CLASSIFICATION AND ELEMENT OF CONTRACT

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CLASSIFICATION AND ELEMENT OF CONTRACT by Mind Map: CLASSIFICATION AND ELEMENT OF CONTRACT

1. Meaning of contract (Sighah), the elements of contract, different kinds of contract forms, the condition necessary for the form, the classifications of contract according to its nature such as the Unilateral contract, Bilateral contract, Quasi contract and the classification of contract according to Legal Consequences.

2. DESCRIBE NATURE OF THE CONTRACT

2.1. 1. AL AQD INFIRADI (UNILATERAL CONTRACT) A unilateral contract is a form of promise made by one party with an intention and expectation that the other party to the contract would accept it.For example, a person approaches a real estate agent and ask him to find a house for him for which he will pay him one month’s rent as commission. The agent finds a house as required which the offeror agrees to rent. The agent is entitled to his commission. The key here is that promise by offeror to anyone from the general public to undertake a task and the promise is made to an identified person.

2.2. 2. AL AQD AL THUNA’I (BILATERAL CONTRACT) A bilateral contract requires at least two parties in which one party should make a proposal (offer) and the other should accept. Example: Azrul sells his car to Badrul for RM60000 on cash basis. In this case, Azrul consents to sell his car to Badrul, who consents to buy the car with an obligation to pay the price in cash.

2.3. 3. SHIBH AL-AQD (QUASI CONTRACT) A quasi contract by nature is not a contract. However, the implication gives rise to an obligation similar to that of the contract. A quasi contract is an obligation, which does not originate from a proper verbal agreement as in the law of contract or tort. A quasi contract has little or no affinity with a contract.

3. CLASSIFY THE CONTRACT ACCORDING TO LEGAL CONSEQUENCES

3.1. 1. SAHIH (VALID CONTRACT) A valid contract in shariah as a contract in which its essence and attributes are according to the shariah and which subsequently has a legal effect of enforceability. In a broader sense, a valid contract, enforceable by the shariah, is presumed if its origin and attributes (Asl and Wasf) are in accordance with shariah. For a contract to be valid, the three condition should be met: 1. All elements required by law must be complete. 2. The additional condition must be fulfilled. 3. The purpose of the contract and its subject matter must be in compliance with shariah principles.

3.2. 2. FASID (INVALID OR DEFICIENT CONTRACT) A fasid contract is an agreement, which is lawful in its substance but unlawful in its description. For example, the price of the subject matter: if an agreement of sale for a definite article is concluded by proposal and acceptance but the price is not settled, the agreement would be fasid. The object should be fit or suitable for carrying out a transaction.

3.3. 3. BATIL (VOID CONTRACT) A void contract is an agreement in which both its substance and descriptions are not in compliance with shariah. For example contracts of sale of fish in the sea or birds in the sky are uncertain and, therefore the contract is batil on the ground of Gharar. Similarly an agreement to sell a dead body or alcohol is not lawful, for it involves the exchange of mal for something having no legal value (ghayr Mutaqawwim).

3.4. 4. LAZIM (BINDING CONTRACT) A Binding Contract is a sound contract without ant defect either in its substance or description. It is classified into two: Irrecoverable Contract and Revocable Contract. 1. Revocable Contracts; Under revocable contract, the right to rescind can be exercised by either party without the consent of the other party. There are two reasons due to which a contract becomes non-binding; The nature of the contract allows independence to both parties like agency (wakalah), and partnership (shirkah). With an option that was stipulated in the contract that prevent it from becoming binding. 2. Irrevocable Contracts: irrevocable lazim contract are those where the parties shall not have any right to revoke at any stage of the contract if such contract is concluded by mutual consent of the contracting parties. Example: contract of marriage or any other bilateral contract. In the contract of a marriage, there is no revocation by either party once it is concluded, except by a talaq pronounced by the husband.

3.5. 5. NAFIDH (ENFORCEABLE CONTRACT) It is an agreement which does not involve any right of the third party. These contracts should not admit delays and must give rise to its effect immediately. For example: home financing, marriage (wife responsibility) and student (obey the rules). There are two types of Enforceable Contract: 1. The lazim; a contract of sale that has no options (to rescind) for any of the parties. 2. The ghair lazim; a contract of sale that may have at least one option for any of the parties.

3.6. 6. MAWQUF (WITHHELD CONTRACT) A mawquf contract is an agreement in which the substance and the description are lawful, but is concluded with the consent of a party who does not own the subject matter of the contract. For example: RM 10,000 paid in advance for a car to be delivered on a certain date. Bai Istisna; this is a kind of sale where a commodity is transacted before it comes into existence.

4. DEFINE THE CAPACITY OF EXECUTION (AHLIYAH)

4.1. Ahliyah becomes an important matter in most aspects such as buying and selling, marriage, and so on, in fact it is also one of the conditions that make something that act is valid on the side of Islam.

4.2. 1. Fetus The fetus still in the mother's womb has two traits. The same nature is alive or dead and also depends on the life and death of the mother. The fetus is entitled to receive some rights that do not require acceptance to obtain it, such as acceptance of heritage, wasiyyat, manfaah waqaf, and so forth. If the fetus is born dead, this qualification is considered never present and does not work.

4.3. 2. Began to be born until the age of mumayyiz; A baby born alive, can have the fullest entitlement. This is because the qualifications receive a person's life-based, not rated on rushd. With the entitlement he has the right to receive all rights and to assume part of the sharia obligation. There are rights and obligations that may be exercised by others on behalf of the child, such as paying zakat or paying damage to damages done by children and so on.

4.4. 3. Mumayyiz age to puberty A child who attains seven years of age, is considered to be a mumayyiz. By the beginning of this stage, a child has the right to exercise, that is, mumayyiz and intelligence already exists in children, but the qualifications are not as perfect as the mind and the baligh. In matters that are likely to have profit and loss, a child can do it after obtaining the consent of her guardian.

4.5. 4. Age of Baligh and Rushd; Someone who has reached this rank is thought to be reasonable, baligh, and astute. With these attributes, he or she has the perfect qualification of either acceptance or feasibility.

5. DESCRIBE THE AHLIYYAH AL WUJUB AND AHLIYYAH AL ADA

5.1. Ahliyyah Al Wujub Ahliyyah Al Wujub can be defined as the suitability of the individual to receive a right and is obliged to perform certain obligations. This type of ahliyah is considered to exist in every human being since the moment he begins to inhale in his mother's womb until it exhale last breath.

5.2. Ahliyyah al-Wujub al-Naqisah Ahliyyah al-Wujub al-Naqisah is established for a fetus (Janin). Deficient capacity implies that only some rights are established for the fetus and no obligations are imposed on it. The reason is that fetus is considered part of the mother in some respect. Fetus is entitled to certain essential, beneficial rights: 1. A fetus has the right to be attributed to his parents. 2. A fetus is also entitled to receive his share of inheritance. 3. A fetus is also entitled to receive his share in a will (Wasiyyah). 4. A fetus is also entitled to receive his share in waqaf. However a fetus is entitled to these rights only when it is born alive.

5.3. Ahliyyah al-Wujub al-Kamilah Ahliyyah al-Wujub al-Kamilah, or complete capacity for acquisition, is found in a human being after his birth and before the age of puberty. This makes one eligible for the acquisition of all kinds of rights and obligations. the law giver allows his guardian (Wali) to stand in his place and represent him. Neither he is obliged to pray, fast or go to haj. Furthermore, the obligations a child receives do not include criminal liabilities as he cannot be punished for crimes he commits.

5.4. Ahliyyah Al Ada Ahliyyah Al Ada can be interpreted as the suitability of a person to do something so that it can be considered legitimate by syarak. For example, a person who has performed dawn prayers solely will be deemed to have performed one of his religious responsibilities which is considered by the syarak. On the contrary, if he commits crimes he will face a determined sentence of either physical punishment or material punishment.

5.5. Ahliyyah al-Ada al-Naqisah Ahliyyah al-Ada al-Naqisah is assigned to a child who possess some discretion or to a Ma’tuh who has attained puberty, but yet lacks complete mental development. The person who possesses deficient capacity cannot be held criminally liable. Hanafi School of law categories deficient capacity for execution into three categories: 1. Purely beneficial transactions; The transactions falling under this category are the acceptance of a gift of Sadaqah (charity). These are allowed for a person who has attained puberty but who can discriminate and has been permitted by his guardian (Wali) to exercise such acceptance. 2. Purely harmful transactions; The granting of divorce, charity (Sadaqah), loan (Qard) and gift (Hibah) as well as making a trust (Waqaf) and bequest (Wasiyyah) are considered transactions resulting in pure financial loss. 3. Transaction vacillating between profit and loss; Sale, hire partnership and other such commercial transactions are considered valid provided that the transactions are ratified by the guardian and also produce a significant result for the parties concerned. According to the Shafie and Hanbali a distinguishing child does not have the requisite capacity and therefore, he cannot enter into any contract with or without the permission of his guardian. His guardian instead may conclude contracts on his behalf.

5.6. Ahliyyah al-Ada’ al-Kamilah Complete capacity (Ahliyyah al-Ada’ al-Kamilah) is established for a human being when he or she attains full mental development and acquires the ability to judge. This state is associated with the external standard of puberty. The physical signs indicating the attainment of puberty are the commencement of wet-dreams in a male, and menstruation in a female.

6. Awarid Samawiyyah

6.1. 1. SIGHAR (MINORITY) It is the stage of a human being after the birth and before the age of puberty. A minor follows his parents or one of them in the matters of Islam. Islamic jurists maintain that a minor is liable for compensation for property destroyed by him, for goods and services bought, for maintenance of relatives and also for zakat according to some.

6.2. 2.JUNUN (INSANITY) Its existence will not deny Ahliyyah al-Wujub as every crazy patient has indeed had the life which is the basis of the existence of the above Ahliyyah type.

6.3. 3.ATAH (PARTIAL INSANITY) It is the first ignorance to be that causes a person to understand something a matter, talk without focus and fail to sort things out. In fact, he is not required to perform worship and will not be punished in the form of physical encroachment if he commits a crime. Instead, he will be charged a compensation if he damages another's property and his payments are made by his guardian.

6.4. 4.FORGETFULNESS A person is not very careful about things though he has full knowledge of them, as distinguished from sleep and fainting fits in which such knowledge is lacking.

6.5. 5.DEATH (MAWT) Death will deny the existence of Ahliyyah Al Wujub and Ahliyyah Al Ada. In fact, all rights and responsibilities are borne by the dead during his life, falling out while he does not involve the rights of others, such as debt.

6.6. 6.SAFAH (FOLLY) Can be defined as ignorance in property management so it is expended extravagantly and conflicts with Islamic boundaries and logic of reason while the culprit has a sane mind. A safah is a person who is wasting or spending his wealth improperly. The opposite of safah is rushd which refers to the maturity of mind. Rushd is a person who has the ability to manage his wealth properly and is not involved in extravagance. Just like hazl, safah does not deny the existence of the two types of Ahliyyah, but it can still affect some of the laws. For example, a judge may impose a ban on children and individuals from managing their property as a result of their spending may harm either themselves or individuals under liability.

6.7. 7. INTOXICATION Can be interpreted as a drunkenness that is caused by alcohol or the like so that the culprit does not realize what he is doing when drunk. From this interpretation, we can say that drunkenness can deny the existence of the Ahliyyah Al Ada because the basis for its existence is that reasoning is gone. However, the Islamic scholars further elaborate on this question where they insist on the drunkenness that can deny Ahliyyah Al Ada until the exemption of sin to the perpetrator is specific to the accidental hangover. For example, if an individual takes a medication because of a fever or is forced to drink alcohol causing him to be drunk then the law is likened to a faint person.

6.8. 8. IKRAH (DURESS) It refers to a situation where a person is forced against his consent to enter into a contract which if left alone, he would not have entered into. . However, the clerics insist that there are three types of actions committed by the forces that can affect the legal determination. 1. If someone is forced to drink alcohol or eat the carcass then he is obliged to do so in order to save his life and not be considered sinful. 2. If he is forced to confess his apostasy while his heart is still strong believers then the law admits apostasy in this situation is even though according to the preferred law, he ought to be brave and does not make apostasy confession. 3. If he is forced to do something similar or heavier than the threat posed as murder or adultery, his law is illegal. The reason is that the resulting harm remains the same as it may even be worse when Islam emphasizes that every Muslim should not sacrifice another person in order to save his own life.

6.9. 9. SLEEPING (NAWM) AND FAINT (IGHMA) Both denied the existence of Ahliyyah Al Ada 'because the individual in that state did not have the reasonableness of reason.However, the act done by him that caused the injury to other individuals was taken into account and punishable accordingly. the sentence is in the form of diyat payments rather than physical torture. For example, if a person sleeps on the sofa then he falls on his friend causing death, his sentence is a diyat payment to the deceased's benefactor.

6.10. 10. PAIN (MARAD) The scholars insisted that he would not deny the existence of both Ahliyyah Al Wujub and Ahliyyah Al Ada to impose sick and soul-minded individuals. However, Islam also gives relief to the patient in doing the praying. For example, a paralyzed paralysis is given a leeway to perform solat fardu sitting or lying even if the legal requirement is to stand.

7. DESCRIBE THE CONDITIONS OF SUBJECT MATTER

7.1. The subject matter of a contract differs from a transaction to a transaction. In a sale contract the subject matter refers to the sold item, in a lease (ijarah) contract it refers to the usufruct, in a transfer of debt (hawalah) it is the debt that is transferred, in agency (wakalah) it is the performance of a service, in a partnership it is the capital contributed by the partners, while in a murabahah contract it includes the capital and the labour or expertise.

7.2. 1.Conditions pertaining to the object of the contract: The legality of the subject matter (valuable and permissible); The property on which a certain contract is concluded should be valuable (Mutaqawwim). A valuable property is a property which is permissible in Shariah and could be secured and possessed. A contract which involves a non-valuable property, which is not secured, possessed, is void. For example, contracts involving fish in the sea or bird in the sky are void as they are not considered valuable property as they are not possessed and secured. 2.Certainty of delivery; The delivery of the subject matter must be certain. The party to a contract must have complete ownership over the property and possess it. He must be capable to deliver the goods or the services. 3.Precise determination of the subject matter (specified and quantified) If the subject matter is present at the session of the contract, the knowledge of the subject matter is attained if it is seen. If the subject matter is not present at the session of the contract, it should be precisely determined. It should be clearly defined and sufficiently described in a way that would dispel all elements of ignorance. 4.Object ownership; The subject matter of sale must be in the ownership of the seller at For example, A sells a car to B, which is presently not owned by A. The sale is void because at the time of the sale, A did not own a car. 5.That the object of sale is a good; This limits the object of sale to things that can commonly be used to benefit people, so the sale of a dead animal, or an insignificant amount of a good such as one grain of wheat, is not concluded. 6.That it is private property; Thus, the sale of what is not owned by any person, such as grass for public grazing is not permissible, even if it is on privately owned land.

8. DEFERRED CONTRACT (SALAM) AND CONTRACT OF MANUFACTURING (ISTISNA)

8.1. 1.SALAM Literally Al-Salam or salaf means pre-payment. Technically meaning, Al-Salam is a sale with postponed delivery of the merchandise but immediate payment of the price. Al-Salam or Salam means a contract in which advance cash payment is made for goods to be delivered later on. The seller undertakes to supply some specific goods to the buyer at a future date in exchange of an advance price fully paid at the time of contract. 2.ISTISNA The word Istisna’ means requesting someone to construct, build or manufacture an asset. Technically, Istisna’ is an agreement to sell to a customer a non-existent asset that is to be manufactured or built according to the agreed specifications and delivered on a specified future date at a predetermined selling price.