SYLLABUS
FACULTY ECONOMIC AND BUSINESS
INTERNATIONAL PROGRAM FOR ISLAMIC ECONOMICS AND FINANCE
(IPIEF)
1 Name of Course / Module
2 Course Code
3 Credit Value
4 Objective
5 Learning Outcomes
Law of Contract in Islam
EU5204
2 credit hours
1. To provide the students with the introductory
knowledge of Islamic Law (Fiqh).
2. To teach students the theories of Fiqh on property
(maal), rights (huquq), ownership (milkiyah) and
contract (‘aqd).
3. To prepare students for the study of the various
Islamic commercial transactions
4. To expose students to issues related to debt and its
treatment in Fiqh.
5. To enhance the students’ skills in relation to the
application of Islamic commercial and financial
transactions.
1. Knowledge and Understanding (Basic Competence)
Upon the completion of the course, the students
should be able to:
 Describe the concept and theory of Islamic law of
muammalah and contract in economic, finance
and business.
 Understand how to explain general theory of
knowledge and negative elements in transactions.
2. Intellectual Skill (Standard Competence)
Upon the completion of the course, the students
should be able to:
 Demonstrate the importance of the knowledge of
Fiqh Muammalah
 Demonstrate the ability to identify the prohibitive
elements in financial and commercial activities.
 Demonstrate the knowledge of the theory of
contract (nazariat al-‘aqd)
3. Practical Skill
Upon the completion of the course, the students
should be able to:
 Apply various types of transactions to their daily
business activities.
 Apply Islamic transactions as alternatives to
 current business practices.
4. Managerial Skill and Attitude
Upon the completion of the course, the students
should:
 Possess ability to analyze the prohibitive elements
in financial and commercial activities.
 Possess ability to do a simple analyze the hybrid
contract for their future research.

It is an introductory course which deals with the

definition of some basic Shariah terms in relation to Fiqh-
ul-Mu’ammalah. The course also includes discussions on
the theories of property, rights, ownership and contracts.
However, the course more discussed in detail some
important contracts, which are related to present
economic/business and financial practices especially in
6 Synopsis
Islamic banking and finance. The course while focusing
on the various types of commercial contracts and their
applications also covers fundamental principles of
commercial and financial transactions in Islamic law. It
also includes a chapter on the concept of debt (dayn) and
its related contracts.

Required:
1. Wahbah Zuhaili, Financial Transactions in Islamic
Jurisprudence, (original book: Fiqh al-Islam wa
Adillatuhu) translated into English by Mahmoud A. El-
Gamal, vols. 1-2, Damascus: Dar al-Fikr al-Mouaser,
2003
2. Muhammad Yusuf Saleem, An introduction to the
Theoretical Foundations of Islamic Transactions,
Kuala Lumpur: Ilmiah Publisher, 2009
3. Saiful Azhar Rosly, Critical issues on Islamic Banking
and Financial Markets, Kuala Lumpur: Dinamas, 2008
7 References
4. Muhammad Ayub, Understanding Islamic Finance,
England: John Wiley & Sons, Ltd, 2007

Recommended:
1. Mohammed Hashim Kamali, Principles of Islamic
Jurisprudence, Kuala Lumpur: Ilmiah Publisher, 2007
2. Mohammad Hashim Kamali, Maqasid al-Shari’ah Made
Simple, London: IIIT, 2008
3. Monzer Kahf, Maqasid al Shari’ah in the Prohibition of
Riba and their Implications for Modern Islamic Finance,
IIUM international conference on Maqashid al-Shariah,
2006
 4. Mohammad Daud Bakar, Contracts in Islamic
Commercial and Their Application in Modern Islamic
Financial System, Kuala Lumpur: IIUM
5. Essia Ries Ahmed, Factors Influencing the
Involvement in Shubuhat Activities: The Case of
Shari‘ah-Complaint Companies in Bursa Malaysia,
International Conference on Islamic Banking &
Finance, 2010
6. Siddiq Mohammad al-Ameen al-Dhareer, Al-Gharar in
Contracts and Its Effect in Contemporary Transaction,
Eminent Scholar’s Lecture Series no. 16, Jeddah: IDB-IRTI
7. Md. Abdul Awwal Sarker, Islamic Business Contracts,
Agency Problem And The Theory Of The Islamic Firm,
International Journal Of Islamic Financial Services Vol. 1
No.2
8. Boualem Benjilal, The Ja’ala Contract and Its Applicability
to the Mining Sector, Discusion Paper no.14, Jeddah: IDB
& IRTI, 2004
9. Beebee Salma Sairally, Murabahah Financing: Some
Controversial Issues, Review of Islamic Economics, No. 12,
2002, pp. 73-86
10. Soemitra, M.A. Andri, Bank dan Lembaga Keuangan
Syariah, Jakarta: Kencana, 2009.

8 Lecturer Yuli Utami, M.Ec

IPIEF Room 402, Pasca Sarjana building, 2nd floor
9 Correspondence E-mail: yuliutami@umy.ac.id
WA: +62 85729989054
10 Consultation time Wednesday and Saturday (08.00am to 02.30pm)
Test Competency I (30%), and II (30%)
Memorizing 10 Verses about Riba (35%)
11 Academic Evaluation
Attendance (5%)
Total 100%

Instructional
Week Topics Indicators Strategies
1,2 Introduction to Disciplines (aqidah, akhlaq and al-fiqh)  Provide the study
Shariah  The relationship between Shariah, al-fiqh and plan, the study
Economics method, the
 Enable some methods to approach Fiqh literatures and the
Muammalah (i.e.: using details usul al-fiqh, activities along the
fiqh legal maxims and maqasid al-shariah) semester
 Class Lectures and
case studies
3 Riba Definition and Type Class Lectures,
 Debt Riba: Qard and Jahiliyah discussion and case
 Trade Riba: Nasiah and Fadl studies

Wealth Definition and Types Class Lectures,

 Mutaqawwim-Ghair mutaqawwim discussion and case
 Aqar-Manqul studies
 Mithli-Qimi
 Istihlaki-Isti’mali
(hint: The relevance of the classical fuqaha’s
definitions of wealth in relation to the modern
economic system)

Theory of Definition and Types Class Lectures,

Ownership  Incomplete and limits ownership discussion and case
 Private, public and state ownership studies

4 Option (Khiyarat) Basis for options and their types Class Lectures,
Khiyar al-majlis, khiyar al-shart, khiyar al-ayb, discussion and case
khiyar al-ru’yah and khiyar al-ta’yin studies

Theory of Rights Definition, Pillars and Types Class Lectures,

(hint: importance of understanding of the discussion and case
concept of rights in muammalah) studies

5 Theory of  Definition and the Importance of ‘Aqd Class Lectures,

Contract (‘Aqd)  Formation of ‘Aqd discussion and case
 Expression: definition, means & conditions studies
 Performer: ahliyyaah, wilaayah, wakaalah,
fadzaalah
 Object ‘Aqd
 Objective of ‘Aqd
 Intention in ‘Aqd
 Effect of ‘Aqd
 Classification of ‘Aqd
According to characteristic, objective,-effects,
physical-non physical, time of execution
 Necessary conditions of ‘Aqd
Performance, specific & general, validity and
binding.

 Termination of ‘Aqd
(hint: relevance of the theory in the current type
of transaction)
6 Negative Avoiding Riba, gharar, shubuhat, maisir and Class Lectures,
Elements in games of chance discussion, case
transactions studies and
simulation
‘Iwad and Lawful Definition, constituent elements & conditions
profits in Islam
Week 7: 1st competence exam
8 Sale Contract  Definition, constituent elements & conditions Class Lectures,
 Invalid and defective sales discussion, case
 Bai’ al’urbun studies and
simulation
  Bai’ al-dayn
 Bai’ al-inah
 Types of sale
 Bargain sale (buyu’ al-musawwamah)
 Trust sale (buyu’ al-amanah)
 Murabahah, tawliyah and wadhiah sales
 Bai’ bithaman aajil (BBA)
 Deferred Delivery sale (salam)
 Manufacturing sale (istisna)
 Currency exchange (sarf)
9-11 Other Contracts  The Lease contract (ijarah) Class Lectures,
 Definition, constituent elements and discussion, case
conditions studies and
 The classification of ijarah simulation
 Hire of property (ijarah al-‘ayn)
 Labor, employment and service (ijarah al
shakhs)
 I’arah
 Ji’alah
 Contract of Agency (wakalah)
 Definition, constituent elements and
conditions
 Wakalah fi al-bai’
 Wakalah fi al-shira’
 Deposit (wadhi’ah)
 Definition, constituent elements and
conditions
 Loan (Qardh)
 Definition, constituent elements and
conditions

12 Partnership  Sharikah al-Amlak (al-Milk) Class Lectures,

contract (al-  Sharikah al’Uqud discussion, case
Sharikah)  Sharikah al-Amwal studies and
 Sharikah al-mufawwadha, simulation
 Sharikahal’inan
 Sharikah al-abdan
 Sharikah al-wujuh
 Silent Partnership (al-Mudharabah)
Definition, constituent elements and
condition

13 Islamic Insurance Takaful Class Lectures,

and Transactions Contact of Pledge (Rahn) discussion, case
involving debt The contract of guarantee (kafalah) studies and
(Dayn) Transfer of Debt (hawalah) simulation
Letter of Credit (suftajah)
Discount and Advance (dha’wa ta’ajjal)
Absolution or Release from Liability (Ibra)
Debt-clearence or Set-off (muqasah)

Week 14: 2nd competence exam

Rules of class meeting:

1. A class will be managed by class leader, consists of a class leader and its deputy. They
are selected democratically according to class members’ aggrement. The class leaders
will get additional appreciation in terms of marks for respectively 10% and 7.5% out of
normal marking arrangement above. Practically, they are responsible for several tasks:
a. Ensuring class attendance and venue
b. Ensuring class assignment timely collected
c. Intermediating communicating between lecturer and students
d. Assisting other related tasks concerning class if deemed necessary
2. Students are allowed to join class for tolerated maximum 10 minutes for late attendance,
otherwise are forbidden entering class
3. Students who are absence due to getting sick and organizational activities must inform the
lecturer and class leader 2 hours prior the class starts.
4. Late assignment submission will not be entertained and accepted
5. Students who were absence for three consequtive weeks or accumulately has 3 unclear
absence, are not allowed to join class for the entire semester .
6. Test examination and assignment results will be openly announced
7. Students who got D and E on his final marks, must repeat the course on the next academic
year
8. Cheating and any dishonest conduct will lead to dismissal
9. Students are required to actively visit BI research corner at least once a week. The visits
will imply to additional 5% mark in the end of semester. A visit must get stamp from the
library staff.
10. Grading System:

Grading and Weight Interval (%)

A A≥80
AB 75≤AB<80
B 65≤B<75
BC 60≤BC<65
C 50≤C<60
D 35≤D<50
E <35