E-5: THE CONCEPT OF FREEDOM OF CONTRACT AND THE ROLE OF KHĪYYĀR AL-SHART (OPTION OF STIPULATION) IN ISLAMIC COMMERCIAL LAW

Abstract

In Islamic law it is necessary for a binding agreement to take place; certain conditions are to be satisfied and a valid transaction can be formed if elements laid down in Islamic law are to be met in order to consider it lawful. The majority of Islamic jurists hold that those essential elements upon which a valid contract bases itself are threefold. The formation; Ijab and Qabūl (Sighah) subject matter of contract and lastly the parties to the contract that the essence of the validity of offer and acceptance is mutual consent. Besides, they are also agreed that there must be three conditions for valid constitution of offer and acceptance. First, both must be clear and definite, in terms of clarity, secondly conformity with the Muqtadā al-àqd, which means coherence or agreement between offer and acceptance and last and third is continuity that offer and acceptance must be connected. In other words, as a basic rule of Islamic law the contracting parties can make whatever stipulations they deem fit for regulating their contractual relationship. The law will intervene only in a few and exceptional cases to invalidate such stipulation. This means, it is validity rather than invalidity of stipulation which is the general rule in Islamic law.