AL-ADWA 49:33 19 The Legal Effects of Unfair Contracts…..

The Legal Effects of Unfair Contracts of Sale in

Islamic Law
Muhammad Akbar Khan*
Introduction:
Islamic law has highly stressed on fulfillment of contractual obligations.1
The general principles of Islamic law of contract provide adequate
protection to the consumers. Islamic law has rendered a number of
transactions unlawful because they directly or indirectly violate rights of
the consumers such as contracts based usury, uncertainty, adulteration,
exploitation, concealment of the truth, cheating, fraud etc. Islamic law on
the other hand opens the ways that lead to the promotion and preservation
of consumer rights. The basic theme of this research is to assess the civil
liability of harmful products therefore the chapter highlights the
significance of the law of contract in cases product liability from the
perspective of Islamic law of contract. The notions on which the modern
product liability law is based have been traced in Islamic law in assessing
the civil liability for the defective products. Islamic law of contract is
formed in such a way that protects rights of both i.e. the seller and the
buyer.2
The Concept of Sale in Islamic Law:
The term Bay is usually translated as sale; however, it has a much
wider meaning in Islamic law. The term Bay‟ has a more comprehensive
meaning, being, defined to be an exchange of property for property with
mutual consent. The eminent Hanafi jurist Imam Kasani has defined Bay
as it is an exchange of a useful and desirable thing for similar thing by
mutual consent in a specific manner.3 The Majallah defines a sale as:
“The exchange of property for property”, and in the language of the
law, it signifies an exchange of property for property with mutual
consent of the parties, which is completed by declaration and
acceptance.4
The term Bay‟ covers all commutative contracts, that is, contracts in
which there is an exchange of two counter-values. Legitimacy of the
contract of Bay is established from the primary sources of Islamic Law.5
Hiring (Ijara) is often referred by jurists as the sale of benefits arising from
property rented or service rendered.6
Legitimacy of Sale:
The contract of sale is legalized by the basic sources of Shari‟ah i.e. the
*Assistant Prof., Faculty of Shariah & Law, International Islamic University,
Islamabad, Pakistan.
AL-ADWA 49:33 20 The Legal Effects of Unfair Contracts…..

Holy Qur‟an and traditions of the Holy Prophet (pbuh). The Holy Qur‟an
has permitted this in the words:
“Allah hath allowed trading and prohibited Riba.7
The Holy Qur‟an says:
“O you who believe! Do not devour your property among yourselves
falsely except that it be trading by your mutual consent”.8
This aspect is further strengthened by the fact that the Prophet (pbuh)
himself, the Companions and the eminent jurists conducted business and
entered into the contract of sale. The holy Prophet (pbuh) also gave it much
importance by saying:
“That one of you takes his rope and then comes with a load of wood
upon his back and sells, it is better than to beg of men whether they
give or reject him”.9
While encouraging truthfulness in sale transactions, the Holy Prophet
(pbuh) stated that the truthful merchant (will be rewarded by being
ranked) on the day of resurrection together with the Prophets, the truthful
ones, the martyrs and the pious people. The Prophet is also reported to
have said: “Allah will let the man enter the paradise who is an easy
purchaser (in bargaining), and easy vendor (in selling), and easy debtor (in
repaying the debts) and an easy creditor (in lending and demanding back
the loans).”10 The holy Prophet also said:
“The best earnings are those of the businessman who does not tell a
lie when he speaks; does not misappropriate the trust; does not break
the word if he promises; does not cavil while making purchases; does
not boast while selling his goods; does not prolong the period of
repayment of loan; and does not cause difficulty to his debtors!”
Further: “The best type of earning is Bay based on truth and earnings
of one by his own hands”.11
Abu Sa`id khudri reported: “The Messenger of Allah (pbuh) said: „The
contract of sale becomes (lawful) with the consent (of both the
parties)‟.”12
Elements of Contract in Islamic Law:
There are various views regarding the elements of the contract in
Islamic law. Majority is of the view that the essential elements of a
contract are four: (a) Sighah the form i.e. (offer and acceptance); (b) the
seller; (c) the buyer and (d) the subject matter (ma`qud `alayh).13 Hanafi
jurists hold that there is only one element of a contract; namely, the Sighah
(form) i.e. Ijab and Qabol.14 This, however, implies the existence of other
elements. From the practical point of view, there is not much difference
between the opinion of the Hanafi jurists and that of the majority. Sighah,
consisting of Ijab and Qabul, is the basic element of contract. It is the
AL-ADWA 49:33 21 The Legal Effects of Unfair Contracts…..

instrument or the means by which a contract is made. Ijab is the statement

in an agreement that issues forth from one of the parties to the contract,
and Qabul is the statement that is made by the second party in response to
the Ijab.15 Offer and acceptance are based on consent or rida. According to
the Maliki School, the first element of the contract is sighah (form) on the
basis of which a contract is formed. The demonstration of consent of the
seller is known as Ijab (offer) and that demonstrates the consent of buyer is
known as Qabul (acceptance).16 In Shafi school the first element of sale
contract is sighah (form) i.e. offer from the side of the seller such as
saying: I will sell you this thing for this much amount. This is known as
Ijab. Second the acceptance by the buyer that is known as Qabul. 17
Similarly, according to the Hanbali School the Ijab (offer) is made by the
seller while the Qabul (acceptance) is always made by buyer.18
Hence to sum up this discussion in the view of Hanafi school the
Ijab is that which is made first in point of time such as if one of the parties
says: “I have sold this car to you for $ 10, 000,” and the other party says, “I
accept,” then, what has been said by the seller is Ijab (offer) and the
acceptance of the buyer is qabul (acceptance). If the buyer had said, “Sell
me this car for 10, 000,” and the seller had said, “accepted,” the statement
of the buyer would have been Ijab and that of the seller qabul. While in the
view of majority of the schools, on the other hand, maintain that Ijab is the
statement of the owner of property, while qabul is always the statement of
the buyer.19
Shariah requires from the contracting parties that they should
be (mukallaf) i.e. capable to understand the legal obligation. 20 Besides
understanding, it is also essential that the subject (mukallaf) performs the
act by his free will and choice. If an act is performed under coercion, it will
not produce legal effects that are assigned to a valid act. Understanding of
communication which is a basis of legal capacity is linked in Islamic law
with adulthood. Thus, when a person attains puberty and adulthood, he is
presumed to have developed ability to understand and perform the act
required by the Shariah. A minor or insane, are therefore, not under legal
obligation (taklif) because they are devoid of intellect and reason required
for understanding the legal obligation. An intoxicated person during the
state of intoxication is also unable to understand the legal obligation, so his
contracts and transactions are considered void in all four schools of
thoughts of Islamic law.21 There is an ongoing debate that whether or not
the Islamic law recognise the artificial legal persons. The question is
important in the context of ascertaining liability of producers or
manufacturers for manufacturing defective and sub-standard products
under Islamic law. These manufacturers and producers are often
AL-ADWA 49:33 22 The Legal Effects of Unfair Contracts…..

artificial/legal persons in contemporary age. For the purpose of this

research the view that „an artificial person‟ is recognised by Islamic law
has been taken into consideration. This view is based on solid arguments
from imminent jurists. In this context it is pertinent to quote Sir Abdur
Rahim who writes:
“Corporations are treated as „legal person‟. It may be doubted
whether the earlier jurists would recognize an artificial or juristic
person. The state or community is regarded by them as holding and
exercising the rights of God on His behalf through the Imam. But later
jurists seem inclined to recognize an artificial person; for instance,
they would allow a gift to be made directly to a mosque, while the
ancient doctors would require the intervention of a trustee”.22
Hence, the research in hand is based on the view of Muslim jurists that
recognize a distinct artificial personality for a corporation that produces
products.
Subject-matter (Mabi‟) is one of the most important elements of
Islamic Law of contract especially in the context of product liability. It
includes object of the contract, commodity, performance, and
consideration and of the contract. In Islamic law the contractual obligation
of one party is consideration for the contractual obligation of another party.
In a contract of sale for instance, the commodity is the consideration for
the purchaser and the price is the consideration for the seller. The subject
matter mabi must be valuable, evaluated or able to be evaluated, exist at
the time of concluding the agreement or be going to exist in the future and
be legal in order to be recognized by Islamic law.23 All these conditions
should exist in the subject matter. For example, the sale and trading of
commodities such as wine or alcoholic products, pork and pork products is
prohibited, and contracts involving such commodities are void on the
grounds of their illegality. 24 The flesh and bones of animals that have died
by other means than ritual slaughter (Halal) cannot be sold. Idols are also
forbidden commodities. 25
Types of sale contracts:
Bay i.e. sale with respect to the counter-values is divided into four
types, the sale of an ascertained commodity (`ayn) for an ascertained
commodity (`ayn), which is the sale of goods for goods and is called
barter; the sale of an ascertained commodity (`ayn) with a (dayn), and this
is the sale of absolute goods for absolute prices (currencies), which are
dirhams and dinars, or their sale for copper coins or with a described
measured commodity as a liability (debt) or a described weighed
commodity or described identical counted items; the sale of a dayn with an
ascertained commodity (`ayn), which is salam; and the sale of a dayn with
AL-ADWA 49:33 23 The Legal Effects of Unfair Contracts…..

a dayn, which is the sale of an absolute price for an absolute price, and is
called sarf.26 Hence, there can be four types of sale according to the above
description. These are `ayn (goods) for `ayn (goods)- barter ; `ayn (goods)
for `dayn (currency)- regular sale; `dayn (delayed payment in goods) for
`ayn (goods)- advanced payment in goods and `dayn (currency) for dayn
(currency)- currency exchange and money loans. 27 The research in hand
has focused on regular sale as most of the consumers sale fall in this
category.
The Legal Effects of a Sale :
The contract of sale once finalized is irreversible that results in the
transfer of complete and instant ownership of the subject matter. It means
that the seller excludes the commodity from his ownership and gives it to
the buyer on a permanent basis, while in loans, ownership is transferred
for a specified period and exactly its similar has to be paid back.28
Express Terms and Islamic Law of Contract:
Muslim jurists have various views regarding the extent of freedom
enjoyed by the contracting parties to insert terms in the contract especially
those which may change and modify the effects Shariah accords to a
contract. In the view of Zahiri School the conditions are not allowed except
those which are approved by Shariah. According to this school the basic
presumption of law is that all terms in a contract are prohibited except that
which is established by the text or ijma (consensus of opinion). 29 They
base their view on the tradition of the Holy Prophet (pbuh): “He who
performs an act we have not ordered him, his act is null and void”.30 The
Hanbali view is a very much liberal on the topic as it acknowledges
complete autonomy of will in contracts and transactions. This view is
based on the presumption that the general rule is permissibility unless a
text from the Qur‟an, Sunnah or Ijma makes them invalid. There are many
arguments for this presumption from the Holy Qur‟an, Sunnah and Ijam.
The Holy Qur‟an says: “O ye who believe! fulfil (all) obligations. Lawful
unto you (for food) are all four-footed animals, with the exceptions named:
But animals of the chase are forbidden while ye are in the sacred precincts
or in pilgrim garb: for God doth command according to His will and
plan.”31
The Holy Prophet (pbuh) said: “Muslims are bound by their
stipulations unless it be a condition which turns haram (forbidden) into
halal (permissible) or halal (permissible) into haram (forbidden).” 32
Hence, it is allowed to insert conditions in contract and the parties are
bound to abide by it. However, the limitation is imposed on the parties that
they should not insert such a term that is contrary to scheme of Islamic
law.
AL-ADWA 49:33 24 The Legal Effects of Unfair Contracts…..

The view of Hanafi, Maliki and Maliki schools on the topic is

divided into three kinds i.e. valid, irregular and void terms. 33 These are
further classified into four kinds. Terms or conditions which confirm the
effects, attributed to juridical act by the Shariah. Such conditions
strengthen the purpose of contract e.g. to sell on the condition that the
seller will not hand over good to buyer unless he pays the price is a valid
condition because it ensures the effects of the contract. Terms or
conditions which are admitted explicitly by the Shariah, such as the Khiyar
al-Shart (option of stipulations) and Khiyar al-ru‟yah (option of
inspection) as these are explicitly admitted by Shariah. Terms or
conditions, which are intimately, connected with the contract such as
pledge of security in a contract of surety.
The Hanafi jurists also allow a term which has been established by
custom such as for example in case of sale of a car by a specific
manufacturer the condition that it will be responsible for its repair for a
certain period.
The condition will be regarded as irregular if it is repugnant to
requisites of the contract; it is irreconcilable with the purpose and effects
of contract; it is not allowed by the Shariah; it is not allowed by custom
and usage; and it gives an undue advantage to one of the contracting
parties such as if a person sells his house with a condition that he will
reside in it for a month after the sale is concluded; if a person sells a piece
of land with a condition that he will cultivate for a year on it; if a person
sells an animal with a condition that he will keep and riding it for a certain
period; and if a person sells a garment to a consumer with a condition that
he will wear it for a certain period etc. such conditions are irregular as it
amounts to usury.34 Hence, the effect of such condition is that it renders the
entire contract invalid especially in case of commutative contracts. It is a
term or condition that directly infringes any rule of the Shariah or inflicts
harm on one of the two contracting parties or derogates from completion of
contract, such as in the context of product liability the condition imposed
by a seller that the consumer will not use the product he bought. The effect
(hukm) of a contract with a void condition is that the condition is severable
from the contract; it does not nullify the whole contract. The condition
alone will be regarded null and void.35
Hence, in Islamic law unfair contract terms are considered void ab
initio. It is one of the requirements of a valid sale that it should be free
from any unlawful term and condition.36 In Islamic law, terms of contract,
properties of goods and consideration must be clear. A forbidden practice
is for a man to purchase goods for a definite sum payable at a specified
deferred term, then to bargain for a sum which will show him a profit if
AL-ADWA 49:33 25 The Legal Effects of Unfair Contracts…..

paid in cash immediately. This is not permissible because the (deferred)

term is allowed for by a portion of the price. Another is for a man to
purchase goods for a specified sum and then, if he should find a flaw in
them, to return to the seller with a demand for a discount, bargaining about
the original price when the question of a discount had not arisen. The terms
of a contract that may lead to Riba (Usury) is strictly forbidden under
Islamic law. In this context, Imam Sarakhsi writes:
“Trade is of two kinds: permitted (Halal), which is called Bay in the
law; and prohibited (Haram), which is called Riba. Both are types of
trade. Allah Almighty informs us, through the denial of the
disbelievers, about the rational difference between exchange (Bay)
and Riba, and says: „That is because they said Bay is like Riba‟.
Almighty, then, distinguishes between prohibition and permission by
saying: „And Allah has permitted sale and prohibited Riba‟.37
Similarly, any term in a transaction that is ambiguous is known as Gharar
(uncertainty) and such contract are considered void in Shariah. There are
many instances such as:
1. Bay` al- hasat
Bay` al- hasat is also known as ilqa al hajar.38 It is effected when the
vendor says, “Of these pieces of cloth or these sheep I sell you the one
upon which falls this pebble thrown in the air,” and the consumer says,
“Yes”. The transaction is valid on the basis of the existence of an offer and
acceptance; similarly the sale of a piece of land is valid to the distance of
a stone‟s through; or by saying, “I want to buy as many goods as there are
stones which I am grasping in my palms.” Or a sale may become
irrevocable by throwing a stone; or by stipulating, “I sell you such and
such an object, and you will have a right of option until I have thrown this
stone. Holly Prophet (pbuh) had forbidden a transaction determined by
throwing stones, which involves uncertainty. 39 Hence, this kind of sale is
forbidden in Islamic law.40
2. Bay` al-Mulamasah
A “touch” sale is an expression which implies:
a) The sale , i.e. of a piece of cloth already folded , that is bought by
merely touching it, and renouncing in advance the right of option
accorded by law after seeing it.
b) A sale by merely touching an article without any formal offer and
acceptance and without mutual consent.
c) A sale concluded by saying, “Where you have touched this cloth I
have sold it you.”
According to Hanafi school this kind of sale is voidable (fasid). 41
According to Imam Malik 42 and Imam Shafi. 43 it is reported that the
AL-ADWA 49:33 26 The Legal Effects of Unfair Contracts…..

prophet (pbuh) had forbidden bay al-mulamasah, because the consumer is

not given a chance to examine the good.
3. Bay` al-Munabadha
According to Imam Malik, Bay`al-Munabadha is the practice whereby
one man throws a garment to another , and the other also throws a garment
without either of them making any inspection. Each of them says, “This is
for this.” It is reported that two types of transactions are forbidden by the
Prophet (pbuh), i.e. Bay`al-mulamasah and Bay` al-munabadha. 44 This
type of sale is prohibited in Islamic law.45 The reason is that consumers
are not allowed to proper or adequate inspection in order to know the
goods thoroughly.
4. Bay`al-Muwasafa: (Sale by Description)
It is the sale of goods which has not been possessed or a sale of goods
by describing them without any inspection, the delivery being made later,
after the vendor had bought them. According to Sa`id ibn al-Musayyab,
the sale by description is a secret agreement made when a man describes
to the consumer goods, which not with him, by deferment of an
obligation. 46 It is prohibited because the transactions would have to be
made before the goods were possessed by the vendor.47
5. Bay`al-Muzabanah
It is a contract of exchange of harvested dry dates by their calculated
and definite measure for fresh dates or other fruit of the same species on
the tree. It was reported that the Prophet had forbidden Bay`al-
Muzabanah.48 In cases where goods (i.e. fruits), whose weight, size and
number are not known, are sold in bulk for a definite weight , measure or
number of some other goods, i.e. green dates for a definite measure of ripe
dates. The same applies to the selling of raisins by measure for grapes.49
This type of sale is prohibited because it is buying of something that‟s
number, weight and measure is not known.
6. Bay`al-Mukhadarah
Bay`al-Mukhadarah is selling fruit before it had started to ripen. The
Holly Prophet is reported to have forbidden Bay`al-Mukhadarah. He
forbade this transaction for both buyer and seller.50 The Holly Prophet is
reported to have stated further; “Have you not seen if God prevents any
fruit (from coming out) for what exchange shall one of you take the
property of his brother.” 51 This type of contract gives rise to a lot of
disputes, quarrels and feuds because of fluctuations in the quantity and
quality; losses resulted on these commodities so that claims were made
and disputes starts.
AL-ADWA 49:33 27 The Legal Effects of Unfair Contracts…..

7. Bay`al-Muhaqalah:52
It is the exchange of seed-produce, still in the ear, for the grain of wheat
.the prophet is reported to have forbidden Bay`al-Muhaqalah which was
considered to involve certain hazardous elements.53
8. Bay`al-Sinin or Bay`al-Mu`awamah
It is effected by saying, “I sell this commodity (fruit or harvest before
the crop has grown on palm trees or others) for a year or more and when
the year has ended the term of contract will be terminated between us and
I shall give the price and you will give me back my commodity.” 54 Holly
Prophet has prohibited Bay`al-Sinin because of the existence of a
hazardous element in it. 55 This type of sale is also called bay`al-
mu`awamah because it selling of something years ahead.56
9. Bay`al-Haml
It is the sale of an embryo or the sale of youngling to be brought forth
later from the foetus of an animal, that is, what a female animal bears in
the womb. This type of transaction is not allowed because the commodity
is not known. It is prohibited due to uncertainty.57
10. Bay’al Hayawan bi’L-lahm
It is narrated that the Prophet (pbuh) had prohibited bartering live
animals for meat.58 It is also considered as a kind of gambling or a game
of hazard (al-qimar). The reason is uncertainty in their weight.
The above types of transaction are declared unlawful in Shariah
because they carry uncertainty because that may result in exploitation of
the consumer. Moreover, Islamic law does not differentiate between false
advertisements, trader‟s puff and sales talk etc. Any statement by the
producer that could influence a consumer in making a purchase will make
him liable under the same rules. It is also pertinent to explain here the
meaning of false or misleading representation under Islamic law which is
one that omits facts as well one that states false one. Even if a statement is
literally truce but it misleads the public would be considered as false
representation. A statement must be read in the context and light of the
overall impression it might give to the people it is addressed to. The Holy
Prophet (pbuh) stated: “he who cheats us is not one of us”.59 Therefore
under Islamic law the literal truth of statements is not a defense if they
convey a misleading impression upon the reader. Hence, in order to
determine the legality of an advertisement the general impression it gives
will be considered and an advertisement will be considered false if it can
deceive or misleads any person. 60 The manufacturer may base his
argument for defense on that the consumer (plaintiff) was not likely to be
deceived by the advertisement; however, the relevant interpretation would
be the one made by the consumer as misleading advertisement is a relative
AL-ADWA 49:33 28 The Legal Effects of Unfair Contracts…..

thing which defends on the group of people addressed.61 Now what would
be the standard for a misleading advertisement so it is very easy under
Islamic law being a religious law that even if a person of below average
intelligence is misled by an advertisement such an advertisement in this
specific case will be considered mis-leading.62
Hence, the contracting parties may change or limit these statutory
provisions if they choose to do so under the contract. Thus, Islamic law of
contract has safeguarded the interests of the consumers in cases of
defective products by imposing liability upon the manufacturer and made
him liable for any hidden defects, the seller is also bound by the express
terms which they offer to the consumers.
Implied Terms in Islamic Law of contract
The Islamic law of contract has recognised various implied terms in
contract through different kinds of (khiyarat) options. These options
highly protect rights of the consumers in contracts and commercial
transactions. The purpose of option is to give chance to a consumer who
suffered some loss in transaction to revoke contract within stipulated time.
They have been designed to maintain balance in transactions and to protect
a weaker party from being harmed. Some of these options are discussed
below which have great impact on the protection of consumers in
commercial transactions. In this context Khiyar al ayb must be highly
appreciated. It is a right given to a purchaser in a sale to cancel the contract
if he discovers that the object acquired has in it some defect diminishing its
value. The defect is anything that is recognised by the commercial custom
(urf tijari). 63 Hence, this meaning covers the various types of defects
recognised in contemporary times such as manufacturing defect, design
defect and instruction defects etc. Khiyar al ayb is a well-recognized legal
method under Islamic commercial dealings which protects society from the
problems arising from purchasing defective products. It is an implied
warranty imposed by the law itself and the parties do not have to stipulate
it. It is thus a necessary condition of the contract. The goods are liable to
be rejected if undeclared defects are discovered. In this context, it is
pertinent to quote Hidaya:
“If the goods purchased prove unfit for use, the buyer is entitled to a
full refund of the purchase price even in case of perishables, if a
person purchases eggs, musk melons, cucumbers, walnuts, or the like,
and after opening them discover them to be of bad quality; in that
case, if they be altogether unfit for use, the purchaser is entitled to
complete restitution of the price from the seller, as the sale is invalid,
because of the subject of it not being in reality property.”64
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Hence, Islamic law protects consumers both before and after

conclusion of the sale and purchase agreement by giving them the right of
inspection and the right of option. The Islamic doctrine of khiyar al ayb
allows the buyer the right of inspection of the goods (to ensure its quality,
etc.) and also the right of option (whether to continue with the contract or
otherwise) both before and after the contract of sale and purchase is
concluded.
The Mejjalla terms such option as khiyar al-ayb, or “option for defects.”65
The option of defect (khiyar al-ayb) is based on the following verse:
“O ye who believe! Eat not up your property among yourselves in
vanities: But let there be amongst you Traffic and trade by mutual
good-will: Nor kill (or destroy) yourselves: for verily God hath been
to you Most Merciful!”66
The other options are such as the Option of the Session (Khiyar al-Majlis),
Option of Defect (Khiyar al-ayb), Option to Ascertain the Subject-Matter
(Khiyar al-Ta`yin), Option of Inspection (Khiyar al-Ru`yah), The Option
to Revoke the Contract (Khiyar al-Sharth), Khiyar al-Ghalat, Khiyar al-
Tadlis. These options are provided in those contracts, which accept
revocation like sale, hire, muzara‟ah (crop sharing). These options are not
available in those contracts, which do not accept revocation such as
divorce, manumission etc.
Majallah has codified six options (khiyarat) in favour of the
consumers. They can be divided into two broad categories. First, the
options that are implied warranties whether the parties stipulates them or
not they exist. These are the option of defect (khiyar al-„ayb); the option of
fraud (khiyar al-tadlis); and the option of inspection (khiyar al-ru‟yah).
Secondly, conventional options that are created by the mutual consent of
the parties and affecting the formation of the contract such as the option of
acceptance or rejection within the contractual session (khiyar al-majlis);
the option of distinction (khiyar al-ta„yin); the option to defer payment
within a specific time limit (khiyar al-naqd).67 Of all these options, Muslim
jurists have regarded Khiyar al-Ayb as a rubric for the study of options.
Option of Defect (khiyar al-ayb) :
Khiyar al ayb is a well-recognized legal method under Islamic
commercial law that protects consumers against the defective products. It
is a right given to a consumer in a sale to cancel the contract if he
discovers that the object acquired has in it some defect diminishing its
value or that makes it fall short of its requirements or specifications. 68
Likewise, in regard to quality, the vendor guarantees to the
purchaser that the sold goods are in proper condition. Ayb is defined as any
defect existing in the goods at the time of the contract that will call for a
AL-ADWA 49:33 30 The Legal Effects of Unfair Contracts…..

reduction in value as recognised by the customary standards of

merchants.69
It would be considered fraudulent of a seller‟s part to intentionally
conceal a defect.70 It is an implied warranty imposed by the law itself and
the parties do not have to stipulated it. The ruling of Islamic provisions, the
Sunnah in particular, has evidently envisaged the eventuality where a
buyer does not possess sufficient knowledge of the product he/she has
agreed to buy. A sale of this type cannot be said to reflect of the true
intentions of the buyer, especially if the product turns out to be defective in
a way that is not obvious to the naked eye.71 The Majallah regulated the
liability for hidden defects in the contract of sale in Arts. 336-355. Article
238 defines a defect as “what reduces the price of the thing sold among
merchants and men of discernment”. As per these provisions, upon the
discovery of a defect the buyer is granted the option either to rescind the
contract of sale, i.e. to practice khiyar al-ayb, or to keep the thing sold as
is.
An Islamic legal mechanism used to protect consumer rights is the
inclusion of option of defect in contract formation. The Ayb (defect) is of
two kinds: patent and hidden. Some authors have defined defect as „„any
increase or decrease of the merchantable quality of the original creation of
anything‟‟ or refer the determination of defect to the precedent. However,
precedent cannot be used to judge goods that are produced for the first
time.72
In this context the Majallah states: “Any buyer in Islamic law has
an automatic implied warranty against latent defects in the goods
purchased”. 73 A defect consists of any faults which, in the opinion of
persons competent to judge, cause depreciation in the price of the
property.74
The option is valid in case of products, which need to be specified like
a house, land or any room, which has its own individuality. The goods are
liable to be rejected if undeclared defects are discovered. This type of
option arises only if the contract has been concluded. If the contract is still
in the state of negotiation or still under discussion, the affected party
cannot exercise this option. This method is based on the Holy Qur‟an75 and
following Sunnah of the Holy Prophet (pbuh): „„He who defrauds another
is not from us‟‟76 and „„If the contracting parties speak the truth and reveal
the defects of the goods then the contract will be beneficial for both. If they
do not speak the truth and hide the defects of the goods they will [Allah
will] diminish the benefit of the transaction.‟‟77
AL-ADWA 49:33 31 The Legal Effects of Unfair Contracts…..

a) Conditions for Option of Defect (Khiyar al-Ayb)

There are various conditions for exercising Khiyar al-Ayb such as: the
defect should be such which causes decrease in the value of the property;
the defect may be obvious or hidden; the defect should have existed prior
to the contract, a defect appearing later after delivery is not valid for
purpose of the option; the defect should continue after delivering till the
time of the exercise of the option, if the defect disappears before this, there
is no option; the buyer should have no knowledge of the defect at the time
of the contract or at the time of delivering; and there should not be any
agreement of non-guarantee.78
b) Effects of Defect on Contract
In case, the consumer has bought a defective product, he/she has the choice
to confirm the sale or to cancel it in the view of majority of jurists. The
Maliki jurists distinguish between the minor (yasir) defect and major
(fahish) defect and purpose that if the defect is minor, the buyer may
confirm the sale while being returned part of the price paid in proportion to
the extent of the defect. In case the defect is major. He has the choice
either to cancel it or to confirm it without compensatory restitution.79 The
Hanbali jurists hold that the buyer of an object with defect whether minor
or major, may confirm the sale while being paid the difference between the
price of the article in perfect condition and its price with defect.80
In case the seller declares at the time of sale that there is a defect in
the product sold, and the consumer accepts the product with the defect, he
has no option on the account of defect as he himself waived the same.81
Hence he cannot return the product in such a situation e.g. if a consumer
buys an animal with all defects of any description whatsoever whether
blind, lame, or worthless, he cannot return such animal ascertaining that it
had a defect of long standing.82
In case when a defect appears in the thing sold while in the
possession of consumer, and it proves to be a defect of long standing, the
consumer has no right to return the thing sold to the seller rather he has the
right to claim reduction in the price. For example if the consumer buys a
piece of cloth which after being cut up is found to be frayed and rotten, he
cannot return it to the seller because by cutting he caused a new defect and
it may not be sold again. The consumer in such a case has the right to
claim a reduction in the price.83
When a purchaser buys a roll of linen and cuts it up to make shirts.
He then finds it to be defective and sells it. He cannot claim any reduction
of the price from the vendor. The reason for this is that while the vendor
may state that he would take back the stuff with the defect of recent origin,
that is to say, cut up, the sale thereof by the purchaser is tantamount to an
AL-ADWA 49:33 32 The Legal Effects of Unfair Contracts…..

adoption of the defect. 84 This indicates that the reduction may not be
claimed when the thing bought is for commercial purposes and sold to a
third party. When the consumer adds something to the product e.g. sewing
or dying in case of a cloth such acts prevent the return of the subject matter
to the seller.85
If the consumer buys a thing and subsequently it appears to be in such
a state that no benefit can ever be derived from it the sale is void and the
consumer can recover the whole of the price. For example if a consumer
buys eggs which have been proved to be rotten and useless, the consumer
can claim whole of his money.86
c) Termination of the Khiyar al-Ayb
The death of buyer does not terminate the option. The right in such case is
inherited by the heirs. The factors that terminate the Khiyar al-Ayb,
mentioned by jurists, are the acceptance of the product with defect by the
consumer; and destruction of the object in the hands of buyer. 87 It is a
matter of further investigation that whether or not the Muslim jurists had
mentioned some rulings about the situation in which the destruction is
caused by a defect in the product itself. Similarly, is it possible for a
consumer to claim damages under the notion of Khiyar al-ayb for such
loss? Traditionally, in Islamic consumer contracts, if one produces and
sells defective goods to others the buyer has the right to nullify the contract
or to obtain compensation (arsh), i.e. the balance price of the damage or
loss between non-defective and defective goods. 88 In such cases, the
modern legal regime may be applied if it promotes the purposes of Islamic
Shariah and leads to the welfare of the Muslim ummah.
Option of fraud (Khiyar al-tadlis or khiyar taghrir) :
The option to rescind the contract, if the option of the defect and
sight cannot be put into effect, is the option of fraud. This option exists in
cases where the disappointed party can established that his agreement
contract was gained by the deceit or wilful misrepresentation of the other
party.89 This also includes concealment of a defect in the subject matter
and the seller hides it to sell the subject matter.90 It can be revoked for
fraud which causes loss of property. It is forbidden to deceive in business
transaction.91 For instance, it is prohibited to sell an animal that has not
been milked for few days in order to increase the amount of milk at the
moment of sale. Such fraud gives the purchaser the right of cancellation,
provided he makes use of it without delay. According to al-Shafi‟ the right
of the consumer in these circumstances, can still be exercised three days
after the discovery.92 If the purchaser has already consumed the milk from
the animal, he should return it to the vendor together with a Sa‟ (Sa‟ plural
suwa is a measure for grain) of the value four mudds (modius), according
AL-ADWA 49:33 33 The Legal Effects of Unfair Contracts…..

to the custom of Medina” or it would be approximately five pints. The

official capacity of the mudd of Madinah (and it was called mudd al- nabi)
would be approximately five gills.93
It has also been stated in Majjalla that when in a transaction of sale
one of the parties deceives another and misrepresentation is proved, the
person so deceived can cancel the contract. 94 In case the victim of such
misrepresentation dies his right is transmitted to his heirs.95
Option of Inspection (Khiyar al-Ru‟yah):
It is the basic rule that the subject matter should be known to the
parties at the time of contract. The option of inspection is given to the
customer buys anything not present at the time of the contract. Knowledge
of the subject-matter is an essential condition for the conclusion of the
contract. The option of inspection gives opportunity to the customer to
examine the subject-matter at the time of the contract or by description in a
manner, which removes all kinds of Jahala (want of knowledge). This is
known as the option of examination or khiyar al ru yia.
In order to conclude a valid binding contract the subject matter
must exist at the time of the contract in order to avoid gharar or
uncertainty.96 But, this strict rule will caused hardship to the contracting
parties. Thus the Muslim jurist had allowed exceptions to the strict rule of
existence. As for example, bay‟ al-salam (sale by advance payment for the
future delivery), bay‟ al-istihshan‟ (contract of manufacture), 97 Ijarah
(contract of hire) and Masqat (contract of irrigation). But still all this kind
of transaction still has its own stage of uncertainty (gharar) because the
party still has not seen the subject matter yet. Thus, to avoid uncertainty
the consumer is given power to opt whether to continue or withdraw the
contract concluded between them after seeing and inspect the subject
matter- This option known as option of viewing or option of sight (Khiyar
al-Ru‟yah). This option also known as option of inspection. The purpose of
this option is to avoid injustice that may lead to ignorance and dispute
among parties, to protect the interest (Istihshan) of Muslim and to prevent
any disputes among them and to avoid unfairness when they have no
experience or ability to market place to buy things they have not seen.98
Option of the session (khiyar al-majlis) :
Al-majlis (a session) is the period during which contracting parties
devote themselves to the business in hand and is terminated by any event,
such as physical departure from place of business, which indicates that
negotiations are concluded or suspended. 99 The right of the option of
session (sitting), called Khiyar al-majlis, is the inalienable right to
repudiate unilaterally a contract concluded by both parties, so long as they
have not yet separated. This is based on the tradition of the Holy Prophet
AL-ADWA 49:33 34 The Legal Effects of Unfair Contracts…..

(pbuh) i.e. “The contracting parties have the right of option until they
separate”.100
Option to Stipulate (khiyar al-sharth) :
Khiyar al Shart is that option through which one party or both of
them stipulate for themselves or for someone else the right to revoke the
contract within a determined period.101 For instance, the consumer says to
the seller “I purchased this thing from you but I have the right to return it
within three days‟‟. As soon as the period is over the revoke derived
through this option, lapses. The result of this option is that contract which
is binding (lazim) initially becomes non-binding (ghair-lazim) with the
stipulation of this option. It is a right given to the parties or another person
to confirm or cancel the contract during an agreed period of time. It is
accepted on two reasons that were one Prophet (pbuh) accepted it and
sanctioned it and two some people may not be knowledgeable about
trading and need expert opinion. It is valid to compulsory, necessary and
binding contracts which are cancellable even it was effecting one party e.g.
sale, rent, partnership, warranty etc. Both or either one of the parties has
the option of condition. Imam Abu Hanifah, Imam Maalik, Imam Ahmad
Ibn Hanbal and the Shafi‟is are of the opinion that one of the parties may
delegate it to the other parties. In response to a question that parties may
not be knowledgeable and need expert opinion, Al-Shafi‟is are of the
opinion that this is not permissible to delegate to another person. Period of
Option of Condition according to Imam Abu Hanifah, Imam Zufar and Al-
Shafi‟i it does not exceed 3 days. But according to Imam Abu Yusuf,
Imam Muhammad and Imam Ahmad ibn Hanbal it can exceed 3 days and
may be longer provided that the time is determined and clear. And
according to Imam Malik it is originally 3 days but can be extended to
sufficient time in case where the subject matter of contract was in a place
which is very far and could not be reached within 3 days.102
khiyar al-ta’yin (option to ascertain the subject matter):
Another option given to the customer by Islamic law of contract is
that the buyer can choose, designate or determine within a pre-stated time
one object out of two or more which are offered to him. It is called Khiyar
al-Ta`yin. This right can be exercised by the customer in a situation when
he is offered to buy an unascertained thing out of a number of ascertained
things with a right to ascertain the exact thing later.103 For example one
buying a car out of three vehicles offered for fixed price, gets opportunity
through this option to have cars examined by a specialist and chooses any
one of them. The reserving of the right to ascertain the bought item later is
known as the Khiyar al tayin or the option of determination. This option
AL-ADWA 49:33 35 The Legal Effects of Unfair Contracts…..

can be only exercised by the buyer and it makes a binding contract non-
binding in favour of the customer.
The option of determination, where a person having purchased two
or three things of the same kind, stipulates a period to make his
selection.104 The purpose of this Khiyar is to give wide choice to the buyer
to choose and the seller to specify the subject matter of the contract e.g. the
object was car and has three types, Toyota, Honda and Suzuki and has
different qualities and different price. In this situation, the seller has the
option to determine the object, price and the qualities of the subject matter
of the contract itself.
This option is applicable to the parties of the contract only in a
determined time. This option cannot be stipulated by the third parties.
However, some scholars are of the opinion that this option is applicable to
the buyer only. Duration of this option is according to the nature of the
transaction. Imam Abu Hanifah maintains that the period of this Khiyar Al-
Ta‟yin is same as Khiyar al-Shart which is 3 days. However duration of
option must be defined by contracting parties while Shafi‟is and Hanbalis
do not recognize this option. They are in the opinion that if the subject
matter of the contract is not determined sufficiently then it is not
confirming the basic principle of Islamic Transaction. They also argued
that there is no authority on Hadith about Khiyar At-Ta‟yin. Hanafi and
Maliki approved Khiyar at-Ta‟yin on the basis of Istihshan and affirmed
that the option has been introduced to prevent any damages.
Option of Mistake (Khiyar al-ghalat):
This type of option was only introduced by the successors. This
natural doctrine of a contractual system is based on the caveat emptor
principle.105 This principle means that the buyer must ascertain the good
quality of goods he buys. In this context, the hadith of the Holy Prophet
(pbuh) is to be mentioned. Narrated „Abdullah bin Umar: Allah‟s
Messenger (pbuh) said: “He who buys foodstuff should not sell it till he is
satisfied with the measure with which he has bought it”.106 However, the
Islamic ethical system does not endorse the doctrine of caveat emptor that
many Western courts have considered valid in several shadowy cases. It
has put the responsibility on the part of seller to disclose all the defects of
the product to the consumer.
Compensation for Damages in Islamic Laws of Contract:
Contractual liability for compensation in Islamic law is well known
as dhaman-al-uqud. When the subject matter of the contract is destroyed,
as in the case where the sold property has been destroyed prior to delivery
or when the hired subject matter is destroyed whilst in the possession of
the hirer, the concept of warranty (daman al-aqd) applies. This means that
AL-ADWA 49:33 36 The Legal Effects of Unfair Contracts…..

the holder of the subject matter in question in warranty (daman al-aqd)

will be responsible for the destruction of the subject matter.107 The contract
liability is applied only to damage or loss of the property that is the subject
matter of the contract and does not extend to consequential personal injury
or damage to the other property of the consumer. In this regard Majallah
states:
“A defect of long standing is a fault which existed while the thing
sold was in the possession of the vendor; any defect which occurs
in the thing sold after sale and before delivery, while in the
possession of the vendor, is considered a defect of long standing
and justifies rejection.”108
Such contractual liability can be applied to the various kinds of damages
that may be awarded to the party seeking remedy i.e. compensatory
damages, consequential damages, punitive damages and nominal damages.
Islamic law too has no problem about these kinds of remedies in general
and compensatory damages in particular. Compensatory damages are
called Dhaman which literally means compensation. The value depends on
the amount of performance promised in the contract. This may be the value
of the commodity sold or services rendered or other consideration.
Consequential damages occur as a result of the breach and are usually lost
profits. These are also termed as Dhaman al- Uqud. If it is known to the
consumer that the product is defective and may cause damage to him or his
other property, he can rescind the contract. Rescission is an equitable right
to put an end to a contract and have the status quo restored.
The right of rescission (Khiyar-Option) is the right unilaterally to
cancel (faskh) or to ratify (imda‟) a contract, and in particular a contract of
sale; if it is not exercised within the proper time limit, the sale is complete
(tamm), with a somewhat different meaning of the term. It can be
conferred by law, or agreed upon by the contracting parties.109 The buyer
has the right of rescission at the time at which he sees the object which he
has bought, the act of „seeing‟ not to be taken too narrowly (khiyar al-
ruyah); also in the case of a defect, i.e. everything that causes a reduction
in price among traders (khiyar al ayb) or lack of a stipulated quality.110 The
defect gives only the right of rescission, not of abatement; this last arises
only if the return of the object of the sale has become impossible either by
its loss or by the occurrence of a new defect after delivery but before
recognition of the first defect (in which case return is possible only with
consent of the seller), or by increase in value (such as the dyeing of cloth).
If the seller delivers less than the stipulated quantity, the buyer has the
choice between rescission of the sale and abatement of the price in
proportion”. 111 The waiver of the Khiyar al ayb by the consumer in a
AL-ADWA 49:33 37 The Legal Effects of Unfair Contracts…..

contract of sale is possible; the resulting absence of obligation is called

bara‟a. The buyer can stipulate the right of choosing from among several
objects (khiyar al-tayin), and by agreement of the contracting parties there
can be conferred on one or on both or on a third party the general right of
rescission (khiyar al-sharth) during a period of not more than three days
(according to the prevailing opinion).112
Dr Wahba Zuhaili is relevant to be quoted here:
“If the sale is valid, binding, free from option and the parties agree to
abolish or terminate it, then its cancellation will be by way of
rescission. And rescission, if it is separate from sale of which it
generally consists, will be allowed in all binding contracts, except
marriag”.113
Hence, damage is one of the basic elements of contractual liability
in Islamic law. In order to satisfy this element the consumer is only
required to prove the link between the product and the manufacturer i.e.
that the product is produced by a particular manufacturer. If this link is
established that is enough proof for the liability of the manufacturer.114
Is there any ‘time limitation’ for suits under the Islamic Law of
Contract? :
Muslim scholars have difference of opinions regarding the
limitation period for claim.115 The Hanafi permit a claim to be barred if a
certain period of time has passed.116 The Ottoman Civil Code that is based
on Hanafi school has provided for statutes of limitations in the following
articles states: “a debt, or property deposited for safe-keeping, or real
property held in absolute ownership, or inheritance, or actions not relating
to the fundamental constitution of a property dedicated to pious purposes
leased for a single or double rent, or to pious foundations with the revenue
of a pious foundation, or actions not relating to the public, shall not be
heard after the expiration of a period of fifteen years since action was last
taken in connection therewith.” 117 In the same sequence, Article 1661
states that “actions brought by a trustee of a pious foundation ... may be
heard up to a period of thirty- six years. In any event these actions shall not
be heard after the thirty-six years has elapsed.”118 Despite these statutory
provisions, the contracting parties may change or limit these statutory
provisions if they choose to do so under the contract.119 This provides a
kind of flexibility to the legislatures in an Islamic state to specify a time
period for certain issues that are adequate with the requirements of a
particular age.
Conclusion:
Contract law in any system ensures the parties to private
agreements that any promises they make will be enforceable through the
AL-ADWA 49:33 38 The Legal Effects of Unfair Contracts…..

machinery of the legal system. Islamic law of contract ensures the

protection of rights of both seller and buyer. Islamic law of contract, based
on the divine law and ethics, highly emphasis on the protection and
preservation of buyers‟ interests before the making of a contract, while
formation of the contract and even after its conclusion. It has prohibited all
the unfair transactions in order to insure protection of buyers against mal-
practices in trade such as hoarding, adulteration, usury, misrepresentation,
exorbitant profiteering, dealing in prohibited goods and services, gambling
and games of chance, arbitrarily fixing prices of the commodities, cheating
and fraud, trickery, false representation, swearing to sell a product and
exaggeration in description of the goods and services etc. all are strictly
prohibited by Sharī‟ah . In Islamic law of contract a large number of
transactions are declared unfair only because they harm a particular party.
Moreover, it has given buyers right to rescind the contract when they feel
that their rights are at stake. Hence, they can utilize the Islamic law of
options (Khiyarāt).
AL-ADWA 49:33 39 The Legal Effects of Unfair Contracts…..

References
1 There are number of verses in Holy Qur‟an that prescribe this rule
such as it says: O ye who believe! fulfil (all) obligations. Lawful
unto you (for food) are all fourfooted animals, with the exceptions
named: But animals of the chase are forbidden while ye are in the
sacred precincts or in pilgrim garb: for God doth command
according to His will and plan (Qur‟an 5:1), “Those who keep their
promises when they make them,” (Qur`an 2: 177), and “I too
promised, but I failed in my promise to you” (Ibrahim: 22.This is the
statement by Satan.) etc.
2 Islamic law of contracts is based upon the following types of
commercial transactions i.e. Contract of Sale, Contract of Ijarah
(Leasing), Contract of Musharakah, and Contract of Mudaraba,
Contract of Kafalah (surety ship), Contract of Hawalah (assignment
of debt) and Contract of Rahn (Pledge) etc. All these contracts have
great concern with consumers as to get some goods or services is the
ultimate motive behind these contracts. The consumer cannot fulfil
their needs and requirements without entering one of these contracts.
However, the research in hand is focused on product liability
therefore the main concern is to discuss provisions from those
chapters of Fiqh where there is delivery of goods such as Bay‟ and
Ijara.
3 Kasani, Badai al-Sanai`, vol.5, p.133.
4 Majallah, Art. 105.
5 Qur‟an says: “And Allah has permitted sale” (Qur‟an 2:278). It also
says: “O you, who believe, devour not your property among
yourselves by unlawful means except that it be trading by your
mutual consent” (Qur`an 4:29).
6 Al-Kasani, Badai al-Sanai, vol.4, p.173; Al-Sarakhsi, Al-mabsut,
vol.15, p.74; Al-Marghinani, Al-Hidaya, vol.3, p.230.
7 Holy Qur‟an, 2: 275.
8 Holy Qur‟an, 4: 29.
9 Al-bukhari, Sahih, tradition no. 2373, vol.3, p.113; Muslim, Sahih,
tradition no. 1042, vol.2, p.271; Ibn Maja, Sunan, tradition no.1836,
vol.1, p.588; Al-nasai, Sunan, tradition no.2584, vol.5, p.93; Ahmad,
Musnad, tradition no. 1430, vol.3, p.43.
AL-ADWA 49:33 40 The Legal Effects of Unfair Contracts…..

10 Ibn Majah, Sunan, tradition no.2203, vol.2, p.742; Malik, Muwatta,

tradition no.100, vol.2, p.685; Al-bayhaqi, Al-sunan al-kubra,
tradition no.10978, vol.5, p.585.
11 Ahmad, Musnad, tradition no.15835, vol.25, 157.
12 Ibn Majah, Sunan, Bab Bai al-Khiyar, tradition no: 2185, vol.2, 737.
13 Al-Zuhayli, al-Fiqh al-Islami wa adillahtuhu, Dar al-Fikr,
Damascus, vol.5, 3309.
14 Al-Marghinani, Al-Hidaya, vol.3, 23.
15 Mejjala, Art.101-102; Al-Kasani, Badai al-Sanai, vol.5,133.
16 Shams-ul-din (d.954 A.H.), Mawahib al-jalel fi Sharh Mukhtasar al-
Khalil, Dar al-Fikr, Beirut, 1992, vol.4,228.
17 Al-Nawwawi (d.676 A.H.), Rawdat ul-talibin wa umdat ul muftin,
Al-Maktab al-Islami, Beirut, Damascus, 1991, vol.3, 338.
18 Ibn Qudama, Al-Mughni, vol.3, 480.
19 Nyazee, Outlines of Islamic Jurisprudence, 107.
20 Al-Jaziri, Al-fiqh ala mazahib al-arba‟, vol.2, 145.
21 Ibn Nujaim, Al-bahar al-Raiq, vol.5, p.278; Al-Khalil Al-Maliki
(d.776 A.H.), Mukhtasar al-Khalil, Dar al-Hadis, Cairo, 2005, vol.1,
143; Al-tousi (d.505 A.H.), Abu Hamid Muhammad bin Muhammad
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(d.1243 A.H.), Matalib ulu al-nuha fi sharh ghayat al-muntaha, Al-
maktab al-Islami, 1994, vol.3, 10.
22 Abdur Rahim, The Principles of Muhammadan Jurisprudence, 96.
23 Al-Zuhaili, Al-fiqh al-Islami wa adillatuhu, vol.5, 3320.
24 Al-mausuwa‟ al-fiqhiya al-kuwaitiya, vol.17, 280; Al-zuhaili, Al-
fiqh al-Islami wa adillatuhu, vol.6, 4233.
25 Muslim, Sahih, tradition no.1581, vol.3, 1207; Ahmad, Musnad,
tradition no.2042, vol.3, 480; Al-darimi, Sunan, tradition no. 2148,
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26 Al-kasani, Badai `al-San`i, vol.5, 134.
27 Nyazee, Outlines of Islamic Jurisprudence, 142.
28 Al-zuhaili, al-fiqh al-Islami wa adillatutu, vol.5, 3367; Al-Jaziri, Al-
fiqh ala Mazahib al-arba‟, vol.2, 140-2.
29 Ibn Hazm, Al-Muhalla, Dar al-Fikr, Beirut, vol.7, 342.
30 Muslim ibn Hajjaj, Sahih, Kitab ul- aqdia, tradition no. 1718, vol. 3,
1343.
31 Qur‟an 5:1.
AL-ADWA 49:33 41 The Legal Effects of Unfair Contracts…..

32 Abu Dawood, Sunan, Al-Maktaba al-Asriyah Seeda, Beirut, vol.3,

304; Al-tirmidhi, Sunan, Dar al-Gharb al-Islami, Beirut, 1998, vol.3,
28.
33 Al-Sarakhsi, al-Mabsut, vol.13, 13-28.
34 Al-Kasani, Badai al-Sanai, vol.5, 169.
35 Zaydan, al-Madkhal li dirasah al-Shariah al-Islamiyyah, 398.
36 Al-mausawa‟ al-fiqhiya al-kuwatiya, vol.9, 101.
37 Al-Sarakhsi, Al-mabsut, n.d., 12, 108.
38 Ibn Nujaim, Al-bahr al-raiq Sharh Kanz al-daqaiq, vol.6, 83.
39 Muslim, Sahih, tradition no. 1513, vol.3, 1153; Ahmad, Musnad,
tradition no.7411, vol. 12, 373.
40 Al-zuhaili, Al-fiqh al-Islami wa adillatuhu, vol.7, 5040.
41 Ibn Munzir, Al-Iqna‟, vol.1, 244; Al-mausua‟ al-fiqhiya‟ al-
kuwaitiya, vol.9, 140; Al-zuhaili, Al-fiqh al-Islami w adillatuhu,
vol.5, 3498.
42 Malik Ibn Anas, al-Mudawanna, vol.3, 254.
43 Al Muzani, Kitab al-Mukhtasar, in al-Shafi‟s kitab al umm, Dar al-
Marifa, Beirut, vol.8, 186.
44 Malik Ibn Anas, al-Muwatta, tradition no.2460, vol.4, 963.
45 Al-Kasani, Badai al-Sanai, vol.5, 176; Ibn Rushd, Bidayat al-
mujtahid wa nihayat al-muqtasid, vol.3, 167;
46 Abd-ur-razzaq, al-Mussaanaf, tradition no. 14228, vol.8,.42.
47 Ibid., 42-43.
48 Malik, al-Muwatta, tradition no.2314, vol. 4, 913.
49 Al-Shafi,Kitab al-umm, vol.3, 63.
50 Al-shafi, Musnad, Dar al-kutub al-elmiyya‟, Beirut, Lebanon, vol.1,
142; Malik, Muwatta, tradition no.11, vol.4, 893.
51 Malik, Muwatta, tradition no.11, vol.2, 618.
52 E.W.Lane, Arabic-English Lexicon, vol.1, 612.
53 Ahmad, Musnad, tradition no. 1959, vol.3, 428; Abu Yusuf, Al-asar,
vol.1, 189; Al-bukhari, Sahih, tradition no.2186, vol.3, 75; Muslim,
Sahih, tradition no.16, vol.3, 1174.
54 Al-murtaza al-Zabaydi, Taj al-Arus vol.33, 158.
55 Muslim, Sahih, tradition no.85, vol.3, p.1175; Ahmad, Musnad,
tradition no.14320, vol.22, 221.
56 Al-Shafi, al-Musnad, vol.1, 145.
AL-ADWA 49:33 42 The Legal Effects of Unfair Contracts…..

57 Al-zuhaili, Al-fiqh al-Islami wa adillatuhu, vol.4, 3021; Al-

mausuwa‟ al-fiqhiya al-kuwaitiya, vol.9, 186.
58 Malik, al-Muwatta, tradition no. 2414, vol.4, 947; Al-dar Qutni,
Sunan, tradition no.3057, vol.4, 38.
59 Muslim Ibn al-Hajjaj, Sahih, Dar Ihya al-turath al-arabi, Beirut,
tradition no. 101, vol.1, 99.
60 Nassar, Manufacturer‟s Liability under Islamic law, LLM
(unpublished) thesis submitted to the Law School, Harvard
University, U.S.A. 1985, 47.
61 Ibid., 48.
62 Ibid., 49.
63 Al-marghinani, Al-Hidaya, vol.3, 36.
64 Al-Marghinani, Ali Ibn Abi Bakr Ibn Abdal Jalel al-Farghani,
(d.593 A.H.), Al-Hidaya, Dar Ihya al-Turath al-Arabi, Beirut,
Lebanon, (n.d), vol.3, 39.
65 Majjalla, Art.336.
66 Qur‟an; 4:29.
67 Majallah, Art. 336-355.
68 Al-Kasani, Bada‟i„ al-Sana‟i„ vol. 5, 247.
69 Nabil Saleh „Remedies for Breach of Contract under Islamic and
Arab Laws‟ Arab Law Quarterly‟ (1989) 4 269, 290.
70 Ibn Nujaim, Al-bahr al-raiq, vol.6, 36.
71 Kamali, M. H. (2002), Islamic Commercial Law: An Analysis of
Futures and Options, Kuala Lumpur: ILMIAH Publishers.
72 Dayani, A. A. R. (2007). The Comparison of the Principles of
Khiyar al-„Aib in Fiqh, Civil law, European law and French law.
Journal of Law & Political Science, 37(3), 127–154.
73 Majjallah, Art.336.
74 Majjalah, Art.338.
75 The Holy Quran has also granted the right to such option to the
individual in relation to trading, civil transactions and contract
(Qur‟an 2:275 and 5:(1) “O ye who believe! Eat not up your
property among yourselves in vanities: but let be there amongst you
traffic and trade by mutual good will: nor kill or destroy yourselves:
for verily God any hath been to you Most Merciful!”75
76 Muslim Ibn al-Hajjaj, Sahih, Dar Ihya al-turath al-arabi, Beirut,
tradition no. 101, vol.1, 99.
AL-ADWA 49:33 43 The Legal Effects of Unfair Contracts…..

77 Al-Bukhari, Sahih, Kitab ul Buyu, tradition no.2082, vol.3, 59

78 When the seller specifically states that he is not responsible for any
defects then the buyer acts at his own risk and goods cannot be
rejected.
79 Al-gharnati, Abul Qasim (d.741 A.H.), Muhammad ibn Ahmad ibn
Muhammad ibn Abdullah, Al-Qawanien al-Fiqhiyya, vol.1, 176.
80 Majd al-din, Abdulsalam (d.652 A.H.), Al-muharrar fi al-fiqh ala
mazhab al-imam ahmad ibn hanbal, Maktabat al-Marif, Al-Riyadh,
vol.1, 324.
81 Majjallah, Art.341, 342.
82 Al-marghinani, Al-hidaya, vol.3, p. 37; Majjallah, Art.343.
83 Majjallah, Art.345.
84 Majjallah, Art.348.
85 Al-Mausuwa‟ al-fiqhiya al-kuwaitiya, vol. 20, 140; Majjallah,
Art.349.
86 Majjallah, Art.355.
87 Mansoori, Islamic Law of Contracts and Business Trasactions, 175.
88 Parviz Bagheri and Kamal Halili Hassan, The application of the
Khiyar al-„Aib (option of defect) principle in on-line contracts and
consumer rights, Eur J Law Econ (2012) 33:565–575.
89 Al-Sarakhsi, Al-mabsut, vol.13, 39.
90 Ibn Nujaim, Kanz al-daqaiq, vol.6, 26.
91 Damad afindi, Majma‟ al-anhur fi sharh multaqa al-abhur, vol. 2,
29.
92 Al-Muzani, al-mukhtasar, vol.8, 181.
93 Alfred, The Encyclopedia of Islam vol.4, 1.
94 Majjalla, Art.357.
95 Majjalla, Art.358.
96 Al-jaziri, Al-fiqh ala mazahib al-arba‟, vol.2, 209.
97 Al-zuhaili, Al-fiqh al-Islami wa Adillatuhu, vol.5, 3320.
98 Al-zuhaili, Al-fiqh al-Islami wa adillatuhu, vol.4, 3125; Al-
mausuawa‟ al-fiqhiyya al-kuwatiya, vol.2, 248.
99 Al-mausuawa‟ al-fiqhiyya al-kuwatiya, vol.1, 205.
100 Al-Bukhari, Sahih, Kitab al-Buyu‟, Maktabah Dar Tauq al-Najat,
Beirut, tradition no. 2079, vol.3, 58.
101 Al-jaziri, Al-fiqh ala mazahib al-arba‟, vol.2, 158-162; Al-
zuhayli,al fiqh al islami wa adillatuhu ,vol .5, 3535.
AL-ADWA 49:33 44 The Legal Effects of Unfair Contracts…..

102 Al-Marghinani, Al-Hidaya, vol.3, 29; Ibn Qudama, Al-Mughni,

vol.3, 498; Ibn Rushd, Bidayat al-Mujtahid wa Nehayat al-
Muqtasid, vol.3, 225.
103 Al-zuhaili, Al-fiqh al-Islami wa adillatuhu, vol.4, 3107; Al-
mausuawa‟ al-fiqhiyya al-kuwatiya, vol.13, 43.
104 Ibid.
105 N. J. Coulson, commercial law in the gulf states-The Islamic legal
tradition, 69.
106 Al-Bukhari, Sahih, Dar Tauq al-Najat, 1422 A.H. vol.3, 67.
107 F Vogel and S Hayes, Islamic Law and Finance, BRILL, 2007, 112.
108 Majallah, Art. 339-340.
109 Schacht, Introduction to Islamic Law, 152.
110 Ibid.
111 Ibid.
112 Ibid.
113 Zuhaili, al-Fiqh al-Islami wa Adilattuhu, vol.4, 3094.
114 Monzer Kahf, “Economics of Liabilities: An Islamic View” (2000)
8(2) Journal of Economics and Management 85, Monzer Kahf (born
in 1940) is a Syrian American professor of Islamic economics and
finance. He received his Ph.D. in economics from University of
Utah in 1975 and lives in Westminster, California.
115 Al-mausuwa‟ al-fiqhiya al-kuwaitiya, vol. 13, 119.
116 Ibn-Abidin, Radd al-muhtar, vol.5, 420.
117 Al-mausuwa‟ al-fiqhiya al-kuwaitiya, vol. 13, 119.
118 Ibid.
119 Majjallah, Art.1661.