DEFINITION OF MUAMALAT
Muamalat (Muamalah) literally means transactions. In the Shariah, they refer to Shariah commercial transactions, i.e men’s dealing with their properties through Shariah contracts. All Shariah contracts can be applied to Islamic finance covering banking, capital market and takaful.
“And verily, this is My path, which is straight, so follow it; and do not follow [other] ways, for you will be separated from His way. This has He instructed you that you may become righteous.” [Al-Quran, Al-An’am (6):153]
All the treasures that exist in this universe whether on land, on the sea or at the base are belongs to God’s absolutely. Man is told to possess the property provided by Allah through the knowledge and skills that he bestowed upon him. Those possessing wealth in the world are the trustee of God and are responsible for those properties. Allah said:
“It is He who made the earth tame for you – so walk among its slopes and eat of His provision – and to Him is the resurrection.” [Al-Quran, Al-Mulk (67):15]
The Element of Muamalat
There are three significant factors:
1) The activities create a responsibility;
2) It arises from mutual agreement;
3) It has the formality traits which bind the activity (offer and acceptance).
Relationship of Muamalat and Islamic Economy
1) Muamalat is social relationship which consists of various economic and non-economic activities;
2) Islamic economy are driven by fiqh muamalat;
3) Fiqh muamalat is Islamic regulations which relate to trading ‘hukm’ (law) which is the frame work for Islamic economic.
Importance of Muamalat
1) To foster cooperation among humans.
2) To produce unity and harmony in a community and country
3) To prevent cruelty
4) To produce responsible ‘ummah’ who are always competing in ‘halal’ live hood.
Basic Principles of Muamalat
Among basic principles that have roles in forming Shariah rulings in Muamalat are:
1) Freedom of contracts – The meaning of one of the Hadiths of the Prophet (peace be upon him) says that Muslims are free to put conditions in their agreements except that which prohibits something which is permissible or permits something which is prohibited. Prophet Muhammad said:
“Muslims are bound by the conditions they made; except a condition that legalises impermissible act or invalidates permissible act.” (Narrated by Imam al-Tirmidhi).
2) Permissibility as original status of matters – According to the Shariah the status of all matters other than rituals is permissible until an evidence is given that a certain matter is prohibited. Salman al-Farisi narrated that Prophet Muhammad said:
“The halal is which Allah has made Lawful in His Book, and the haram is that which He has forbidden and that which He kept silent about is permitted as a favour to you.” (Narrated by Imam Ibn. Madjah & Imam al-Tirmidhi).
3) Custom is of force – A fiqh legal maxim states that “Custom is of force”. In many Shariah commercial contacts many things become permissible following customs.
Principle of Asset (Mal) in Muamalat
The majority of Islamic jurists were of the opinion that something could be regarded as asset (mal) if it could be controlled and benefited from.
Meaning: “Something that can be controlled and benefited from according to customs.”
The Shafi’i Madzhab also provided general guidelines on what can be considered as a property. This principle strengthens the awarding of the status of asset (mal) on call warrants according to Islamic jurisprudence as outlined by Imam al-Suyuti.
Meaning: “Something is categorised as asset (mal) if it has value. That is why it can be traded, and compensation shall be paid by anyone who causes it to be damaged.”
General Prohibitions in Muamalat
Trade and commerce in Islam must conform to the requirement of the Shariah, which broadly speaking refer to:
- Abstinence from prohibitions, (haram matters);
- Observing that every contract possesses all its essential elements and that every essential element meets the necessary conditions.
There are many prohibitions, but these five will make Akad or contracts invalid:
- Producing and selling impure goods;
- Producing and selling goods that are of no use therefore of no value;
- Gharar, i.e. ambiguity or uncertainty; and
- Gambling, i.e. anything that involves betting.
- Selling of grape to wine producer;
- Selling of uranium to develop nuclear weapon.
Theory of Asset (Mal) in Muamalat
According to the Shariah, Asset (Mal) is anything which has value and is guaranteed by whoever damages it. Asset (Mal) is divided into four categories as follows:
1) Mutaqawwim and Ghairu Mutaqawwim
Mal Mutaqawwim is a thing that can be possessed physically and the benefit of which is permissible by the Shariah to be enjoyed, like fixed and movable assets and foods.
Ghairu Mutaqawwim is a thing that may not be possessed or the benefit of which is prohibited by the Shariah from being enjoyed, like a pig or wine.
2) Similar and Dissimilar
A similar asset is a thing which can be matched with another in a market without any difference causing a difference in price, like grains of rice or an egg. Usually they are measured in volume or weighted.
A dissimilar asset is a thing which normally cannot be matched with another in a market without any difference causing a difference in piece, like a water melon, a cow, an article of clothing or a car.
3) Fixed and Movable Asset. Like car for movable asset, and house or property for fixed assets.
4) Perishable and Non Perishable.
Perishable Asset is a thing which parishes by consumption like any kind of food.
A non-Perishable item is a thing which will not destroy with repeated use, like an article of clothing, a car or a house.
Concept of Contract (Akad) in Muamalat
Akad (al-‘Aqd) which is called as a contract is a commitment, a decision, an affirmation, or an agreement or a transaction that framed by sharia values. Akad in literal meaning is “Rabbah (binding) that is between two edges of rope and tied one of them with another with a continuous, then both into one thing” and uqdah it is: “the connection that holds both edges and ties it”.
Based on the above definition we can describe that, first akad is a relationship or meeting between the ijab and qabul related to the emergence of legal consequences. The Ijab is an offer submitted by either party, and qabul is the consent answer given by the contract partner in response to the first-party offer. The contract will not happen if the declaration of the will of each party is not related to each other because the contract is the link between the will of both parties as reflected in the ijab and qabul.
Both akad is a legal action for both parties because akad is a meeting of representatives who represent the will of one party and qabul expressed the will of the other party. One-party legal action, such as a promise of giving a gift, a testament, a waqf (wakaf), or a disposal of rights, is not akad in this definition, since such actions are not two-party acts and therefore do not require qabul.