Essentials of a Valid Contract: A Comparative Study of Islamic Law and the Contract Act, 1872

Abstract

Islamic Law and Pakistani Law have identical basic ingredients to conclude the contract. This term paper will explore the comparison of the ingredients of contract in Islamic Law and the essential requirements of contract in the Contract Act, 1872. The concept of Sighah is identical to the concept of agreement but major difference is the free consent. Sighah includes free consent of the parties but in the Contract Act, 1872 the free consent is treated as an independent ingredient of contract. Contracting parties is the other ingredient in Islamic Law of Contract, Islamic Law provides that a person who is competent to understand the risk and liability. There are some impediments imposed by Islamic Law upon the contracting capacity i.e minority, lunacy, insanity, death illness, insolvency, coercion and forgetfulness. The Contract Act, 1872 also put some exception to the contracting capacity. Minor, person of unsound mind and person disqualified by law is incompetent. Classical Islamic Law only honor the contractual capacity of a natural capacity but Pakistani Law also recognizes the separate corporate personality of companies and corporations. In Islamic Law it is either an offer or not but no otherwise but there is an exception to this general rule that is the case of auctions. Islam law recognize auctions in which one invites others to offer some bid. Invitation to treat is not recognized in Islamic Law. Pakistani Law give room to invitation to treat. Pakistani Law honor auctions, transfer of share etc by invitation of offer.