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  • 1. ISLAMIC BUSINESS TRANSACTIONCHAPTER ONEINTRODUCTION TO FIQH & SHARIAH MAHYUDDIN KHALID emkay@salam.uitm.edu.my

2. CONTENT Business Lesson From the Sirah of prophetSIRAHMuhammad s.a.w FiqhFIQH Components Of Fiqh SHARIAH Comparison Between Fiqh And Muamalat Shariah SOURCES Distinction Between Shariah And Fiqh Sources Of Islamic LawCOMPARISON Comparison Between Islamic Law And Man-made Law2 3. BUSINESS LESSON FROM THE SIRAH OF PROPHET MUHAMMAD S.A.W Before Muhammad s.a.w became Messenger of Allah, he wasSIRAHinvolved in business and trading an experienced merchant with vast knowledge in trade.FIQH His first business exposure was when the prophet (s.a.w) was only 12 years old when he accompanied his uncle, Abu Talib in a trading caravan to Busra in Syam (Syria). This has actually been SHARIAH normal practice for the Quraisy tribe who are mostly professional traders. SOURCES Prophet (s.a.w) actual involvement in business when he was 25 years old when he was invited by a wealthy and nobleCOMPARISON businesswoman named Khadijah Khuwailid to head her trade to Syam to transport and sell merchandise from Makkah and import Syrian-made product and resell them back in Makkah. This offer was mainly based on positive characteristic that Muhammad (s.a.w) associated with like honesty, trustwothiness and nobility and called Al-Amin.3 4. BUSINESS LESSON FROM THE SIRAH OF PROPHET MUHAMMAD S.A.W As capital provider, Khadijah would engage men in profit-sharingSIRAHpartnership for her international trading operation. By having them as part of company instead as a employee will instillFIQH sense of ownership and belonging of the employees. They will take extra care of the business that they share part of profit and loss. Being the owner of business and employer, she already gained SHARIAH experience in recruiting, managing, handling and possibly terminating the services of her employees ensure the prosperity SOURCES and longevity of her business. Khadijah recognize Muhammad (s.a.w) possessed all the attributesCOMPARISON of a good employee, partner and entrepreneur and natural talent that would further consolidate and expand her business position. She presented him (s.a.w) business proposal to venture with her capital in a trade mission to Syam - and offered to pay twice to ensure his acceptance without any hesitation. Prophet (s.a.w) accept the deal since his uncle, Abu Talib was really poor at that time and need financial assistance.4 5. BUSINESS LESSON FROM THE SIRAH OF PROPHET MUHAMMAD S.A.W The decision was actually turning pint of her business and personalSIRAHlife. Muhammad (s.a.w) proved his mettle and quality of endurance and managed to gain huge amount of profit from the Syam venture twice from Khadijah normally gained from other trade mission.FIQH Muhammad (s.a.w) and Khadijah eventually married and the business continued until Muhammad became Messenger of Allah SHARIAH fifteen years later. Despite being young and illiterate, Prophet Muhammad (s.a.w) was SOURCES never a nave trader. He (s.a.w) was really and excellent and skilled trader that could certainly grasp the real world situation and face challenge of local and international trade.COMPARISON By having accumulate 15 years of trading skills and experience until he (s.a.w) was 40 years old, Prophet (s.a.w) guidance (sunnah) in Muamalat should be highly regarded by traders and businessman. Besides being divinely revealed by Allah, the guidance and rulings came from a successful corporate figures who was able to understand the secrets of both the worldly affairs as well as the matters of hereafter life5 6. FIQH Fiqh () literally means to understand ()SIRAH An example of this is found in the Quraan in the Dua of Prophet Musa (as) when he asked Allah to remove theFIQH impediment from his speech so Firaun and his people could understand him. SHARIAH And loosen the knot from my tongue. That they may SOURCES understand my speech. Chapter 20 verses 27-28. LiteralCOMPARISON the true understanding of what is intended Technical The knowledge of the laws of the Shariah, relating to mens act and that have been derived from specific sources and evidences.6 7. FIQH TechnicalSIRAH The knowledge of the laws of the Shariah, relating to mens act and that have been derived from specific sources and evidences.FIQHKnowledgeIncludes every single field of knowledge whatever its sources or origin SHARIAH LawsExcludes all kind of knowledge that do not pertain to rules (hukum) SOURCESShariahFiqh is confined to legal rules of man made laws, or rules based onrational, or those that are discoevered through experienceCOMPARISONActs Confine the definition to the knowledge of practical (amali) rules and nottheritical. Excluded knowledge of rules with respect to belief and faithDerivedConfine fiqh to knowledge that are acquired and not knowledge that arerevealed Excludes evidences of Shariah that are too general and not available forSpecificthe purpose of practice. Excludes the acquired knowledge of the laymanfrom the juristSourcesIndividual texts of whether the Holy Quran or Sunnah7 8. FIQH Fiqh:SIRAH Product of legal reasoning (ijtihad) and deduction of the jurist and scholars from the specific sources of the HolyFIQH quran and Sunah Faqih SHARIAH Jurist; a person expert in legal sciences and know how to derive ruling and judgement based on a detail and SOURCES analysis of every single evidence in Islamic Law.COMPARISON8 9. COMPONENTS OF FIQH Ibadat Adat (custom/ practice)SIRAH Governs the relationship between Governs the relationship of men man and godbetween themselvesFIQH Laws regulating ritual and religious observance Made up of obligatory and1. Munakahat: Family law, law of SHARIAH recommended marriage and divorce, law of 1. Obligatory (Wajib) ibadat such asinheritence SOURCESObligatory prayers 5 times a day, 2. Muamalat: Commercial law, lawZakat, Fasting in the month of of property and contractRamadhan and pilgrimage to3. Uqubat: Criminal law, penaltiesCOMPARISONMakkah and procedures 2. Recommended (mubah/ sunat)4. Siyasah Syariyyah: Constitutionalibadat such as recommended law and the administration of theprayers, donation. Charity,staterecommended fasting, umrah etc5. International Law: Law on the relationship between government and nations9 10. COMPARISON BETWEEN IBADAT AND MUAMALAT IBADATMUAMALAT Original Rules: Original Rules:SIRAH Prohibition unless there is a clear evidence on Permissibility unless there is a clear evidence its permissibilityon its prohibition Any act of worship is forbidden unless there is Commercial transaction are formed on the FIQHevidence that validate its permissibility.principle if permissibility in accordance with Muslims can only perform devotion to Allahlegal maxim of fiqh in the manner specified in the Quran and SHARIAH Sunnah Ibadat are quite standardized and fixed with Commercial transaction are quite flexible, very strict rules and regulations.changeable, temporary and varies according to SOURCES the time, place, custom and condition (except for certain rulings)COMPARISON Devotional matter are made of guidance from To declare transaction valid, Muslim only the Quran and Sunnah and not from the needs need to investigate whether a clear, self- of societyexplanatory prohibition exists, and if none found, the transaction maybe presume to be valid Basic norm in Ibadat based on total Basic norm in muamalat is based on rational, submission and devotion to Allaheffective cause and benefit The evidence of ibadat from the Quran and The evidence of muamalat are mostly general Sunnah are mostly specific and detail in nature and quite universal in nature10 11. SHARIAH Sharia () comes from the word ( ) whichSIRAHliterally means to prescribe or ordain, law, and a straight road or path. FIQH Literal SHARIAH The road to watering place; the straight path to befollowed SOURCES Technical Rules which are ordained by Allah for His servants byCOMPARISONsending His Messenger Refers to Islamic laws which were revealed to the Prophet Muhammad (saw) and which are recorded in the Quran and Sunnah11 12. DISTINCTION BETWEEN SHARIAH AND FIQH SHARIAH FIQH A path leading to the source of a meaningful A product of understanding of the sources in ShariaSIRAH life (Islam)Humanly acquired God-given FIQHEmbrace all human beliefs, activities andDeals with legal rulings and acts actions Components: Components: SHARIAH AqidahIbadah AkhlaqMunakahat IbadahMuamalat SOURCES MuamalatUqubatInternational relationsCOMPARISON The body of revealed laws found both in the A body of laws deduced from shariah to cover Quran and Sunnah specific situation not directly treated in Shariah law Fixed, unchangeable and eternalCertain components are fixed while some others are subject to change according to the circumstances Most part are generalTend to be specific and detail Lay down basic principlesUnderstanding and application of Sharia, how it should be applied12 13. RULINGS RELATED TO SHARIAHSIRAHWajib Obligatory FIQHMandubVoluntary SHARIAH Mubah SOURCES PermissibleCOMPARISONMakruhDislike Haram Forbidden13 14. SOURCES OF ISLAMIC LAWSIRAHPRIMARY SOURCES Al-Quran FIQH Sunnah Ijma SHARIAH Qiyas SOURCES SECONDARY SOURCES Istihsan (juristic preference of the stronger principles)COMPARISON Istishab(Presumption of continuity) Maslahah Mursalah (extended analogy/ consideration of public interest) Sadd al-Zarai (blocking unlawful means to an unlawful end)14 15. AL-QURAN The fundamental and main sources of Islamic LawSIRAHfrom which all other sources derive their authority It may be defined as: FIQH The book containing the speech of Allah, revealed toProphet Muhammad in Arabic and transmitted to us by SHARIAHcontinuous testimony, or tawatur. SOURCES Consists of the word of Allah SWT revealed on Prophet Muhammad saw in 23 years divine originCOMPARISON Address to all humanity, without distinction of