QUESTION 2CONCEPT OF MISTAKE AND ITS CATEGORIES

ISLAMIC LAW OF TRANSACTION

GROUP MEMBERSNur Arfah Bt Abdul Sabian 2009810436

Arsidah Bt. Arhan 2009587659

Amir Nur Ikhwan B. Amernudin 2009482894

Jaslina Bt. Kassim 2009677636

IMPEDIMENTS TO CONSENT IN ISLAMIC CONTRACT

The jurists determined that

any consent which is impeded is

consent conditional upon the cause of

contract

Considered the consent is

impaired and invalid – no an

actual agreement

Eg : victim of mistake, fraud or deceit – the

contract become voidable and burden of

proof lies in establishing that the

consent had been induced by misleading

factors.

4 Grounds of the impediments

Mistake Fraud

Duress Effective constraint

Definition of Mistake (Ghalat)According to Rayner in his book ‘the theory of contracts in Islamic law’, mistake can be defined as a false or inexact representation of reality, may be regard to different elements of a contract.

Concept of Mistake (Ghalat)

Concept of mistake in islamic contract

Islamic law conceives of mistake as a substantive or intrinsic element which capable of occurring only during the formation of contractual agreement.

Mistake could arise from an assumption as to the existence, quality or quantity of the contractual object or to the nature or existence of the contract itself.

The provisions concerning mistake are scattered and usually are to be found in the books of fiqh among the discussion in option of description, defect or sight.

The Islamic concept of mistake is inextricably bound to the notion of consent in contract.

The law lacks in formulated theory because the provision of mistake are in actuality, mostly preclusions or safeguards designed to prevent its very incidence.

Categories of Mistake

MISTAKE AS TO OBJECT

Mistake as to Object of the contract

- It is the most

important category of

mistake.- It consist of 2 types

of mistake:1)

substantive mistake

2) mistake as to

insubstantial qualities

of the object.

- It deals with the

controversy between continuing commercial

relations and the

maintenance of due

respect for real

consent. It includes 3 different options

1Option of

defect

2Option of descriptio

n

3Option of inspection

MISTAKE AS TO MEANING (GHALAT AL-MAA'NA)

Mistake as to meaning(Ghalat al-Maa’na)

According to classical jurists, a mistake with regard to the substance (Jins) of the object will constitutes the contract void ab nitio.

It considered as substantive mistake.

Based on Art. 208 of Al-Majella:

“If the object is declared in kind (Jins) and the object proves to be another kind, the sale is invalid (batil)”.

ExamplesA sold B a stone as sapphire which is subsequently realized to be a mere glass.

1

A made a contract to sell wheat to B but then it turn out to be flour or bread.

Both mistake is substantive and real, as for second example, despite the fact that flour, wheat and bread are actually are different stages of process of the same substance.

2

In this case, the mistake as to meaning is also actionable under the option of description.

This shows that the Islamic doctrine of mistake takes on noticeably wider ambit that mistake in common law.

Mistake as to desired quality (insubstantial) of the object

Insubtantial quality (Wasf) of a contract refer to the object being in the same substance as contracted for, but different in its quality.

It is regarded as valid but not binding - the remedy is sought under Islamic law is not under mistake (ghalat) but either under the option of defect or description.

Example of insubstantial mistake

if a seller represents the stone as refer to a sapphire, and it is later deemed to be a ruby.

the sale is valid as it is not mistake as to substance of the object and is not deemed to have affected the usufruct intended by the purchaser and the true sale.

1

MISTAKE AS TO PERSON

Mistake As To PersonNot explicitly formulated by the classical

jurist.

Resolution may be adopted to form general outline of a doctrine.

Not affect the contract unless the persona of the contractor, or a substantive quality thereof, which give rise to a mistake, is a legal cause to the contract.

Mistake As To PersonSpecific contract in which a mistake as to

person of the co-contractor has become importance.

Party who suffers is given the right to annul the contract following the French Civil Law concept.

Contrasted with English Common Law where Mistake as to Person falls into the category of Mistake which negate consent

Mistake As To Person1) Marriage Contract.The person of the spouse is generally of prime

consideration in the contract.

Sanhuri, a modern author, distinguish between qualities generally, and essential qualities of the person.

Mistake as to essential qualities of the person in Sanhuri’s opinion will invalidates the marriage contract.

Mistake As To Person2) Unilateral Contract of Gift.The donee constitute a substantive aspect

of the contract.

A mistake as to his person will give the donor the right to withdraw or demand the return of his gift.

Mistake As To Person3) Unilateral Contract of Bequest

The legatee is regarded as a cause of the contract.

Al-Kasani states that among the important condition of a contract is a consent (Rida) of the testator because it is connected with the property.

Therefore, a bequest made in jest or by compulsion or mistake is invalid.

Mistake As To Person4) Contract of Pre-emption and Agency. In the contract of agency, Mistake pertains not so much to

the identity of the person as to his substantive qualities. For example, a minor purporting to be an agent lacks

capacity so to act. If the third party dealing with the agent believes the latter

has proper capacity to contract, this is a mistake in the substantial quality of the agent, that is his capacity to the contracts.

Mistake As To PersonThus the third party who deals unwittingly

with such an agent may avoid the contract on the ground of Mistake.

Abu Yusuf states that if the buyer is aware of the status of the agent minor, he is not allowed to avoid, whereas if he is mistaken wittingly, he may be given the option to annul or perform.

MISTAKE AS TO LAW

Mistake As To LawGeneral principle of the civil law that

Mistake as to Law, like a mistake as to fact, may vitiate the consent of the contracting party.

Bellafonds states that the Shariah, as formulated by the classical jurist, rarely distinguishes between the concept of Mistake as to Law and that of ignorance of the law.

Mistake As To LawModern exposes of the principle of

contract, there is a distinction made between Mistake and ignorance of the law.

The general maxim that “ignorance of the law is no excuse” with regard to Mistake is not always applicable is Islamic law.

Mistake As To LawCompendiums on Usul al-Fiqh, the principle is that

ignorance of the law is a valid excuse as long as it is not accompanied by negligence (Taqsir).

Whoever is ignorant of the law and is negligent, is held answerable to this ignorance and will not be considered a Mistake in Law.

Whoever is ignorance of the law and is not negligent in that ignorance is excused his ignorance and it may be regarded as a Mistake as to Law.

Mistake As To Law The primary assumption of Islamic Fiqh is that Mistake as to

law is not excusable except if the special surrounding condition can be established to rebut the charge of the assumed negligence regarding the ignorance as to the law.

The Hanafi author, al-Kasani states, in the sale of moveable property, if a neighbour asks for a right of pre-emption to that property, and the buyer, thinking that his neighbour may legally have per-emption over it, submits that right of pre-emption to him, when later one of the two want to revoke the contract without the other’s consent, he will not able to because when the submission is made, it became a contract between them.

Mistake As To LawHere, the buyer mistakenly thinks that pre-emption

may be allowed on moveable objects, which is mistake in law in Hanafi school.

This ignorance cannot be considered excusable because it encompasses negligence on the buyer’s behalf.

Therefore, he is not allowed to revoke the sale due to ignorance, and the contract is binding upon him.

Sanhuri contrast two situations:

1) a seller sells a sapphire but calls it a stone without knowing that it is a sapphire. This will not considered as mistake, as the seller does not reveal his intention to the buyer, indeed it is has no different from his implied intention to sell the stone due to his ignorance of its true essence.

2) the purchaser request a piece of Mervian cloth valued at one Dinar, the seller produces a piece of cloth worth four Dinars. Here the mistake is discoverable and the seller is permitted to avoid the contract. Then result would have been the same if the seller were to produce a piece of cloth for half a Dinar

MISTAKE WITH STIPULATION OF INTENTION

Hanafi :do not distinguish between an object

of superior or inferior value to that stipulated.

Shafii : solution is diametrically opposed to

that of the Hanafi’s. Shirazi :

when the object is discovered to be superior to that stipulated, the buyer has no option to rescind the contract for mistake

Mistake with Stipulation of Interntion divides by three:

1) Manifest expression of intent2) Deduction of intent from

circumstances of the case3) Deduction of intent from the

nature of the things

Manifest Expression of Intent What is about ?

Expression of intents formula are al- Tasmiya (nominator) and al- Inshara (indication)

Explanation?

Nomination represents the real will of the contracting party

Indication represents the apparent will A Example?

sales by catalogue

Sanhuri

If the nomination of an article differs from an indication given and thereby the true intention or will is different from the apparent intention

Maliki

Sale by catalogue and arrive at the same solution. If the delivered article fails to fit its catalogue description, the buyer has an option to rescind the contract for misdescription

Hanafi

No differences in the use to which the object is put, the contract is formed on the basis of the indicated object even if the buyers has given a description of a desired be in an option of description

Deduction of Intent from Circumstances of the case

Explanation?

• Not necessary for manifestation of a contracting party’s will to be express.

• The other party may reasonably assume to have tacitly understood or deduced his co-contractor’s will from his accompanying circumstances or origin and be expected to recognised a mistake

Example?

selling stone in a market for a precious jewel may reasonably be assumed to be that category of value.

When mistake have been establish, the contractor is deemed to have the right of option of defect (Khiyar al- Ayb), but the burden of proof does lie with the holder of that option

Deduction of Intent from the Nature of the Things

What is about?

The option of defect

Explanation?

• Established option with an implied condition for there is an implied condition of

guarantees concerning the soundness of the object.

• Unless, contractor expressly inserts a condition of waivers against defects in the

contracts.

Example?

• Anything which appreciably diminishes the value of an object of ordinary

commerce is regarded as a defect giving rise to an option.

Al- Kasani states in this context that the will of the buyer is that the object is sound and that his will

is a valid condition of the contract. Therefore, if the object is discovered to contain a defect, this

condition of the buyer’s will is lacking and the validity of the contract is affected, giving rise to the

right of opinion

Khiyar al-Ru’ya

NON- DISCLOSURE OF THE WILL

What is about?

• General Rule in Islamic jurisprudence:

If a contractor agrees to buy an object without having seen it, he is allowed an Option of Inspection, which gives him a right to ratify or rescind the contract.

• In this doctrine:

A contract formed by the will of two parties cannot be valid when the will of one of those parties has been breach by mistake as to the intended object.

This doctrine, like the option of defect in mistake has its foundations in the role of the will of contracting parties. A contract formed by the will of two parties cannot be valid when the will of one of those parties has been breached by mistake as to the intended object

MISTAKE AS TO VALUE (GHABN AL-FAHISH)

MISTAKE AS TO VALUE (GHABN AL-FAHISH)DefinitionThe Majella : Excessive deception in the

value of goodsWhat constitute Excessive deception?Article 165 of the MajellaArticle 356Article 357

CONDITIONS ATTACHED (OPINION OF THE JURISTS)

Hanafi, Shafi’i and Hanbali school: Ghabn must be accompanied by fraud or verbal deceit.

Shafi’I school: must be accompanied by flagrant misrepresentation.

I’badi school: diminution in value of the object.

Exception to conditionContracts relates to :-

Property of minor

A waqf donor

The treasury

The effect of Mistake as to value Ibn Al-Hamam :- Buyer has the right to

return the property to the seller

Ibn A’bidin :-

1. the sale is valid but maybe rescinded absolutely;

2. rescission is not absolute

3. if deceit has also occurred rescission is absolute.

The effect of Mistake as to value(cont’d)Shafi’i school: Ghabn accompanied by

taghrir maybe rescinded at the option of the buyer

Hanbali school: allow option to rescind on 3 grounds and must be accompanied by taghrir

Maliki school: rescission is permissible on 3 conditions.

Application of doctrine of mistake as to value by modern statutes

The Iraqi Civil Code

The UAE Civil Code

The Kuwaiti Civil Code

The Bahrain Contract Law

The Malaysian Contracts Act

THE CONCLUSIONMISTAKE is not a question of ignorance or a wrong

decision but a doctrine which seeks to identify the underlying cause of the error.

The error must have motivated the decision to contract to be actionable.

where such motivation or consent has been induced by deceit, misrepresentation or fraud the Muslim jurist assign primary attention to the consent of the contracting parties.

The remedies are always deduced in the light of effect of the mistake and its cause on the consent of the contracting parties.