INTRODUCTION

The contract law principles in Shariah Law are not different from English contract law principles. In English law, ‘contract is an agreement enforceable by law’. According to Islamic law, a promise may not be legally enforced although it is strongly recommended by religious and moral values to be fulfilled.[1] In Islamic law, contract is known as ‘aqd’ which means tie or bond. It means a contract binds the parties together. From the definition, the term ‘aqad is more or less of the equivalent of the technical term of contract in Western Jurisprudence. However, ‘aqad does not necessarily involve agreement (which is a necessary element in a conventional contract) because the term is also used to describe a unilateral juridical act which is binding and effective without the consent of the other party. Islam emphasizes on fulfilling contractual obligations. Allah says in the Quran,

“O ye who believe, fulfil all of your obligations”[2]

and also similarly in this surah which is stated

“…So fulfil your engagement with them to the end of their term, for Allah loves the righteous”[3]

Under Islamic law, to be a valid contract, there must have some elements in the contract. Those elements are sighah (ijab and qabul), contracting parties and subject matter.

The first element is sighah (ijab and qabul) or offer and acceptance. There are three kinds of offer which are verbal offer (kalam), offer by conduct (‘amal’) and offer in writing (kitabah). When an offer is accepted by the offeree, it is said that an acceptance has been made. Acceptance can be verbal, by conduct or in writing. In Islamic law, to make a contract, the offer must be accepted by the offeree and the acceptance must be in the same meeting (Majlis) not later.

Second element of ‘aqad is contracting parties. The contracting parties are the parties