Friday, April 24, 2009

Put Debts and Contracts in Writing

In the Quran, it is prescibed that debt and contracts must be put in writing. Such instruction has been in place since more that 1400 years ago. This can be found in verse 282 Surah Al-Baqarah. The translation from Yusuf Ali ( as follows:

"O ye who believe! When ye deal with each other, in transactions involving future obligations in a fixed period of time, reduce them to writing Let a scribe write down faithfully as between the parties: let not the scribe refuse to write: as Allah Has taught him, so let him write. Let him who incurs the liability dictate, but let him fear His Lord Allah, and not diminish aught of what he owes. If they party liable is mentally deficient, or weak, or unable Himself to dictate, Let his guardian dictate faithfully, and get two witnesses, out of your own men, and if there are not two men, then a man and two women, such as ye choose, for witnesses, so that if one of them errs, the other can remind her. The witnesses should not refuse when they are called on (For evidence). Disdain not to reduce to writing (your contract) for a future period, whether it be small or big: it is juster in the sight of Allah, More suitable as evidence, and more convenient to prevent doubts among yourselves but if it be a transaction which ye carry out on the spot among yourselves, there is no blame on you if ye reduce it not to writing. But take witness whenever ye make a commercial contract; and let neither scribe nor witness suffer harm. If ye do (such harm), it would be wickedness in you. So fear Allah. For it is God that teaches you. And Allah is well acquainted with all things."


1. Debts can occur when business transaction is not done in cash
2. All debts must be paid.
3. Debts must be put in writing so as to provide evidence and avoid doubt (about the occurrences, amounts and time to settle the debts)
4. An agreement writer and two male witnesses are required. Otherwise, one male and two female witnesses. (Note: At least one man is needed to be witnesses. Women are spared from the burden and social responsibilities, which can entangle them into court fight between the two parties involved in debt settlement of contract. Allah is just, since women are already burdened with the task of giving birth.)
5. Commercial contracts must also be put in writing.
6. Both parties must honour the obligations and contracts willingly so as not to burden the writer and the witnesses (in modern times, also include the guarantors).

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