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Islamic Contract – Bay’ al-Istisnā‘: Legality of Istisnā‘
Q1: What is the legal basis for the permissibility of istisnā‘?
Answer:
According to Muslim jurists, the legality of the istisnā‘ contract is established through various Islamic legal sources, including:
Q2: What evidence from the Sunnah supports the legality of istisnā‘?
Answer:
The legality of istisnā‘ is supported by a narration reported by Nāfi‘:
“Abdullāh ibn ‘Umar reported that Prophet Muhammad (SAW) requested that a ring be manufactured for him.”
(Ahmad, 2001, hadith no. 12360)
This hadith demonstrates that:
Q3: How does ijmā‘ support the legality of istisnā‘?
Answer:
According to Hanafi jurists, istisnā‘ is also legitimised through:
ijmā‘ (consensus of Muslim jurists).
They argue that:
Q4: What is the role of qiyās and istihsān in legitimising istisnā‘?
Answer:
Qiyās (Analogy)
Jurists use analogy to compare istisnā‘ with other recognised sale contracts involving future delivery and specified assets.
Istihsān (Juristic Preference)
Hanafi jurists particularly rely on istihsān because:
Case Study 1: Manufacturing of Custom Furniture
A hotel owner contracts a furniture manufacturer to produce 200 customised chairs.
Contract Details
Case Study 2: Construction of a Commercial Building
A company appoints a contractor to construct a warehouse under an istisnā‘ arrangement.
Contract Details
Notes: Legal Basis of Istisnā‘
Sunnah
Istisnā‘ is permitted because it facilitates:
Q1: What is the legal basis for the permissibility of istisnā‘?
Answer:
According to Muslim jurists, the legality of the istisnā‘ contract is established through various Islamic legal sources, including:
- the Sunnah;
- ijmā‘ (consensus);
- qiyās (analogy); and
- istihsān (juristic preference).
Q2: What evidence from the Sunnah supports the legality of istisnā‘?
Answer:
The legality of istisnā‘ is supported by a narration reported by Nāfi‘:
“Abdullāh ibn ‘Umar reported that Prophet Muhammad (SAW) requested that a ring be manufactured for him.”
(Ahmad, 2001, hadith no. 12360)
This hadith demonstrates that:
- the Prophet (SAW) requested the manufacture of an item according to specifications; and
- the manufactured item was to be produced in the future.
Q3: How does ijmā‘ support the legality of istisnā‘?
Answer:
According to Hanafi jurists, istisnā‘ is also legitimised through:
ijmā‘ (consensus of Muslim jurists).
They argue that:
- people have continuously practised istisnā‘ transactions throughout different periods of Islamic history;
- scholars did not object to this widespread commercial practice.
Q4: What is the role of qiyās and istihsān in legitimising istisnā‘?
Answer:
Qiyās (Analogy)
Jurists use analogy to compare istisnā‘ with other recognised sale contracts involving future delivery and specified assets.
Istihsān (Juristic Preference)
Hanafi jurists particularly rely on istihsān because:
- strict analogy may initially disallow selling something not yet in existence;
- however, commercial necessity and public interest justify allowing istisnā‘.
- manufacturing;
- construction; and
- economic activities essential for society.
Case Study 1: Manufacturing of Custom Furniture
A hotel owner contracts a furniture manufacturer to produce 200 customised chairs.
Contract Details
- Total contract price: RM80,000
- Manufacturing period: 4 months
- Specifications:
- wood type;
- dimensions;
- colour;
- design.
- The chairs do not yet exist at the time of contract.
- The manufacturer agrees to produce them according to specifications.
- The transaction reflects the essence of istisnā‘.
- Its permissibility is supported by the Sunnah and customary commercial practice.
Case Study 2: Construction of a Commercial Building
A company appoints a contractor to construct a warehouse under an istisnā‘ arrangement.
Contract Details
- Construction price: RM2,500,000
- Completion period: 24 months
- Payment schedule:
- RM500,000 upfront;
- RM1,000,000 during construction;
- RM1,000,000 upon completion.
- The building will be constructed in the future.
- Specifications and delivery timeline are predetermined.
- Payment arrangement is flexible.
- The contract reflects established customary practice accepted by Muslim jurists.
- Sunnah;
- ijmā‘;
- qiyās; and
- istihsān.
Notes: Legal Basis of Istisnā‘
Sunnah
- Prophet Muhammad (SAW) requested manufactured items.
- Hadith supports permissibility of manufacturing contracts.
- Continuous practice of istisnā‘ accepted by Muslim jurists.
- No significant objection from scholars historically.
- Analogy with other valid commercial contracts.
- Juristic preference based on commercial necessity and public interest.
Istisnā‘ is permitted because it facilitates:
- trade;
- manufacturing;
- infrastructure development; and
- societal economic needs within Shariah principles.
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