Jualah - Scope Of Standard

Transcription

1. Shari ’ah Standard No. (15): Ju’alah Statement of the Standard 1. Scope of the Standard This standard sets out fundamental rules of the Shari’ah on Ju’alah and its application in activities for which the extent of the work required cannot be precisely determined for it continues throughout the determined period. It is for this reason that it does not cover the contract of Ijarah for employment/service or leasing, just as it does not cover maintenance contracts or stipulations of maintenance in relation to other contracts, such as the requirement of maintenance in a sale contract or an Istisna’a contract (construction contract). 2. Definition of Ju’alah Ju’alah is a contract in which one of the parties (the Ja’il) offers specified compensation (the Ju’l) to anyone (the ’Amil) who will achieve a determined result in a known or unknown period. 3. Permissibility of Ju’alah Ju’alah is permissible deeming the determination of the end result to be realised through it as sufficient, and it is not affected by the uncertainty that prevails with respect to the subject-matter of the contract, that is, the work to be done. It is for this reason that Ju’alah is suitable for activities for which Ijarah, which requires that the desired work be clearly specified, is not. 4. Shari’ah Status of Ju’alah 4/1 With due consideration to item (6) below in respect to the revocation of Ju’alah, Ju’alah, in principle, is not a binding contract. The general offeror (Ja’il) or the worker (’Amil) are entitled to revoke it unilaterally, however, it becomes binding for the Ja’il when the worker commences work. If the worker undertakes not to revoke the contract during a specified period, it is binding on him to abide by the undertaking. 426
2. Shari ’ah Standard No. (15): Ju’alah 4/2 The possession of the worker exercised over the property of the offeror is that of a trustee. He is, therefore, not liable except in the case of negligence, misconduct or violation of the conditions stipulated by the offeror. 5. Elements of Ju’alah and Its Conditions The elements of Ju’alah are: The two parties (the offeror and the worker), the form of the contract and the subject-matter of the contract (the compensation and the work). 5/1 The two parties to the contract (the offeror and the worker) The existence of legal capacity is a condition for both parties to the contract. It is not a condition that the worker be specified, therefore, Ju’alah is concluded by the issuance of an offer directed at the general public. Any person whom the offer reaches may undertake the work himself or with the help of another. If, however, the worker is specified, it is obligatory for him to undertake the work himself or with the express consent of the offeror through someone under his supervision and control. 5/2 Form of the contract The Ju’alah contract is concluded by an offer directed towards a specified worker or towards the general public, irrespective of such an offer being made verbally, in writing or through any other means that indicate an invitation to work and an obligation to pay the compensation. Acceptance of the offer is not stipulated as a condition. 5/3 The subject matter of the contract (compensation and work) The subject matter of the contract is the work that is agreed upon through Ju’alah as well as the compensation for the work. 5/3/1 Work that produces the desired result 5/3/1/1 Among the forms of activity that may be agreed upon on the basis of the Ju’alah contract are the following: a) An activity that is intended, through the agreement, to produce a result such as the extraction of minerals. 427
3. Shari ’ah Standard No. (15): Ju’alah b) Any information in which the offeror has an interest such as presenting a report or study or the completion of scientific works that realise a result, but in which the extent of the work cannot be determined. c) An activity that is intended, through the agreement, to return lost property to its seeker. 5/3/1/2 It is permissible to stipulate that the job is done within a specified period so that the worker will not be entitled to compensation after this period, except when the period is over and the result is close to realisation, in which case the period will be automatically extended. 5/3/1/3 When the period is over and the worker has done (part of) the work that will benefit the offeror, the worker is entitled to reasonable wages ((Ujrat Ujrat al-Mithl). al-Mithl). 5/3/1/4 The Ju’alah contract is valid despite uncertainty as to the nature of the work, provided that the required result realised by the work is determined. 5/3/1/5 It is a condition that the work involves some type of effort. 5/3/1/6 It is a condition that the work not be obligatory for the worker. 5/3/2 The compensation 5/3/2/1 The compensation should be known, valuable in the eyes of the Shari’ah, and deliverable. If the compensation is unknown, unlawful or not deliverable, payment of reasonable compensation becomes binding. 5/3/2/2 The compensation may be a portion of the object of work in Ju’alah, for instance, a percentage of a debt agreed upon for collection or the right to utilise, for a determined period, a project whose implementation is agreed upon. 428
4. Shari ’ah Standard No. (15): Ju’alah 5/3/2/3 As a rule, entitlement to compensation is not established until the work is completed and delivered to the offeror. The following are the exceptions to the rule: a) Where it is evident that the work undertaken by the worker belongs to someone other than the offeror and has been decreed as such, the worker is entitled to the compensation. b) Where an accident occurs during work undertaken by the worker causing loss that was not due to the tort or negligence of the worker, the worker is entitled to full compensation. 5/3/2/4 It is permissible to stipulate that all or part of the compensation be paid in advance at the conclusion of the contract or thereafter, even though this is before the completion of the entire work, however, it is considered “subject to accounts” and the worker is not entitled to it without the realisation of the result, the offeror having the right to reclaim it if the work is not realised. 6. Revocation of Ju’alah 6/1 If the offeror, or the worker, revokes the contract prior to the commencement of work, the worker is not entitled to compensation. 6/2 If the offeror prevents the worker from working after commencement of the work, the offeror is bound to pay reasonable wages. 6/3 If Ju’alah contract is terminated by the worker after the work is commenced; the worker is not entitled to a reward, except when the parties agree to otherwise. 6/4 If the worker revokes the contract after commencing the work, he has no claim against the offeror, unless they had agreed to the contrary. 429
5. Shari ’ah Standard No. (15): Ju’alah 7. Distinction between Ju’alah and Ijarah Ju’alah is distinguished from Ijarah on the following grounds: 7/1 Ju’alah is valid despite uncertainty of work deeming the determination of the required result by the offeror as sufficient. 7/2 Ju’alah does not require acceptance. 7/3 Entitlement to compensation depends on completion of work and delivery of result. 7/4 Ju’alah is valid even if the other party is not known. 7/5 As a rule, Ju’alah is terminable, while Ijarah is binding. 8. Applications of Ju’alah Among the applications of Ju’alah in activities where the extent of work is undetermined and in which uncertainty is overlooked are: 8/1 Exploration for minerals and extraction of water Ju’alah contract may be used for the exploration for minerals and the extraction of water in situations where entitlement to wages is contingent upon the finding of minerals or water without reference to the amount of time or the extent of the period. 8/2 Collection of debts Ju’alah is used for collecting debts in cases where the entitlement to compensation is contingent upon the collection of all of the debt, in which case entitlement to the entire compensation is established, or part of the debt so that compensation proportionate to the amount of debt collected is due. 8/3 Securing permissible financing facilities 8/3/1 Securing permissible financing facilities means that the worker undertakes some work that leads the institution to agree to the granting of financing facilities to the offeror or to arrange syndicated financing. 8/3/2 Ju’alah contract may be used for securing facilities provided that the condition of the permissibility of Ju’alah is met, that is, 430
6. Shari ’ah Standard No. (15): Ju’alah the subject-matter of Ju’alah must be valid such as the creation of debt through Murabahah on deferred payment, Ijarah with deferred rental, raising of loans without interest, issuance of letters of guarantee or the opening of documentary credit with the condition that the transactions are not employed for raising interest bearing loans through stipulations, customary practice or dealings among institutions. 8/4 Brokerage Ju’alah is used in brokerage activities in cases where the entitlement to compensation is contingent upon the conclusion of the contract for which intermediation is undertaken. 8/5 Discoveries, inventions and designs Ju’alah is used for the realisation of scientific discoveries, innovative inventions and designs, such as symbols and trade marks, where entitlement to compensation is contingent upon the realisation of the discoveries, the registration of patents or the creation of designs conforming to the conditions elaborated by the offeror. 9. Role of Institutions in Ju’alah 9/1 It is permissible for an institution to have the status of a worker in Ju’alah by contract, for work benefiting others irrespective of the institution undertaking the work itself or by contracting out the work through another Ju’alah that is in the nature of a parallel, unless it is stipulated that the institution will carry out the work itself. It is obligatory that the two Ju’alahs are not linked. 9/2 It is permissible for an institution to have the status of the offeror whether the work benefits the institution or is for the fulfilment of its obligation in a Ju’alah for the benefit of another (parallel Ju’alah) ensuring that the two Ju’alahs are not linked. 10. Date of Issuance of the Standard This Shari’ah Standard was issued on 7 Rabi’ I, 1424 A.H., corresponding to 8 May 2004 A.D. 431