MAHYUDDIN KHALID emkay@salam.uitm.edu.my

FIQH MUAMALAHISLAMIC BUSINESS TRANSACTION

CHAPTER THIRTEEN

AL-WAKALAH

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

2

DEFINITION EVIDENCE PILLARS OF AL-WAKALAH TYPES OF AL-WAKALAH CONDITIONS OF AL-WAKALAH MODERN APPLICATION

CONTENT

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

3

Literally Agency, representation, proxy, mandate,

authorization, delegation, empowerment etc. Technically:

The appointment of someone to take over the appointer’s affairs on his/her behalf for the purpose of accomplishment of certain tasks

Wakalah implies a kind of delegation by a person of his business to act on his behalf.

It is lawful if a person appoints another as his representative for selling or buying, letting or hiring, giving or taking a pledge for depositing or receiving a gift, for safe keeping, for making a compromise, and for giving an acquaintance and for making an admission etc.

DEFINITION

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

4

EVIDENCE

Al-Quran .

The verse indicate the assigning of agents for zakat management (collection and distribution)

Hadith: Reported by Urwah R.A that the prophet S.A.W gave him

one gold Dinar to buy with it (be an agent for the Prophet S.A.W) a sheep but instead he managed to buy two sheep. He then sold one of it for one gold Dinar and then presented the prophet with both the sheep and one gold Dinar that he acquired. The prophet S.A.W prayed for him to be given blessings (barakah) in all his trade and transactions and mentioned that even if he sells solid soil, he will definitely gain profit in it.

Reported by Abi Hurairah R.A to the effect that: the Prophet S.A.W had sent Umar R.A to be his agent in Zakat collection (representative in zakat collections)

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

5

Reported by Sulayman bin Yasar that: The prophet S.A.W sent Abu Rafi’ and a man of the Ansar to accept (Qabul)his S.A.W marriage to Maimunah binti al–Harith on his S.A.W behalf while he was in Medinah before he had left for Hajj (representative in Marriage)

Ijma’: The ummah had came to a consensus on the

legitimacy of Wakalah contract since there is a great need for it, and individuals are also not capable of catering and handling all his/her needs, matters and daily affairs on their own without having to resort for the help of other people.

Hence, it is permitted because it is one of the types of cooperation on good deeds and fear of God ( Ta’awun Alal Birri Wa Taqwa ) encouraged in Islam.

EVIDENCE

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

6

1. Wakil The authorized agent, representative, proxy, trustee

2. Muwakkil. Authorizer, mandatory, client, principal

3. Muwakkal Bih Things or subject matter that is being entrusted for,

or the business deals involved4. Sighah

Ijab (Offer) Qabul (Acceptance)

PILLARS OF AL-WAKALAH

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

7

FLOWS OF AL-WAKALAH

Muwakkil.(Authorizer,

mandatory, client, principal)

Wakil

(authorized agent, representative, proxy)

Muwakkal Bih(Things or

subject matter)

Ijab (Offer)

Qabul (Acceptance)

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

8

1. Wakalah Mutlaqah Unlimited Agency/ Unrestricted Wakalah

A Wakalah contract that is not restricted to any conditions except for those that are permitted in Islam

Not confined to certain circumstances or time limit.

2. Wakalah Muqayyadah

Limited Agency/ Restricted Wakalah

A Wakalah contract that is restricted or confined with certain conditions that are legitimized by Islam

Bounded by special circumstances or time limit

TYPES OF AL-WAKALAH

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

9

1. The agent must be someone that is capable of performing the responsibility and fulfill the minimum requirement (being sane, adult and smart)

2. The subject matter or business dealings must be clearly specified in the contract by the authorizer.

3. It is legal to entrust certain business dealings to an agent even if the authorizer is capable of performing the same deal himself.

4. The authorizer has the freedom to terminate the contract or the service of the agent and the agent could also withdraw from the contract Except if the responsibility of the agent towards the

other party is still pending or his obligation towards the other party has yet to be fulfilled.

5. The Wakalah contract ends with the accomplishment of the entrusted tasks or mission

CONDITIONS OF AL-WAKALAH

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

10

6. The money or property received by the agent and has yet to be handed over to the actual owner will be under the rules and regulations of Al-Wadiah

7. It is permissible to charge some fees or commission on the tasks and works involved in the Wakalah contract

8. It is not permissible to conduct Wakalah for physical prayers since the objective behind these prayers are to test and act as trials to the believers with the exception of certain prayers such as the Pilgrimage (Hajj), slaughtering animals for sacrifice (Qurban), distribution of Zakat, and fasting of Kafarah (on behalf of the dead) as stated in the previous hadiths that support the legality of Wakalah.

9. The entrusted agent will not be held responsible for any damage or disruption of the business deal except for cases of proven negligence or ignorance on part of the agent

10. The agent is not permitted to act beyond what he was entrusted for by the authorizer in the first place except if it is an unlimited agency ( Wakalah Mutlaqah ).

CONDITIONS OF AL-WAKALAH

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

11

Letter of Credit (LC) Under the concept of al-Wakalah, the bank acts as an

agent to the customer: The customer informs the bank of his LC requirement

and requests the bank to provide the facility. The bank may require the customer to place a deposit

to the full amount of the price of the goods to be purchase, which the bank accepts under the principle of al-Wadiah Yadd Dhamanah.

The bank establishes the LC and pays the proceeds to the negotiating bank utilizing the customer’s deposit and subsequently releases the document to the customer

The bank charges the customer fees and commission for its services under the principles of al-Ijarah.

MODERN APPLICATION

DEFINITION

EVIDENCE

TYPES

CONDITION

APPLICATION

12

END OF CHAPTER