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Islamic Finance




Al-Shart al-Batil


A shart (condition) in a commutative contract that leads to an impressible outcome (haram). For example, a shart batil may arise when the seller stipulates that the buyer will not sell the object of sale or dispose of it in a specific manner. Ab initio, this sale is permissible, but with an invalid condition being stipulated therein, it turns out to be impressible. This is the opinion of the majority of Hanafis which is based on the fact that the condition doesn’t bestows on either party an undue benefit, and as such doesn’t render the contract fasid (defective). However, Abu Hanifa himself ruled that attaching a shart fasid to an otherwise valid contract will render it defective on the grounds that legal consideration must be given to the actions of an eligible party to the contract.

Disciples of Abu Hanifa (particularly Abu Yusuf and Mohammad) rules that appending a valid condition is an exception to the general rule that renders the appending of all conditions invalid (as it is invalid to add new conditions to the contract). This exception is generally meant to account for legitimate needs.



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