Question:-
The following” early cancellation” clause appears in a contract. Is this Shariah compliant?
A substantive provision of a definition, shall be treated as a substantive provision which the cancellation takes effect or is deemed, or is found , to have taken effect, multiplied by 36 calendar months (“the penalty”), as illustrated below. Provided that the Agent shall be entitled in its sole and absolute discretion, to recover all damages arising from the said breach of this Agreement by the Owner, instead of the penalty. ILLUSTRATION Assume the cancellation takes effect in August 2016, and the remuneration earned by the Agent in July 2016 was R100 ,00. The Owner is accordingly obliged to pay the Agent, R 3 600.00, as penalty , calculated as follows: R100 ,00 x 36 calendar months= R3600,00 Notwithstanding anything to the contrary herein contained, the Agent shall be entitled to deduct such penalty from any monies/ amounts held by the Agent on behalf of the Owner, or otherwise , standing to the credit of the Owner in the books of the Agent , or, otherwise held in a banking account/s operated by the Agent on behalf of the Owner.
Answer:-
We assume that the contract is in regards to an agent/employee that has been appointed to carry out some work for the owner (such as a rental collection agent, employee etc.), and the owner terminates the contract prior to the stipulated date of the agreement. The jurists have written that there are certain reasons which entitle one to cancel an Ijaarah (hiring) agreement, such as the employer no longer requiring the employee, as the work for which the employee was hired is no longer available; or the employer will experience some harm by keeping the employee (such as the business not generating sufficient revenue to remunerate employees) etc. These will be considered as valid reasons to terminate the employment contract. Keeping the above in mind, the clause in question is in conflict with Shariah.
On the other hand, if we are to assume that the owner / employer doesn’t have a valid reason to terminate the contract (as discussed above), but ignores the stipulated contract period and terminates employment (of the agent), then he has failed in fulfilling his pledge (with the employee), for which he will be accountable in the court of Allah Ta’ala, as fulfilling one’s pacts are obligatory in terms of Shariah. The Quraan Sharif states, ‘O people of Imaan, fulfill your pledges.’ [Re:- Surah Maa’idah Verse 1] However, the owner or employer in this instance also cannot be monetarily penalized for his actions. In conclusion, the said clause is not Shariah compliant.
إن كانت الإجارة لغرض ولم يبق ذلك الغرض أو كان عذر يمنعه من الجري على موجب العقد شرعا تنتقض الإجارة من غير نقض كما لو استأجر إنسانا لقطع يده عند وقوع الأكلة أو لقطع السن عند الوجع فبرئت الأكلة وزال الوجع تنتقض الإجارة لأنه لا يمكنه الجري على موجب العقد شرعا، وإن استأجر دابة بعينها إلى بغداد لطلب غريم له أو لطلب عبد آبق له ثم حضر الغريم وعاد العبد من الإباق تنتقض الإجارة لأنها وقعت لغرض وقد فات ذلك الغرض وكذا لو ظن أن في بناء داره خللا فاستأجر رجلا لهدم البناء ثم ظهر أنه ليس في البناء خلل أو استأجر طباخا لوليمة العرس فماتت العروس بطلت الإجارة. كذا في فتاوى قاضي خان.
وكل عذر لا يمنع المضي في موجب العقد شرعا ولكن يلحقه نوع ضرر يحتاج فيه إلى الفسخ. كذا في الذخيرة.
الفتاوي الهندية ص458 ج4
ALLAH TA’ALA KNOWS BEST!
ANSWERED BY:
Mufti Mohammed Desai
Date: 27 Rajab 1443 / 01 March 2022
