Types and Classifications of Contracts

There are two main types of contracts:

  1. Unilateral; and
  2. Bilateral.

A unilateral contract is gratuitous in character and does not require the consent of the recipient (qabool). Examples of a unilateral contract include gift (hadiah, hibah), off-set of the debt (ibra), will (wassiyyat) endowment (waqf) and loan (qard). Each of these transactions will be explained later in more detail.

A bilateral contract requires the consent of both parties and covers the remaining transactions in Islamic law. The scholars have traditionally divided bilateral contracts into six classifications:

  1. Contracts of exchange (mu’awadat);
  2. Contracts of security (tawthiqat);
  3. Contracts of partnership (shirkah);
  4. Contracts of safe custody (wadi’ah);
  5. Contracts pertaining to the utilization of usufruct (manfa’ah); and
  6. Contracts pertaining to do a work (e.g., wakalah and ju’alah).

These classifications and various contracts that come under these will form the basis of later discussion under contracts and transactions in Islamic law.

Source: “Contracts in Islamic Commercial and Their Application in Modern Islamic Financial System.” Iqtisad Al-Islamy. 2003. Islamic-World.Net. 16 January 2006. [http://islamic-world.net/economics/contract_01.htm].

About these ads

9 Comments

Filed under Contracts and Transactions

9 responses to “Types and Classifications of Contracts

  1. azida

    assalamualaikum…
    i need to know with more details about contract of security (tawthiqat) for my presentation..
    can explains to me the function and how its work with several example..

    thank you..

  2. Saleem

    I want to know much about riba,its classes and rational behind its prohibition

  3. Prince george

    I wants to know all about contract

  4. tabish

    in a mudaraba transaction both parties undertake the management and disposal of credit ? yes or no

  5. tabish

    in a murabaha sale it is permissible to charge an increment over the principal

  6. tabish

    In diminishing musharika the participant shares profit and repays his share
    of equity ?

  7. julikiv

    why should you just rely on islamic law to explain this?

  8. Ibrahim

    I want to know islamically how an intentional and un_intentional defaulting party will be delt with in contracts

  9. fatima zakari

    I want to know about common law,customary law,Nigerian legislation and case law

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s