Journal of Islamic Studies > Volume 26, No. 3, 2014

Cartel Contract from a Jurisprudential Perspective / Abdul elah Ibn Mazroa Al Mazroa

This research deals with the study of the cartel contract from a fiqhi (Islamic jurisprudential, perspective. It aims to explore the Shari'ah rulings on the cartel contract, showing what is permissible and what is not. The research follows the inductive and deductive approaches. It reveals the following significant findings. Contracts are basically permissible so long as there is no evidence to the contrary. With respect to the cartel contract, it is subject to certain conditions: if it renders a particular needed good or service unavailable or restricted in the market, leading to high prices that harm the public, the contract becomes impermissible; compensation in cartel contracts is permissible, for it is in exchange for money justifying compensation. Regarding obligation in the cartel contract, it is conditional: if it involves something prohibited by Shari'ah, the obligation is invalid – in fact, it is not lawful to agree to it; if the deal is on something permissible, it is valid; if it involves a compensation, it is obligatory; if with no compensation, the contract is valid; if what is promised is included in expenses and commitment because of the contract, it is obligatory, but if not involved, the concerned party has the choice to sign or get out of the contract. Regarding a penalty clause in the cartel contract, it is basically permissible; if the involved companies or establishments cause harm to the public interest, the ruler can impose penalties to end monopoly. The research recommends that serious consideration be given to the study of modern contracts from the Islamic jurisprudential perspective.