Definition of Contract

Much of Islamic economics and finance is based on contracts between two or more parties. Whether it is a contract to purchase goods or a contract to make a loan, one needs to understand the concept of contract in Islam and how/if it differs from the one we see in the man-made law.

Definition of Contract in Islam

According to Kharofa, the word ‘aqd (contract) in Arabic language means tying tightly, as in tying a rope. Arabs used the word to speak about firm belief or determination. They used to say ‘aqd al ‘ahd to mean ‘make a covenant’ and ‘aqd al yamin to mean ‘give an oath’. Along the same line is ‘adqat al nikah meaning a marriage contract.

The word ‘aqd also carries the meaning of obligations, as used in the first verse of Surah al-Maida. O ye who believe! Fulfil your obligations.

In Islamic jurisprudence the word contract is used to mean an engagement and agreement between two persons in a legally accepted, impactful and binding manner.

Definition of Contract in Man-Made Laws

The definition of a contract according to the French Civil Law in article 1101 is ‘an agreement which commits a person or a group of persons to give something, do something or refrain from something to another person or group of persons.’

The Distinction

The definition of a contract in both Islamic jurisprudence and the civil law are fairly similar. Kharofa states that the Islamic definition is stronger, however, I personally believe the difference is nothing more than artificial.

Source: Kharofa, Ala’ Eddin. Transactions in Islamic Law. 2nd ed. Kuala Lumpur: A.S. Noordeen, 2000. 1-7.


Filed under Basics and Definitions, Contracts and Transactions

9 responses to “Definition of Contract

  1. Dr Samir Radwan

    Dear brothers
    your great effort is undeniable and appreciated,May God guide you and reward you .But I noticed that you have fallen in a mistake and itis a serious one while explaining forbidden sales titled ” sale of something before receiving the price “. In reality it is not the price that must be received but the subject matter ” the sold article ” that must be owned and in your possession at time of contract . It is permitted to delay the price and not the priced thing

  2. abid

    excellent work

  3. Salaam,

    This site is very beneficial.

  4. I want you to send me latest note in respect of islamic law of contract.

  5. This article is really helpful for getting a general knowledge about Islamic Economics. However, you can read this one for more information about;

  6. Abdussalam ambazhathingal

    Very good site indeed!.
    Would appreciate if u could send me docs on ‘contracts and their application in modern islamic financial system’ under islamic economics’ to
    Thanks and regards

  7. need notes on remedies for breach of contract in islamic law.. will u plz send me some link or notes..

  8. Hoosen Essof

    AsSalaamu Alaikum

    Is this site still attended too by the author/webmaster?

    I would like to connect with the author/webmaster … please drop me an email at

    Shukran WasSalaam

    M. Hoosen Essof

Leave a Reply

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

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

Google photo

You are commenting using your Google 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 )

Connecting to %s