Laws, regulations and the holy Shari’a all agree that the established contracts with free will of the parties and fulfilled contracts requirements are legally binding in normal conditions according to the holy Qura’an “ O you who have believed, fulfill all contracts”, and principles of contracts honouring and transactions stability.
However, a binding contract due to some extraordinary conditions, might become subject to reconsideration and modifications to keep up with the changing circumstances, weather is was an administrative shortcoming, confusion or misinterpretation of contract’s provisions, or a radical change in the circumstances surrounding the contract that impose serious harm on all parties.
Contracts adhere to the general rules and principles, including contractual balance, reciprocity of obligations, force majeure principle, and emergency circumstances theory, thus Shari’a is elastic and take all parties’ interests into consideration and do not accept imposing any downright damage on either party.
Our topic today would be in alignment with the current situation of Corona virus crisis, which is responsible for people being quarantined at their homes and the governments taking precaution measures to protect public health, these measures include: imposing curfew, temporarily suspend the work of several government agencies, ban dine-in at restaurants and cafes, suspend both domestic and international flights, and imposing limitation on private sector work, such measures undoubtably will have some effects on contracts and legal obligations.
First, it is crucial to point at the legal argument on whether Corona crisis must be described as force majeure or emergency circumstances. Although both opinions agree that this event cannot be predicted nor prevented, the force majeure side consider the obligation impossible to be executed, whereas the emergency circumstances side consider the obligation oppresive to be executed.
My opinion is that it should be considered as force majeure, because of its global impact since it was considered as global pandemic, and its role in disrupting and confusing houses of economy, health, and labour, which rendered a lot of obligations rather impossible to execute, such as: travelling, tourism, occasions, shops and retailers at malls, transportation contracts, studying courses abroad, and export medicine and medical equipment.
The definition of Force majeure:
Mining investment law stipulated the definition of force majeure in article 28 as “common events noun as irresistible forces resulted from unpredicted circumstances in time of granting the license, and did not resulted from either parties’ doing, which render the execution of stated obligation on the licensee impossible”.
This is the only legal definition of force majeure, which included all three aspects of it, those being: unpredicted circumstances, did not cause by either parties’ actions, and make the execution of obligations impossible.
Domestic laws vaguely mentioned force majeure, for instance Labour law in articles 74, 87, 91, finance lease law and implementing regulation of bankruptcy law.
The origins and legitimacy of force majeure principle:
- 1. Allah almighty said in the Qura’an “Indeed, God orders justice and good conduct”, this verse has established the principle of fairness between people, including in contracts and obligations, therefore in this case, the origin is maintaining the state of balance and not allow only one party to endure downright damage.
- 2. The principle of contractual balancing and reciprocity of obligations. Both parties consensually agreed to reciprocal obligations, doing something in exchange for something else, the state of force majeure diminish this balance, benefiting one side and cause downright damage to the other!
- 3. Allah almighty said in the Qura’an “God does not charge a soul except with that within its capacity”, thus the obligee must perform his or her obligation as much as possible and circumstances allow.
- 4. Taking the situations and changed circumstances into consideration. Abnormal events need exceptional measures.
- 5. The Hadeeth of prophet Mohammad (peace be upon him) ”There should be neither harming (darar) nor reciprocating harm (dirar)”. Whenever the balance of interests was diminished and resulted in the damage being placed only on one side, the law has the authority to interfere to prevent this downright damage and administer it on both sides.
Force majeure principle applications:
Force majeure’s effect differ from one contract to another, because it is a powerful, more legitimate reason to terminate contracts than emergency circumstances, which the latter only allow to amend contracts in order to maintain contractual balance.
Force majeure principle apply all types of contracts, particularly one type of contracts that come into view in these extraordinary situations, which is lease contracts.
Lease contracts are binding contracts that cannot be terminated in normal circumstances without both parties’ consensual agreement unless there was a breach of contract, or according to what was stipulated in Shari’a on types of choices.
In emergency circumstances on the other hand, changing obligations can be done more easily as long as the contractual balance or the reciprocity of obligation were diminished, or there was a lot of obstacles on performing obligations stipulated in the contract.
In cases of force majeure, the landlord-tenant relationship must be reconsidered according to the author of Almoghni book by Ibn Qodama 30/6 “ in case of public fear that prevents accommodating a certain place where the rented land, or an area was sieged in a way that prevent tenant of benefiting from the rented arable land, then tenant must be grant the choice of termination”.
The saying of Ibn Alqiem is in consistence with the opinion of Hanafaiah scholars, that the public crisis drop the obligatory of contracts.
Perhaps the most powerful thing that can be relied upon or used as measurement here is the hadith of Jaber (the prophet's order to place the pandemics).
In a version by Al-bokhari “if you sell your brother fruits (on the tree) then it was destroyed after the sale, it is not permissible for you to take anything from him. How would it be rightful taking your brother’s money?”, and Ibn Qodama had defined force majeure as “calamity that no humankind has any control over” (Almoghni 78/4)
The matter needs more elaboration:
First, if the rented space was closed as to what happened with malls or the suspension of a particular commercial activity by governmental decision, then tenants have the choice of terminating the contract and vacating the rented space, and then the competent authority must decide whether landlords could sue for compensation by an administrative lawsuit according to the roller theory?
Second, if the tenant’s commercial activity was limited which resulted in great harm to the operation and revenue that made the tenant unable to pay the salaries and the rent, then the tenant has the right to request amending the rent according to the hdeeth ”There should be neither harming (darar) nor reciprocating harm (dirar)”.
Third, if the landlord accepted to exempt tenant from the rent during the state of force majeure and its precautionary measures, in this case then the tenant does not possess the right of termination choice.
This is a summary introduced as a motivation for more research and wise deliberation in this topic.
May Allah bless you