the offer in a different country with a different legal system.

Two other points have also to be noted: first, determination of the time and the place of the sale contract depend, according to the Islamic Law, primarily on the intention of the parties; and second, contrary to the classical view, there is no necessary link between the time and the place of acceptance and thereby of the contract. Most of the problem areas, therefore, concern cases where the intention of the parties is not known and, in such cases, the greater difficulty is experienced in the domain of contract inter absents.

We deal in this section with instances where the parties determine the time and the place of the sale contract over the internet, then with cases where their intention is not known, and finally with the consequences of determining the time and the place of acceptance in the sale contract.

Parties’ Determination

As a matter of contract principle, the parties are entitled to fix the time and/or the place of the acceptance of the contract. Whether the contract is inter absences or inter presented, variation of the time of acceptance from that of the contract calls for some explanation.

The question of the time of the contract under Islamic law may be approached in a different way, which will be relevant in part to the legal system of each Islamic country. Generally, in the most important category of contracts under Islamic law, those which are to be concluded inter presented and in a set pattern of offer and acceptance, the contract takes effect immediately upon offer and acceptance. Any deferment of the effect of the contract, making the contract take effect at a future date, may throw doubt on the definiteness of offer and acceptance and give rise to the question of a suspensive condition. There are, however, two particular instances that may be considered as constituting exceptions:

Unauthorized (Fuduli) Transactions

In the case of an unauthorized (fuduli) transaction, when a person sold something to foster the interest of another person without the latter’s prior consent, the time at which the owner’s subsequent authorization if given, takes effect is the subject of elaborate and often inordinately lengthy discussions of Muslim jurists of the four schools. According to the minority view that holds authorization to be dispositive (naqil), effective as of the time when authorization is given, the date of the contract will become different from and subsequent to that of the acceptance.

By contrast, the majority view holds the authorization to be of retrospective effect (kashif) and so ratification of the unauthorized contract becomes effective as of the date of the contract. This view accords with the normal pattern of Islamic law whereby the date of the contract is the same as that of the date of offer and acceptance.

The Option of Meeting-Place (Khiyar al-Majlis)

As already discussed in section 4.6 Duration and revocation of the offer in chapter 4, under Islamic law, the option of meeting-place (khiyar al-majlis) entitles either party, in a sale contract, unilaterally to rescind the contract before the meeting-place breaks up. The consequence of this option is that the time of the contract does not irrevocably become complete at the time of acceptance even though the contract is categorized as an irrevocable (lazim) contract.

In such cases in which the contract date is projected into the future, the question relates in essence to the effective date of the contract rather than to the date of its conclusion. When the parties fix a date for the contract later than that of the effective acceptance, the contract will take effect as of that date, subject to the construction of the terms and conditions. The Hanafi and Maliki schools agreed that the time of the contract is the time when the offer and acceptance are concluded unless there is a condition of one of the parties, and Option by Stipulation (Khiyar al-Shart) clause, that requires the same right of choice for a certain period as we have already discussed in subsection 2.6.4.1 Option by stipulation in chapter 2.

The Shafi’i and Hanbali schools’ view is that each of the contracting parties has the right to rescind the contract as long as they are in the meeting-place (majlis al-Aqd), despite the date set by the parties either before or after the date of acceptance.

It is not certain whether, under Islamic law, this option will apply also to contracts made by an instantaneous means of communication between persons absent in space, such as through the internet.

Parties’ Intention Not Known

In the absence of a determination by the parties of the time and/or the place of acceptance in the contract, cases of contracts inter-presented and inter absences should be differentiated.

In the case where the parties are actually in each other’s presence, as we had already discussed in the section on the communication of acceptance, the Islamic law holds the time of the contract to be the time of the acceptance and the place of the contract to be where the parties meet. The time and the place of the contract, therefore, coincide.

However, when the sale contract is to be treated inter absences, either because the parties are separate in time and place, or for a particular purpose under the given legal system because the parties are separate only in place, such as the sale contract over the internet, then the problem under Islamic law is academic due to its negative approach to contract inter absents. In limited instances where such contracts are allowed, the time and the place of the contract are where the offeree (acceptor) announces his/her acceptance. Thus, we find the Islamic law takes “the theory of declaration of acceptance” as the principle to determine the time and the place of the contract in inter absences contracts.

As evidence that Islamic law has adopted the declaration theory, Ibn al-Humam said:

“If the offeree reads the letter or hears the message and understands what it says when he receives it, the ‘meeting place’ is formed whereupon if he accepts the offer there and then, the requirement will be satisfied and the contract will be created.”

In addition, Ibn Abdeen said in his book:

“In a writing phrase of selling something, if the seller wrote a letter to the buyer to sell something for a certain amount and the buyer after he read the letter accepts it, the sale is concluded”.

From the foregoing cases, we find that the inter absents contract, such as an e-sale contract, under Islamic rules will be complete immediately from the moment that the buyer accepts the offer without regard to other conditions such as the knowledge of the seller of the acceptance unless the parties made a different agreement.

A recent Muslim jurist (Dr. Ali al-Grdagi) claimed that this view (declaration rule) is not compatible with electronic contracts. He maintained that in electronic contracts, the contract will be concluded when the acceptance reaches the offeror and is read (Information Theory). Before that, both parties have the option of stipulation (Khiyar al-Majlis).

Given the above analysis, in the e-sale contract under Islamic law, we have an individual case regarding ‘meeting-place’ (majlis al-Aqd). In our opinion, the meeting-place can be either inter presented or inter absences depending on the method of the electronic communication.

Thus, unless the contracting parties agreed, the e-sale contract is formed as soon as there is consensus between the parties to the contract, i.e. as soon as the offeree has legally accepted the offer, other than when it is received. Where the parties are not in each other‘s presence, a contract between parties making use of information messages is inferred at the moment and the place when the offeree accepts the offer, according to our analysis of the Islamic view.

As to the adoption of this theory of acceptance, although this provision creates problems such as the non-acknowledgment by the offeror of the offeree’s acceptance, the Islamic law has tried to eradicate hesitation from the creation method. Also, it provides the offeree with self-belief and safety that an acceptance once affirmed will be successful, even if the postal system delays delivery of the acceptance beyond the offer date and avoids many problems such as the loss of the acceptance before it comes to the actual knowledge of the offeror.

Moreover, as the general rule is that an electronic offer can be withdrawn at any time before acceptance, the implication is that the offer can not be withdrawn once it has been accepted. In the case of an e-sale contract, as soon as the acceptance enters the information system of the offeree, even if the offeror is not yet aware of the acceptance, the offer can, according to our discussion, no longer be revoked. This is a clear deviation from traditional rules relating to offer and acceptance under the Islamic view.

As far as the place of the contract is concerned, according to our earlier discussion that the place of the e-sale contract by e-mail is the place where the offeree received the e-mail, thus a data message must be referred to as having received at the offeree’s usual place of business or at the place of residence. This means that, in the case of an e-sale contract where one clicks an “ I accept” button, the data message is sent to the seller (offeror), and the place of the contract will be where the buyer (offeree) declares the acceptance of the electronic offer, which is his usual residence or business.

However, in a case, where the parties’ communication in an e-sale contract is actually instantaneous, such as where the parties are engaged in a chatting room, as we have already discussed in the section on the communication of acceptance, the Islamic law holds the time of the formation of the contract to be the time of the acceptance and the meeting-place (majlis al-Aqd) will be the period of conversation between the parties. This resembles a case which has been found in some old jurists’ books, (the validity of a contract between two parties, which are far from each other and they can not see each other, but they can hear each other under Islamic law). Thus, the time and the place of the contract coincide.

There is another method of making contracts established directly over the Web which is now being considered to be more common. ‘Click wrap’ contracts of such a nature may be for the supply of goods or services in return for the payment, such as the secure order form available at amazon.com for the procurement of books, or they may be mere registration and checking forms which provide the contractual terms of use monitoring the subject website. These HTML-based contracts use a communications method dissimilar from e-mail. We consequently assume that as the same rule applies to e-mail it also applies to these contracts.

The major dissimilarity between clickwrap contracts and e-mail is that connections between web clients and servers, unlike e-mail, are immediate. The superlative way to envisage the transmission of data between the computers is to treat it as a telephone conversation, only one that is between two computers rather than between two individuals. If either one of the involved parties goes off-line at any time the other will be alert of this change in status. This is because of the fact that all interactions between clients and servers have an inherent self-checking system called a checksum.

If the checksum does not appear or is not established, the client/server will know there has been a breakdown in communications within seconds. The checksum is almost the computer equal to ‘someone saying ‘Okay?’ after being asked a question over the telephone. The lawful implication of this technological growth is that clickwrap contracts show the individuality of a telephone conversation rather than a mail message. As the sender of the acceptance (offeree) is in a position to be able to determine whether their message has been productively received, almost instantaneously, the writing rules (inter absences) under Islamic law will therefore not apply because they do not need to. Clickwrap acceptance needs to be received to be effective.

On the other hand, with respect to our discussion in section 2.6, The valid modern sale contract & stipulation options in chapter 2, the subject matter of the e-sale contract may be known for its genus, species, attributes, and quantity, and it may also be in existence, and deliverable, and yet, for some Muslim jurists, it may still be subject to uncertainty (Gharar) because one of the contracting parties cannot see it if it is not present at the site of the sale contract or is present there but unseen placed in a container. This is what is known as the sale of the absent object. What is meant here is that the object, owned by the seller, is present at the site of the sale contract, but not seen by the buyer.

Muslim jurists from the four Islamic schools – as we have discussed – hold different views regarding the sale of the absent object. Hanafi, Maliki, and Hanbali jurists have held it permissible to sell the absent object on the basis of description because this is the customary manner in the sale of absent objects. However, they have laid down certain conditions for the validity of such a sale that are designed to remove uncertainty (Gharar).

Also, they have found that the sale is binding on the buyer if he found the object corresponding to the way it was earlier described to him. But if he found it different, he has the option either to ratify the sale or to revoke it. Therefore, in an e-sale contract by any method of electronic communications under Islamic law one or both parties may also include all the kinds of stipulation options: option by stipulation (Khiyar al-Shart), option by sight (khiyar al-Ru’ya), and option by a defect (Khiyar al-Ayb).

However, comparing our discussion in section 4.6 Duration and revocation of the offer in chapter 4, in a case when the offeror in an e-sale contract revokes his offer before the acceptance, does the offeree have to have actual knowledge of the revocation of the offer? The Hanafi school agrees with the view of the Hanbali and Shafi’i schools in considering the offeror free to withdraw his offer at any time before it is accepted, and the offeror is not responsible for informing the offeree of his revocation of the offer unless the parties otherwise agreed. Thus, we find the majority of Islamic schools tried to create a compromise between taking by the “declaration theory” for the time of the contract is concluded and the right of the offeror to revoke his offer without informing the offeree of his revocation.

Consequences of Determining the Time and the Place of Acceptance

Determination of the time and the place of acceptance produce significant effects which are enumerated below. It is to be noted that most, but not all, of the effects of the time and the place of acceptance are the same as those of, respectively, the time and the place of the contract. Some, however, are the effects of acceptance rather than those of the contract. And, conversely, some are the effects of the contract rather than those of the acceptance, such as those relating to the determination of the jurisdiction of the competent court, if under a legal system it depends on the place of the contract, when the place of the contract may differ from that of the acceptance.

Consequences of the Time of Acceptance in e-sale contract

By the time of acceptance we mean the time when, under the Islamic law and according to the applicable judicial and/or doctrinal trend, acceptance is considered to have been effectively made such as, under the declaration theory, the time when the offeree declares his acceptance.

Certain consequences pertaining to the time of the acceptance will follow if the parties have not provided to the contrary, but some others are to follow due to the mandatory rules of Islamic law. The following instances represent the types of issues to be considered under Islamic law.

In Relation to the Formation of E-Sale Contract

Issues pertaining to the formation of the e-sale contract may be listed as follows:

1. Subject to the reservations outlined in the preceding pages and notably in the absence of an agreement by the parties to the contrary, the time of acceptance determines the time of the contract.
2. The parties’ intervention in the process of contract formation terminates upon acceptance, at which point the offeror will no longer be able to revoke the offer which may have until then been revocable, nor can the acceptor in principle retract his acceptance subject, however, to certain special considerations which may apply under a given legal system.
3. The offeror’s or offeree’s death or supervening incapacity will become immaterial except where the contract may have a strong personal character or the law may otherwise provide, such as for facultative (ja’iz) contracts which are terminated upon such events under Islamic law. It is to be noted, however, that such instances concern post-formation incidences and, therefore, may not be true exceptions.
4. The validity or enforceability of the contract at issue shall be determined, such as when the contract may be tinged with fraud in bankruptcy cases. Under English law, it has been suggested that the bankruptcy of the offeror or the offeree may prevent the formation of a contract in certain circumstances.
5. Incidences of the contract concerned shall follow, for example, title and/ or risk, or the benefit in a contract involving the transfer of property, will pass, depending on the legal system and the type of the contract concerned or in a contract of insurance the loss will thenceforth be covered by the policy.

In Relation to What Follows the Formation

As of the time the contract is formed, certain other consequences may follow:

1. The period of limitation of action for a claim under the contract, if applicable, will start running. However, Islamic law does not recognize the limitation of actions.
2. the period allowed by the law in certain cases such as the time limits pertaining to certain ‘options’ under Islamic law, or stipulated by the parties, for unilateral termination of the contract, will begin.
3. the substantive laws applicable to the contract for municipal purposes are, in principle, the laws which are in force at the time when the contract is made, and the supervening illegality or impossibility will not usually affect the formation of the contract through the performance may thereby be affected.
4. other, miscellaneous, effects may follow either due to the operation of a particular rule under the law or a particular contractual arrangement, for example, when the offer is to the effect that the contract price shall be the market price applicable at the date of acceptance (provided the mechanism of price-fixing is certain enough and the legal system concerned recognizes the validity of such an agreement).

Consequences of the Place of Acceptance

The most significant consequence of the determination of the place of acceptance is its relevance to the determination of the place of the contract. We have already discussed in the previous sections a number of instances under Islamic law where the place of the contract is where the acceptance is effectively made. The determination of the place of the contract, in its turn, may become of significance for jurisdictional purposes and/ or determining the governing law at the municipal and/or international levels. However, it should be noted that our study is exclusive to the formation of the sale contract (offer and acceptance). Also, it should be noted that all classical Islamic schools are obviously not concerned with such cases and recent suggestions for the extension of its basic rules to such instances do little to overcome basic problems rooted in its formalistic approach.

Conclusion

The expansion of e-sale in the past few years has led to a significant multiplicity and intricacy in its structure and applications. E-sale contracts refer to making use of information and communication technologies to network economic operations and processes, in order to diminish information related to transaction costs to gain a deliberate information benefit.

E-sale changed the way business is done and businesses quickly adopted it. When selling and buying online a simple message can result in the formation of a contract. That is why businesses should be aware of relevant contract regulations.

As a result, from the Islamic point of view, we find e-sale has an alike definition to sale in conservative commerce, but some regulations and requirements must be brought in line with Islamic principles and what is permissible by Islam.

In Islamic law there is no separation between the religious and tangible practices (ritual and ordinary actions), for all actions performed in compliance to the command of God (Allah) are considered as acts of good quality and religious duty, these include e-commercial transactions. Hence, the Qur’an, the Sunnah, and other Islamic sources in general regarded business or selling and buying by any means as legal, superior, and advantageous for both the individual and society. Fairtrade and sincere business and sale are praised, recommended, and strongly exhorted by Islamic sources.

Reviewing the definitions of the traditional sale contract by some Muslim jurists and having a clear understanding of the differences between the traditional sale contract and an electronic sale contract, we may define the e-sale contract as an agreement concerning the exchange of a valid offer and acceptance for selling licit described goods or services for valuable consideration made between two parties who bind themselves in writing within the framework of an electronic device.

Based on our discussion from the four classical Islamic schools’ perspectives (Hanafi, Maliki, Shafi’i, and Hanbali), it is clear that Islamic law revealed two prerequisites for the validity of any given transactions or sale contracts: namely, acceptability and harmlessness. Acceptability means that the goods and service in question must be allowed by Islamic law; while harmlessness means that the goods or the service must not be detrimental for the contracting parties or the common public. Hence, in spite of whether the sale transaction is carried out as conventional commerce or electronically, the above rudiments must be satisfied by all Muslim sellers or buyers.

Honesty, genuineness, and sincerity are fundamental moral values of Islamic law. Seller and buyer have to be honest, open, and straightforward in all their trading dealings. There is no capacity for cheating, lying, and false promotion in the Islamic framework of the sale transaction.

When making efforts to influence people to purchase their products, advertisers are prone to take advantage of vagueness, hide facts, overstate and use psychological approaches to convince buyers to purchase in accordance with their emotional needs instead of reason. These gimmicks are particularly effective and place the buyers in a more susceptible position in sale contracts in the electronic environment, as buyers refer to web information to make a purchasing verdict. Thus, the assurance of the buyer plays an imperative role in the progress of any business concern. Therefore, the idea of faith is very important because, without faith, the development of the e-sale contract cannot reach its potential. As stated in the Qur’an:

“Allah does command you to render back your trust to those to whom they are due; and when you judge between man and man, that you judge with justice….”

“O ye who believe! Eat not up to your property among yourselves in vanities: but let there be amongst you traffic and trade by mutual goodwill.”

Since the e-sale contract is carried out using computers and networks, there are certain conditions that must be met to make sure the validity of the e-sale contract in Islamic law. Firstly, there should be simplicity in the communication and the products obtainable must be clearly distinct, for example, the pictures of the products or the subjects must be clearly depicted on the screen, comprehensive conditions must be given, and the price, the method of delivery and the method of payment must be obviously stated. Secondly, both contracting parties must obtain the message in order to achieve conventionality in the accord closing the contract. Thirdly, there must be permanence in the message, whether in the communication of the message or in consulting between one another via e-mail.

Most of the Islamic jurists from the four Islamic schools defined a sale contract as an agreement of both parties to the fulfillment of a certain condition arising from accord and agreement of the offer and acceptance.

Also, in accordance with the Muslim jurists, there are four pillars of the sale contract that need to be fulfilled, which are offer and acceptance, the two contracting parties, the subject matter, and the method of expression (seaghat al-Aqd).

Firstly, the offer is made by the original party to the contract. Therefore, it gave and established the autonomy of acceptance from the second party. The offer and acceptance must be clear to both parties, established by both parties and there must be stability from the offer to the acceptance (the connection between offer and acceptance). Secondly, the capacity of the two contracting parties to enter into a valid e-sale contract: they must have reached the age of youth and must be of sound mind. Thirdly, the subject matter is the object of the sale and it has to be mandatorily beneficial, lawful in Islamic law (halal), valuable, under possession, in existence, and deliverable.

Fourthly, the method of expression is the expression of both contracting parties articulating their wills. It can be through words (act) or in writing, but it should be clear to both parties. In fact, none of the four Islamic schools from our discussion requires the traditional written and signed agreement as a requisite for the validity of the sale contract. Thus, all Islamic schools believe valid any form of the agreement that entirely reflects the permission of the parties involved in the business as a tool to express the will of the contracting parties. In the Qur’an it is mentioned:

“O believers, when you contract a debt one upon another for a stated

Write it down …”

Based on that, sale in the electronic method is lawful because all the four pillars of the Islamic contract are satisfied.

Ordered Sale (Bay’ al-Salam) is a contract of sale in which the price is paid in complete advance while the product is to be delivered in the future. The necessary conditions for Ordered Sale are,

1. Must be able to be specific.
2. Must be belated in its delivery.
3. Must be obtainable in the market.

The decision on Ordered Sale is that the possession of the ordered subject matter is recognized to the consumer upon receiving of the subject matter due to the consumer later and mandatory upon the vendor until he delivered the ordered subject matter.

Manufacturing Sale (bay’ al-Istisna) is a contract of sale where the buyer gives an order to a workman (seller) to make a specific item with an accord to pay a definite wage or price for it when it is made. It is similar to the Ordered Sale since it is also something that is not in subsistence, but the price need not be paid in advance; there is no requirement of delivery and the subject matter is not obtainable in the market.

Deferred Sale (bay’ Muajjal) is a contract of sale in which both contracting parties concur that the compensation of price for the product shall be postponed. The Deferred Sale is legal in Islamic law as we have already conversed upon. There are regulations of sales that are applicable to the Deferred Sale:

1. Subject matter must exist.
2. Subject matter must be under the ownership of and the possession of the seller.
3. The sale must be immediate and complete and must not be pending on a future date.
4. There should be no conditions attached.

The first stage is beginning an e-sale contract (al-T’aqud). In this stage, as we have already discussed in chapter 2, the parties shall check whether all four pillars to bind the contract are there. Generally, offer and acceptance, two contracting parties, subject matter, and the method of expression must be met. If the owner of the product is not able to be in attendance, there must be an agent to make sure that the corporation is in existence. Even if the agent acted as the delegate of the company, he or she should produce a verification certificate to make sure that he or she is the person at liberty to act on behalf of that company or the vendor.

Regarding the subject matter, other than the conditions mentioned earlier, there must be something allowable, deliverable, and under the ownership of the people, and the subject matter must be available someplace in the market. Regarding the manner of expression, since the e-sale contract is performed online, the communication must be clear and the system must work properly without any interruption such as the server being down or a virus attack.

The most imperative element in this initial stage is that the e-sale contract should be in line with the Islamic prerequisites. For example, the contracting parties must be in a state where they can be considered to be of a sound mind and sound opinion to make sure that one engages in transactions with the right person. Thus, the possibility that they will be subjugated is abridged.

According to the second stage, confirming the soundness of the e-sale contract, during the method of cooperation, the agreement must be free from the following elements:

1. Interest (Riba), is defined as an enhancement in a trade or sale of merchandise which accrues to the owner exclusive of giving in return any equal counter-value. Islamic law strictly prohibited interest.
2. Uncertainty (Gharar) in business means to embark blindly on anything without adequate information and where there is an element of risk.
3. Dishonesty or deception is a statement by which one party is led to enter into the contract with the expectations that he could get revenue or growth out of the contract, but unfortunately it was otherwise.
4. Duress is defined as the threat of something unlikable in order to get an act done by the person without his permission.
5. Any elements of gambling (Maisir).

In the third stage, two things must be made certain: the person offering the subject must be the actual possessor of the subject sold and have complete privileges over the subject and in any event, the subject must be free from any legal responsibility. In dealing with the lawful aptitude of the contracting parties, in order to bring a valid e-sale contract to a close, the contractor, either offeror or offeree, must satisfy the requirement of legal capacity of natural personality, must have attained a certain age, and must have a certain level of mental ability. If the parent or guardian has not taken sufficient care to keep that kind of material out of the reach of a minor, in effect, we would adopt the legal fiction that the parent or the owner of the computer is bound by the contract under the fiqh principle of the guaranteed (al-Daman).

In the fourth stage, both parties involved in the contract are bound to sign an e-sale contract that is obligating (lawful contract). Before becoming part of the contract, the consumer must authenticate the company (seller) and the subject sold through hired third parties or any other people to corroborate its presence. The reason is that the consumer could only see the company (seller) in the form of its website and websites can be developed by almost anybody in today’s world of technology. So the actual existence of such a company (seller) becomes a question mark. After becoming part of the contract, the consumer must keep the contract copy of the agreement in any format, paper or electronic, in order to be able to refer to it later in an attempt to avoid potential manipulation and exploitation.

The concluding period is where both contracting parties have to swap the counter values that are the worth and the subject matter. In general, e-sale contracts use credit cards as the payment mode. Once the buyer receives the subject matter, he/she has to check and confirm whether the subject matter is one that satisfies the buyer’s stipulations and conditions within a period of three days, according to the principle of Islamic law as we have mentioned in subsection 2.6.4.1 Option by stipulation in chapter 2. Here, the buyer could use one or more kinds of stipulation options: option by stipulation (Khiyar al-Shart), option by sight (khiyar al-Ru’ya), and option by a defect (Khiyar al-Ayb) if there are definite stipulations that were not met, however, it must be stipulated in the contract.

According to my research, the most arguable subject in the creation of an e-sale contract is the technique of offer and acceptance. It is a general presumption under Islamic law that there is no existence of contractual obligations having a legal effect when no obvious agreement is being created between the contracting parties in question. The agreement is taken to be established when a sound offer by a single party (offeror) is unquestionably acknowledged by another party (offeree). The offer and acceptance method does not generate directives in the Islamic contractual legal system. It is only a resource to find out the internal resolve and approval of the contracting parties. based on the manner of offer and acceptance, a decision is able to be pronounced whether a fee agreement has been resolved in transactions or not.

An offer is a preliminary proposal which is made by one of the parties to show his enthusiasm and interest in entering into an e-sale contract acceptance, in turn, is the afterward response from the second party to express his compliance to the offer.

Yet the simple episode of the offer and acceptance does not itself grant an e-sale contract to be absolutely legitimate. In order for a business deal to be legally completed and to take lawful effects in the doctrine, certain additional conditions must be satisfied. To express the importance of these elements in the law, it should be stressed that if one or more of those conditions are not fulfilled, then the e-sale contract will not be genuinely created.

Those crucial stipulations are put as follows: the offer and acceptance should be so clear in representing the absolute motivation of the contracting parties to enter into commercial transactions, the acceptance should be well-matched in every part with the offer, both the offer and the acceptance should be expressed to each party involved in the e-sale contract, and finally, the association of the offer and acceptance should be carried out at the parties’ meeting place (Majlis al-Aqd ) of the transaction. Further amplification will now be presented on the idea of meeting place as it is practiced in the Islamic law of contract.

Islamic law declares the parties’ meeting (Majlis al-Aqd) as “the meeting that is convened for contract making.” This explanation, as can be observed, seems to be inadequate, and the term still needs further amplification. Therefore another definition, which offers more illumination and exact details, is recommended for this legal code, as “the time span during which the involved parties are together to engage with the forming of a contract without being occupied by something else not related to the negotiated bargaining by any of them.”

The concept of meeting place (Majlis as-Aqd) under Islamic law is taken in accordance with the second definition as one unit of time. The uniformity in the establishment of the meeting place (Ittihad al-Majlis) brings forth the fact that the offer and acceptance will only be acceptable to be the same if they are carried out in a manner such that the offeror and the second party are present faces to face with each other in a manner such that their attention is not being diverted and they are not being distracted in any manner. Regardless to say, the contract should be performed upon in the precise place where the parties initially commenced their negotiation as occasionally they may have been engaged in business transactions while walking or riding or even traveling in a plane, and therefore, such a place is not valid under the law.

To be specific, the offer and the acceptance cannot possibly be, in a realistic sense, simultaneous since the existence of the offer ends before the acceptance ‘comes to life. Thus, to facilitate the vital connection to take place, the meeting-place is considered as one unit of time. As such they offer is believed to be recognizable so long as the contracting parties maintain their commercial association.

The main idea behind the creation of the theory of meeting-place (Masjid al-Aqd) in the Islamic law is to resolve the duration of time the offer is permitted to be legally open for acceptance without causing possible damage to the offering party, by postponing the acceptance for a long duration after the separation of the parties from their meeting place or causing the accepting party to suffer a loss, as the theory grants him with more time to consider the worth and the profit of the proposal before making any hurried decision.

In face-to-face business dealings in an e-sale contract, there is no time gap in communicating both the offer and the acceptance. We can surmise from this that no time is taken up in cases where the sale contract is executed via electronic communication. It is not vital to classify all these instantaneous methods as this is not idyllic at the present time with the incredible and quick development of technology.

However, it is satisfactory to identify the fact that when both the offer and the acceptance are almost instantly communicated through means of electronic media, the method that is used to express the parties’ consent is classified as instantaneous. In certain scenarios, electronic communication may be carried out through voice through means such as the telephone, or through a combination of voice and picture through means such as video conversation over the internet. Instant messaging software also allows instant writing through chat rooms and instant messaging software over the internet.

Dissimilar to the sale contract, with the availability of both parties in one place, parties are situated in diverse situations when dealing in business transactions using such mediums of communication. As a consequence, there is a legal predicament whether such a contract is considered as a face-to-face transaction or contracting in the nonattendance of parties.

In answer to such a question, it has been observed that such a new form of trading using immediate methods of communication should be considered as parallel to the sale contract when both the parties, in actuality, face each other, although they are not together in flesh. The reason for such a decision is that the communication of the offer and the acceptance in both natures of sale contract is done immediately and without any setbacks. Therefore the creation of an e-sale contract using instantaneous apparatus should be via the same principles as in face-to-face.

Hence, by similarity with the face-to-face business deal in a sale contract, the foundation of meeting-place is a vital component for the legality of contracting to utilize instant electronic means. As specified previously, the meeting place is the stage in which both parties are included in discussing a business transaction without either of them being involved with any object outside the range of their commercial discussion.

Hence, in pertaining to the meeting-place (Majlis al-Aqd) in sale contracts created through immediate tools of communication, the episode during which both parties communicate would be classified as the meeting-place. So long as the two parties maintain their business communication via such means, the meeting-place is regarded as legitimate; yet the meeting-place is concluded as soon as their conversation is brought to an end or turned towards another unconnected subject.

The opportunity of meeting-place (Khiyar al-Majlis) is also practical in the creation of a contract utilizing immediate modes of communication. This task can be carried out only in the event that the involved parties are inconsistent in communication through electronic means. The choice of meeting place reaches conclusion when the immediate bargaining between the offering party and the receiver (offeree) is suspended.

For instance, in the situation of the telephone being utilized to finalize the sale contract, the choice of meeting place is concluded on the instant the phone is hung up. In the case of the commonly used MSN messaging service, the establishment of the meeting place is taken to be established when either one or both the parties enter a chat room by signing in or leave the room by signing out of the chat room.

However, in another perspective, when there is no occurrence of communication between the offer and the acceptance, this form of sale contract is considered to be one that deals with a situation incorporating contracting between absentees (inter absences). In such business contracts, the parties involved are situated in differing locations at the moment of creating the bargain, and also there is a significant time gap between the issuance of the offer and the acceptance and the moment when the other contracting party becomes aware of them.

It is evident that such a break between the association of the offer and the acceptance exists in the shaping of e-sale contracts utilizing non-instantaneous means of communication. As a consequence, this form of sale contract must be treated in all respects under the Islamic law of contract as the equivalent of contracting between absentees (inter absences).

In the historic eras, the messenger and the letter were the most popular non-instant methods to carry parties’ contractual wills; although, many other different tools of communication have been surfacing with the introduction of technology in our modern-day life, for instance, interactive websites and emails, to suggest but a few. In such tools, there is no direct link amongst the contracting parties, and the offer and the acceptance are not immediately connected. Therefore such form of a sale contract is considered by law as contracting between absentees and is frequently accordingly.

In dealing with the time and/or place of an e-sale contract, under contract principles, the parties are entitled in principle to fix the time and/or the place of the acceptance of the contract. Whether the sale contract is inter absences or inter presented, variation of the time of acceptance from that of the contract calls for some explanation.

However, in the absence of a determination by the parties of the time and/or the place of acceptance in the e-sale contract, we find that under Islamic rules the inter absents contract such as the e-sale contract will, in general, conclude immediately from the moment that the buyer accepts the offer without regard to other conditions such as the seller’s knowledge of the acceptance. The Islamic law takes “the theory of declaration of acceptance” as the principle to determine the time and the place of the contract in inter absences contracts in cases where the parties’ intention is not known in the contract.

Although this provision has created problems such as the non-acknowledgment by the offeror of the offeree’s acceptance, the adoption of this theory of acceptance, in our opinion, agrees with the Islamic law, which has tried to eliminate vagueness from the configuration procedure. Also, it endows the offeree with self-assurance and defense that an acceptance once declared will be effectual. Moreover, we find the Islamic law tried to balance taking by the “declaration theory” and the right of the offeror to revoke his offer without informing the offeree of his revocation.

On the whole, it is believed, after considerate scrutiny, that this fresh form of contract known as the e-sale contract is completely reliable with general Islamic principles and there is no reason why the traditional Islamic contract rules can not apply. As a result, it is acceptable to perform all forms of sale-creating actions through cyberspace so long as it is not in negation with various key aspects of Shari’a. However, it is not the object of this hypothesis to put forward a widespread assessment of e-commerce in all features under the principles of the Islamic law of contract – attention is focused here on applying the aspect of Islamic Law of the formation of sale contract in the electronic sphere.

Therefore, we recommend that Muslim countries can benefit from this kind of research by drawing up more flexible electronic commercial regulations to resolve these formal contract issues in e-transactions under Islamic law principles. Also, how do they resolve conflicts with non-Muslim partners? This special electronic commercial regulation should include comparisons with different Muslim countries, such as those in North Africa, the Gulf region, and Southeast Asia.

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Ibn al-Juzy, M, Ahkam ahl al-Themah ( Beirut:Dar al-Ilm li-al-malayin, 1979).

Ibn al-Juzy, M, al-Qawanin al-Fiqhiyyah (1979).

Ibn al-Juzy, M, I’lam (1973).

Ibn Taymiyya, T, al-Fatawa al-Kubra (Beirut: Dar al-Ma’rifa, 1966).

Ibn Taymiyya, T, Nazarih al-Aqd, Dar al-ma’rifat, Beirut.

Ibn Taymiyya, T, al-Qiyas fi al-Shar’ al-Islami (1951).

Ibn Qudama, M, al-Mughni wa yalihi al-Sharh al-kabir, vol.3,4 (d.620/ 1223, Beirut,Dar al-Kitab, 1983)

A Cabinet Decree of 1961 of Saudi Judgements.

The Religious Decree No 52(3/6) by the Islamic Law Institute ( Majam’a al-Figh al-Islami).

Legislation

Al-Qur’an (The Koran)

Al-Sunnah references:

Abu Dawud, Sulyman, Sunan Abi Dawud (d. 275/889).Edited by Mohammed Muhyi al-Din Abd al-Hamid. Cario: Dar Ihya’ al-Sunna al-Nabawiyya, n.d.

Al-Bukhari, Mohammed bin Isma’il (d. 256/870). Matn al-Bukhari.with commentary by Abu al-Hassan Nur al-Din Mohammed bin Abd al-Hadi al-Sindi (d. 1138/1726). 4 vol. Cairo: Matba’at Dar Ihya al-Kutub al-Arabiyya, n.d.

Al-Nasa’i, Abu Abd al-Rahman Ahmad bin Shu’ayyib (d. 303/915). Sunan al-Nas’i. with commentary by Jalal al-Din al-Suyuti (d. 911/1505).Cairo (1930).

Al-Tirmiddhi, Abu ‘Isa Mohammed bin Isa (d. 297/892). Sunan al-Tirmidhi. Cairo: Mustafa al-Babi al-Halabi, Cairo (1975-1978).

Muslim, Ibn al-Hajjaj al-Nisaburi (d. 261/875). Sahih Muslim. With a commentary by yahya bin Sharaf al-Nawawi (d. 676/1277). Editied by Abdullah Ahmad Abu Zinah. Cairo: al-Sha’b Press, n.d.

Egyptian Civil Code, 1948.

French Civil Code, 1804.

Jordanian Civil Code, 1982.

Kuwait Law of Commercial Companies, 1960.

Kuwait Civil Code,1983.

Majallah al-Ahkam al-Adliyyah (Turkey), 1877.

Oman Commercial Companies law, 1974.

Qatar Commercial Companies Law, 1981.

Regulations for relations between the foreign contractor and his representative in Saudi Arabia, Ministry of Commerce, 1398 H.

Regulation for the repression of fraud in Saudi Arabia, 1382 H.

Regulations for the fiqh against commercial fraud, Minister of Finance and the Economy in Saudi Arabia, 1381 H.

Register of Commerce, Ministry of Finance and the Economy in Saudi Arabia,1403 H.

Regulations for Companies in Saudi Arabia, 1385 H.

Saudi Electronic Transactions Act, 2006.

United Arab Emirates Federal Law, 1984.

United Arab Emirates Federal law on the Insurance of the Commercial Transactions, 1993.

Treaties

The Vienna Convention on Contracts for the International Sale of Goods, 1980.

UNCITRAL Model Law on E-Commerce, 1997.