Muamalat (also muʿāmalāt, Arabic: معاملات, literally “transactions” or “dealings”) is a part of Islamic jurisprudence, or fiqh. Sources agree that muamalat includes Islamic “rulings governing commercial transactions”[Note 1] (Islamic Banking and Finance Institute of Malaysia and Majallah al-Ahkam al-Adliyyah)[Note 2] but other sources (Oxford Islamic Studies Online, Brian Kettell, and Wahbah al-Zuhayli’) give it a broader definition including civil acts and in general all aspects of fiqh that are not Ibadat (acts of ritual worship such as prayer or fasting).[Note 3] (See organizational chart of the structure of Islam below in “Principles” section.)
Mu’amalat provides much of the basis for Islamic economics, and the instruments of Islamic financing, and deals not only with Islamic legality but also social and economic repercussions and the rationale of its prohibitions (according to Monzer Kahf).
- commercial and civil acts or dealings under Islamic law, (Oxford Islamic Studies Online);
- what involves acts of interaction and exchange of sureties and sales (Oxford Dictionary of Islam);
- “the knowledge of Shariah rulings that relates to the practical aspects of a mukallaf (an accountable Muslim, i.e. an adult and mentally competent) in the area of business and financial dealings and derived from its detailed evidences.” (Abdullaah Jalil, Asharaf Mohd Ramli, Syahidawati Shahwan. Based on the definition of fiqh established by the founder of the Shafi’i school of fiqh, Al-Shafi‘i (204 AH))
- all engagements that take place in business, (“corporate sharia elite” according to Patricia Sloane-White);
- Islamic jurisprudence of transactions, and the principles upon which Islamic finance is based (M.R. Ab`Aziz);also the study of “the legal framework within which economic transactions are conducted in an Islamic society” and that “determines their contracts” (Monzer Kahf);
- that aspect of Islamic jurisprudence that deals with civil obligations, (Jamal J. Nasir);
- “any form of mutual dealings held between men to solve their everyday needs, especially in matters relating to trade and commerce”; also “a social relationship which consists of various economic and non-economic activities.” (Takaful Basic Examinationof Islamic Banking and Finance Institute of Malaysia).
According to at least one author (Monzer Kahf), Mu’amalat “sets terms and conditions of conduct for economic and financial relationships in the Islamic economy” and provides the “grounds on which new instruments” of Islamic financing are developed. It also extends beyond discussions of Islamic legality “to the social and economic repercussions of alternative legal forms of economic or financial relationship and analyze the rationale behinds [sic] it.”
According to Hosein Askar, Zamir Iqbal, and Abbas Mirakhor, a “significant subset” of muamalat “defines the conduct of economic activities” within the economic system, which “ultimately lays down the rules for commercial, financial and banking system.”
According to Aznan Hasan, basic principles of muamalat, are that dealings and contracts in Islam …
- are permissible until evidence is given proving otherwise;
- must be based on mutual consent;
- must be in accordance with the maqasid (goals of) al shariah;
- should facilitate the circulation of wealth and property;
- should be transparent;
- must observe justice and fair dealing.
Theories of Muamalat
According to Abdullaah Jalil, Asharaf Mohd Ramli, Syahidawati Shahwan there are four “theories” that underlie the framework of Mu’amalat dealings:
- Ahliyyah(Legal Capacity). Legal capacity refers to whether the person is of sound mind and old enough (puberty) to enter into a legal financial contract.
- Mal(Property) concerns the nature and types of property that the contract deal with.
- Property must exist at the time of transaction
- seller must be owner of the merchandise
- merchandise must be Islamically lawful
- must be of some use or value
- must be able to be delivered by the seller to the buyer
- the details of the merchandise must be known to both the seller and buyer
- Milkiyyah(Ownership), concerns the types, methods and scopes of ownership, that affect the relationship between the property and its owner in Islamic jurisprudence.
- ‘Aqd(Contract), describes the framework or structure of a contract in fiqh.
Jalil, Ramli and Shahwan also note that the development of Mu’amalat rules is less strict than ‘Ibadat.
|Some differences between Mu’amalat and ‘Ibadat fiqh|
|Specific Quranic and Sunnah resources
to base ruling on are few and general in nature;
hence the rational thinking can be applied extensively.
|Specific Quranic and Sunnah resources
to base ruling on are many and detailed in nature;
hence it cannot be developed extensively by rationalization.
|Actions are permitted except where
the Shariah states prohibition.
|Actions are not permitted except where
the Shariah states permission.
|Fatwa or verdict in based on the
most appropriate (al-aysar) opinion
|Fatwa or verdict is based on the
most cautious (al-ahwat) opinion.
|Legal rulings are heavily based on
rational reasoning (‘illah ‘aqliyyah)
|Legal rulings cannot be heavily based
on rational reasoning (it is a submissive action – ta’abbudi).
According to muamalat, contracts …
- should not involve the selling or buying of alcohol or any other haram
- should not include any financial deal on the basis of usury (riba)
- should not involve gambling (maisir)
- should not involves major uncertainty (ghararfahish)(minor uncertainty is permissible).
At least one source (a scholar identified as “Barbarti”) defines aqad (contract) as a “legal relationship created by the conjunction of two declarations, from which flow legal consequences with regard to the subject matter”. 
The essential elements of a contract are contracting parties (aqidan’), a subject matter (‘Ma’aqud Alaih), and a legally binding offer and acceptance (Sighah). They may be written, verbal or even indicated by signs (in the case of speechless person).
Muamalat contracts are prominent in Islamic banking where they are “fundamental factors” that determine whether a “transaction is valid or not”.
Further information: Islamic banking and finance § Islamic financial transaction terminology
Some contracts in Mu’amalat include:
- Sale Contract;
- Cost plus profit (murabahah);
- Debt (al-Qard);
- Hiring/leasing (al-Ijarah);
- Lending (al-I’arah);
- Agency (wakalah);
- Mortgage (al-Rahn);
- Partnership (Musharakah);
- Profit Sharing (Mudarabah).
- ^Muamalat does not deal with all aspects of property and money in Islam as zakat (compulsory alms giving that is one of the five pillars of Islam) is part of Ibadat.
- ^IBFIM and Majallah al-Ahkam al-Adliyyah divide fiqh into
- Fiqh Ibadat(worship),
- Fiqh Munakahat(Islamic family law),
- Fiqh Jinayat(Islamic criminal law) (or Uqubat),
- Fiqh Muamalat(Islamic commercial transaction law).
In his introduction to Islamic Law, Wael B. Hallaq does not use the term Muamalat, but also writes of Islamic law being divided into “four major fields” or “quarters”, one of which is “sales”. It includes not only laws on buying and selling but also on “partnerships, guaranty, gifts and bequests”.
“Generally, Muslim jurists gave the main topics of law the title kitab (“book”), e.g., the Book of Agency, which, in our modern organizational scheme, we recognize as a chapter. A sub-chapter was termed “bab,” which would in turn be broken into a number of fasls (sections). Many jurists conceived of the whole of Islamic law as falling into four major fields, which were called “the four quarters,” i.e., “rituals, sales, marriage and injuries.” Each of these terms, used in this context metaphorically, stands for a staggering variety of subjects that belong to a single quarter. Thus, the “quarter of sales” would encompass, among many other subjects, partnerships, guaranty, gifts and bequests, while that of “marriage” would cover as varied a field as dissolution of matrimony, foster relationships, custody, and wifely and family support. In the same vein, the “quarter of injuries” includes homicide, the Quranic punishments and the laws of war and peace, among other topics. Works generally ended with what we term procedural law, supplemented by coverage of slave manumission. Other works ended instead with inheritance and bequests.”
- ^see also JALIL, et. al., FOUR INTRODUCTORY THEORIES OF FIQH MUAMALAT, p.8
- ^ Jump up to:ab TBE, “CHAPTER A1, INTRODUCTION TO ISLAMIC MUAMALAT”, 2012: p.6
- ^ Jump up to:ab c “Muamalat”. Oxford Islamic Studies Online. Retrieved 1 April 2017.
- ^ Jump up to:ab TBE, “CHAPTER A1, INTRODUCTION TO ISLAMIC MUAMALAT”, 2012: p.2-3
- ^ Jump up to:ab c d JALIL, et. al., FOUR INTRODUCTORY THEORIES OF FIQH MUAMALAT: p.8
- ^Hallaq, Wael B. (2009). An Introduction to Islamic Law. Cambridge University Press. p. 28. ISBN 978-0-521-86146-5.
- ^Kettell, Brian (2011). Introduction to Islamic Banking and Finance. Chichester, UK: John Wiley & Sons. p. 15. ISBN 9780470978047. Retrieved 1 April 2017.
- ^Chik, Shariah in Islamic Finance: p.5
- ^Lee, “Islamic Banking Law”, 2015: p.29
- ^ Jump up to:ab Kahf, “Relevance definition and methodology of Islamic Economics”: p.46
- ^Oxford Dictionary of Islam 2003: 208, quoted in Sloane-White, Patricia (2017-03-30). Corporate Islam: Sharia and the Modern Workplace. Cambridge University Press. p. 32. ISBN 9781107184329. Retrieved 5 April 2017.
- ^JALIL, et. al., FOUR INTRODUCTORY THEORIES OF FIQH MUAMALAT: p.6
- ^Sloane-White, Patricia (2017-03-30). Corporate Islam: Sharia and the Modern Workplace. Cambridge University Press. p. 32. ISBN 9781107184329. Retrieved 5 April2017.
- ^ABʻAZIZ, MUHAMMAD RIDWAN (2013). Islamic Banking and Finance in Malaysia; System, Issues and Challenges. Al Manhal. p. 117. ISBN 9789670393728. Retrieved 1 April 2017.
- ^Kahf, Monzer. “Relevance Definition and Methodology of Islamic Economics” (PDF). p. 46.
- ^Nasir, Jamal J., ed. (1990) . The Islamic Law of Personal Status. Brill Archive. p. 5. ISBN 1853332801. Retrieved 1 April 2017.
- ^Askari, Hossein; Iqbal, Zamir; Mirakhor, Abbas (2015-02-16). Introduction to Islamic Economics: Theory and Application. John Wiley & Sons. p. 46. ISBN 9781118732960.
- ^ Jump up to:ab c d e f g Aznan Hasan, Fundamentals of Shariah in Islamic Finance, pp. 193-199, as cited in “CHAPTER A1, INTRODUCTION TO ISLAMIC MUAMALAT” (PDF). Takaful Basic Examination, IBFIM. p. 7. Retrieved 1 April 2017.
- ^ Jump up to:ab c d e JALIL, et. al., FOUR INTRODUCTORY THEORIES OF FIQH MUAMALAT: p.16-7
- ^ABʻAZIZ, MUHAMMAD RIDWAN (2013). “6. Muamalat Contracts in Islamic Banking and Finance”. Islamic Banking and Finance in Malaysia; System, Issues and Challenges. Al Manhal. p. 120. ISBN 9789670393728. Retrieved 5 April 2017.
- ^JALIL, et. al., FOUR INTRODUCTORY THEORIES OF FIQH MUAMALAT: p.11
- ^ Jump up to:ab c d TBE, “CHAPTER A1, INTRODUCTION TO ISLAMIC MUAMALAT”, 2012: p.8
- ^ Jump up to:ab c d “CHAPTER A1, INTRODUCTION TO ISLAMIC MUAMALAT” (PDF). Takaful Basic Examination, IBFIM. p. 8. Retrieved 1 April 2017.
- ^Chik, Shariah in Islamic Finance: p.33
- ^Chik, Shariah in Islamic Finance: p.34
- ^ABʻAZIZ, MUHAMMAD RIDWAN (2013). “6. Muamalat Contracts in Islamic Banking and Finance”. Islamic Banking and Finance in Malaysia; System, Issues and Challenges. Al Manhal. p. 117. ISBN 9789670393728. Retrieved 5 April 2017.
- ^Introduction to Fiqh Muamalat Al-Madinah International University, page 2
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.