Advance Fiqh Muamalat 1

ADVANCED FIQH ISB548
MUAMALAT
SHARIAH
Root word of sharaà, means to start, begin or commence
Literally: the way to watering place, all creation need it to survive
Technically: all the rulings that Allah has enacted for His servants.
Shariah is what has been sent down by Allah to His Prophet as a revelation
(wahyu) via al-Quran and the prophetic tradition.
It consists of every single aspect that relates to the religion of Islam.
It is not a set of codified law, but it is a general principle derived mainly from
Quran and hadith.
FIQH
Root word of faqiha, to understand, grasp, comprehend, apprehend, realize, or to know or
to have knowledge of something.
Literally:
1) a very deep understanding which recognizes the objectives and purposes behind certain
sayings and actions.
2) the knowledge of the essence of something and reaching the in depth of it.
3) the true understanding of what is intended.
Hence it implies any form of understanding.

This meaning exists in another verse, attached to the word religion.
It indicates that its usage must be coupled with other words before associating it
with certain meaning and narrow it down to its technical usage.
Now, we do understand why we have at least 4 schools of thought in Islamic
jurisprudence.
Because fiqh is the product of understanding of jurists on evidences derived from
Quran and sunnah.
The methodology deriving rulings in fiqh is relatively similar to each other, although
they differ in many details but the discussion still revolves on the framework of
shariah law.
SOURCES OF FIQH
Quran Istihsan
Sunnah Istishab
Ijma’ Masalih Mursalah
Qiyas Sadd al-Dhara’I
Ùrf
MAQASID SHARIAH VS ISLAMIC
FINANCE
al-Deen
al-Mal al-Nafs
al-Nasb al-Àql
LEGAL MAXIMS VS ISLAMIC FINANCE
al-Ùmur bi Maqasidiha
al-Mashaqqatu tujlab at Taysir
La Darara wa la Dirar
al Yaqinu La Yuzalu bi ash Shaq
al Àdatu Muhakkamatun
MAJOR FIQHI SCHOOLS
the name of different trends which have been adopted to derive
solution of matters from the principal Shariah sources.
Hanafi, Maliki, Shafi’i and Hanbali

HANAFI
Fiqh Hanafi is the oldest of all four Sunni Fiqhi schools.
The Fiqhi rules and matters were first compiled in this school.
This school spread the most in the Islamic world and it is
followed by a majority of the Muslims.
This Fiqh is attributed to Imam Abu Hanifah and therefore is
called Hanafi.
MALIKI
Fiqh Maliki came in to being after the Fiqh Hanafi in historical
order.
This was a good mixture of Hadith and reason.
It was founded in the city of the Prophet Madinah and was called
Maliki after the name of Imam Malik bin Anas (rahimahullah) .
Madinah was the holy city where each and every house was
enlightened with the rays of the Prophet (sallallaahu alayhi
wasallam).
SHAFII
Fiqh Shafi’i is the third Fiqhi school of Islamic Jurisprudence
attributed to Imam Shafi’i (rahimahullah).
Imam Shafi’i (rahimahullah), on one hand, is a student of Imam

Malik (rahimahullah) , he learnt the Fiqh Maliki and Hijazi
thoughts from him.
On the other hand, he attended Imam Muhammad bin Hasan

Shaibani (rahimahullah) and learnt Fiqh Hanafi and Iraqi style of
Fiqh
HANBALI
This is fourth Fiqhi school of Ahlus Sunnah attributed to Imam
Ahmad bin Hanbal (rahimahullah) .
Fiqh Hanbali falls in the last in historical order.
The personality of Imam Ahmad (rahimahullah) is
more Muhaddith than Faqeeh, therefore this aspect seems to dominate
his Fiqh.
Imam Shafi’i (rahimahullah) who accumulated all the Fiqhi trends
and interpretations, was his main teacher.
1.1 DIFFERENCES OF OPINION AMONG
SHARIAH SCHOLARS (KHILAF)
Introduction
1.2 ROLE OF IJTIHAD IN THE DEVELOPMENT
OF ISLAMIC BANKING
WHY DIFFERENCES EXISTED?
Background
Style of
Exposure
Derivation
2 BROAD CATEGORIES
• Detailed in nature
USUL • NOT open for changes

• NOT subject to human interpretation
• Standardization
• Only provide brief information
FURU’ • General guidelines

• SUBJECT TO CHANGES and development
according to different times and places
FOUR MAIN REASONS
1. Variation in Understanding the Meaning of a Word
2. Differences Over the Narrations of the Sunnah
3. Conflict in the Application of Principles
4. Divergences in the Method of Qiyas
MEANING OF A WORD
Have more than one literal meaning
Example: “gold and silver”

“Gold is to be paid for by gold, silver by silver, wheat by wheat,
barley by barley, dates by dates, and salt by salt - like for like,
equal for equal, payment being made on the spot. If the species
differ, sell as you wish provided that payment is made on the spot".
Hadith : Muslim
NARRATIONS OF THE SUNNAH
During the era of the great Imams, the Sunnah was not yet
properly compiled due to the existence of different sources.
Example: Bay al-Inah

Where the seller sells his asset to the buyer at an agreed selling
price to be paid at a later date and afterwards he immediately
buys back the same item from the original buyer at cash price
lower than the agreed selling price.
APPLICATION OF PRINCIPLES
The jurists adopted certain general principles which were rejected
by other jurists.
Example:
Istihsan approved by Imam Abu Hanifah but rejected by Shafii
Imam Malik regarded the practice of the people of Madinah but
not others.
Bay al-Inah
METHOD OF QIYAS
Differed in determining the ìllah of the rulings.
Example:
“Gold is to be paid for by gold, silver by silver, wheat by wheat,
barley by barley, dates by dates, and salt by salt - like for like,
equal for equal, payment being made on the spot. If the species
differ, sell as you wish provided that payment is made on the spot".
Hadith : Muslim
Maliki:
Shafii: all Hanafi: foods
non-perishable
kinds of food sold by weight
food
ROLE OF IJTIHAD
Effort made by mujtahid in seeking knowledge of the legal rules
of Shariah through interpretation
Ijtihad exercised collectively by a group of qualified mujtahids.
A Mujtahid is someone qualified to exercise ijtihad, which literally

means striving and technically means juridical endeavor and
competence to infer expert legal rulings from foundational proofs
within or without a particular school of law.
The Mujtahid must be a Muslim and a person of sound mind and

intellectual competence.
METHODS OF IJTIHAD
1. To discover the laws directly from the text
2. To extend the law to new cases that might be similar to cases
mentioned in the texts by way of Qiyas
3. To extend the law to new cases that are not covered by the
previous two methods by extending the general principles of
law or maqasid al-shariah.
EXPLANATION ON THE Classifications of
CLASSIFICATIONS OF CONTRACTS contracts in Fiqh
IN FIQH MUAMALAT Muamalat
REASONS
The purpose for which certain contracts are entered into.
The legal purpose intended by the Lawgiver which causes the
difference in the legal effects of the contracts.
Differences in the purpose and nature of the contracts.
To determine the rules and conditions which need to be met

completely.
1.EXCHANGE-BASED/UQUD AL
MUAWADAT
Contracts entered into by two parties to acquire ownership
of an asset or commodity which end up with the transfer of
ownership of the exchanged counter-values (usufruct OR
corporeal thing)
Exchange of a commodity for another commodity (barter), a
commodity for money (sale), money for money (sarf)
Examples: Bay’ bithaman ajil, Bay’ Salam, Bay’ al-Istisna’
2.CHARITY-BASED/UQUD
AL-TABARRU’AT
Contracts effected by someone on the basis of
benevolence and cooperation, which does not require the
exchange of something for another thing
Qard, Hibah, Sadaqah, Waqf

3.WAIVING (UQUD AL ISQATAT)
Contracts which are entered into by someone who has waived the right that
has been established in one’s liability whether with or without a
counter-value.
The claim of ownership or demand of rights are being removed with this
contract.
Isqat occurs in ownership and in right.
The purpose is to release the right from those have obligatory right, or the
owner of right exempts the other party from his right to claim.
This contract is regarded as a kind of good deed (Ihsan).
Example: Rebate or discount (ibra’).
4.PARTNERSHIP
Contracts which are entered into for the purpose of having
a partnership in work and profit.
Musharakah
Mudharabah
5. SECURITY (TAWTHIQAT)/GUARANTEE
(DHAMANAT/ASSURANCE (TA’MINAT)
The provision of securities to protect the interests of the parties to the
contract.
The creditor can be assured or feel certain about the obligation to pay
back the debt by debtors.
Known as guarantee since it guarantees the rights of parties involved.
Known as assurance since it assures that the risk of loosing the right can be
avoided.
Example: Kafalah (Guarantee), Rahn (Pawning), Hawalah (Transfer of debt)

6. SAFE-CUSTODY (WADIAH)
The owner of property deposited his property in custody of
another for safekeeping.
Not intended to transfer any property, or utilize the usufruct, or

to do a work.
Example: Deposit (Wadiah), safe deposit boxes or vault

services for valuable items with rental fees, safekeeping of
gold and jewelleries in al-Rahn shops with rental fees.
7. USUFRUCT/UQUD AL MANFAAH
The transfer of the right to use the usufruct of a property
from the owner to the user for or without a consideration.
Example:
Leasing/hiring/employment (Ijarah),
Lending (I’arah/Ariyah),
Loan (Qard)
8. CONTRACTS PERTAINING TO
WORK/SERVICES
One of the contracting parties is requested to do a work
whether with a consideration or not.
Example: Wakalah (Agency), Reward (Jualah), Contract of

manufacture (Istisna`)
9.CONTRACTS OF PERMISSION
(UQUD AL ITLAQAT)
To allow someone to act on something which he has no right to
do so before the contract is sealed.
Itlaq: It contains the permission for other party to act on

certain things which he has no authority or right before the
contract is entered by both parties.
Example: Contract of agency (Wakalah), the will contract

(wasiyyah)
10.CONTRACTS OF RESTRICTION
(UQUD AL TAQYIDAT)
Taqyid: It contains a restriction by someone to another party and a
prevention for him from conducting certain act.
The purpose: is to protect the property from irresponsible acts which

may lead to its loss of value due to certain damages or even a total
loss.
Example: the removal of agent (al-wakil) from the wakalah contract,

termination of the contract of wakalah, al-hajr (restraining order
toward an underage child having been previously permitted to get
involved in business), restraining insane or mad person.
NEXT TOPIC
TOPIC 2: EXCHANGE-BASED CONTRACT
1. Bay’ al-Murabahah
2. Bay’ Bithaman Ajil
3. Bay’ al-Salam
4. Bay’ al-Istisna’
5. Bay’ al-Sarf
6. Bay’ al-Inah
7. Bay’ al-Tawarruq
8. Bay’ al-Dayn
9. Bay’ al-Arbun

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ADVANCED FIQH ISB548

Hence it implies any form of understanding.

Hanafi, Maliki, Shafi’i and Hanbali

Imam Shafi’i (rahimahullah), on one hand, is a student of Imam

On the other hand, he attended Imam Muhammad bin Hasan

USUL • NOT open for changes

• Only provide brief information

FURU’ • General guidelines

Example: “gold and silver”

Example: Bay al-Inah

A Mujtahid is someone qualified to exercise ijtihad, which literally

The Mujtahid must be a Muslim and a person of sound mind and

To determine the rules and conditions which need to be met

Qard, Hibah, Sadaqah, Waqf

Known as guarantee since it guarantees the rights of parties involved.

Example: Kafalah (Guarantee), Rahn (Pawning), Hawalah (Transfer of debt)

Not intended to transfer any property, or utilize the usufruct, or

Example: Deposit (Wadiah), safe deposit boxes or vault

Example: Wakalah (Agency), Reward (Jualah), Contract of

Itlaq: It contains the permission for other party to act on

Example: Contract of agency (Wakalah), the will contract

The purpose: is to protect the property from irresponsible acts which

Example: the removal of agent (al-wakil) from the wakalah contract,

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