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Islamic Contract Law – Positive Law vs Normative Law vs Islamic Law 


1. Positive Law (Modern Legal Systems)
  • Meaning
    • Law created by:
      • State or sovereign authority
    • Example:
      • Statutes, legislation, regulations
  • Key Features
    • Based on:
      • Command of authority
    • Focus on:
      • Legal enforceability
    • Does NOT depend on:
      • Morality or ethics
  • Scholars
    • Influenced by Jeremy Bentham and John Austin
  • Example
    • A law requiring:
      • Contracts to have consideration
    • Binding because:
      • It is enacted by authority


2. Normative Law (Moral/Ethical System)
  • Meaning
    • Law based on:
      • Values, ethics, and moral standards
    • Focus on:
      • What ought to be done
  • Key Features
    • Appeals to:
      • Conscience
    • Encourages:
      • Good behaviour
    • Not always legally enforceable
  • Examples
    • Be honest in trade
    • Fulfil promises
    • Avoid harming others


3. Islamic Law (Combination of Both)
  • Meaning
    • Law derived from:
      • Qurʾān
      • Sunnah
  • Nature
    • Combines:
      • Normative (moral guidance)
      • Positive (binding legal rules)


4. Key Characteristics of Islamic Law
  • A. Moral Foundation
    • Appeals to:
      • Conscience
      • Faith
    • Example:
      • Encouragement to act fairly


  • B. Legal Binding Force
    • Some rules are:
      • Legally enforceable
    • Example:
      • Obligation to fulfil contracts


  • C. Use of Different Forms
    • Commands
    • Prohibitions
    • Warnings
    • Rewards and punishments


  • D. Integration of Law and Morality
    • No strict separation between:
      • Legal rules
      • Moral values


5. Key Differences (Note Form)
  • Positive Law
    • Source:
      • State authority
    • Focus:
      • Enforcement
    • Nature:
      • Technical and formal


  • Normative Law
    • Source:
      • Moral values
    • Focus:
      • Ethical behaviour
    • Nature:
      • Persuasive


  • Islamic Law
    • Source:
      • Divine revelation
    • Focus:
      • Both morality and legal obligation
    • Nature:
      • Integrated system


6. Application in Contract Law
  • Positive Law
    • Contract valid if:
      • Legal requirements met


  • Normative Law
    • Contract judged by:
      • Fairness and ethics


  • Islamic Contract Law
    • Contract must be:
      • Legally valid + morally acceptable


Final Summary
  • Positive law
    • “Follow the law because authority commands it”
  • Normative law
    • “Act rightly because it is morally good”
  • Islamic law
    • “Act rightly because it is morally right and legally required by God”


One-Line Comparison
  • Positive = Authority
  • Normative = Morality
  • Islamic law = Morality + Divine authority + Legal obligation

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Islamic Contract Law – Nature of Divine Law vs Modern Positive Law
1. Key Idea
  • The style and nature of legal rules in:
    • Islamic law (Qurʾān & Sunnah)
    • Modern statutory law
  • Are fundamentally different


2. Nature of Islamic Law (Qurʾān & Sunnah)
A. Appeals to Conscience (Normative Approach)
  • Islamic law:
    • First appeals to the individual’s conscience
  • Reflects:
    • Moral and spiritual guidance, not just legal commands


B. Forms of Expression (with Examples)
  • Persuasion
    • Encouraging good behaviour
    • Example:
      • Encouragement to be honest in trade


  • Warnings
    • Strong discouragement of wrongful acts
    • Example:
      • Warning against cheating or injustice


  • Benefit vs Harm
    • Explains consequences of actions
    • Example:
      • Fair dealings → benefit
      • Fraud → harm


  • Reward and Punishment (Eschatological)
    • Linked to:
      • Afterlife consequences
    • Example:
      • Fulfilling contracts → reward
      • Breaking promises → punishment


👉 Overall:
  • Law is:
    • Moral + spiritual + legal


3. Nature of Modern Positive Law
A. Based on Positivist Theory
  • Influenced by:
    • Jeremy Bentham
    • John Austin


B. Key Characteristics
  • Law is:
    • Command of a sovereign authority
  • Focus on:
    • Legal enforceability, not morality
  • No emphasis on:
    • Persuasion
    • Moral appeal
    • Spiritual consequences


C. Example
  • Statutory rule:
    • “A contract must have consideration”
👉 No explanation of:
  • Moral good or bad
  • Only:
    • Legal requirement


4. Key Differences (Note Form)
  • Islamic Law
    • Appeals to:
      • Conscience
      • Morality
      • Faith
    • Uses:
      • Persuasion, warnings, rewards


  • Modern Positive Law
    • Based on:
      • Authority and command
    • Focus:
      • Enforcement and compliance


5. Why This Matters for Islamic Contract Law
  • Islamic contract law:
    • Is not purely technical
    • Rooted in:
      • Ethical and religious values
  • Contracts are:
    • Not just legal agreements
    • But also:
      • Moral commitments


Final Summary
  • Islamic law:
    • Guides behaviour through moral and spiritual appeal
  • Modern law:
    • Imposes rules through authority and enforcement
👉 Understanding this helps explain why:
  • Islamic contract law emphasises:
    • Fulfilment of obligations
    • Ethics in transactions


One-Line Understanding
  • Islamic law = “Obey because it is right”
  • Positive law = “Obey because it is required”



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Islamic Contract Law – How These Theories Affect Contract Drafting (Islamic vs English Law)


1. Starting Point of Drafting
  • Islamic Contract Law
    • Starts with:
      • Shariah principles (what is lawful/ethical)
    • Then:
      • Legal structure is built around it
 
  • English Law
    • Starts with:
      • Legal requirements (offer, acceptance, consideration)
    • Focus:
      • Enforceability in court


2. Role of Language in Contracts
  • Islamic Contracts
    • Emphasise:
      • Clarity (no ambiguity / gharar)
      • Fairness
    • Avoid:
      • Uncertainty
      • Exploitation
 
  • English Contracts
    • Emphasise:
      • Precision and technical wording
    • Often include:
      • Detailed clauses to cover all risks


3. Structure of Obligations
  • Islamic Contracts
    • Must ensure:
      • Real economic activity
      • Asset-backed transactions
    • Prohibit:
      • Interest (riba)
      • Excessive uncertainty
 
  • English Contracts
    • More flexible:
      • Parties can agree to almost anything
    • As long as:
      • It is legal and meets formal requirements


4. Moral vs Legal Emphasis
  • Islamic Contracts
    • Combine:
      • Legal obligation
      • Moral and religious responsibility
  • Example:
    • A party should not exploit loopholes even if legally possible
 
  • English Contracts
    • Focus on:
      • Legal enforceability only
  • Example:
    • If a clause allows advantage, party may rely on it


5. Risk Allocation
  • Islamic Contracts
    • Risk must be:
      • Shared fairly
    • Profit must be linked to:
      • Risk and effort
 
  • English Contracts
    • Risk can be:
      • Allocated freely
    • One party may bear most risk


6. Example (Very Clear Comparison)
Scenario: Financing a Building Project
  • Islamic Contract
    • Structure:
      • Based on asset (e.g., lease or partnership)
    • Return:
      • Rent or profit
    • Requirement:
      • Must comply with Shariah
 
  • English Contract
    • Structure:
      • Loan agreement
    • Return:
      • Interest
    • Requirement:
      • Legal validity only


7. Practical Reality (Very Important)
  • Modern Islamic finance contracts often:
    • Use English legal drafting style
    • But incorporate:
      • Shariah-compliant structures
👉 Result:
  • Hybrid contracts


8. Key Insight
  • Difference in theory leads to difference in drafting:
    • Islamic law → ethical + legal drafting
    • English law → technical legal drafting


Final Summary
  • Islamic contract drafting:
    • Focus = lawfulness + fairness + moral responsibility
  • English contract drafting:
    • Focus = enforceability + precision + risk allocation


One-Line Understanding
  • Islamic contracts = “Must be lawful, fair, and fulfilled”
  • English contracts = “Must be clear, valid, and enforceable”​

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Islamic Contract Law – Real Clause Comparison (Islamic vs English Drafting)


1. Scenario: Financing a Property


A. English Law Clause (Conventional Loan)
The Lender agrees to lend RM1,000,000 to the Borrower.
The Borrower shall repay the Loan together with interest at the rate of 5% per annum.
Repayment shall be made in monthly instalments over a period of 10 years.
Key Features
  • Based on:
    • Loan + interest (consideration)
  • Focus:
    • Repayment obligation
  • No requirement for:
    • Asset involvement
  • Purely financial transaction


2. Islamic Contract Clause (Shariah-Compliant Structure – Ijārah Example)
The Financier shall acquire the Property and lease it to the Customer for a fixed term.
The Customer agrees to pay rental in agreed instalments for the use of the Property.
Ownership of the Property shall remain with the Financier during the lease period.
Key Features
  • Based on:
    • Asset (property)
  • Structure:
    • Lease (ijārah), not loan
  • Return:
    • Rental (not interest)
  • Reflects:
    • Real economic activity


3. Additional Islamic Clause (Shariah Compliance)
The Parties agree that this Agreement shall comply with Shariah principles.
Any provision found to be non-compliant shall be amended to ensure conformity with Shariah requirements.
Key Features
  • Ensures:
    • Religious and legal compliance
  • Adds:
    • Moral + legal dimension


4. Risk Allocation Clause Comparison
English Law
The Borrower shall bear all risks associated with the Property, including damage or loss, and shall remain liable to repay the Loan in full.
  • Risk:
    • Placed entirely on borrower


Islamic Contract
The Financier, as owner of the Property, shall bear ownership-related risks.
The Customer shall be responsible for usage-related obligations during the lease period.
  • Risk:
    • Shared based on ownership and use


5. Key Differences from Clauses
  • English Law
    • Loan-based
    • Interest-driven
    • Risk can be one-sided
    • Focus on:
      • Legal enforceability


  • Islamic Contract Law
    • Asset-based
    • Profit/rent-driven
    • Risk-sharing
    • Includes:
      • Shariah compliance + ethical considerations


Final Insight
  • Even though both contracts may:
    • Achieve similar economic outcomes
👉 They are fundamentally different in:
  • Structure
  • Legal theory
  • Moral foundation


One-Line Comparison
  • English clause = “Repay money with interest”
  • Islamic clause = “Use asset and pay rent lawfully.  

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Islamic Contract Law – Development of a “Law of Contracts” ​

1. Emergence of a “Law of Contracts”
  • Early Muslim jurists did not create a single unified theory of contract
  • Instead, they developed:
    • Specific rules for different types of contracts
  • This approach is referred to as:
    • A “law of contracts” (as described by Hussein Hassan)
👉 Meaning:
  • Each contract type has its own rules and structure


2. Classification of Contracts
A. Nominate Contracts (ʿUqūd Muʿayyana)
  • Contracts with:
    • Specific names and established rules
  • Examples:
    • Sale (bayʿ)
    • Lease (ijārah)
    • Partnership (mushārakah)
👉 These are:
  • Clearly defined and widely recognised


B. Innominate Contracts (Ghayr al-Muʿayyana)
  • Contracts that:
    • Do not fall under specific classical categories
  • More flexible:
    • Developed based on needs and circumstances
👉 Allowed as long as:
  • They comply with Islamic principles


3. Result of This Classification
  • Led to the development of:
    • A structured body of contract rules
  • Even without a formal theory:
    • Islamic law effectively created a functional contract system


4. Debate Among Scholars
  • Some scholars argue:
    • Islamic law has a general theory of contract
  • Others argue:
    • No formal theory exists because:
      • Classical jurists did not systematise it


5. Four Core Principles as a “General Theory”
Even without a formal theory, Islamic contract law can be understood through four key principles:


1. الأصل في المعاملات الإباحة (Permissibility Principle)
  • الأصل:
    • All commercial transactions are permissible by default
  • Unless:
    • Specifically prohibited


2. Prohibition of Certain Elements
  • Contracts must avoid:
    • Ribā (interest)
    • Gharar (excessive uncertainty)
👉 Ensures:
  • Fairness and transparency


3. Obligation to Fulfil Contracts
  • Parties must:
    • Honour their agreements
  • Based on:
    • Qurʾānic command


4. Prohibition of Unjust Enrichment
  • Cannot:
    • Consume others’ property unjustly
  • Prevents:
    • Exploitation and fraud


6. Key Insight
  • Islamic contract law:
    • Developed practically, not theoretically
  • But these principles:
    • Function like a general framework


Final Summary
  • Classical jurists:
    • Focused on individual contract types, not abstract theory
  • However:
    • A general theory can be inferred from:
      • Permissibility
      • Prohibitions (ribā, gharar)
      • Obligation to fulfil
      • Protection of property


One-Line Understanding
  • Islamic contract law =
    “A practical system of specific contracts guided by overarching principles rather than a formal theory.”

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Islamic Contract Law – Express vs Implied Contracts (Comparison with English & Malaysian Law)


1. Recognition of Contracts
  • Islamic Contract Law
    • Recognises:
      • Express contracts
      • Implied contracts (by conduct and custom – ʿurf)


  • English Law
    • Recognises:
      • Express contracts
      • Implied contracts (by conduct, facts, or law)


  • Malaysian Law
    • Based on Contracts Act 1950
    • Also recognises:
      • Express contracts
      • Implied contracts (similar to English law)


2. Express Contracts
Definition
  • Terms are clearly stated


Examples (All Systems)
  • Oral:
    • “I sell you this for RM500”
  • Written:
    • Signing a lease agreement


Key Point
  • All three systems:
    • ✅ Fully recognise express contracts


3. Implied Contracts
Islamic Contract Law
  • Based on:
    • Conduct (actions)
    • Custom (ʿurf)
  • Example:
    • Taking goods in a shop → paying at counter


English Law
  • Implied through:
    • Conduct
    • Circumstances
    • Court implication
  • Example:
    • Boarding a bus → obligation to pay fare


Malaysian Law
  • Follows English law approach
  • Implied from:
    • Conduct and surrounding facts


4. Formation (Offer & Acceptance)
  • Islamic Contract Law
    • Can be:
      • Oral
      • Written
      • By conduct


  • English Law
    • Same:
      • Offer + acceptance may be implied


  • Malaysian Law
    • Same principle applies


5. Key Requirement for Validity
  • Islamic Contract Law
    • Requires:
      • Legal capacity (ahliyyah)
      • Consent


  • English Law
    • Requires:
      • Capacity
      • Consideration
      • Intention


  • Malaysian Law
    • Requires:
      • Capacity
      • Consideration
      • Intention


6. Role of Custom (Important Difference)
  • Islamic Contract Law
    • Custom (ʿurf) plays a major role
    • Can determine:
      • Terms of contract


  • English Law
    • Custom plays:
      • Limited role


  • Malaysian Law
    • Custom recognised but:
      • Less central than Islamic law


7. Freedom of Contract
  • Islamic Contract Law
    • Allows freedom:
      • BUT limited by Shariah


  • English Law
    • Strong freedom of contract


  • Malaysian Law
    • Similar to English law


Final Summary
  • All three systems recognise:
    • Express contracts
    • Implied contracts
  • Key differences:
    • Islamic law emphasises:
      • Custom (ʿurf) and moral framework
    • English & Malaysian law emphasise:
      • Consideration and legal structure


One-Line Comparison
  • Islamic law = flexible (words, conduct, custom)
  • English & Malaysian law = similar structure, but more legal-technical





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Islamic Contract Law – Why Banks Often Do NOT Truly Bear Risk in Murābaḥah 

You’re thinking in the right direction--legally, the asset belongs to the bank, so the bank should bear the risk.
But the issue is not just legal ownership, it is about real (substantive) risk in practice.


1. The Ideal (Correct) Murābaḥah Situation
  • Bank:
    • Buys the asset
    • Becomes true owner
  • During ownership:
    • Bank bears:
      • Damage risk
      • Loss risk
      • Market risk
Example (Proper Risk)
  • Bank buys a house
  • Before selling to customer:
    • House is damaged by fire
👉 Result:
  • Bank bears the loss
✅ This is genuine risk → profit is justified


2. What Happens in Practice (Agency Structure)
  • Customer is appointed as:
    • Agent of the bank
  • Customer:
    • Selects the house
    • Buys it on behalf of the bank
👉 Technically:
  • Ownership passes to bank (even briefly)
BUT…


3. Why Scholars Say “No Real Risk”
Because banks structure the transaction to eliminate risk
A. Immediate Back-to-Back Sale
  • Bank buys → instantly sells to customer
👉 No time to bear:
  • Market risk
  • Price fluctuation


B. Risk Shifted to Customer
  • Customer may:
    • Already agree to buy before bank purchases
    • Bear costs if anything goes wrong
👉 So:
  • Even during “bank ownership”:
    • Customer carries practical risk


C. Paper Ownership Only
  • Bank:
    • Never physically possesses the asset
    • Never controls it
👉 Ownership exists:
  • Legally (on paper)
  • Not:
    • Economically (in reality)


4. Example (Very Clear Comparison)
Example 1 – Real Risk
  • Bank buys a car
  • Keeps it for a few days
  • Car is damaged
👉 Bank loses money
✅ Real ownership + real risk


Example 2 – No Real Risk (Typical Practice)
  • Customer:
    • Chooses car
    • Signs promise to buy
  • Bank:
    • Pays supplier
    • Immediately sells to customer
  • If anything goes wrong:
    • Customer still must pay
👉 Bank never truly exposed to loss
❌ Risk is theoretical, not real


5. Key Issue: Legal vs Economic Reality
  • Legal position
    • Yes, asset belongs to bank
  • Economic reality
    • Bank avoids:
      • Loss
      • Uncertainty
      • Market exposure
👉 Islamic law focuses on:
  • Substance, not just form


6. Why This Matters in Islamic Law
  • Principle:
    • “Profit must be linked to risk” (al-ghunm bil-ghurm)
  • If bank:
    • Takes profit
    • But avoids risk
👉 Then:
  • It resembles:
    • Interest-based lending


7. Final Insight
  • You are correct:
    • In theory, bank should bear risk
  • But in practice:
    • Contracts are structured so:
      • Risk is minimised or shifted
👉 That’s why scholars criticise:
  • Murābaḥah as sometimes being:
    • Formally valid but lacking substance


One-Line Understanding
  • Ownership on paper ≠ real risk in practice
  • Islamic law requires:
    👉 Real risk, not just technical ownership​
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​Islamic Contract Law – Murābaḥah and the Issue of Risk (Notes)


1. Basic Structure of Murābaḥah
  • A cost-plus sale contract
  • Steps:
    • Bank buys an asset
    • Bank sells it to customer at:
      • Cost + profit (markup)
    • Customer pays later (deferred payment)
👉 Key principle:
  • Must be a genuine sale, not a loan


2. Core Requirement: Bank Must Bear Risk
  • In Islamic law:
    • Profit is justified only if risk is borne
👉 Therefore:
  • Bank must:
    • Take ownership of the asset
    • Bear ownership risk (even if briefly)


3. Types of Risk the Bank Should Bear
  • Asset Risk
    • Damage or loss before sale
  • Ownership Risk
    • Liability as owner
  • Market Risk
    • Price fluctuation before resale
👉 These risks justify:
  • The bank’s profit (markup)


4. The Practical Problem (Modern Practice)
  • In many cases:
    • Bank tries to avoid all risk


How this happens
  • Asset is:
    • Never physically held by bank
  • Customer:
    • Acts as agent to buy asset
  • Ownership:
    • Exists only on paper
👉 Result:
  • Bank bears:
    • Little or no real risk


5. Why This is a Problem (Substance Issue)
  • If bank does NOT bear risk:
    • Profit becomes:
      • Unjustified in Islamic law
👉 Because:
  • It resembles:
    • Interest (riba)


6. Example (Clear Illustration)
  • Proper Murābaḥah
    • Bank buys a car
    • Car is damaged before sale
    • Bank bears loss
👉 Valid:
  • Risk → Profit justified
 
  • Problematic Murābaḥah
    • Customer selects car
    • Bank never truly owns it
    • Customer bears all risk
👉 Substance:
  • Looks like:
    • Loan with fixed return


7. Key Criticism
  • Critics argue:
    • Many murābaḥah transactions:
      • Only comply in form
      • Not in substance


8. Key Principle to Remember
  • Islamic law rule:
    • “Al-ghunm bil-ghurm”
    • (Profit comes with risk)
👉 No risk = questionable profit


Final Summary
  • Murābaḥah is valid only if:
    • Bank genuinely owns and bears risk
  • If risk is eliminated:
    • Contract may:
      • Become formally valid but substantively problematic


One-Line Understanding
  • No real risk → no real sale → possible riba in disguise










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​Islamic Contract Law – Form vs Substance (Examples Only)


1. Murābaḥah Financing (Cost-Plus Sale)
  • Form
    • Bank buys an asset and sells it to customer at a markup
    • Structured as a sale contract
  • Substance Issue
    • In practice:
      • Bank may never truly bear risk
      • Transaction closely resembles:
        • Loan + interest
👉 Question:
  • Is it a real sale or just a disguised loan?


2. Tawarruq (Commodity-Based Financing)
  • Form
    • Customer buys a commodity on deferred payment
    • Immediately sells it for cash
  • Substance Issue
    • No real intention to use the commodity
    • Purpose:
      • Obtain cash
👉 Looks like:
  • A series of sales
    👉 But substance:
  • Cash loan with profit (similar to interest)


3. Ijārah (Leasing Contract)
  • Form
    • Bank owns asset and leases it
    • Customer pays rent
  • Substance Issue
    • If:
      • All risks shifted to customer
      • Ownership is only “on paper”
👉 Then:
  • It may resemble:
    • Conventional financing, not true leasing


4. Ṣukūk Structures
  • Form
    • Investors own shares in assets
    • Returns based on asset performance
  • Substance Issue
    • If returns are:
      • Fixed and guaranteed
👉 Then:
  • It resembles:
    • Conventional bonds (interest-based)


5. Buy-Back Arrangement (Bayʿ al-ʿĪnah)
  • Form
    • Asset sold and then repurchased
  • Substance Issue
    • No real transfer of ownership intended
    • Purpose:
      • Generate cash with extra payment
👉 Substance:
  • Similar to:
    • Loan with interest


Final Insight
  • These examples show:
    • A contract can be:
      • Valid in form
      • But questionable in substance


One-Line Understanding
  • Form = what the contract looks like
  • Substance = what the contract actually does







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Islamic Contract Law – Debate on Form vs Substance 


1. Core Issue
  • There is a long-standing debate in Islamic contract law between:
    • Form (ṣūrah) → outward legal structure
    • Substance (ḥaqīqah) → real economic and ethical reality
👉 Key question:
  • Is a contract valid if it looks Islamic, or must it also truly reflect Islamic principles in substance?


2. Historical Background
  • Debate dates back to classical jurists
  • Addressed using the concept of:
    • ḥīlah (legal ruse) → using legal form to achieve a particular outcome
👉 Concern:
  • Contracts may be:
    • Technically valid
    • But used to bypass Islamic prohibitions


3. Meaning of Form vs Substance
Form
  • Focus on:
    • Legal structure
    • Compliance with formal rules
  • Example:
    • Structuring a transaction as a “sale” instead of a loan


Substance
  • Focus on:
    • Real intention and economic effect
    • Whether it reflects:
      • Justice
      • Fairness
      • Shariah objectives
  • Example:
    • If a “sale” behaves exactly like an interest-based loan → substance issue


4. Modern Relevance (Islamic Finance)
  • Today, many Islamic financial products:
    • Are structured using classical contract forms
  • But critics argue:
    • They may only comply in form, not substance


Example (Very Important)
  • A conventional loan:
    • Money → interest
  • Islamic structure:
    • Replaced with sale + markup
👉 Criticism:
  • Is this:
    • A genuine trade?
    • OR just a disguised loan (form over substance)?


5. Criticism of Modern Islamic Contracts
  • Some scholars argue:
    • Contracts are:
      • Replications of conventional finance
  • Issues raised:
    • Lack of:
      • Real risk-sharing
      • Genuine asset involvement
👉 Result:
  • Compliance may be:
    • Technical (form-based) only


6. Alternative View (Defensive Argument)
  • Other scholars argue:
    • As long as:
      • Contracts comply with Shariah rules
    • They are:
      • Valid
 
  • However, even within this view:
    • Concern remains:
      • Contracts may not reflect the spirit (maqāṣid) of Islamic law


7. Legal Challenges in Modern Context
  • Disputes increasingly appear in:
    • English courts
  • Issues:
    • Whether Islamic contracts are:
      • Legally enforceable
      • Properly structured
👉 Highlights need for:
  • Clear and consistent framework


8. Key Insight
  • The debate is not just legal, but:
    • Ethical + economic
👉 True Islamic contract should:
  • Be valid in:
    • Form
    • AND substance


9. Why This Matters
  • Without proper balance:
    • Islamic finance risks becoming:
      • Formally compliant but substantively conventional
  • This undermines:
    • Trust
    • Authenticity


Final Summary
  • Form
    • Legal structure and compliance
  • Substance
    • Real economic and ethical reality
  • The challenge:
    • Ensuring contracts are:
      • Both legally valid and genuinely Islamic


One-Line Understanding
  • Islamic contract law must ensure:
    “Not just the correct form, but the correct substance and purpose.”​
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