What is Islamic Law?
In contrast to Western legal systems, in Islamic Law the sources are interpreted to deduce the law. Generally, the sources of Islamic Law comprise of four types: Quran [divinely revealed book of God], Sunna (sayings, actions and tacit approvals of the Prophet Muhammad peace and blessing be upon him), Ijma (consensus) and Qiyas (analogical reasoning). The first two serve as primary sources whilst the latter two are predominantly regarded as secondary sources.
How is the law derived?
The process by which juristic effort is undertaken in an effort to extract the law from the sources is referred to as ijtihad. The Quran provides a basis for this: ‘and those who strive for Us, We will surely guide them to Our ways.’ This is supplemented by a saying found in the hadith (saying of the Prophet peace and blessing be upon him) corpus wherein it is transmitted that the Prophet (peace and blessings be upon him) approved the use of ijtihad when he questioned his senior companion, Muadh Ibn Jabal, regarding his methodology when acting as a judge in Yemen. Muadh told the Prophet (peace and blessings be upon him) that he would use the Quran and Sunna but if he was unable to locate direct authority in the Quran and Sunna he would resort to ijtihad, which the Prophet (peace and blessings be upon him) acceded to. The highly regarded Islamic theologian Imam Al-Ghazali stated that the aforementioned hadith is an established evidence for performing ijtihad. Nonetheless, Al-Ghazali expounded that the qualifications to undertake this juristic effort are high. Otherwise, if everyone was able to exercise ijtihad there would be no law as Weiss articulates and it would contravene the Quranic injunction that points out ‘ask the people who are learned if you do not know’.
Islamic law of contracts
In classical Islamic Law, the jurists developed four basic contract types from the sources: sale (bay’), gift (hiba), hire (ijara), and loan (‘ariya). These contract types are permissible so long as the contract does not contravene the prohibitions of gharar (uncertainty), riba (interest) and maysir (gambling) and the subject matter is not one that conflicts with Shari’a.
A practical example of the expansion of Law
Numerous instruments are available at the disposal of jurists who desire expansion, development and adaptation of the law. The following list of instruments are not exhaustive in any way but for the purposes of exploring the expansion, development and adaptation of Islamic finance they suffice: public welfare (maslaha), necessity (darura), using opinions of other schools (takhayyur) , objectives of the shari’a (maqasid shari’ah) and analogical reasoning (Qiyas), which is one of the secondary sources.
After the nineteenth century, there was recognition that Islamic Law was to operate by addressing the questions of that period through qualified jurists – oft-noted as fiqh-al-nawazil. Ijtihad was not to be explicated as antiquated and jurists like Al-Sanhuri (1952) understood this as he expanded the law of contracts. As highlighted above, four basic contracts exist in classical Islamic Law. Notwithstanding this, Al-Sanhuri appreciated that these four basic contract types developed by the classical jurists was zanni (probable) in nature and thus they could be reinterpreted and expanded upon. By method of qiyas of the verse ‘God has made sale lawful’, Al-Sanhuri added a further three types to the existing four types of contracts: partnership (sharika)¸ piecework (muqawala), and agency (wakala).
Conventional banks such as Al-Rayyan use the expansions of nominate contracts to offer individuals a chance to purchase property in a shari’a compliant manner through mushakara (derived from the word ‘sharika’). In musharaka, the customer avoids the prohibition of riba (usury, which is generally forbidden in Islamic Law) through the purchase of the property in partnership with the bank. This illustrates the flexibility, adaptation and positive practical expansion of Islamic finance by jurists which result in a win-win situation as opposed to a win-loss situation if there were an element of riba which shari’ah does not tend to accommodate.