MA`QUD ALAYHI: SUBJECT-MATTER OF CONTRACT

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MA’QUD ALAYHI:
SUBJECT-MATTER OF
CONTRACT
Prof. Dr. Zainal Azam Abd. Rahman
Islamic Contract3-2
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THE CONCEPT OF SUBJECT
MATTER: MA’QUD ‘ALAYHI
 In barter trading both assets exchanged can be
considered subject-matters of the contract
 Depends on whose perspective the assets are
looked at
 In an economy where there is money as medium
of exchange, money not considered as subject
matter but price in sale contracts
 Contract needs subject-matter to be valid
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CLASS OF SUBJECT-MATTER OR
MA’QUD ALAYHI
Tangible assets
Usufruct of asset
Work/labour of individual
Debt or receivables
Rights and privileges
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TANGIBLE/REAL ASSETS
Moveable and non moveable
Qimiyy and Mithliyy
Ma’sum and ghayr ma’sum
Present or absent
Ordinary goods/commodity or
money
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RIBAWI SUBJECT MATTERS
 CHARACTERISTICS OF RIBAWI ITEMS
– Money/medium of exchange
– Foodstuff
– Items having standard weight, measures, units
 The rule of parity for exchanging ribawi
items
 The cash/spot rule
 Contemporary issues
Islamic Contract3-2
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USUFRUCT OF ASSET
 Usufruct is similar to real/tangible asset if it
is valuable can be considered mal/property
according to the Majority
 Why usufruct is treated differently ( not as
mal) by the Hanafi
–
–
–
–
-element of control
-element of durability
-ownership/tradability
-exception to general rule
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WORK/LABOUR OF
INDIVIDUAL/ANIMAL
 Human being is not saleable except with regards
to slaves
 Human parts are also not saleable
 The use of labour or works as subject matter in
ijarah, jualah, istisna’, musharakah, mudarabah,
muzaraah
 Nature of services that can be secured
– -as employeee (ajir khas)
– -as independant contractor (ajir mushtarak)
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DEBT OR RECEIVABLES
 possible situations that can impact hukm:
– Selling to the debtor
– Selling to third parties
– Debt can be either monetary sum or certain goods to be
delivered
– In exchange for another debt or sum of money
– The price is paid in cash or deferred term (debt)
– Or in exchange for tangible asset/goods
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DEBT…
– Whether debt is confirmed/certain or
prospective/potential
– Whether payment to buyer is certain or
doubtful/gharar/uncertainty
– Whether (if ribawi in nature) sold at par or
not/issue or riba
– Whether debt sold or to be sold is due or not
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DEBT NOT DUE SOLD TO DEBTOR FOR
DEFERRED (DEBT) OR CASH PRICE
 Not permissible according to four schools
 Gives rise to al-kali’ bil kali’: debt for debt
if payment is also deferred
 If payment is in cash still the relevant issues are
not addressed
–
–
–
–
–
-selling something not in one’s possession
-as such doubtful as to capability of delivery/payment to purchaser
-debtor not party to the sale contract
-time of delivery not due yet
-if sold at discount leads to giving value to mere time in ribawi
transaction if the debt is a sum of money
I/paymentslamic Contract3-2
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DUE DEBT SOLD TO DEBTOR
FOR DEFERRED PRICE (DEBT)
 Not permissible as in the above situation
 View of Ibn Taymiyyah and Ibn Qayyim
regarding al-Kali’ bil Kali’ in relation to
sale by description for future delivery where
the price is not paid in cash: whether it is
prohibited
 and the issue of selling salam object for
cash before taking delivery for a profit
margin
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DUE DEBT SOLD TO
DEBTOR FOR CASH PRICE
 Permissible according to the four schools
 Hadith Ibn Umar regarding sale of camels
and collecting payment in different currency
 Not permissible in two situations
– In sarf or currency excahnge
– In paying for advance purchase price in salam
contract
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DEBT NOT DUE SOLD TO A THIRD
PARTY FOR DEFERRED PRICE (DEBT)
 Ijma’: not permissible as it leads to al-
kali’ bil kali’- debt for debt
– -sale is for a transfer of ownership
– -it is a sale from Shariah perspective
– -selling something not in possession
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DUE DEBT SOLD TO THIRD PARTY FOR
DEFERRED PRICE (DEBT)
 MAJORITY/FOUR SCHOOLS: not permissible due to
 1. selling something not in one’s possession
 2. selling something not capable of delivery
 3. full of uncertainty: denial by debtor
 4. very close to debt for debt
 NOTES: AYN IS READY ASSET THAT IS PRESENT
IN FRONT OF THE PARTIES WHEREAS DEBT/DAYN
IS SOMETHING NOT THERE IN PHYSICAL SENSE
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DUE DEBT SOLD TO THIRD
PARTY FOR CASH PRICE



VIEW ONE (Hanafi, Hanbali and the most obvious (azhar) among Shafi’I views): not permissible due to
uncertainty/gharar of delivery like selling run away animals
VIEW TWO (one view in Shafi’I school, a view attributed to Imam Ahmad that are said to be the correct view by Ibn
Taymiyyah and Ibn al-Qayyim: it is permissible
VIEW THREE (Maliki school): 1. debt of salam if not in the form foodstuff (to be delivered by the salam seller to the
purchaser) for whatever price 2) other kind of debts are saleable with 8 conditions:
– -cash price
– -debt in the form of something allowable to be sold prior to taking delivery
– -not involving exchange of money for money @sarf
– -to be sold for other than its genus that needs to in the form of goods/real asset not money
– -debtor is known (solvency/status) and residing in the jurisdiction
– -debtor has admitted being indebted/no denial
– -no enmity between purchaser of debt and the debtor
– -the purported sale is not to cause problems to the debtor
 VIEW FOUR (Shafi’i school as held by many of its jurists): allowable to self
debt of whatever nature if due on conditions:
–
–
–
–
-debtor had admitted his indebtedness
-debtor is solvant
-the debt is dayn mustaqirr/confirmed or established debt
-the price is paid in goods or reals assets
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GENERAL CLASS
DISCUSSION
 Conventional finance and commercialization of
credit/lending
 Debt market and risk by own design
 Financial crisis as a result of market distortion
 Due to interference with the law of supply and
demand because of such commercialization of
lending
 The peril of riba finance is obvious to see
 THE QUESTION: IS ISLAMIC FINANCE
EQUALLY INVOLVED??
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NATURE OF RIGHTS
 Rights of Allah, Rights of Man, Combined rights
 Right granted by Shariah to avoid hardship or injustice to
the person concerned, cannot be exchanged with price or
tanazul for a fee
 Right granted by Shariah not for the above reason
specifically
– -cannot be sold
– -cannot be inherited
– -cannot be given for free/hiba
– -can only be exchanged in sulh or tanazul for a fee
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RIGHTS AND ITS
CLASSIFICATION

Rights can be looked at as:
– Right of ownership (complete and incomplete)
– Right to acquire ownership (ownership will materialize at a later time when that right is
eventually exercised
– Right of ownership compared to right to make use (haqq al-intifa’)
– Rights personal to the holder only not transferable freely
– Rights allowed to be sold for a price
– Rights not allowed to be sold but can be subject of sulh/tanazul
– -full complete right of ownership (al-milk al-tamm) compared incomplete right of ownership
(al-milk al-naqis)
– al-milk al-tamm compared to beneficial right and haqq al-intifa’
• -al-milk al-tamm give to holder full power of disposal and control and assumption of risk
and gain of the asset
• -haqq al-intifa’ only gives right to use not power of disposal
• -beneficial right gives incomplete power of disposal and control to the holder
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PRIORITY CAN NOT BE
SOLD
 Priority in ihya’ al-mawat case by tahjir
 Concession/alienation by government/iqta’
 By being first to control abundant
items/mubah
 By being the first to occupy open market
space
 By being the first to be in the first raw in the
mosque or other public spaces open for all
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HUQUQ MA’NAWIYYAH:
INCORPERIAL RIGHTS
 Intellectual property rights
– -copyright
– -patent
– -license
– -trademarks
– goodwill
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GENERAL CONDITIONS
GOVERNING DEALING IN RIGHTS
 The right must be fully established at that material time;




not potential right
It is granted not specifically for a particular holder for the
purpose of avoiding injustice or harm to him personally
Such a right is transferable to other person not personal to
the holder
It is possible to define the boundary or nature/attribute of
the right such that intolerable uncertainty/gharar can be
avoided
That right is generally accepted based on customary
practices/uruf
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SPECIFICATION OF THE
SUBJECT MATTER
 Jins/genus
 Naw’/category
 Sifah/attributes
 Quantity
 Specifications needed to avoid possible dispute
between parties
 If subject-matter is present, buyer has right of
inspection
 Contemporary issues
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DELIVERABILITY OF
SUBJECT-MATTER
 Must be in seller’s ownership and possession
 Meaning of ownership: complete and partial
 Implication of possession
 Possession of movable and non-movable asset
 The rationale for the ruling: uncertainty and issue
of risk and avoidance of dispute
 The issue of frustration of contract when asset is
destroyed before delivery to the other party
 Contemporary issues
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EXISTANCE OF SUBJECTMATTER
 Non-existent can not be contracted as a
general rule
 Ability to deliver is questionable
 The Hanbali view on this is peculiar to this
mazhab
 Exception in the case of salam and istisna’
where sales are based on description
 Contemporary issues
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PERMISSIBILITY/HALALNESS or
LEGALITY OF SUBJECT-MATTER
 Halal for Muslims to posses or acquire
 Recognised for non-Muslim to possess but not Muslims
 Impure things can not be acquired
 Permissible works
 Permissible employment of asset in ijarah
 Dealing with individuals whose assets are essentially of
haram origin
 Dealing with non-Muslims
 Selling of goods likely to be used for illegal purposes
 Contemporary issues
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SUITABILITY OF SUBJECT
MATTER
 Durability of the subject matter for rahn
 Life span of asset in ijarah/;leasing
 Asset that can be properly described in
salam
 Specific object or an object fully described
in some contracts
 Purpose of the contract and the likelihood of
used of the subject-matters
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