Question Summary:
Can you please send me a Shari῾ah compliant lease agreement and an Islamic Employment contract or give me some guidelines on how to draw these two contracts?

Question Detail:

I request Mufti Saheb if possible to send a Shari῾a compliant lease agreement and an Islamic Employment contract to me. If this is not possible could Mufti Saheb give me some guidelines regarding drawing up these two contracts?

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
 
As-salāmu ‘alaykumwa-rahmatullāhiwa-barakātuh.
 
Al-Ijarah (hiring) contract has a number of terms and conditions in addition to the common terms and conditions that apply to other contracts. Hereunder are the basic terms and condition of Ijarah:
1.      Leasing is a contract whereby the owner of an item transfers its usufruct to another person for an agreed period of time, at an agreed amount.[1]
2.      A very important point is that everything must be specified and clear. There must be no ambiguity in the contract which may lead to a misunderstanding in future.
3.      The leased item must have a valuable use. Therefore, things having no usufruct at all cannot be leased.[2]
4.      It is necessary for a valid contract of lease that leased property remains in the ownership of the lessor, and only its usufruct is transferred to the lessee. Thus, anything which cannot be used without consuming cannot be leased out. Therefore, the lease cannot be effected in respect of money, eatables, fuel and ammunition etc. because their use is not possible unless they are consumed. If anything of this nature is leased out, it will be deemed to be a loan and the rules concerning the transaction of loan shall accordingly apply. Any rent charged on this invalid lease shall be an interest charged on loan[3].
5.      Generally, in Fiqh the Fuqahaa discuss the Ahliyyah (qualification) to carry out any particular act and generally , there are four qualifications: a) Muslim, b) Free, c) Sane, d) Adult
In Ijarah, the only condition of qualification is to be sane. That means an insane person cannot be an employer or a employee/worker. Being a Muslim is not necessary. The employer or the employee/worker or one of the two may be a non-Muslim. To be a free person is also not necessary. A slave who is granted permission from his master may be a employer or employee/worker. To be an adult is also not necessary. A minor who has reached an understandable age may be an employer or employee/worker on a issue that is of benefit to him/her, if there is a possibility of a loss, for example, in buying, selling, hiring, etc. then the minor requires the consent of his/her guardian to affect such a deal.[4]
 
Lease agreement
 
1.      The hired property must be in a useable condition (i.e., the lessee should be able to use the property for its intended purpose).[5]
2.      The duration of the hiring should be mentioned clearly at the time of the contract.[6]
3.      The rental amount should be mentionedin the contract.[7]
4.      Rental can be fixed at different amounts for different phases during the lease period.
EXAMPLE 1:
A leases his house to B for a total period of 5 years. The rent of the first year is fixed R2000 per month, and the rent of every subsequent year shall be 10% more than the previous one. This lease is VALID.
EXAMPLE 2:
A now puts a condition in the agreement that the rent of R2000 per month is fixed for the first year only. The rent for the subsequent years shall be fixed each year at the opinion of the lessor. This lease is VOID, because it is uncertain[8].
5. Lease of a jointly owned property is permitted and rentals shall be distributed between all the joint owners according to the proportion of their respective shares in the property.[9]
6.      The lessee is not permitted to use the subject (property, items etc) in a manner contrary to what is permitted by the contract. Specifically, the lessee is not allowed to inflict any harm on the subject (property, items etc) of the contract.[10]
7.      The lessee is liable to compensate the lessor for every harm to the leased asset caused by any misuse or negligence on the part of the lessee.[11]
8.      The leased asset shall remain in the risk of the lessor throughout the lease period in the sense that any harm or loss caused by the factors beyond the control of the lessee shall be borne by the lessor.[12]
9.      The lessor cannot charge an additional amount in case the lessee delays payment of the rent.[13]
10.  The lease period shall commence from the date on which the leased asset has been delivered to the lessee, no matter whether the lessee has started using it or not.[14]
11. The Ijarah contract can be terminated by mutual consent of the two parties.
12.  The Ijarah contract will be cancelled by any valid excuse such as the tenant becomes insolvent and he can’t pay the rent, so the contract of lease will be terminated.
13. The Ijarah contract will be cancelled by any valid excuse such as the tenant becomes insolvent and he can’t pay the rent, so the contract of lease will be terminated.[15]
14. If the lessee contravenes any term of the agreement, the lessor has the right to terminate the lease contract.[16]
15. The Ijarah contract will end by the death of one of the two parties.[17]
 
Employment contract
1.      The employee must be able to perform the job required of him or her.[18]
2.      The duration of the employment should be mentioned clearly at the time of the contract.[19]
3.      The wage must be fixed and specified, that is to say, so much per day or so much per month. It is not valid to say that a suitable wage will be paid. If someone is employed without fixing his salary or wage, then the agreement is invalid, and he will have to be paid Ujrat Mithli ( a fair wage which generally s determined by an impartial third party, government). However if the rate of some work is fixed, then agreement can be made without specifying the wage. And in the event of cancellation of the agreement, the worker will have to be paid for as many days as he has worked.
However, difference of place will be taken into account. The same rate will not be paid in a small town as in a big city, nor will the same amount be paid in a big city as in a small town.[20]
4.      The nature, place and times of work must be specified. The person being employed must be told the kind of work he will be required to do, where he will work and the time he will have to work, or the amount of work he will have to do and then his wages should be agreed, therefore, if the employee is to be asked to carry any task which was not mentioned at the time of employment, he may refuse to do so. For example, if you employ a worker you have to tell him that you will be paid so much. Each day you will have to do so much work, and you will be working in this factory or in this place, and it will be in a cloth mill or a shoe factory, because the place and type of work makes a difference to the wages.[21]
5.      The employee is not permitted to use the subject in a manner contrary to what is permitted by the contract. Specifically, the employee is not allowed to inflict any harm on the subject of the contract.[22]
6.      The position of a employee is an Amin (entrusted person) without Zamaanat i.e. trustee without liability. A trustee has to take full care of the item that he is entrusted with, but if by chance a item is lost or damaged, he will not be liable for compensation, but if he deliberately damages it, then he will be liable. In the same way, every worker and employee is a trustee of his employers’ property, i.e. the things that he uses or is put in charge of, and of the work he has been given to do. So, if by chance or because of some difficulty he falls short in his work, or by chance the things that he is using or are in his charge break down, or get damaged, then he will not be held responsible.[23]
7.      If on one day, the employer does not give his employee any work to do, then does he have to pay him for that? In this, there are two possibilities: one is that he is keeping him on the basis of a monthly or weekly wage, and the employee reported for work but was not given any work to do. In this case, he has to be paid for his time, as well as for his day off. But if is kept on a daily wage basis then he will have to be paid for the days on which he works, and not for the days on which he is not given work.[24]
8.      The Ijarah contract can be terminated by mutual consent of the two parties.
9.      Once an employer and employee have entered into a wage agreement, then neither party has the right to cancel it unless either party is confronted with some constraint or legitimate objection which excuses the employer from taking the work or the employee from doing the work.[25]
10. The Ijarah contract will end by the death of one of the two parties.[26]
ش
NOTE; The lessor or the employer may put any other conditions at what has been mentioned above, but the conditions has to be such that they are not conflict with the integrals of a transaction, as such we would advise that one send to Mufti or a Alim the contract with all added conditions made by the lessor or the employer so that the contract may be verify if all condition is in conformity with the integrals of a transaction or not.
 
We advise one to write down the contract made between the two parties, as was the practice and teaching of our messenger Muhammad Sallallahu Alaihi Wasallam:
حدثنا محمد بن بشار . حدثنا عباد بن ليث صاحبالكرابيسى . حدثنا عبد المجيد بن وهب قال : قال لى العداء بن خالد بن هو ذة : ألا أقرئك كتابا كتبه لى رسول الله صلى الله عليه وسلم قال قلت : بلى . فأخرج لى كتابا (هذا ما اشترى العداء بن خالد بن هو ذة من محمد رسول الله صلى الله عليه وسلم . اشترى منه عبدا أو أمة . لا داء ولا غائلة ولا خبثة ، بيع المسلم المسلم (سنن الترمذي –ج 2 – ص 230 – ايج ايم سعيد)
Hadhrat Abdul Majid Bin WahbRahimahullah narrates: Hadhrath Addaa Bin Khalid bin HauzhahRadhiallahu Anhu told me, “Should I not recite to you the letter that the messenger Muhammad Sallallahu Alaihi Wasallam wrote to me?”Hadhrat Abdul Majid Bin Wahb Rahimahullah says: I replied, “Yes indeed.” Then Hadhrat Addaa Bin Khalid bin Hauzhah Radhiallahu Anhu took out a written document for in which it was imprinted:
“This is what Addaa Bin Khalid bin Hauzhah purchased from Muhammad the Messenger of Allah Sallallahu Alaihi Wasallam.  He purchased from him a male slave or a female slave that had no sickness, no deceit, and no defect.  This is a transaction between a Muslim and another Muslim.” 
Sunan At-Tirmidhi, vol 2, pg. 230. Saeed.
We advise one to put a Mediation/ Arbitration clause such as:
Ay dispute arising from or in connection with this contract shall be finally resolved in accordance with the standard conditions of Mediation/Arbitration of the Darul IftaaMahmudiyyah Sherwood, Durban, by an arbitrator appointed by the Darul Iftaa or any other competent Darul Iftaa. 
 
And Allah Ta’āla Knows Best
Mufti Hussein Issa,
Student of Darul Iftaa
Mozambique
Checked and Approved by,
Mufti Ebrahim Desai.
www.daruliftaa.net