Principles of Islamic Contract Law

Abstract

Heightened awareness in the United States about Islam and Muslims presents an opportunity to explore issues in Islamic Law, and particularly to examine the concepts that underlie Islamic law. This study is an effort to present briefly the controlling principles of Islamic Contract Law. In view of the monumental growth of trade between the Western and the Muslim worlds and projected increase in the coming century, the subject should continue to be of particular interest.The doctrinal basis of Islamic law is the point of departure for this study. A brief historical sketch reveals the doctrinally-based components that have evolved into Islamic law. Islamic belief begins with Prophet Muhammad, the Messenger of God (Allah). The Prophet's mission was to establish an order in this world based on divine revelations made to him by God (Allah). These divine revelations are recorded in the Quran, the sole scripture of the Muslims. The spiritual and secular practices of the Prophet came to be known as Sunna. These two sources constitute the main guidelines for spiritual as well as temporal Muslim conduct in this life as a preparation for the hereafter, and are called Sharia. The word Sharia means the highway to good life. Over a period of time two additional sources of Sharia came into existence. They are: 1) Qiyas, or analogical reasoning, and 2) Ijma, or consensus of the Islamic community on a point of law. According to Sharia, sovereignty vests in God (Allah), requiring the state to act within the limits of divine law, or Sharia. This sovereignty is recognized by incorporation of Sharia into the Islamic legal system and community. In this sense Sharia is the constitutional law of a Muslim society.