Last month we discussed what is meant by Qard Hasan and why it is important to offer Qard Hasan. In this week's QH special we will be discussing the rules regarding a Qard Hasan contract.
As with any contract in Islam there are strict rules and regulations to follow. Qard Hasan being a contact (aqd) between two parties requires the same principles that apply for other Islamic transactions, which are as follows:
1. Both parties should be legally capable to enter into the qard contract:
It is unanimously agreed by the four schools of law that to enter into a contract, parties will have to be baligh, 'aqil and rashid (major with sound judgment).
In the holy Qur'an, Allah says, "Make trial of orphans until they reach the age of marriage; if then you find sound judgment in them, release their property to them." [Al-Nisa (4): 6]. This verse states that the age of marriage and the sound judgment is the age of majority, and thereby a major person is capable to enter into any transaction validly.
In a hadith, the Prophet (s.a.s) said, "The pen is raised for three groups (of people) that is, they will not be responsible for their actions: the insane until they become sane, those who are sleeping until they are awaken, and the youth until they reach puberty." [Ahmad, Abu Daud and al-Tirmidhi]
The above hadith makes it clear that a person, who has not attained the age of puberty, may not be a responsible party for al-qard al-hasan transaction.
NOTE: The legal age for someone to be in a loan contract in the UK is 18. This is because you cannot be legally held to a contract you make when you are under 18.
2. Ijab (offer) and qabul (acceptance) of the qard must be clearly made before entering into the loan contract:
All four schools of thoughts agree upon that ijab and qabul should be clearly indicated in the contract, otherwise, the loan contract may create dispute in future.
3. The date of payment must be specified:
It is also agreed among the Muslim jurists that the date of payment should be mentioned in the loan agreement. If no date is specified, the transaction may lead to ambiguity and dispute in future among the lender and the borrower.
It was based on the loan agreement of the Prophet's (s.a.s) companions. When the Prophet (s.a.s) migrated to Madinah, he was informed that contracts of salam were made without stating specified time or amount, then the Prophet (s.a.s) said, "Whoever enters into a contract of salam should specify the date of delivery and the amount of subject matter."
4. The loan contract should be written down.
This ruling is based on a Qura'nic injunction. As Allah (s.w.t) says; "O you who believe! when you deal with each other in transactions involving future obligations for a fixed period of time reduce them in writing." [Al-Baqarah (2): 282]
Muslim jurists, however, differ on this condition. Majority of the Muslim jurists opine that it is not obligatory but strongly recommended. The reason given by them is that if both parties agree not to write, then it is no longer an obligation upon them to write down. The wisdom behind the writing down is to avoid future dispute. On the contrary, minority of the Muslim jurists like al-Tabari are of the opinion that it is obligatory upon the parties to write down the contract. It is submitted that the majority's stand seems more reasonable as they have given the option upon the parties whether to write down or not.
5. Getting two witnesses
The Qura'nic injunction is that there must have two male witnesses, if two men are not available, then one man and two women will have the same effect. As the Qur'an says: "And get two witnesses out of your own men and if there are not two men, then a man and two women." [Al-Baqarah (2): 282]
It is very essential for the loan contract to be complied with this Qura'nic requirement to avoid future disputes.
The rules set above apply to all contracts and we encourage you to use them in your daily lives when dealing with each other
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