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All Praise be to Almighty Allah.
Blessing and peace be on His Prophet Muhammad
after whom there is no prophet, and on all those
who followed his way of guidance.
The Islamic Fiqh Council during its 5th session held between 8-16 Rabi Al-Aakhir 1402H (2-10 February 1982) reviewed the problem of a sudden change caused by extra-ordinary circumstances in the undertaking contracts, which are sighed for different purposes. These extra-ordinary circumstances, which greatly affect the balance of both parties’ estimates as the contract gives each party certain rights and obligations.
This problem has certain forms and situations of dealings, which require just and appropriate solutions to those forms and situations in the light of the Islamic Shari’ah. Some forms of this problem are mentioned in the following:
1. If a construction contract for a huge building, which requires a long period of construction is signed between two parties and its construction and plaster price per cubic metre is fixed at a rate of 100 Dinar, while the cost of the basic materials such as steel, cement and wood as well as cost of the labour at the time of contract is estimated 80 Dinar per cubic metre. Then, an unexpected war or a major happening takes place during the execution of the building, breaking the communication and import links and compelling a major price hike, which made the execution of the contract very difficult.
2. If a party, which has signed an undertaking contract to supply the foodstuff such as meat, milk, eggs, vegetables etc. to a hospital, university hostel or government guesthouse at a fixed price for a period of one year. Then, a natural calamity or disaster took place in the country and prices of the various commodities became manifold high making the supply commitment very difficult.
There are other forms of this problem. Then, what is the Shari’ah ruling on such cases, which often take place in the present time that is characterized with big contracts with the governments for constructions of roads, tunnels, bridges, hospital, residential complexes, university campuses and the government headquarters?
Similarly, there are contracts signed with big companies to construct the industrial complexes and the like, which did not exist in the ancient past. In this situation, whether the contractor would continue with the same conditions and prices that were before the change of the situation or the above-mentioned major happenings, whatever heavy losses, he may incur in compliance of the contract and its stipulations, or he may have some relaxation or remedy from the Islamic Shari’ah, which can adjust both the parties in a more balanced way and achieve justice between the two parties as much as possible.
The Islamic Fiqh Council looked into the similar cases in the different schools of the Fiqh and reviewed the related Shari’ah rules, which can be taken into consideration in order to find out a solution in this regard and recommend an appropriate ruling.
The Council while referring to the various schools of the Islamic jurisprudence found the following:
1. The lease can be nullified due to the extra-ordinary circumstances such as war and other natural calamities, in which the profit becomes very difficult, even the Hanafi school of Fiqh allows the nullification of the lease due to some circumstances related to the lessee, which shows that the Hanafi school of Fiqh preferably accepts the nullification of lease in the general emergency. Ibn Rushd mentioned (Bidayat Al-Mujtahid Vol.2 P.192, 1st Khanji Edition, Jamaliyah Press, Egypt) under the heading: (The Emergency Rules) that the Maleki school of Fiqh views that the land, which is irrigated only by rain waters is given on lease and the drought prevents its cultivation, if the lessee cultivates this land, the drought would not hep him and the lease would be considered nullified. Similarly, when the rain is very little till the period of the cultivation expired and the lessee could not cultivate this land, the same ruling would apply in this case.
2. Ibn Qudamah Al-Maqdesi mentioned (in Al-Mughni, with Al-Sharh Al-Kabeer, Vol.6, P.30) that when a general situation of fear prevents the residence in a place, which has been leased or there is a blockade that prevents access to a land leased for cultivation, then it gives the lessee an option of nullification, because it is a situation that prevents the lessee from getting the benefit of the lease. If the fear is due to the lessee, for example, he is frightened because he has foes in that place, then he does not have an option of nullification, because this is due to his own reason and does not prevent the benefiting from the lease itself.
3. Imam Al-Nawawi has mentioned (in Raudhat Al-Talibeen, Vol.5, P.239) that the lease is not nullified because of the excuses like a person who hired an animal for travelling and became sick or he took a shop on rent for a profession and lost the equipments of that profession or he took on rent, a bathroom for hot water and could not manage the required fuel. Imam Al-Nawawi adds that if the excuse is associated with the lessor as if he fell sick or became unable to go out with the animal or he rented his house and his family members, who were on tour, came back and he then needed the house. In this case, there is no nullification because there is no trouble with what has been leased.
4. What is mentioned by the Fiqh scholars about the natural calamities that destroy the sold fruits on trees due to certain factors such as extreme cold or heat, rain, storms, whereas they decide to discount the amount equivalent to the loss caused by the natural calamity. It is a known issue of the natural calamities in the Islamic Fiqh.
5. Sheikh Al-Islam Ibn Taymiyah said (in Mukhtasar Al-Fatawa P.376) that a person, who takes on lease, some amenity which is useful for general public such as bathroom, hotel or the shopping centre and its usual profit decreases due to the lesser number of customers or some other reasons such as war, change of government or fear of any kind, then the rent equivalent to the decreased profit would be discounted from the lessee.
6. Ibn Qudamah also said (in the above-mentioned reference P.29)that if a person hired an animal for riding or loading to a certain place, then, the way to that place was cut off for fear of a mishap, or he hired an animal to Makkah for Hajj but the people did not go for Hajj that year due to some reasons, then each of the two parties can nullify the hire and if they wished to continue it till the possibility of getting the benefit, then also, it would be valid.
Sheikh Al-Kasani, one of the eminent scholars of the Hanafi school of Fiqh, said (in Badae’ Al-Sanae’ Vol.4, P.197) that the nullification is in fact, for prevention of harm, and the denial of nullification – in case, the excuse exists – is contrary to the reason and religion, because it is like a person, who had pain in his tooth and hired a person to take out that tooth, however, pain of the tooth died down, then if he forced the hired person to take out his tooth, it would be very bad in reason and religion. What the scholars of the various schools of the Fiqh have said about the extra-ordinary circumstances in lease, they have said the same in agriculture, plantation and irrigation.
7. Prophet Muhammad (peace be upon him), his companions and many scholars of the Islamic Fiqh have given the ruling on the natural calamities, which destroy the fruits on trees that the value equivalent to the loss of the sold fruits would be discounted from the total value and if the whole quantity of the fruit is destroyed, the entire value would be discounted.
8. Prophet Muhammad (peace be upon him) is reported to have said: “No harm to self and no harm to others.” The Fiqh scholars have derived from this Hadith, a jurisprudence rule and considered it one of the essential foundations of the Islamic Fiqh. They have based many rulings of the Islamic Fiqh on the basis of this rule with the aim of preventing as well as removing the harm as much as possible.
There is no doubt that the contract, which is concluded according to its legal system, is judicially binding to the concluding parties as Almighty Allah says: “O you who believe! Fulfil (all) obligations…” (Qur’an, 5:1) However, the binding power of the contract is not stronger than the textual ruling of the Islamic Shari’ah.
The Islamic Fiqh Council has found in the criteria of the religious commandments and the rationale of legislation in Islam that hardship, which is generally associated with the religious commandment such as the hardship of standing in Salah (prayer), hardship of hunger and thirst in Siam (fasting) does not nullify the commandment and even does not cause any relaxation in the commandment.
However, when the hardship crossed its natural limits found in each commandment, it either nullifies the commandment or causes relaxation in it such as the hardship of the sick person in the prayer and fasting as well as the hardship of a blind or handicapped in Jihad, then the extreme hardship due to extra-ordinary circumstances, should cause the extra-ordinary dispensation that removes the extreme limit. Imam Abu Is’haq Al-Shatebi in his book, Al-Muwafaqaat Fi Osool Al-Shari’ah has explained in detail and presented many examples of rulings from the Islamic Shari’ah.
It is clear from this, that the usual loss in ups and downs of the business has no impact on the contract, because such loss is associated with ups and downs of the business. However, when the loss crossed its usual limits due to the above-mentioned extra-ordinary reasons, then, it causes an extra-ordinary dispensation.
Imam Ibn Al-Qayyim said in his book, I’lam Al-Mu’qieen: Allah has sent His Prophets and Books with balance that is key to every thing between heavens and earth. Everything that is contrary to justice has nothing to do with the Islamic Shari’ah and whenever there is justice, it means that there is Islamic Shari’ah.
The intention of the contract parties is determined by the circumstances of the contract. This intention cannot be ignored and also it is difficult to stick to the contract literally in all the circumstances. So it is obvious that the intervention in such extra-ordinary circumstances of the contract in order to find out a just solution is jurisdiction of the judicial system. In the light of these guidelines and textual rulings that provide an appropriate Fiqh solution of this vital issue, the Islamic Fiqh reached the following conclusion:
1. In contracts of relaxed execution (like contracts of supply, undertaking or construction) when circumstances of the contract change in a radical way altering the prices, costs and conditions due to unexpected extra-ordinary circumstances inflicting the huge losses to the contractor in case of the contract execution, then the judge can, on request, modify the contractual rights and obligations in a way that distributes the loss on both parties. He also can nullify the contract, which was not executed yet if he found that its nullification is better through a just compensation to the contractor to cover up the major loss that may incur to him due to nullification of the contract in order to have a balance between the two parties. The judge will look into these matters in the light of the experts’ opinions.
2. The judge can give the time to the contractor if he found that the extra-ordinary situation may go shortly and the contractor would not incur much loss with this extra time.
The Islamic Fiqh Council is of the view that this solution derived from principles of the Islamic Shari’ah would achieve the balance between the two parties of the contract and would prevent the heavy loss to any of the parties due to a reason, which he has nothing to do with it. The Council is also of the view that this solution is closer to the Islamic Shari’ah and its just objectives.
Chairman, Islamic Fiqh Council
Abdullah Ibn Muhammad Ibn Humaid
President, Supreme Judicial Council
Deputy Chairman, Islamic Fiqh Council
Muhammad Ali Al-Harakan
Secretary-General, Muslim World League
Abdul Aziz Ibn Abdullah Ibn Baz
General President, Research, Ifta, Da’wah and Guidance
Muhammad Mahmood Al-Sawwaf
Saleh Ibn Othaimeen
Muhammad Abdullah Al-Subaiel
Muhammad Shadhli Al-Neifer
Mustafa Ahmad Al-Zarqa
Abdul Quddoos Hashemi
Abul Hassan Ali Al-Nadwi
Abu Bakr Muhammad Joomi
Hasanain Muhammad Makhloof
Muhammad Rasheed Qabbani
Mahmood Sheith Khattab
Muhammad Salem Abdul Wadood