GROUP MEMBERS
Nur Arfah Bt Abdul Sabian
2009810436
Amir Nur Ikhwan
Ida
Jaslina
The jurists determined
that any consent which
is impeded is consent
conditional upon the
cause of contract
Considered the consent
is impaired and invalid
– no an actual
agreement
Eg : victim of mistake,
fraud or deceit – the
contract become
voidable and burden of
proof lies in
establishing that the
consent had been
induced by misleading
factors.
4 Grounds of the impediments
Mistake
Fraud
Duress
Effective
constraint
Definition of Mistake (Ghalat)
Term use - Ghalat,which applies to both to
calculated and material error.
In Maliki texts – jahl (ignorance) is found to
replace ghalat.
Oxford law dictionary – define mistake as a
misunderstanding or erroneous belief about a
matter of fact or a matter of law.
According to Rayner in his book ‘the theory of
contracts in Islamic law’, mistake can be defined as
a false or inexact representation of reality, may be
regard to different elements of a contract.
*The muslim theories of obligation detailed as to object of contract.
*It seem to preclude most area of
mistake prior to the conclusion of the
contract.
*Example :
the object must not only exist but in
the condition to be taken possession of,
precisely determined in its substance,
class, quality and value, and must also
be identified.
*Any defect -will renders the contract
void ab nitio.
Concept of Mistake
(Ghalat)
Sanhu’ri
Mistake is given the least consideration
among the impediments of consent
despite the fact that it is the most
conducive to be dispute.
Prof. Coulson
Reducing the degree of mistake to
degree of ignorance (jahl) on the part of
contracting parties which renders the
contract not binding. .
Concept of mistake in islamic
contract
 Islamic law conceives of mistake as a substantive or
intrinsic element which capable of occurring only
during the formation of contractual agreement.
 Mistake could arise from an assumption as to the
existence, quality or quantity of the contractual object
or to the nature or existence of the contract itself.
 The provisions concerning mistake are
scattered and usually are to be found in the
books of fiqh among the discussion in option
of description, defect or sight.
 The Islamic concept of mistake is inextricably
bound to the notion of consent in contract.
 The law lacks in formulated theory because
the provision of mistake are in actuality,
mostly preclusions or safeguards designed to
prevent its very incidence.
Categories of Mistake
1) Mistake as to object of the contract
2) Mistake as to meaning
3) Mistake with stipulation intention
4) Mistake of non-disclosure of the will
5) Mistake as to person
6) Mistake as to law
7) Mistake as to value
MISTAKE AS TO OBJECT
Mistake as to Object of the contract
- It is the most important
category of mistake.
- It consist of 2 types of mistake:
2
Option of
descriptio
n
1) substantive mistake
2) mistake as to insubstantial
qualities of the object.
- It deals with the controversy
between continuing commercial
relations and the maintenance of
due respect for real consent. It
includes 3 different options
1
Option
of
defect
3
Option
of
inspecti
on
MISTAKE AS TO MEANING
(GHALAT AL-MAA'NA)
Mistake as to meaning
(Ghalat al-Maa’na)
 According to classical jurists, a mistake with regard to
the substance (Jins) of the object will constitutes the
contract void ab nitio.
 It considered as substantive mistake.
 Based on Art. 208 of Al-Majella:
“If the object is declared in kind (Jins) and the object
proves to be another kind, the sale is invalid (batil)”.
Examples
1
A sold B a stone as
sapphire which is
subsequently realized
to be a mere glass.
2
A made a contract to sell
wheat to B but then it turn
out to be flour or bread.
Both mistake is substantive and
real,
as for second example, despite
the fact that flour, wheat and
bread are actually are different
stages of process of the same
substance.
 In this case, the mistake as to meaning is also
actionable under the option of description.
 This shows that the Islamic doctrine of mistake
takes on noticeably wider ambit that mistake in
common law.
Mistake as to desired quality
(insubstantial) of the object
 Insubtantial quality (Wasf) of a contract refer to the object
being in the same substance as contracted for, but different
in its quality.
 It is regarded as valid but not binding - the remedy is
sought under Islamic law is not under mistake (ghalat) but
either under the option of defect or description.
Example of insubstantial mistake
1
if a seller represents
the stone as refer to a
sapphire, and it is
later deemed to be a
ruby.
the sale is valid as it
is not mistake as to
substance of the
object and is not
deemed to have
affected the usufruct
intended by the
purchaser and the
true sale.
MISTAKE WITH STIPULATION OF
INTENTION
1) Manifest expression of intent
2) Deduction of intent from circumstances of the case
3) Deduction of intent from the nature of the things
Manifest Expression of Intent
 What is about ?
Expression of intents formula are al- Tasmiya (nominator)
and al- Inshara (indication)
 Explanation?
Nomination represents the real will of the contracting
party
Indication represents the apparent will A
 Example?
sales by catalogue
Deduction of Intent from
Circumstances of the Case
 Explanation?
• Not necessary for manifestation of a contracting party’s will
to be express.
• The other party may reasonably assume to have tacitly
understood or deduced his co-contractor’s will from his
accompanying circumstances or origin and be expected to
recognised a mistake
 Example?
selling stone in a market for a precious jewel may reasonably
be assumed to be that category of value.
Deduction of Intent from the Nature
of the Things

What is about?
The option of defect
 Explanation?
•
Established option with an implied condition for there is an implied condition of
guarantees concerning the soundness of the object.
•
Unless, contractor expressly inserts a condition of waivers against defects in the
contracts.
 Example?
•
Anything which appreciably diminishes the value of an object of ordinary commerce is
regarded as a defect giving rise to an option.
NON- DISCLOSURE OF THE WILL
Khiyar al-Ru’ya
 What is about?
• General Rule in Islamic jurisprudence:
If a contractor agrees to buy an object without having
seen it, he is allowed an Option of Inspection, which
gives him a right to ratify or rescind the contract.
• In this doctrine:
A contract formed by the will of two parties cannot be
valid when the will of one of those parties has been
breach by mistake as to the intended object.
MISTAKE AS TO PERSON
Mistake As To Person
 Not explicitly formulated by the classical jurist.
 Resolution may be adopted to form general
outline of a doctrine.
 Not affect the contract unless the persona of the
contractor, or a substantive quality thereof, which
give rise to a mistake, is a legal cause to the
contract.
Mistake As To Person
 Specific contract in which a mistake as to person
of the co-contractor has become importance.
 Party who suffers is given the right to annul the
contract following the French Civil Law concept.
 Contrasted with English Common Law where
Mistake as to Person falls into the category of
Mistake which negate consent
Mistake As To Person
1) Marriage Contract.
 The person of the spouse is generally of prime
consideration in the contract.
 Sanhuri, a modern author, distinguish between qualities
generally, and essential qualities of the person.
 Mistake as to essential qualities of the person in Sanhuri’s
opinion will invalidates the marriage contract.
Mistake As To Person
2) Unilateral Contract of Gift.
 The donee constitute a substantive aspect of the
contract.
 A mistake as to his person will give the donor the
right to withdraw or demand the return of his gift.
Mistake As To Person
3) Unilateral Contract of Bequest

The legatee is regarded as a cause of the contract.

Al-Kasani states that among the important
condition of a contract is a consent (Rida) of the
testator because it is connected with the property.

Therefore, a bequest made in jest or by compulsion
or mistake is invalid.
Mistake As To Person
 4) Contract of Pre-emption and Agency.
 In the contract of agency, Mistake pertains not so much to
the identity of the person as to his substantive qualities.
 For example, a minor purporting to be an agent lacks
capacity so to act.
 If the third party dealing with the agent believes the latter
has proper capacity to contract, this is a mistake in the
substantial quality of the agent, that is his capacity to the
contracts.
Mistake As To Person
 Thus the third party who deals unwittingly with
such an agent may avoid the contract on the
ground of Mistake.
 Abu Yusuf states that if the buyer is aware of the
status of the agent minor, he is not allowed to
avoid, whereas if he is mistaken wittingly, he may
be given the option to annul or perform.
MISTAKE AS TO LAW
Mistake As To Law
 General principle of the civil law that Mistake as
to Law, like a mistake as to fact, may vitiate the
consent of the contracting party.
 Bellafonds states that the Shariah, as formulated
by the classical jurist, rarely distinguishes
between the concept of Mistake as to Law and
that of ignorance of the law.
Mistake As To Law
 Modern exposes of the principle of contract, there
is a distinction made between Mistake and
ignorance of the law.
 The general maxim that “ignorance of the law is
no excuse” with regard to Mistake is not always
applicable is Islamic law.
Mistake As To Law
 Compendiums on Usul al-Fiqh, the principle is that
ignorance of the law is a valid excuse as long as it is
not accompanied by negligence (Taqsir).
 Whoever is ignorant of the law and is negligent, is
held answerable to this ignorance and will not be
considered a Mistake in Law.
 Whoever is ignorance of the law and is not negligent
in that ignorance is excused his ignorance and it may
be regarded as a Mistake as to Law.
Mistake As To Law
 The primary assumption of Islamic Fiqh is that Mistake as to law is
not excusable except if the special surrounding condition can be
established to rebut the charge of the assumed negligence regarding
the ignorance as to the law.
 The Hanafi author, al-Kasani states, in the sale of moveable
property, if a neighbour asks for a right of pre-emption to that
property, and the buyer, thinking that his neighbour may legally have
per-emption over it, submits that right of pre-emption to him, when
later one of the two want to revoke the contract without the other’s
consent, he will not able to because when the submission is made, it
became a contract between them.
Mistake As To Law
 Here, the buyer mistakenly thinks that pre-emption
may be allowed on moveable objects, which is mistake
in law in Hanafi school.
 This ignorance cannot be considered excusable
because it encompasses negligence on the buyer’s
behalf.
 Therefore, he is not allowed to revoke the sale due to
ignorance, and the contract is binding upon him.
MISTAKE AS TO VALUE
(GHABN AL-FAHISH)
MISTAKE AS TO VALUE
(GHABN AL-FAHISH)
 Definition

 The Islamic Law only recognizes mistake to value
as one of the impediment to contract if it is
regarded as Ghabn al-fahish (Flagrant
misrepresentation).

 The Majelle in its glossary has defined Ghabn al-
fahish as “Excessive deception in the value of
goods”
 The Articles of the Majelle further elaborate to
what extent shall a deception be considered
excessive and enable a contract to be vitiated.
 Article 165 states that excessive deception
means: not less than 1/20 of the total price in respect of
goods,
 not less than 1/10 of the total price in respect of
animals;
 not less than 1/5 of the total price in respect of real
estate unless it is accompanied by verbal deception
(Taghrir) or fraud (Tadlis)

 Article 356 states that “ If there is an excessive
deception without fraud in a sale, the person
deceived cannot annul the sale”.

 Article 357 states that when one party has
defrauded the other and it has been ascertained
that there has been excessive deception the
person who is so deceived can annul the sale.

 The rationale is that in the case of contract that is
flawed due to excessive deception there is lack of
equivalence in the contract which would result
injustice to one of the parties.
CONDITIONS ATTACHED (OPINION OF THE JURISTS)
 According to Hanafi, Shafi’i and Hanbali school:
Ghabn must be accompanied by fraud or verbal
deceit.

 The Shafi’i school further added that Ghabn must
be accompanied by flagrant misrepresentation. A
mistake accompanied by Ghabn alone does not
give rise to rescission unless accompanied by
taghrir.


 According to Hanafi, Shafi’i and Hanbali school:
Ghabn must be accompanied by fraud or verbal
deceit.

 The Shafi’i school further added that Ghabn must
be accompanied by flagrant misrepresentation. A
mistake accompanied by Ghabn alone does not
give rise to rescission unless accompanied by
taghrir.
 However the the I’badi school was of the opinion
that a contract maybe cancelled for any
diminution in value of the object whether or not
that diminution is a veritable defect.

 Therefore it is clear that in order for a mistake as
to value have effect on the validity of the contract
it is very pertinent that it must be accompanied
with the element of fraud and verbal deception.
Exception to condition
 The only exception to the rule that mistake must
be accompanied by fraud and verbal deception is
applicable in the case of contract which involves
the property of a minor, a waqf donor or treasury.

The effect of Mistake as to value

 Ibn Al-Hamam in his book al-Bahr al-raiq states
that a contract for the sale of property (Qunya) if
the Buyer is deceived in the exorbitant manner by
the seller has the right to return the property to
the buyer under the principle of Ghabn. has the
right to return the property to the seller.

 According to Ibn A’bidin there are 3 different
stances taken by Islamic fiqh towards Ghabn
unaccompanied by tgahrir:
 1. the sale is valid but maybe rescinded absolutely;
 2. rescission is not absolute
 3. if deceit has also occurred rescission is absolute.
 According to the Shafi’i school: Ghabn accompanied by taghrir maybe
rescinded at the option of the buyer
 According to Hanbali school which allow option to rescind on 3 grounds
and must be accompanied by taghrir as follows: the sale to receive passenger;
 al-Najsh;
 the contract of dispatch when the carrier is unaware of the value of the
commodity and does not consider it to be a condition of the contract. If he
asks the contractor for indemnity and is deceived then the carrier is given the
option of Ghabn since there is verbal deceit.
 Maliki school was of the opinion that rescission is permissible on 3
conditions as follows: where the Ghabn al fahish occurs in a sale other than at public
auction and the Ghabn al-fahish exceed 1/3 of the price or is
underpriced by a 1/3 or more in a purchase;
 where it occurs in a sale whereby it maybe determined that any
reasonable person might have so been deceived , in which case
consideration must be had to the price at the time of contracting.
The prejudiced party must have had no knowledge about the value
prior to the contract;
 the claim must proceed within a year of the action which give rise to
the deceit so that longer lapses of time leading to breaches of
agreement may not disrupt the ordinary continuance of trading
relations.

Application of doctrine of mistake as to value by
modern statutes
 The doctrine of Mistake as to value has been adopted by the modern
legislations in the Islamic country as follows: Article 125 of the Iraqi Civil Code state that Ghabn may be pleaded where
the needs of one parties have been exploited or where he has been
deliberately confused or intimidated into the agreement, or where he has
been misinformed or is of subnormal intelligence.
 Article 170, UAE Civil Code, Law No. 2 of 1987 provides that where
exploitation or conspiracy has been exerted in the disposition of property of
subsequently restricted personthe judge may avoid the contract despite the
fact that the disposition were made prior to the court’s restriction.
 Article 24 of the Bahrain Contract Law 1969 states
that an erroneous opinion as to the value of the of
the thing which forms the subject matter of the
agreement is not to be deemed a mistake as to a
matter of fact.
 The Malaysian Contracts Act
Conclusion
 From the discussions mentioned above we can
conclude that the Islamic Law does not allow a
mistake by itself to form an impediment to the
contract or to affect the validity of the contract.
 There must be an element of fraud or deceit exist
in the transaction to enable the contracting party
to plead that there is a mistake in the contract and
subsequently demand that the contract be void or
voidable.
 This is because by the existence of the element of
fraud or deceit, it affected the consent of the
parties whereby in the event if the party who is so
deceived has the knowledge of the deception than
he would not have entered into the contract.
 However for the purpose of preserving public
interest the only contract that can be avoided on
the grounds of mistake even though there is no
element of fraud or deceit is the contract
involving the property of the minor, waqf donor
or treasury.