Notes on the Theory of Contract

Theory of Contract: Human cooperation is essential for economic fulfillment through lawful trade.

Economic Interactions:

• Trading is based on mutual consent.
• Unlawful practices (batil) like usury, excessive ambiguity, fraud, and transactions involving prohibited items are condemned.

Definition of Contract ('AQD):

• 'Aqd means a legally binding obligation with consequences.
• Mere promises without mutual present consent are not enough to transfer ownership.

Pillars of Contract:

• Expression (Ijab and Qabul): Clear offer and acceptance are necessary. Can be verbal or through behavior.
• Parties to a Contract: Both must have legal capacity (ahliyyah) to consent.
• Subject Matter: Defined qualities and delivery conditions must be clear.

Types of Legal Capacity:

• Passive Capacity: Receiving rights (e.g., minors have an incomplete capacity).
• Active Capacity: Performing legal transactions (requires maturity, which varies by interpretation).

Obstacles to Capacity (Hajr): Insanity, intoxication, or poverty can bar contractual engagements.

Conditions of Offer and Acceptance:

• Must be clear, correlate to ensure conformity, and be continuous without breaks in negotiations.

Classification of Contracts:

• Valid, voidable, or void based on pillars and legally valid conditions.

Termination of Contracts:

• Occurs by either mutual agreement, expiration, or upon death under specific conditions.

Options in Contracts: Includes conditions during which parties may confirm or cancel an agreement based on defects or uncertainty in the subject matter.

Legal Personality: A corporation has distinct rights and responsibilities akin to a natural person.