Sanhuri and Stipulations
Tuesday, November 30th, 2010Just a note to follow up my previous one on stipulations on contract in sale. The unambiguous Prophetic declaration prohibiting two stipulations in a sale (some say one, but all agree on at least two) is not only ignored by Sanhuri when he comes up with a general theory of contract, it is well nigh devastating to his notion that there could possibly be a general theory of obligation consistent with classical doctrine.
Sanhuri develops a theory of obligation, but let’s be common lawyers and stick, for now, with a general theory of contract. What that means is that you don’t divide contracts as the classicists did into specific forms and have rules for each form, but agree to a general idea that the contract, whatever it is (whether that contract be in the form of a rent contract, or sale, or agency, or whatever) is enforced under a uniform set of rules and conditions. No modern system of commerce works any other way, it would be nothing short of commercial and economic disaster to suggest that a specific set of contracts of specific forms will be enforced, each according to its own rules, and none other. That’s why Sanhuri goes so far to create the general theory, he needs it and needs classical doctrine to be consistent with it. But the two stipulations ins a sale prohibition is close to a death knell to his effort I maintain, which is probably why he avoids that knotty issue by pretending it does not exist.
Just to be clear on what a stipulation is and how it works, if I sell to Ahmed a camel for 0, this is permissible. If I sell the camel to Ahmed for 0, on condition that he come to my home to pick it up, this is controversial, but there is authority to suggest it is permissible. It has to do with a split among the madhabs as to whether or not one stipulation, or condition, is permissible. If I sell the camel to Ahmed for 0, on condition that he come to pick it up, and on condition that he pay me in dates rather than in gold, this is impermissible. Unquestionably, by the classical authorities, this cannot be done, because I’ve attached two conditions, and you cannot do that. Sanhuri and the Mecelle, the latter being the first codification of shari’a rules, ignore this, they say they apply the Hanbali rules which allow stipulations freely and without exception. Modern very smart and capable people have jumped on this, from Ousamma Arabi to Frank Vogel, quoting Sanhuri, or the Mecelle, or Ibn Taymiyya freely. usually it comes back to statements from Ibn Taymiyya which indicate that stipulations and contracts have to be freely upheld, unless they can be found to violate some specific injunction in the foundational texts. The problem? Such a prohibition can indeed be found, if there are two stipulations, in a contract of sale, the contract is invalid. Ibn Taymiyya says that, you can check out my article The Muezzin’s Call in the American Journal of Comparative Law for the proper citation to Ibn Taymiyya.
Why does this do so much damage? Because there is no way, once the two stipulations rule is in place, to claim that Islamic law can be harmonized with a general theory of contract. The possibility is, and I will say this pretty provocatively but truthfully, all but destroyed, counterarguments strain credulity. Once you tell me that this particular type of contract, the sale, so basic to modern commerce, cannot be made generally but has to be stripped of any conditions (or all conditions but one), then I cannot see how you can then sensibly tell me that the shari’a permits one to contract over any thing that they want and that the nominate categories are not that important. You just imposed a tremendously limiting set of rules on one single nominate form. Clearly the rules for that form differ tremendously from any other contract–the forms are pretty damn important, in other words.
I know there has been scholarship advancing positions to the effect that the rules over the nominate forms are basically similar, and that therefore it is close to a general theory in the classical work. It’s not the place here to criticize that work so I won’t reference it specifically, but I will say this. Anyone who thinks that this additional rule for sales is trivial, such that Islamic law viewed all commercial contracts as more or less governed by a uniform set of rules and not split into nominate forms does not seem to know very much about commercial contracts, or contract law generally. Which explains why the people who DO know law, the ones with the law degrees, and the ones who DO know commerce, are so eager to ignore stipulations rules on whatever basis they can imagine, because you cannot, on the one hand, say it’s all the same rules fr contracts no matter the form and on the other, say two stipulations in a sale is impermissible.
Let’s concretize it to demonstrate the problem. I enter into a rent to own contract, where i pay lease amounts and then at the end of a particular time period, I own the item in question. You can easily structure these things to avoid other shari’a prohibitions like riba and gharar, but here’s the question: is this a sale, or is it a lease? If the latter, then I can put in all sorts of stipulations. If the former, I cannot. So if a judge is going to take the two stipulations rule seriously, as the classical authorities all did, and all on the basis of Prophetic Sunna, she has to make that determination. There is no general theory of contract, in other words, you break it first into the form, and then apply rules based on the form. To say modern commerce couldn’t function this way is to understate the matter considerably.
The conclusion, thus, is not that classical law allowed for freedom of contract “within boundaries” because while true, that’s uninteresting. It could easily be said of any legal system that wasn’t Marxist at its core. (American law has “boundaries” too, in the form of public policy, or unconscionability, or the like). It would be better said that while the classical rules did allow for freedom of contract, they did so within a theoretical normative system that precludes the possibility of the general theory of contract that is absolutely fundamental to modern commerce, and that in order to develop the modern means of commerce, the hadith, the primary source of Islamic law rules, had to be ignored in one instance.
My further point is that if we’re going to ignore hadith to make Islamic finance work, then I’ve got a few others I’d like to add to the list to serve other ideological preferences of mine. . . .









A U.N. General Assembly committee has once again voted to condemn the “vilification of religion” but support narrowed for a measure that Western powers say is a threat to freedom of expression. The non-binding resolution, championed by Islamic states and opposed by Western countries, passed by only 12 votes on Tuesday in the General Assembly’s Third Committee, which focuses on human rights, 76-64 with 42 abstentions.