Islamic View on Contracts Via Modern Means of Communication

Islam has prescribed certain guidelines to regulate transactions where permissibility is a general principle for everything that does not transgress these guidelines. The aim of these guidelines in principle is to preserve rights, block the means of usurious transactions and removing any feeling of injustice.

A unique feature of the Islamic Sharia is its unmatched consideration of the minute details of human transactions insofar that subtle distinctions have been drawn between apparently similar dealings on the basis of some fine elements added or omitted which render one transaction valid and another invalid.

Thus, despite the amazing outbreak in the means of communications nowadays, the comprehensive principles outlined in the texts of the Sharia and brilliantly delineated by Muslim jurists, manage to successfully respond to the challenge and will continue to do so.

Responding to this issue, Dr. Rajab Abu Melih, A Sharia consultant, said:

Undoubtedly, contracts have taken on a different dimension following the spread of the internet. Thus, it has become easy to sign all forms of contracts via the internet, from marriage contracts, financial transactions, and contracts to subscribe to multiple services. However, the Islamic Sharia has its own perspective regarding the issue of authenticating contracts, deeming it permissible to conclude some contracts via the internet, while others are considered impermissible.

Here, it is worth noting that Shafi`i ٍٍ scholars say that it is not a condition for the conclusion and validity of a contract that the two contracting parties be in close proximity nor that they can actually see each other. In this case, the right of option is surely operative. It is stated in Al-Majmu`, “If they (buyer and seller) contract the sale while being at a distance through calling out, then such a sale is indisputably valid.”

Moreover, the following was stated in the sixth session of the Islamic Fiqh Academy, held in Jeddah – the Kingdom of Saudi Arabia -, from Sha`ban 17-23, 1410 AH (March 14 – 20, 1990 AC):

Having reviewed the research papers that were submitted to the academy regarding the topic of the execution of contracts through modern means of communication, the academy has decided the following:

1. If the contract is concluded between two parties who are not present in the same place, and neither of them can physically see the other or hear his voice, and they are communicating with each other through writing or through a messenger; this is also applicable to telegraph, telex, fax, and the computer screen, then, the contract shall be deemed concluded when the offer is communicated to the person to whom the offer waws made and he accepts it.

2.  If the contract has been concluded between two parties at the same time, and they are in different places, as is the case with telephone and wireless communications, this contract shall be deemed a contract between two present parties, and it will be subject to the original rules established by Muslim jurists.

3. If a person extending an offer through these instruments limits his offer to a specified period, he shall be bound to abide by this offer throughout this period and he cannot retract from it.

4. The preceding rules shall not extend to the contract of marriage because the presence of two witnesses is a necessary condition for its validity; nor shall it extend to the contract of Sarf (exchange of gold or silver in return for gold or silver), because it requires hand to hand exchange; nor the contract of Salam (purchase of future goods by a spot price), because the immediate payment of the capital amount is a necessary condition for the validity of such contracts.

5. In relation to the possibility of forgery, distortion or error, reference should be made to the general rules of establishing evidence.

Also, the resolution of the Islamic Fiq h Academy of India include the following points:

1. What is meant by Majlis is the state in which the contracting parties are when concluding the contract, while the unity of Majlis means that the offering and acceptance are done at the same time. If Majlis is said to be different, it means that the offering and acceptance are not done at the same time.

2. It is valid to offer and accept via telephone or video conference. Moreover, if the contracting parties are concluding the contract through the internet at the same time and the other party (offeree) shows acceptance immediately after the one who makes the offer presents his offer, the sale is valid, and in this case the Majlis of the two contracting parties is considered to be united (the same Majlis).

3. If, during a sale via the internet, someone presents an offer while the offeree is not present (online) at the time the offer is made, and then he receives it sometime later, this is then a form of sale by writing, and when he reads the offer (message), he is then bound to show his acceptance.

4. If the buyer and the seller seek to secretly conclude the contract and thus, they use secret numbers for this purpose, then it is impermissible for anyone else to look at the contract. However, if a person has the right of preemption or has any other legal right related to the contract or sale, it is permissible for him to look at it.

5. The marriage contract is more serious than a contract of sale, and it also has a ritual aspect. Moreover, the presence of two witnesses is a condition for its validity. Therefore, the offer and acceptance (of marriage) that are made via the internet and video conference are considered invalid. However, if these means are used to authorize someone to conclude the marriage and the authorized agent – on behalf of the one who authorized him– makes the offer and receives acceptance in the presence of two witnesses, then the marriage is valid. In this case, it is incumbent that the two witnesses know the authorizer or that the authorizer’s first and second names are mentioned at the time of offering and acceptance of marriage.