Theory of Property and Ownership in Shariah - PDF

CHAPTER 2: THEORY OF PROPERTY AND OWNERSHIP IN SHARIAH DEFINITION OF PROPERTY (MAL) Definition of property (Mal) in Islam  The word mal means what a person owns and possesses. It can be translated as property, capital and wealth. Definition of Mal in Hanafi & Maliki School...

CHAPTER 2: THEORY OF PROPERTY AND OWNERSHIP IN SHARIAH DEFINITION OF PROPERTY (MAL) Definition of property (Mal) in Islam  The word mal means what a person owns and possesses. It can be translated as property, capital and wealth. Definition of Mal in Hanafi & Maliki School  Mal define as what normally desired can be stored up for the time of need.  There are two critical criteria in defining mal in this school:  Desirability- This means mal should be something that people desire to own.  Storability- This indicates that mal should be something that can be stored to use in the future in a time of necessity.  Things that are not desired, such as some medicines, cannot be included under the concept of mal.  Many types of property that generally cannot be stored, such as fresh vegetables and fruits, will be excluded Definition of Mal in Hanbali School  Mal is anything that has a beneficial nature which is permissible by shariah, provided that such permission does not come under the circumstances of necessity (dharurah).  “Beneficial nature” seems to cover any benefit that might be gained from the property including usufruct.  However, the condition that it must be permissible by Shariah restricts the scope of the definition.  Example: A Muslim destroys some wines belonging to a non-Muslim, he does not need to compensate anyone as the bottle of wine is not considered property. Definition of Mal in shafi’i School  The word mal refers only to a thing that has a material value, with which it can be sold.  The criterion of having a material value is sufficiently general, including the corporeal properties and the usufruct (manfa’ah).  However, the phrase “with which it can be sold” restricted items that can be the subject matter in a contract of sale. So, if an item cannot be sold, it is not define as a property. CLASSIFICATION OF PROPERTY (MAL) 1. LASTING OR NOT i) Istihlaki (Non-Lasting) - Anything that can only be used by changing or destroying its original form. Example: Foods and money ii) Isti’mali (Lasting) - Anything that can be used without changing its original form or structure Example: Book or computer Benefit of this classification:- 1. Validation of Ijarah (lease) Contract: Ijarah is not valid for Istihlaki (non-lasting) property. 2. Differentiation of Qard and ‘Ariah contract: Qard is appropriate for Istihlaki (non-lasting) and ‘Ariah is applicable for Isti’mali (lasting) property. 2. VALUE i) Mutaqawwim (Valuable) - A property allowed in the Shariah to possess and get benefit from it. Example: Car ii) Ghayr Mutaqawwim (Non-Valuable) - A property not allowed in the Shariah to possess and get benefit from it. Example: A bottle of wine, pig and dead animal. Impact of this Classification:- 1. Providing compensation -There is no compensation for non-valuable property (Ghayr Mutaqawwim) However, According to the majority of scholars, if a Muslim destroys a bottle of wine belonging to a non-muslim, the muslim person is required to compensate the non-muslim. 3. MOVABILITY i) Manqul (Movable) - Anything that can be moved from one place to another without changing its original form of structure. Example: Computer and Clothes ii) Ghayr Manqul (Non-Movable) - Property that cannot be moved from its original place Example: Land Impact of this Classification:- 1. According to Hanafi School, Waqf (perpetual charity) is not allowed for Manqul property 2. According to most Scholars, Shuf’ah (the right of a partner in a jointly-owned property to purchase his other partner’s property before someone else) is not applicable to Manqul property. 3. In discharging the debtor’s property, Manqul precedes the Ghayr Manqul. The judge should sell the moveable assets before selling the non-moveable assets, which protects the debtor’s interest.  4. FUNGIBILITY i) Mithli (Fungible) - A mithli item is one that has standard replacements in the market whose prices are identical or very close. Example: Proton Saga Car Mithli property can be divided into four types:- 1) Property that can be measured by volume e.g. milk 2) Property to be weighted e.g. gold 3) Property that can be counted e.g. egg 4) Property that can be measured with a yard e.g. clothes ii) Qimi (Non-Fungible) - There is no similar or equivalent to it in the market, or a similar property is available but the prices significantly vary from one another. Example: Animals, Arts, Used car, antique watches. Significance of this classification:- 1) Compensation 2) Riba al-Fadl  CHAPTER 3: FORMATION OF CONTRACT (‘Aqd) Shariah Terms Related to ‘Aqd 1. Wa’d (Promise) - Technically, it is a declaration from the declarer that he intends to perform a good deed in the future - Wa’d may termed as an offer, but there is no acceptance in wa’d as it does not required an acceptance from the promise. 2. Muwa’adah (Mutual Promise) - To promise each one of the two to the other to perform something good in the future. - However, it is essential to note that the two promises are not conditional on each other. 3. Tasarruf (Action) - Covers every expression and action that has an outcome in Fiqh such as anger. - Tasarruf is a general term which includes all contractual and non-contractual expressions. - Therefore, ‘Aqd is a part of a Tasarruf. 4. Iltizam (Obligation) - It means when a person is obliged to perform an action or to abstain from an action. - An obligation can be established by TWO ways: 1) Mutual wills. E.g. contract 2) Unilateral will. E.g vow (nudhur) Subject Wa’d Muwa’adah ‘Aqd Time to effect A declaration to A declaration to A mutual agreement on a act in the future act in the future particular matter which is in effect at present Party One Two Two Reward Voluntary Voluntary A mutual exchange where every party is rewarded Types of Contracts Unilateral Contract Bilateral Contract A unilateral contract is a one-sided contract Two-sided contract made by two parties made by one party only. It involves gratuitous transactions. Majority of the islamic commercial transactions are based on bilateral contract No consent required from the recipient party. Consent of both parties are required Shariah principles related to the pillar of the Shariah principles related to the pillar of the contract are relaxed. contract is strict Example: hibah (gift), Wasiyyah (will), and Example: Contract of sale Waqf (endowment) Types of Bilateral contracts 1. Contract of exchange  The ownership of an asset is transferred to another party for a counter 2. Contract of security  Conclude to keep the security of the loan or debts. E.g. ar-rahn 3. Contract of partnership  Two or more parties enter a contract to partner in work and profit.  E.g. Musharakah and Mudarabah. 4. Contract of Safe custody  To keepsafe any asset by the owner. E.g. Wadiah contract. 5. Contract of pertaining to the utilization of usufructs 6. Contract pertaining to do work Pillars of Contract 1) Expression (sighah)  Offer ( ijab )  Qabul (Acceptance) 2) Subject Matter (Mahal- al’aqad)  Price (thaman)  Commodity (Muthman) 3) Contracting parties (‘aqidayn)  Offeror (Mujib)  Acceptor (Qabil) -Hanafi School divide contract into Valid, Voidable & Void -While other scholars divide contracts as Valid & Void only. Valid contract  A contract is considered valid when all pillars and condition are satisfied.  It has legal effects whereby the contract is binding upon the parties with immediate after the contract concluded. Voidable contract  When something in the contract, other than the pillars or the foundations, is defective.  Fasid contracts can be validated through their ratification by the interested party, or because of prescription of the action which obstructs their validity. Void contract  When one of the pillars of contracts or its conditions is not satisfied, the contract will be void (Batil) and will have no legal effect.  No title may be passed neither the ownership or price of the goods.  CHAPTER 4: FORMAT (SIGHAH) OF A CONTRACT Meaning of Ijab and Qabul Definition of Ijab & Ijab: Offer, validation and obligation Qabul Qabul: Acceptation, satisfaction with something Definition in Hanafi Ijab: What is expressed first from one of the contracting parties School indicating his willingness to execute a contract. Qabul: what is expressed secondly from another contracting party indicating his consent towards what the first party has imposed.  Ijab and qabul are not specified to the buyer or seller Definition in Majority Ijab: Which is expressed by the existing owner in the contract. of school. E.g. seller, lessor, wife Qabul: Which was expressed by the future owner in the contract. E.g. buyer, lessee, husband.  The ijab (offer) is always from the owner even though the seller pronounce first that he intends to purchase the item. Types of Ijab & Qabul 1. Ijab & Qabul through words > Words are the basic medium to express Ijab and Qabul > They are mostly used by people as they are clear and easy to understand > There is no specific wording for Ijab and Qabul > Any wording clearly reveals the consent of the contracting parties based on the custom and practice are accepted. A woman says to a man: “ I gift myself to you” or “ I make you my owner “ - Hanafi and Maliki jurist: Allowed - Shafi’i and Hanbali jurist: Not allowed due to some risks in using other words in relation to the contract of marriage > Words must convey the past tense - Example: A says to B, “ I have sold this house to you for MYR 100,000” and B replies, “ I have accepted “. - A contract concluded in the future tense is invalid - A contract made through the present tense can be accepted subject to circumstantial evidence. A says, “ sell to me your house for MYR 1 million” and B says, “Ok, I agree”. - Hanafi School: Not allowed as it it merely the demand for an offer. - Majority of the scholars: Allowed. > Communication through telephone takes the similar rulings of direct verbal communication. > Communication through video calls e.g. skype, IMO, WhatsApp etc. are also gets the similar rulings of direct verbal communication. 2. Ijab and Qabul through Conducts ( Ta’ati ) Ta’ati means the buyer and the seller agree on the price and the commodity and exchange between them without any Ijab and Qabul. Sometimes, there may have an expression from one contracting party only. E.g. common practice in house rent, online shopping Scholar’s opinion on Ta’ati Majority of the scholars ( Hanafi, Maliki and Shafi’i School : Not Allowed whether the Hanbali ): Allowed commodity is of small value or big - Consent is the only requirement in contract - It is necessary to pronounce either the from Shari’ah perspective. explicit (sarih) or implicit (kinayah) wordings. - It is necessary to refer to the custom (‘urf). - This is because the intention of the - No narration reported from the prophet (SAW) buyer/seller cannot be known except by and his companions on the pronouncement of the pronouncement of Ijab and Qabul. ijab and Qabul in ordinary transactions. Some jurist stipulate the followings for the Ta’ati to be accepted: 1. The subject matter must be fixed 2. There must be an intention 3. The item must be small value ( excluding the Malikis) 3. Ijab and Qabul through Writing > It is allowed by the Majority of the jurists as the writing is similar to verbal communication. > Presence of both party is not required in the writing session. > Writing is prescribed in the Shari’ah as Allah SWT commanded writing the debts However, According to Shafi’i School, writing is allowed for the who cannot speak. 4. Ijab and Qabul by Gesture or Indication > Majority of the Scholars: Allowed > Hanafis and Shafi’is: Allowed for the one who cannot speak With the condition that it is clear to understand and shows the intention of the party. 5. Principle of Ijab and Qabul through modern technologies > AAOIFI and Islamic Fiqh Academy has allowed concluding a contract through modern technologies. > However, the procedure should be:- 1. Accepted among the parties based on ‘urf 2. Should be transparent and free from ambiguity Ijab: Where the buyer choose the products and make the payment Qabul: The seller receives the purchase order and continue to deliver the item  CHAPTER 8: THE PROHIBITION OF USURY ( RIBA ) Types of Riba Riba Riba Al- Buyu' Riba Al-Duyun (Riba in sale (Riba in loan) transactios) Riba Al-Fadl Riba Al-Nasiah (Riba by way of (Riba by way of excess) deferment) i) Riba al-Fadl ( Riba by way of excess )  Exchange of money for money of the same denomination where the quantity on both sides is not equal.  Example: Exchange of one ribawi item for same type but different amount  Such as exchanging 5 kg of wheat for 6 kg of wheat. ii) Riba al-Nasi’ah ( Riba by way of deferment )  A form of riba occurring through deferment in exchange, whether between same or different types of goods. For example, exchanging 5 kg of gold for 20 kg of silver with a one-year delay  Why it is prohibited? 1) To prevent riba al-duyun (riba on loan) 2) The unequal exchange in Riba al-Fadl may lead to hoarding and monopoly practices. Then, there will be a shortage of dates in the market. The rich will take advantage of this market situation. 3) The deferred delivery in Riba al-Nasi’ah may provide undue benefit to one of the contracting parties. E.g. in the case of currency exchange, the exchange rate change even in a few minutes. Scholarly interpretations of Riba al-buyu’ Hanafi & Hanbali school Shafi’I School Maliki School Applies ruling to all Gold / Silver represents Gold / silver interpreted as weighable articles. currency value currency value E.g. Ringgit Malaysia For example, when Other items represent Other items represent exchanging iron for iron, general foodstuff. storable foodstuffs. weights must be equal. E.g. Vegetables The Wisdom behind the prohibition of Riba Harmful Impact of Riba 1. Riba does not add any value to the real economy. Example: In the most case, the income earned from interest does not produce any goods and services for the real economy. 2. Riba is one of the major contributors to inflation. Example: People purchase houses through riba-based borrowings from banks. The price of the houses sometimes becomes double or triple due to the interest payment to the bank. 3. Riba cause depression in the debtor Example: Many entrepreneurs feel depressed when they start a business through riba-based borrowings. 4. The rich exploit the poor Example: The rich get more money from the interest income, but the poor need to work hard to settle their loans with interest.  CHAPTER 9: THE PROHIBITION OF UNCERTAINTY ( GHARAR ) Definition of Gharar Ibn’ Abidin Gharar is uncertainty about the existence of the subject matter of sale Ibn Hazm Gharar in the sales occurred where the purchaser does not know what he has bought and the seller does not know what he has sold. Contract Invalidity Second major cause of contract invalidity in Islamic finance Prohibited External prohibited attribute in Islamic contracts Attribute Modern definition Any form of intentional misrepresentation or concealment in business transactions that leads to fraudulent outcomes Gharar VS Jahalah Jahalah refers to the lack of knowledge about the specifics of an object, event, or action, in spite of knowledge about its occurrence. Gharar Jahalah Its concept is wider in scope A type of gharar with a narrower concept Typically associated with the existence or Usually related to quantitative and non-existence of the object of sale qualitative uncertainty Not every gharar that invalidate a Every jahalah that invalidates a commutative contract is necessarily a commutative contract is necessarily a jahalah gharar Types of gharar Immaterial Uncertainty Exorbitant Uncertainty (Gharar Yasir) (Gharar Fahish) -Minor uncertainties that are tolerated in -Excessive uncertainties that invalidate Islamic law due to commercial necessity contracts due to their potential for dispute and common practice. and injustice. -These uncertainties don’t invalidate -These are strictly prohibited in Islamic contracts. finance. -This type of immaterial gharar is tolerated -A contract involving this type of gharar in Shariah considered void or voidable in Shariah. Example: Example: -Using public facilities with fixed payments -Selling non-existent items (The amout of water or the time the user -Transactions with unknown delivery dates is unknown) -Selling fruits on the tree before they ripen -Monthly rental agreements (the fruits may be destroyed due to some -Product warranty services natural conditions) -Minor price fluctuations in market trades Puts the buyer at excessive risk of losing his wealth. Conditions for Gharar Fahish 1. The element of gharar shall be abundant Contract with undefined terms – Agreements lacking clarity about price, quantity, or delivery timelines. Speculative transactions – Excessive gambling (maysir) 2. The element of gharar shall be in contracts of exchange (Aqd mua’awadat) 3. The element of gharar shall be in the original (asl), not in the subsequent (tabi’) Example: i) Selling a dairy cow with milk in its udder (the cow is the asl; milk is the tabi) ii) Selling fruits on trees with some unripe portions (the tree is the asl; future ripening is the tabi) 4. The contract shall not reach the level of need (hajah) among the people Hajah is something needed by man to avoid mashaqqah ( difficulty and hardship)  CHAPTER 10 THE PROHIBITION OF GAMBLING (MAYSIR) Maysir VS Qimar Maysir Qimar Definition Refers to the easily available The game of chance where one wealth or acquisition of wealth by gains at the expense of another. chance, whether it deprives the other’s right. Scope Refers to wishing something Receipt of money or benefit or valuable easily without equivalent usufruct at the cost of others by effort, relying purely on chance. resorting to chance. Example 1. Buying a lottery ticket with the 1. Betting on outcome of a sport hope of winning a large sum of game money 2. Poker of other card games with 2. Casino games like slot stakes. machines. Three essential characteristics to classify an action as maysir: 1. The subject matter shall be provided from both sides of the gambler. 2. The winning party earns something valuable from the losing party. 3. The entitlement of the winning party’s property or benefit is established without equivalent compensation. Maysir VS Gharar Similarities: Both contain uncertainty over a gain and loss of property. Maysir Gharar Purpose Maysir is the purpose of the Gharar usually not the purpose of game. a contract but incidental to it. Risk Risk due to luck and chance Risk due to lack of information Reason for Maysir leads to unjust Gharar undermines fairness and prohibition enrichment and social harm, as transparency in transactions, it often results in the loss of potentially leading to disputes or wealth for one party while the exploitation. other gains without effort or fairness. Maysir and Speculation Definition: Speculation involves engaging in financial transactions to profit from short- term price movements in markets, rather than deriving value from the underlying assets. Example: Buying shares when prices are low and selling them when prices rise, based on an analysis of market trends and factors. Similarities Between Speculation and Maysir 1. Risk Involvement: o Both speculation and maysir involve a degree of uncertainty and risk. o Speculators may lose money if the market moves against their expectations, akin to gamblers losing a bet. 2. Uncertainty: o The outcome in both practices can be unpredictable, as market conditions or luck may determine gains or losses. Differences Between Speculation and Maysir Speculation Maysir Basis of Action Speculators rely on market Gambling relies purely on luck or analysis and trends to make chance. informed decisions. Effort and Involves effort, research, and Requires no effort; outcome Strategy calculated risks. depends on luck. Impact Not always at someone else’s Always involves one party loss; may lead to economic gaining at another's expense. efficiency. Maysir in Contemporary Transactions 1. Lottery Definition: A lottery means raising money by selling numbered tickets and giving prizes to the holders of numbers drawn at random. Why it’s Prohibited:  Many participants pay money by purchasing tickets, but only a few of them receive prizes based on their luck.  Winners gain at the expense of the majority who lose, relying purely on luck rather than effort or skill. 2. Prize-Carrying Saving Accounts Mechanism:  Conventional banks offer savings accounts where account holders have chances to win prizes through periodic draws.  Prizes are funded through interest earned on deposits. Why it’s prohibited:  Riba (Interest): Account holders receive interest payments or benefits from their deposits.  Maysir: Prize distribution involves uncertainty and a gamble-like structure where a few gain at the expense of others.  The arrangement creates inequality among account holders, as not all participants benefit from the prizes. Shariah-Compliany Alternatives:  Islamic banks use mudarabah (profit-sharing) contracts to offer saving accounts.  Prizes are distributed from the bank’s profit share, eliminating riba and maysir elements. 3. Online Forex Trading Mechanism:  Forex trading allows individuals to trade currencies on global markets, often facilitated by brokers.  Many brokers permit trading with margin payments (e.g., paying 10% of the total trading amount). Why it’s prohibited:  Excessive Risk: The practice involves significant financial risks due to high leverage and market volatility.  Riba (Interest): Brokers charge interest on borrowed amounts or amounts held overnight.  Gharar (Uncertainty): Lack of transparency and unclear terms in online forex transactions contribute to its prohibition. 4. Conventional Insurance Mechanism:  In life insurance, policyholders pay a premium in exchange for potential future financial compensation.  The payout often depends on uncertain events such as death or accidents. Why it’s Prohibited:  Maysir: The policyholder bets on the outcome of uncertain events, hoping to gain significantly in return for a small premium.  Gharar: The terms and outcomes of the contract may lack transparency and certainty.  CHAPTER 5: CONTRACTING PARTIES Conditions for the contracting parties Al- Ahliyyah Al-Wilayah (Legal Capacity) (Guardianship) 1. Al-Ahliyyah (Legal Capacity) - Literally: Capacity or competence - Technically: “ The eligibility of a person to establish right for and obligation upon himself “ Types of Legal Capacity 1. Ahliyyah al-Wujub ( Receptive Legal Capacity ) - It refers to the capacity of a person to receive rights and obligations. - It starts from the beginning, at birth and ends with death There are two types: i) Ahliyyah al-wujub al-naqisah ( deficient receptive legal capacity ) - This is the capacity to enjoy rights only, but not to take an obligation. - E.g. Fetus in mother’s womb ii) Ahliyyah al-wujub al-Kamilah ( Complete receptive legal capacity ) - This is the capacity to enjoy rights and to take responsibility - It starts from birth and ends with death 2. Ahliyyah al-Ada’ ( Active Legal Capacity ) - Capacity of a human being for the issuance of words and performance of deeds to which the lawgiver has certain legal effects. - Its criterion is based on maturity of intellect Types of capacity:  Obliged to observe prescribe worships  Entitled to receive punishment  Entitled to conduct transactions Types of Ahliyyah al-Ada’: i) Ahliyyah al-Ada’ al-Naqisah ( Deficient Active legal capacity ) - The competency of person to do certain dispositions with and subject to the authorisation of another person. - A minor who reaches the age of seven until he reaches the age of puberty. - He is known as sabi mumayyiz. Disposition of Sabi mummayiz according to the Hanafis: The dispositions that are purely beneficial for the Permitted person The dispositions that are harmful for the person Not permitted The dispositions that may either be beneficial of Subject to the ratification by the harmful to him guardian ii) Ahliyyah al-Ada’ al-Kamilah ( Complete active legal capacity ) - The competency of person to do whatever acts and dispositions he likes without any need to get permission from other. - The person who reaches the age of puberty (bulugh)and prudent (rushd) have this legal capacity. - He has complete obligations to perform religious duties - He is eligible for punishment if his actions or words violate a particular prohibition of the Shariah. Impediment to legal capacity Coercion ( dipaksa )  Majority of the scholars : The contract are invalid  Hanafi Jurist : Contracts are voidable except for marriage, divorce and manumission (release from slavery)  CHAPTER 6: SUBJECT MATTER (MAHAL AL-‘AQD) Conditions Relating to the subject matter 1. Legality of the subject matter  The subject matter of a contract must be permissible (halal) according to Islamic law. This excludes prohibited items like alcohol, gambling, and usury.  It should be not be things yet to be owned like fish in the sea. 2. Existence of the subject matter  The subject matter must exist at the time of the contract and being capable of being delivered in the future.  Selling something that doesn't yet exist, like a future harvest, is generally not permitted. 3. Certainty of delivery  It refers to the ability to deliver the subject matter of the contract at the time of the conclusion of the contract.  The subject matter should be clearly identified and the delivery must be certain. This ensures clarity and avoids disputes. 4. Precise determination of the subject matter  The subject matter must be clearly and precisely defined. It must be determined regarding its essence, quantity, quality, and price  The subject also must be determined either obligation or performance. This avoids any ambiguity and ensures both parties understand what's being exchanged.  E.g. Selling "a used car" is vague. The contract should include details like model, year, mileage, and any defects to avoid confusion. 5. Legality of underlying cause (purpose)  The underlying cause or purpose of the transaction must be legal or lawful.  A contract with an immoral or illegal purpose is invalid.  If someone sells a weapon with the intention of using it for illegal activities, the sale is invalid because the purpose is unlawful. Issues of Subject Matter through Online transactions 1. Uncertainty of the existence of the subject matter. 2. The deliverability of the subject matter. 3. Limited description of the subject matter provided. Principles for Online transactions 1. The accurate picture of the object should be shown through the computer screen without any exaggeration. 2. A detailed description of the object should be provided in terms of its essence, type, colour, weight, length and other characteristic. 3. There should be a fixed deadline for the delivery of the subject 4. The buyer should be given the right to revoke the contract at first sight of the object, termed khiyar al-ru’yah  CHAPTER 7: RIGHTS OF OPTION TO REVOKE A CONTRACT (Khiyarat) Types of Options ( Khiyarat ) 1. Khiyar al-Majlis ( Option of Contracting session ) Definition: The right given to each party in a contract to cancel or not proceed with the contract before they leave the contract session. Evidence: Hadith narrated by al-Bukhari and Muslim “The two parties in a business transaction have the right to option as long as they have not parted, and either of them may give the other an option for a longer period." Duration: Ends when the parties part physically or by mutual agreement. Scholars’ Opinion on Khiyar al-Majlis Majority of Scholars Imam Shafi’I and Hanbali - Khiyar al-Majlis is valid and ends with physical separation of the parties or by mutual agreement. Minority of Scholars Imam Maliki and Hanafi - believe that the contract is binding immediately after the offer (ijab) and acceptance (qabul). Strongest Opinion Khiyar al-Majlis is valid and its nature and characteristics should be referred to customary practice. 2. Khiyar al-Shart ( Option of Condition ) Definition: An option where one or both parties stipulate for themselves or others the right to cancel the contract within a specified period. Validity: Based on the advice of the Prophet (peace be upon him) to Hibban bin Munzir to say during a contract: "There is no deception, and I have the option of choice for three days." Example: The buyer says to the seller: "I am purchasing this item from you, but I have the right to return it within three days." Contracts Permitting Khiyar al-Shart  Permitted – Contracts that accept cancellation such as sales.  Not Permitted – Not applicable for divorce and manumission ( freeing from slavery ).  Exceptions – Not applicable for salam and sarf. Futile to use in contracts that can be cancelled such as agency. Maximum Period of Option of Stipulation Hanbali, Imam Abu Yusuf & No maximum limit Muhammad Abu Hanifah and Shafi’i Not exceeding three days Malikis Depending on the case, for example one day for clothing, one month for a house. Termination of Khiyar al-Shart 1. Death Death of the party with the option. It cannot be inherited except according to Maliki and Shafi'i. 2. Expiration The end of the specified period for the option 3. Destruction Destruction of the subject of the contract. 3. Khiyar al-Ru’yah ( Option of Inspection ) Definition: The right granted to the buyer to ratify or cancel the contract after inspecting the object that was not present when the contract was signed. Purpose: To ensure the buyer is satisfied with the actual condition of the purchased item. Application: Usually used in transactions involving goods that cannot be inspected at the time of the contract. Scholars’ Opinion on Khiyar al-Ru’yah Hanafi Validate Khiyar al-Ru'yah because they validate the sale of an object through description. The contract is valid and enforceable but not binding. Shafi’i Completely invalid. because the contract where the subject has not been examined is not valid. Maliki and Hanbali Take a middle stance by validating it in certain specific cases. Conditions for Khiyar al-Ru’yah 1. Buyer has not seen  The buyer must not have seen the item purchased before the contract 2. Types of Asset  The asset must have its own individually, such as a house, land, or a house 3. Time for Inspection  The inspection must be carried out within a reasonable period after the contract. Factors terminating Khiyar al-Ru’yah 1. It end immediately after the inspection of the object 2. It ends with the destruction of the subject matter 3. It ends if the purchaser passes away