Is It Halal for One of the Parties to Enter a Contract with the Intention of Doing Something Haram?

In commercial relations, it is not only the outward (external) structure of contracts that matters, but also the inner intentions and aims of the parties. If one of the contracting parties enters a deal with the motive (intention, purpose) of carrying out some sin or committing a haram act, how should the religious and legal status of that transaction be determined? This issue, which occupies an extremely broad and important place in Islamic law, has been passed through different legal filters by the madhhabs on two planes: religious responsibility before Allah (the diyani ruling) and worldly validity before the court (the qada'i ruling). In this article, drawing on the book "Fiqhu’l -Buyu" by Muhammad Taqi Usmani, one of the greatest figures of our time in Islamic civil and contract law, we will examine in detail the degree of validity of contracts concluded by one of the parties with the intention of doing something haram, and the principled approaches of the Islamic schools of law to this subject.

The Hanbali School

In Islamic contract law, the question of one of the parties concluding a contract with the intention of committing a sin or carrying out a haram act is regulated very strictly by the Hanbali madhhab, both religiously (diyani) and legally (qada'i).

Basic Legal Position: According to the unanimous view of the Hanbali jurists (legal scholars), if one of the contracting parties enters an agreement in order to realize some sin or to take a haram step, that transaction is haram in religious terms. At the same time, the contract concluded is also considered batil (completely invalid) legally.

A classic example of this is a person buying a knife in order to kill another. Although whether the killing takes place is assessed separately by the law, a person's entering a commercial transaction solely with the motive of doing something haram is in itself haram, and according to Hanbali law the contract concluded is void at its foundation.

The Condition That the Seller Be Aware of the Buyer's Intention. The most important criterion for the contract to be considered haram and batil is the seller's awareness of the buyer's inner evil intention.

• If the seller knows this evil intention and purpose of the customer, the contract concluded is considered entirely without effect (invalid).
• In this case the buyer does not acquire ownership of the goods, and the seller is not considered to have rightfully earned the money (the price) he obtained. For both parties the transaction carries the status of being completely unlawful.
• For example, selling grape juice (or grapes) to a person who produces wine is categorically batil if the seller knows this intention.

Ways in Which the Seller Becomes Aware of the Intention: Ibn Qudama, a prominent jurist of the Hanbali school, elaborates on this issue further and clarifies how the seller can become aware of the customer's evil intention. According to his approach, awareness can come about in two ways:

1. Verbal (spoken) declaration: While buying the goods, the customer explicitly states that he will use them in a haram act.
2. Indications and specific signs: At the time of the contract, there are concrete indications and signs in the customer's circumstances that he will use these goods in a haram act.

The Ruling on Doubtful and Merely Probable Cases: If the buyer's purpose or circumstances are not entirely clear, that is, if there is merely a possibility, the ruling is different.

• For example, if it is not known exactly for what purpose the purchased goods will be used, or if the person buying the goods engages in both halal (for example, vinegar production) and haram (for example, wine production) activity and has not openly declared his inner intention, then the commercial transaction is considered permissible.
• However, if haram is definitively revealed within the established conditions, the contract absolutely takes the status of batil and becomes entirely without effect.

The Maliki School

On the question of one of the parties concluding a contract with the intention (purpose) of committing a sin or carrying out a haram act in Islamic contract law, the Maliki madhhab sets out its own distinctive legal methodology. This approach can be analyzed in detail on the religious (diyani) and legal (qada'i) planes, and also through concrete examples.

1. Distinguishing the Religious (Diyani) and Legal (Qada'i/Worldly) Rulings

In the view of the Maliki jurists, contracts concluded with the intention of doing a haram thing are categorically haram from the religious standpoint. However, from the worldly and legal standpoint the situation is different:

• The Contract Being Sound in Form: Such contracts are accepted legally as outwardly sound (munaqid). That is, there is no defect in the contract itself, in its fundamental pillars and structure; the haram arises not from within the contract but from an external factor surrounding it, namely the evil intention of one of the parties (an extraneous element).
• The Absence of an Intermediate Category: In the Maliki school there is no intermediate category called "fasid," as there is among the Hanafis. Instead, there is the concept of a makruh contract, regulated according to external factors surrounding the contract. Depending on the degree and gravity of the sin intended, this kind of makruh can even rise to the level of haram. Thus, although the contract is considered valid in terms of the transfer of ownership, the parties are considered sinful from the religious standpoint.

2. Examples of Prohibited Contracts in Maliki Fiqh

The Maliki jurists have systematized, with concrete examples, which commercial transactions are haram and prohibited when the parties are aware of each other's evil intention:

• Sales to Those in a State of War (Belligerents): It is prohibited to sell weapons, military supplies, mounts, or anything that would add to the military strength of non-Muslims who are in a state of war with the Muslims.
• Sales Connected with Matters of Belief and Worship:
  • It is not permissible to sell a house or building to a person who will definitely use it as a church.
  • Selling wood or other timber products to someone known for certain to be going to make a cross is haram.
  • Selling copper to someone known to be going to make a church bell is prohibited.
  • Selling a plot of land (earth) that is expected or known to be turned into a church or a tavern is not permissible.
• Selling Raw Materials for the Production of Haram Products: Selling grapes to a person known to be going to make wine (to press wine) is prohibited.
• Sales That Endanger a Person's Dignity and Religion:
  • Selling a concubine (female slave) to people who lack religious sensitivity and are given to sedition and corruption is not permissible (because of the likelihood that they would feed her haram or use her in evil ways).
  • Selling a young male slave who is known to be going to be used in evil ways is prohibited.
• Selling Sacred Texts: Selling the Holy Quran (the mushaf), any part of it, or the hadith books to a non-Muslim (whether a People of the Book or anyone else) is not permitted.

The Validity Status of the Contract

Although all these commercial transactions listed above (the sale of grapes, copper, land, weapons, or sacred books) are obstructed and prevented by the law, according to the well-known view accepted in the Maliki madhhab, if these contracts have taken place, the contract is in itself outwardly sound and valid.

That is, according to the Maliki jurists, the evil intention in the buyer's inner world, or the fear that the goods will later be used for haram, is not a basis for treating as legally void (rendering batil) a contract in which all the legal conditions are outwardly in place. The sale is complete, ownership legally and officially passes, but the responsibility for the sin and the haram is recorded directly as the religious liability of the parties, because of the external act that facilitates the haram. Its reckoning is left not to the worldly court but to the court of the hereafter.

The Shafi'i School

On the question of one of the parties concluding a contract with the intention (purpose) of committing a sin or carrying out a haram act in Islamic contract law, the Shafi'i madhhab sets out a highly systematic and interesting legal perspective that differs from the other schools of law. According to the Shafi'i jurists, even if the other party's haram intention is known, such contracts are not considered batil (invalid); they are legally accepted as munaqid (sound/valid), but are considered makruh in religious terms.

The fundamental principles, legal foundations and classic examples of the Shafi'i madhhab on this issue can be classified in detail as follows:

1. Imam Shafi'i's Principle of "Outward Soundness"

Imam Shafi'i, the founder of the Shafi'i school of law, takes outward (external) signs as the basis when assessing the validity of contracts. The fundamental foundation of his legal methodology is expressed as follows:

• A Contract Is Not Annulled on Account of Accusation and Suspicion: No contract that outwardly, in its external appearance, has all its conditions in place and appears lawful can be annulled on account of any suspicion, probability or accusation coming from outside.
• The Ineffectiveness of Past Habits: The parties' having engaged in the past in unlawful dealings (for example, interest-based trade or selling tools for evil purposes) does not affect the legal status of the new contract they conclude. Imam Shafi'i states that it is not legally correct to annul a new transaction on the basis of past habits. If the newly formed contract is outwardly correct, a ruling of its soundness is given.
• The Legal Status of Hidden Intentions: If the parties have not openly stated any condition that would violate the contract, and conceal an evil intention in their hearts, this hidden intention, although considered makruh (disapproved) in religious terms, does not harm the validity of the outwardly formed contract.

2. Concrete Legal Examples in Shafi'i Fiqh

Imam Shafi'i substantiates this theory in detail with concrete examples taken from daily life:

• Selling a Weapon to Kill Unjustly: In the case of a person buying a sword in order to kill another wrongfully, Imam Shafi'i refrains from saying "haram" of the act of the one who sells this sword. The main legal reason for this is that it is not certain that the person buying the sword will directly commit a crime with that weapon; it is always within the realm of possibility that he will desist from this act or use the weapon for an entirely different halal purpose. A legal contract cannot be annulled on mere conjecture, apprehension and accusation. However, such a sale is considered makruh in moral terms.
• Selling Grapes to a Person Known to Be Going to Produce Wine: This sale by a seller who knows that the grapes will be turned into wine is governed by the same rule. Because the sale itself (its form) is a pure and halal transaction, the contract is not considered batil. For the buyer can refuse, at the last moment, to turn those grapes into wine. For this reason, the sin arising from the inner intention and the legal ruling of the contract itself are assessed separately from one another.
• Renting Out a House to Be Used for Selling Wine: According to the Shafi'i school, where a non-Muslim (dhimmi) rents a house from a Muslim in order to sell wine, the ijara contract is likewise accepted as permissible. The legal reason (illa) for this is that the rental contract is built on the direct benefit (use) of the house. The use of the house is not limited to selling wine; it is always possible for the tenant to sell other halal goods there as well.

3. The Nature of the Concept of "Makruh" in Shafi'i Fiqh

The "makruh" ruling that the Shafi'i madhhab gives to such contracts does not express a mild disapproval merely in the sense of "it is better not to do it." The makruh here in fact carries the meaning of close to haram, that is, tahrimi makruh (or makruh to the degree of haram).

With this distinction Imam Shafi'i separates the scale of moral and religious responsibility from the legal order. Although the person earns a great sin before Allah because of his evil intention, the commercial transaction he has formed remains valid and in force in terms of ownership, as long as it conforms to the conditions.

The Hanafi School

On the question of one of the parties concluding a contract with the intention (purpose) of committing a sin or carrying out a haram act in Islamic contract law, the Hanafi madhhab sets out a highly systematic, profound and principled framework that differs from the other schools of law. In analyzing this issue, the Hanafi jurists direct their main attention to the subject matter of the contract. The Hanafi jurists divide goods that are the subject of trade into two main categories: goods on which the sin is carried out directly (in reality) and goods that lead to the haram indirectly (thanks to the additional labor of the user).

1. The Sale of Goods That Are Directly the Subject of Haram (Sale of Weapons)

This category includes cases such as selling weapons to people who cause sedition and corruption, rebel against the state and disturb public order. Because a weapon is a ready-made tool directly, no additional work or processing needs to be carried out on it; from the moment the buyer obtains it, he can use it immediately in a sinful act.

According to the Hanafi jurists, such commercial transactions are tahrimi makruh in religious terms. Tahrimi makruh is regarded, practically and morally, at the same level as haram and places a great burden of sin on the individual.

2. The Sale of Goods That Lead to Haram Indirectly (Sale of Grapes and Land)

If the goods sold are not directly an instrument of haram, and for them to turn into sin the buyer must in the future carry out additional labor, processing or activity, then in this case the commercial transaction is considered structurally permissible. The clearest examples of this in classical law are the following:

• Selling grapes or grape juice (must) to a person known to be going to make wine: According to Imam al-A'zam Abu Hanifa, this sale is permissible. Because selling grapes does not mean directly making wine. Here the buyer's own free will enters between the seller's act and the haram deed; the buyer, as a Fa'il-Mukhtar (a person who decides freely of his own volition), turns that juice into wine. Under the rule in Islamic law that "a sin does not pass (is not transmitted) from one person to another," the sin remains only on the buyer who directly commits that act. The jurists also stress here that the causal link is not direct, and that the sale simply has no direct creative effect on the production of wine.
• Selling land (a plot) to a person known to be going to build a church: The land itself is not directly a church or a place of shirk. The buyer erects a building on that land and later commits the act of shirk there. For this reason, since the connection is indirect, the sale of the land is also accepted as permissible.

3. The Concept of "Makruh Contract" in Hanafi Fiqh

In the Hanafi school, makruh that arises from an external factor outside the contract itself does not harm the legal validity of the contract. The best example of this is buying and selling at the time of the Friday adhan.

This commercial transaction has no defect either in its origin (foundation) or in its attribute (conditions); yet the contract is considered makruh because of an external religious reason, such as delaying the Friday prayer. Such contracts are distinguished from "fasid" contracts. That is, the contract is valid (sound) in form and in law and transfers ownership, but in religious terms carries sin or makruh.

With this subtle distinction the Hanafi jurists protect the security of civil circulation and avoid punishing people on the basis of conjecture and suspicion.

The Method of Muhammad Taqi Usmani's Father

The father of the eminent jurist of our time Muhammad Taqi Usmani, the great Hanafi jurist Mufti Muhammad Shafi Usmani, wrote an independent treatise on this subject. Bringing together the scattered rulings and texts found in the classical Hanafi fiqh sources, which at first glance seemed disorganized and sometimes contradictory to one another, he set out a clear system.

As a result of Muhammad Shafi Usmani's deep principled analyses, the question of assisting or being a means to haram was settled on two fundamental planes: Being a means to direct (real) haram and being a means to indirect (tasabbubi) haram.

1. Being a Means to Direct Haram

This is where the link between the transaction carried out by the seller or the lessor and the sin that will be realized is completely unbroken and evident.

Under normal conditions, according to the general rule in Islamic law, when a third person who decides of his own free will, the Fa'il-Mukhtar, steps in between the seller and the sin, the responsibility for the sin is lifted from the seller. For example, when an ordinary knife is sold and the buyer commits a crime with that knife, the seller is not considered sinful, because the buyer's free will has entered between the seller's act and the crime. However, according to Mufti Muhammad Shafi Usmani, in the following three special cases that relation (link) is not severed by any means, and the seller is considered a direct partner (abettor) in the sin:

1. Explicit Purpose and Intention: The seller or the person leasing out the property, when forming the contract, directly aims at the carrying out of that haram act. For example, leasing out property with the purpose of selling alcohol or committing prostitution inside the house is of this kind. Because this evil intention exists together with the trade, the person bears direct moral responsibility.
2. Adding the Haram as a Condition Within the Contract: When the contract is concluded, the fact that the haram act will be committed is explicitly stated as an internal condition of the contract. An example is the buyer's saying "sell me this grape juice only on the condition that I make wine."
3. Selling Goods That Serve Only and Exclusively Haram: The item sold or leased, by its nature, has no halal use other than haram.

In each of these three situations the sin is considered rooted in the contract itself. The parties are considered sinful simply because they have formed such a contract; even if those goods are not later used in a haram way, the formation of the contract is in itself haram and the contract is invalid (batil). The author ties these three types to a single rule, "purpose and intention." In the first case the purpose is plainly present, and in the second and third cases it exists by ruling or by implication.

2. Being a Means to Indirect (Tasabbubi) Haram

If the three special conditions mentioned above (direct purpose, a haram condition in the contract, or goods that serve only haram) are not present in the contract concluded, but the product sold indirectly creates the conditions for the sin to be committed, this transaction is included in the category of being a means to indirect haram. For example, selling ordinary grapes to a person who is assumed likely to make wine in the future, selling a singing slave girl, or renting out a house on the assumption that it will be turned into a place of worship, are of this kind.

Mufti Muhammad Shafi Usmani declares that tasabbub itself is divided into three degrees (levels) and that the ruling changes accordingly:

1. The Instigating Cause (Muharrik): These are causes that directly push and incite a person to commit sin. As stated in the verses of the Holy Quran (for example, the prohibition on insulting the false gods of others, because this provocation leads them to insult Allah as well), being such an instigating cause is categorically haram.
2. The Near Cause: If the goods sold can be used in sin directly in their existing state, without any additional processing or labor being carried out on them, this is a near cause. The clearest example is selling ready-made weapons to rebels and terrorist groups. If the seller knows this situation, the contract made is considered haram (tahrimi makruh).
3. The Distant Cause: If, for the buyer to commit the sin, he must necessarily carry out additional labor or a processing operation on the goods sold, this is a distant cause. For example, selling raw iron so that rebels can make weapons falls in this category. Because iron is not directly a weapon, and additional labor is needed for it to become a weapon. In this case, because the cause is weakened, the contract is considered tanzihi makruh (mildly makruh).

Explanation and Application of Contemporary Issues

Mufti Muhammad Shafi Usmani's principled classification makes it possible to resolve easily the most difficult financial and technological questions of our time:

• Selling or Leasing Buildings to Interest-Based Banks: If the property owner, in selling the building to the bank, directly intends to help the bank's interest transactions, or if an explicit condition about "carrying out interest-based transactions" is placed in the contract, the contract is batil and the profit is haram. If it is known that the building is being leased to open a bank branch, this is considered a near cause and is regarded as tahrimi makruh. However, if the building is given to the bank not for interest transactions but for non-interest services such as an archive, a personnel department, a kitchen (mutfak) or a canteen, this is considered a distant cause and the transaction is permitted.
• Selling Software: If software is prepared and sold solely and exclusively for interest calculations, it falls under the third type (goods used only in a haram way) and is haram and without effect. However, if the software is of general purpose, that is, it carries out halal accounting, personnel and warehouse operations and can also perform interest calculations within it, then, since the seller has no intention of directly assisting haram, the contract is considered sahih (valid) and is regarded only as makruh.

Mufti Muhammad Taqi Usmani's Final Conclusion

1. His Choice on the Legal Status of Contracts with Direct Haram Intention

In the dispute that arose among jurists over the legal validity of contracts concluded where haram is directly intended, Taqi Usmani adopted the view that the contract is batil (invalid).

Although the haram nature of such contracts is accepted in Islamic law, there are different legal approaches as to whether they are considered completely batil or accepted as "fasid" (formed with a certain defect). On this issue Muhammad Taqi Usmani adopts the view that the contract is directly batil and does not become munaqid (does not come into force) in any way. Thus, if there is a direct intention of sin between seller and buyer, that contract is legally as if non-existent, does not transfer ownership, and the money earned is not considered halal.

2. Final Conclusions on Contemporary Economic Relations

Applying these classical principles to two of the most controversial areas of the modern world of finance and technology, the author has determined the final rulings:

• Selling or Leasing Buildings to Interest-Based Banks: According to Taqi Usmani's final opinion, if the property owner, in selling or leasing his building to a bank that conducts interest transactions, directly intends to assist the bank, or places an explicit condition within the contract such as "to be used for interest-based transactions," this contract is batil and the income earned is haram. Here he puts forward a legal interpretation of great importance for modern commerce: A bank's buying or renting any building in order to open a branch has the same status as its openly declaring "I will carry out interest-based transactions here." It makes no difference whether this is written in the text of the contract; because the operating purpose of a bank branch is known, this is considered a direct near cause. However, if the building is given to the bank for halal and administrative areas far removed from interest transactions, such as an archive, kitchen, canteen or personnel department, this is attributed to a distant cause and accepted as permissible.

Final Conclusion: The Power of the "Takhrij" Method

The most important methodological conclusion reached by Muhammad Taqi Usmani is that in Islamic law the subject of being a means or a cause of haram must be assessed not arbitrarily but only by these systematic criteria. These excellent standards set out in his father's treatise are the most reliable and durable legal foundation for carrying out takhrij (deriving the correct fiqh ruling from them) on the countless new and complex questions we encounter every day in the modern global economy. Thanks to this system, Muslim merchants can both continue their economic activities freely and be protected from religious and moral liability.

Note: For further information you can watch the readings presented by Dr. Ozat Shamshiyev of "Fiqh al-Buyu". Note that this 2-volume work is an important work written by Muhammad Taqi al-Usmani, one of the great hadith and fiqh scholars of our age, in the field of financial relations (financial muamalat). The book is written on the basis of the four madhhabs and in comparison with the commercial law of some Western countries. The most striking feature of this study is that, taking into account current issues in Islamic economics and financial innovations, it brings together the "Kitab al-Buyu" (Book of Trade) chapters found in the authoritative sources of the four madhhabs.