Islamic Legal Maxims & Their Application in Islamic Finance (2nd Edition, 2020)

Pages: 260
Year: 2020

All praise is for Allah, and may Allah bless our master, Prophet Muhammad, and bestow peace upon him and upon his family and Companions and whoever follows his guidance.
By the grace of Allah, ISRA was able to publish Islamic Legal Maxims and Their Application in Islamic Finance in 2013. The book makes the meanings of these maxims accessible to a group of researchers and specialists who need to understand them but are not able to easily read their explanations in Arabic. The first edition was well received by university professors and teachers in other institutions who made it the main textbook or a reference on the reading lists for their courses on Islamic legal maxims. This was a reflection of their satisfaction that the book presents the fiqhī and financial aspects with exceptional concordance and marvelous simplicity that clarifies both the meanings of the individual words and their overall import. It was also well received by legists and practitioners because it links the fiqhī meaning to the practical application in an easy manner difficult to imitate. All this caused the first edition to sell out and necessitated a reprint. It has been five years since the first printing. Academic practice dictates that an elapse of that many years calls for a review of the first edition and some updating of the contents to keep it current with the latest developments in the Islamic finance industry.
By the grace of Allah, we have been able to do so. We conducted a linguistic review of the first edition and made some slight revisions to the wordings. We also added some new examples of contemporary Islamic finance applications of the maxims in order to further clarify them and deepen the understanding of their implications. Some new references have also been added. The team decided to keep the number of maxims the same as in the first edition, satisfied that they fulfil the purpose for which the book was designed. That is because the purpose of the book is not to exhaustively treat every legal maxim relevant to Islamic finance; rather, the purpose is educational: to systematically present an understanding of these maxims and explain how to operationalize them in Islamic financial transactions.

Organisation of the Book
Understanding the author’s methodology in composing a specific work is crucial for attaining full benefit from it. This is because every author has a particular objective in composing a work, a particular approach to the topic, and a particular way of organizing it. This book targets English-speaking readers, providing them with the guiding principles of Islamic jurisprudence as embodied in the legal maxims identified and formulated by Muslim jurists over a span of centuries during the classical era.

Some readers may be aware that there are a large number of Islamic legal maxims and that this book does not come close to mentioning all of them. A major reason for this is that we focused upon the most important maxims related to muʿāmalāt (transactions) in general and Islamic finance in particular. When we had identified a substantial number of them, we noticed that the number was approaching forty. Classical scholars established a practice of composing books comprised of forty items; for example, al-Ghazālī and al-Rāzī both composed works consisting of forty ḥadīths on uṣūl al-Dīn (principles of Islamic belief), and Imām al-Nawawī composed his famous Forty Ḥadīths, which he intended as a summary of the most important principles of Islam. Other scholars compiled more specialized collections of forty ḥadīths on other topics. In keeping with that good custom, we decided to round out our collection to consist of forty Islamic legal maxims.
It has become customary in books on Islamic legal maxims to start with the five major maxims and their subsidiaries. We thought it appropriate to preface them (in Section 1) with a discussion of five preliminary maxims, one that is a prerequisite for critical thought and four that focus on the nature of contracts. These four are of particular importance to Islamic finance, which is the reason for giving them precedence in this context.
The first of the four is ‘The presumption of validity and permissibility applies to all contracts and conditions’. It means that evidence must be provided to prohibit a contract or one of its terms. The burden of proof in cases of dispute lies with the claimant that the contract, or one of its terms, is prohibited.
The second is ‘The fundamental requirement in every contract is justice’. It is important to keep this principle actively in mind when deliberating any issue relating to Islamic finance, which was originally conceived as an alternative to conventional finance because of the injustice that is embedded in the conventional system. If advisors propose solutions to the problems of Islamic finance that remove all other Sharīʿah objections to a conventional practice while maintaining injustice in the relationship between the contracting parties, their efforts are pointless.
The third maxim is ‘A general principle in contracts is the consent of both parties, and the effective terms and conditions are what they agree to in the contract.’ Even though it is not sufficient by itself, freely given consent is a necessary and major condition for the validity of all contracts. The absence of free consent is an indicator of the absence of justice. The fourth maxim is ‘Deferment constitutes a part of the price’. Without this principle, Islamic banking would not be commercially viable.
The five major legal maxims that are accepted by all the legal schools, along with their corollaries, are presented in Section 2 stretching from Maxim 6 to Maxim 26.

Although Maxim 8 (Giving effect to words is preferable to giving them no effect) is not a corollary of the first of the major maxims (Matters are determined by intention), it is included after the discussion of its corollary (In contracts, greater weight is given to intention and meaning than words and forms) because of Maxim Eight’s relevance to the interpretation of words.
Section 3 of the book consists of miscellaneous maxims dealing with topics such as profit and liability, the exercise of religious and political judgment, the responsibilities that accompany acting as an agent, the limits of private property rights, the implication and effects of prohibition, the relationship between the primary and the auxiliary, and the legal effect of promises, among others.
The discussion of each maxim is structured in the same way. A short introduction contextualizes the maxim, identifying its place in the overall scheme of the Sharīʿah and the most important topics to which it applies. Next comes an explanation of the maxim, starting with linguistic and technical definitions of its keywords and followed by elucidation of the maxim’s overall meaning and the parameters of its application. Scrutiny then turns to the Sharīʿah evidence that provides authority for the maxim. Particular attention is paid to the way in which each item of evidence supports the maxim. Occasional mention is made of exceptions to a maxim, but this book is intended as an introduction to the topic so such discussions have been minimized in the interest of keeping things simple. The explanation of each maxim is capped with the mention of three general fiqh applications of it, followed by three or more applications in Islamic finance. The reader will notice that in a very few cases we were unable to identify three Islamic finance applications, but such instances are exceedingly rare.

A glossary of Arabic terms has been placed at the end of the book to facilitate comprehension for lay readers.

Allah is the guide to the straight path.



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