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Saturday 11 February 2012

Form and substance in muamalat

The world is laden with permissible things, and the right attitude to hold is that we must find ways to make them indeed halal, rather than haram.
IN Islamic transactions (muamalat), one of the prerequisites determining the validity of a variety of contracts is the spoken offer and acceptance (aqd) between the two parties involved.
Certain quarters, however, are putting excessive emphasis on this to the effect that if aqd is missing or not properly carried out in any given transaction, the whole contract is invalid beyond rectification.
Some Muslims even hold that failure to strictly observe such requirement would adversely compromise their Islamicity. And any proceeds accrued from this purportedly invalid dealing cannot be utilised or consumed as they are viewed prohibited (haram).
The invalidity claim, its implications and related consequences are questionable. A hypothetical illustration may help our understanding here.
Say, a bank offers a personal financing scheme to customers based on the Islamic principle of bay al-inah (buyback sale). The bank’s employees approach prospects on the phone and manage to get hundreds of people to subscribe for the product.
The telephone conversation is followed by official documents from the bank, sent out to the customers offering the loan and stating other details of the transaction.
A few months later the bank realises that the utterance of aqd was missing during the telephone conversations. As each transaction is considered not properly concluded, the bank is now in doubt of the halalstatus of the profits garnered from such contracts and seeks legal redress.
Based on the facts above, I can affirm that since the aqd did not take place in the conversation, no contract was concluded.
This omission, however, does not necessarily render the entire transaction invalid outright. The transaction may not fulfil the requirements of bay al-inah as originally intended, but it is still a transaction anyway, and valid. Sayyid Sabiq, a modern scholar, in Fiqh Sunnah (vol 12) states that there is no clear ruling prescribing that aqdmust necessarily be uttered in certain specific words.
He further explains that the validity of a transaction does not solely depend on the specific words or specific manner in which the wordings ofaqd are arranged, but rather determined by the objective or spirit of the transaction.
To me the objective or spirit here is to enter into a meaningful and beneficial transaction or contract whereby all parties involved may benefit, which must be good within the parameters of Syariah.
Ahmad Naqib al-Misri, a traditional jurist, in ‘Umdat al-Salik, discusses the aqd in relation to a type of transaction known as al-mu’atah, i.e. giving the seller the price and taking the merchandise without uttering the aqd, for instance, in buying something the price of which is known. The point here is the acceptance by both sides.
The work records that Imam Nawawi and a group of jurists have validated sales conducted in this mu’atah manner. It covers all transactions that people might consider sales.
Misri relates that there is no decisively authenticated primary textual evidence stipulating that this acceptance must be uttered. So, common acknowledgement, i.e. consent of both parties, is the final criterion as to what legally constitutes an acceptance.
From the preceding discussion, we know that the most fundamental elements in any transaction are consent (al-taradhi) between the parties involved and good objectives, not the name of the transaction or the accompanying aqd.
I am strongly inclined to say that the bank’s product at stake here meets the above criterion and falls under the mu’atah category, and therefore valid. In addition, what is also essentially required in any transaction is that the contracting parties understand the basic nature of the transaction.
When one voluntarily tries to obtain a financing facility from a bank, or if one is offered such a facility by any bank, one must know, among other things, that one is getting a certain amount of money payable at a certain amount in a certain manner for a certain period of time; and one is to repay on a monthly basis.
Obviously, in the preliminary communication of the product, both the customer and bank know/understand these basics.
Since the first telephone conversation does not and cannot constitute the bay al-inah contract, we may regard the understanding or agreement reached between the bank and customers in that particular occasion as a kind of trust, a simple cooperation, a loose business deal, but done in good faith.
Remember, this is still a transaction, a real one. As long as the parties concerned understand and honour the basic terms and conditions, such arrangement is valid as a transaction and either side may take benefits from the capital involved.
What finally concludes the contract is the documents sent to the customer after the first conversation, offering the product and detailing its terms and conditions.
When the customer accepts the offer stated in the documents, it is only here that the transaction becomes legally effective as a bay al-inahcontract. These documents supersede the conversation.
Bear this in mind. The original position of things is permissible, not otherwise, as aspired by the maxims: al-asl fi al-ashya’ al-ibahah or al-asl fi al-mu’amalah tilq. This world is laden with permissible things, and the right attitude to hold is that we must find ways to make them indeed halal, rather than haram.
I believe, therefore, that the more appropriate guiding principles in ascertaining the legal status of new and unknown things of our time are the maqasid al-shariah (the objectives of Islamic law), not strictly the letters and words of the law.
Do not be too quick to declare something as prohibited, especially if it establishes justice, serves the public interest, and enhances the people’s welfare, i.e. parts of maqasid.
Do not reduce Islam into a technical and mechanical religion by giving unqualified emphasis on form rather than substance.
ThestarOnline/DR WAN AZHAR WAN AHMAD/7Feb2012)

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