Criteria for deception affecting the validity of contracts
Financial transactions in Islamic law are based on solid foundations of clarity, transparency, and justice between contractors, which ensures stability in transactions and preserves funds and rights from loss or exploitation. In order to achieve this goal, Sharia law forbids sales and contracts that are fraught with deception and ignorance, which lead to conflict and rivalry, and the unjust consumption of people’s money.
However, Islamic law does not aim to prohibit all forms of ignorance or risk-taking, as human transactions, by their nature, are not devoid of a small amount of it that is difficult to avoid. Therefore, Islamic jurisprudence has established precise controls that determine when deception affects the validity of a contract and necessitates its invalidity, and when it is easy and forgiving and does not affect the conclusion or implementation of the contract. These jurisprudential principles were reflected in the Saudi civil transactions system, which derived its provisions from the principles and general rules of Islamic law.
First: The concept of deception and the basis for preventing it
Ghurar means ignorance or risk that surrounds the subject of the contract or its effects in a way that makes the outcome of the contract unknown or subject to dispute. The legal texts prohibit the sale of deception because it harms the contracting parties and opens the doors to disputes and conflicts.
Preventing deception is not intended to eliminate the natural risk inherent in commercial activities, but rather to prevent outrageous deception that leads to unstable transactions or exploitation by one party of the other.
Second: Jurisprudential standards for deception affecting the validity of the contract
Islamic jurisprudence has settled on four main criteria that deception cannot affect the validity of a contract unless they are combined, which are:
The first criterion: that the deception be excessive (obscene)
Deception does not affect the validity of a contract unless it reaches the level of obscenity or abundance. However, a small amount of deception is forgiven by Islamic law, due to the difficulty of avoiding it and the general affliction it causes in transactions.
Contemporary applications of this include purchasing a car without knowing all the details of its precise internal parts, or purchasing shares of a company without being fully aware of all of its assets and origins. Such ignorance is considered easy and tolerated by custom.
Imam Ibn al-Qayyim, may God have mercy on him, established this rule by saying: «If deception is easy or cannot be avoided, it does not prevent the validity of the contract, unlike many that can be avoided.»
This standard is one of the most important controls that achieve a balance between protecting contractors and not disrupting the movement of trade and transactions.
The second criterion: that the deception in the contract be original
The effect of deception must fall in the place of the original contract and be directly intended. However, if it occurs in a matter that is subordinate to the purpose of the contract, it does not affect its validity, because what is subordinate is forgiven in what is not forgiven in what is followed.
Among the well-known jurisprudential applications of this is the permissibility of selling a pregnant camel if there is ignorance regarding the pregnancy in its belly, and the permissibility of selling a sheep with the milk in its udder, as well as selling trees with their fruits before they begin to be repaired if the fruit belongs to the root.
This standard is based on an important jurisprudential rule, which states that rulings tolerate consequences as much as they do not tolerate original objectives.
The third criterion: The contract does not call for a public need or significant interest
If there is a general need or significant interest that calls for contracting despite the presence of some degree of deception, then Sharia law tolerates this deception in order to ward off embarrassment and achieve people’s interests.
The most prominent examples of this are the permissibility of selling hidden objects on the ground, such as carrots, potatoes, and onions, and the permissibility of selling what is eaten inside, such as watermelon, pomegranates, and eggs, even though the buyer cannot know the truth about what is inside them until after opening or extracting them.
If the sale of these items were prohibited due to their ignorance, this would disrupt people’s interests and cause them hardship, which is inconsistent with the objectives of Sharia law, which is based on facilitation and removing hardship.
Sheikh Al-Islam Ibn Taymiyyah, may God have mercy on him, pointed this out by saying: «The corruption of deception is less than usury, so he permitted what is necessary; prohibiting it is more harmful than the harm of it being deception.»
The fourth criterion: that the deception occurs in a compensation contract
The effect of deception is limited to financial compensation contracts, such as sales, leases, contracting, supply contracts, and the like, where each party provides a financial compensation and expects to receive a certain compensation.
As for donation contracts, such as charity, gifts, and wills, deception often does not affect their validity, because the donor did not provide financial compensation for it to be said that he was wronged or harmed.
Examples of this include a person giving in charity what is in his wallet without knowing how much money is in it, or another person giving a closed gift whose content the recipient does not know. In such cases, the behavior is correct despite the presence of ignorance.
Criteria for deception affecting the validity of contracts
Third: Regular applications of deception in the Saudi civil transactions law
The Saudi Civil Transactions Law expresses these jurisprudential principles and translates them into modern regulatory texts that achieve contractual stability and protect clients.
1- Regulating the provisions of deception
The system did not limit itself to addressing abstract deception, but also addressed the forms of deception and trickery that drive a contractor to enter into a contract based on incorrect information or concealing material information.
The system defined deception as the use of fraudulent means or concealing influential facts to force the other party to contract, and it also considered deliberate silence about a statement of an essential matter a type of deception.
2- Invalidation of the contract when deception affects satisfaction
The system gives the deceived person the right to request the annulment of the contract if the deception is related to a fundamental matter without which he would not have concluded the contract or agreed to it under the same conditions.
It is understood from this that the system does not consider deception or slight ignorance, but rather arranges the effect of invalidation on cases in which deception has a real impact on the will and satisfaction of the contractor.
3- Taking into account custom in assessing deception
The commercial and social custom system adopted an important criterion for determining what is considered an influential defect and what is considered tolerated among people.
Many matters that may involve a small amount of ignorance do not affect the validity of the contract if they are traditionally tolerated, which is consistent with the jurisprudential rule stipulating the forgiveness of a small deception and the need to deal with it.
Criteria for deception affecting the validity of contracts
Conclusion
It is clear from examining the provisions of Islamic jurisprudence and the Saudi civil transactions system that the theory of deception represents one of the most important legal and legitimate means of protecting the stability of contracts and achieving justice among clients. The deception does not lead to the invalidity of the contract simply because it exists, but rather it must be obscene, occur in the place of the contract in principle, not motivated by a significant need, and occur in financial compensation contracts.
The Saudi regulator has succeeded in translating these jurisprudential principles into clear regulatory rules that balance protecting parties from deception and ignorance while maintaining flexibility in commercial transactions and meeting people’s needs, thus achieving the objectives of Sharia law in preserving funds, stabilizing transactions, and preventing the causes of conflict and rivalry.
For law and legal consultations..Contact the office of lawyer Abdul Majeed Al Rashid.
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