‎⁨عقد بيع و ايجار⁩.pdf

# The contract of lease: definition and characteristics This section details the fundamental definition and key characteristics of a contract of lease [66](#page=66). ### 1.1 Definition of the contract of lease A lease is defined as a contract where the lessor undertakes to grant the lessee the utilization of the leased property in exchange for a consideration [67](#page=67). **Key notes on the definition:** * A lease does **not** involve a transfer of ownership [67](#page=67). * The primary subject matter of a lease is the **utilization** of the leased property [67](#page=67). * Unlike a sale contract, the consideration in a lease can be money or any other form of value [67](#page=67). ### 1.2 Characteristics of the contract of lease The contract of lease possesses several distinct characteristics: #### 1.2.1 Consensual contract A lease is a consensual contract, meaning it is concluded upon the mutual agreement of the parties' minds. Unlike formal contracts, writing is not a mandatory requirement for its validity [68](#page=68). > **Tip:** This implies that a lease agreement can be established verbally or through conduct, though a written agreement is highly advisable for clarity and evidence. #### 1.2.2 Bilateral contract It is a bilateral contract, signifying that both the lessor and the lessee are bound to fulfill an obligation towards each other. This stands in contrast to unilateral contracts, where only one party has an obligation to the other [68](#page=68). #### 1.2.3 Commutative contract The lease is a commutative contract, wherein each party receives an equivalent in return for fulfilling their obligation. Specifically, the lessor receives a consideration, while the lessee gains the utilization of the leased property [68](#page=68). #### 1.2.4 Executory contract A lease is an executory contract. While the contract itself is formed upon the exchange of offer and acceptance, the actual performance of the lease obligations occurs over a period of time that can extend for years. In contrast to executed contracts, time is an essential element in the contract of lease [68](#page=68). --- # Pillars of the contract of lease: mutual assent and subject matter The contract of lease, like any contract, is founded upon three essential pillars: mutual assent, subject matter, and cause; the absence of any one of these will render the contract null and void. This study will focus specifically on the first two pillars: mutual assent and subject matter, as there are no unique rules governing the third pillar [69](#page=69). ### 2.1 Mutual assent in the contract of lease Mutual assent, also known as consent, is a fundamental requirement for a valid lease contract, necessitating that both the lessor and the lessee express their will to enter into the agreement. This involves one party making an offer, and the other party making an acceptance that is identical to the offer [70](#page=70). #### 2.1.1 Declaration of will The declaration of will by either party can be: * **Explicit:** This can be communicated through words, writing, or a customary sign [70](#page=70). * **Implicit:** This occurs when a party takes an action that leaves no doubt about their intention to enter the lease agreement [70](#page=70). * **By silence:** In very exceptional circumstances, silence may be considered a declaration of will, in accordance with general civil law rules [70](#page=70). > **Tip:** While explicit declarations are straightforward, understanding implicit consent requires careful consideration of actions and their unambiguous implications. #### 2.1.2 Vices of consent and legal capacity Crucially, the declarations of will must be free from vices of consent. Furthermore, both the lessor and the lessee must possess the necessary legal capacity to enter into a contract [71](#page=71). #### 2.1.3 Lessor's power to dispose For the lessor specifically, they must possess the power to dispose of the leased property. A lease contract concluded by a party who is not the rightful owner (an officious lessor) will be suspended and can only become valid if the true owner ratifies the agreement [71](#page=71). > **Example:** If an individual leases out a property they do not own without the owner's permission, the lease contract is suspended. It only becomes legally binding if the actual owner subsequently approves or ratifies the lease. ### 2.2 The subject matter in the contract of lease The subject matter of a contract encompasses the totality of the objects of the obligations arising from that contract. In the context of a lease contract, the subject matter comprises two key elements [72](#page=72): 1. **Utilization of the leased property for a specific period:** This is the object of the lessor's obligation [72](#page=72). 2. **The rent:** This is the object of the lessee's obligation [72](#page=72). Consequently, the study of the subject matter in a lease contract will involve examining three distinct topics: the utilization of the property, the lease term, and the rent [72](#page=72). --- # Seller's obligations regarding delivery of the sold property The seller's primary obligation regarding the delivery of the sold property involves ensuring the transfer of ownership and facilitating the buyer's possession and use of the item [47](#page=47). ### 3.1 Transferring ownership The method by which ownership is transferred depends on whether the sold property is movable or immovable [43](#page=43). #### 3.1.1 Immovable property (real estate) For immovable property, ownership is transferred through registration in the official real estate records at the ministry of housing. Although an unregistered contract remains valid if its three essential pillars are met, the transfer of ownership is postponed until registration. If the seller refuses to assist with the registration, the buyer has recourse through legal action [43](#page=43). ##### 3.1.1.1 Lawsuits for registration assistance * **Authenticity of signature lawsuit ( دعوى صحة التوقيع )** This is a formal lawsuit aimed at proving that the signature on the contract belongs to the seller. It does not affect the origin of the right, the validity of the contract, or the transfer of ownership itself. Once the court verifies the seller's signature, the buyer can then demand that the seller fulfill their duty to transfer ownership via registration. The court verifies the signature by [44](#page=44) [45](#page=45): 1. Confirming it if the seller appears and admits it is their signature [45](#page=45). 2. Using an expert to verify it if the seller appears but denies the signature [45](#page=45). 3. Confirming it if the seller does not appear despite being properly notified [45](#page=45). * **Validity and enforceability of the contract of sale lawsuit ( دعوى صحة العقد أو دعوى صحة ونفاذ العقد )** This lawsuit offers an alternative to direct registration of the contract in the real estate records. The buyer requests the court to confirm the contract's validity and order the seller to perform their obligation to deliver the property. The court determines the contract's validity by examining its pillars. If the contract is deemed valid, the court's decision can be registered in the official real estate records, thereby transferring ownership to the buyer. This lawsuit can be initiated by the buyer or their heirs against the seller or their heirs [46](#page=46). #### 3.1.2 Movable property identified by kind If the sold property is a movable item identified by its kind (generic), the seller is obligated to sort out or specify the sold property within a reasonable period [47](#page=47). ### 3.2 Conditions affecting ownership transfer It may be agreed that the transfer of ownership is delayed until the full price is paid, even if the property has already been delivered. However, once the full price is paid, the buyer owns the property from the moment the contract was concluded [47](#page=47). ### 3.3 What must be delivered? The seller must deliver not only the sold property itself but also any accessories that are necessary for its use or are customarily delivered with it, even if not explicitly stated in the contract [49](#page=49). > **Example:** If a mobile phone is sold, the seller is expected to also deliver its battery [49](#page=49). ### 3.4 Place of delivery The parties to the contract should agree on the place of delivery. In the absence of such an agreement, custom will be resorted to. If neither an agreement nor a custom exists, the seller must deliver the property wherever it is located at the time the contract was made [49](#page=49). ### 3.5 Method of delivery Delivery can be actual or assumed [50](#page=50). #### 3.5.1 Actual delivery Actual delivery occurs when the seller enables the buyer to take possession of the sold property. It is sufficient that the buyer is able to take possession, not necessarily that they have actually taken it over. The method of delivery must be consistent with the nature of the sold property [50](#page=50). > **Examples:** > * For a house, delivery involves evacuating it and handing over the keys [50](#page=50). > * For a laptop, delivery is typically hand-to-hand [50](#page=50). > * For an eBook, delivery can be via email or by making it available for download [50](#page=50). #### 3.5.2 Assumed delivery Assumed delivery means the seller does not physically hand over the property, but the buyer is considered to have received it [51](#page=51). > **Example:** If the buyer was already in possession of the property in some capacity before the contract was concluded (e.g., renting a house before buying it), they are assumed to have received it upon purchase [51](#page=51). --- # Conditions for a valid sale contract A valid sale contract requires the fulfillment of several essential conditions to be legally binding and effective. ### 4.1 The subject matter of the sale The subject matter of a sale contract must be a legitimate and identifiable good [17](#page=17) [19](#page=19). #### 4.1.1 Legitimacy of the good A good is considered legitimate if it falls within the scope of permissible dealings. Goods are generally considered within the scope of dealing, with specific exceptions [19](#page=19): * **Things outside the scope of dealing by nature:** These are items that cannot be claimed as property by anyone, such as sunrays, seawater, or air [19](#page=19). * **Things outside the scope of dealing by rule of law or Shari’ah:** These are items whose ownership can be claimed but are prohibited by law or Islamic Shari’ah, including examples like drugs, wine, or poker machines [19](#page=19). #### 4.1.2 Identifiability of the good The subject matter must be identifiable. While it does not need to be specifically identified at the exact moment of the contract, it must be capable of identification at a later time. This is often facilitated by the contract specifying the location of the goods [18](#page=18). ##### 4.1.2.1 Lump sale A lump sale is a contract where a specific group of fungible goods is priced and sold as a single unit without individual weighing, counting, or measuring [17](#page=17). > **Example:** Selling all the goods in a store for a fixed sum, or selling all the sugar in a store for a specific amount. Only fungible goods can be the subject of a lump sale. Such sales are valid because, even if the exact quantity isn't identified at the contract's inception, it can be identified later, often due to the agreed-upon location of the goods [17](#page=17) [18](#page=18). ### 4.2 Ownership of the good The seller must own the good they are selling to be able to fulfill the obligation of transferring ownership. There is a distinction between the sale of future things and a sale by a non-owner [20](#page=20): * **Sale of future things:** This involves selling something that does not yet exist. The seller is not the owner at the moment of contracting, but no one else claims ownership either [20](#page=20). * **Sale by a non-owner:** This occurs when a person sells a specific item that is already owned by someone else [20](#page=20). #### 4.2.1 Sale by a non-owner If a person sells property owned by another, the sale is suspended and does not bind the true owner, as they are a third party to the contract. However, the sale can become valid and effective in two circumstances [21](#page=21): 1. **Ratification by the real owner:** The true owner can explicitly or implicitly ratify the sale [22](#page=22). * **Explicit ratification** involves a clear statement of consent [22](#page=22). * **Implicit ratification** can be demonstrated through behavior that leaves no doubt about consent [22](#page=22). * Ratification can also be inferred from silence if custom dictates that silence denotes consent [22](#page=22). * If the real owner ratifies the sale, the contract is considered valid and effective from its original conclusion date [22](#page=22). * Conversely, if the real owner refuses to ratify, the contract becomes void [22](#page=22). 2. **Transfer of ownership to the seller:** If the ownership of the sold property is transferred from the real owner to the seller, the contract becomes valid and effective. This is because the seller, who was not the owner at the time of the contract, becomes the rightful owner, thereby validating the contract [23](#page=23). --- # Essential elements of a lease contract A lease contract is fundamentally defined by three essential elements: the utilization of the leased property, the rent, and the term of the lease [73](#page=73). ### 5.1 The utilization (or the leased property) The utilization, or the leased property itself, is the subject matter of the lease agreement. Three conditions must be met for this element to be valid [73](#page=73): #### 5.1.1 Existence or future existence The leased property must either exist at the time of the contract or be capable of existing in the future [73](#page=73). * **Example:** A lessor can offer their currently owned house for rent, or they can offer a house that is still under construction, provided the rent period begins only after construction is completed [73](#page=73). #### 5.1.2 Determination or determinability The leased property must be clearly defined or capable of being defined at a later stage [74](#page=74). * **Example:** If a lease contract specifies a car by its make, model, and number, the leased property is considered determined. If the contract only specifies the make and model of the car without its number, it is still considered valid because, although not determined, it is determinable at a later date [74](#page=74). #### 5.1.3 Legitimacy The utilization or leased property must be lawful and permissible within the scope of legal dealings [74](#page=74). * **Example:** A lessor cannot offer illegal items such as a poker machine or drugs for rent, as these are outside the scope of permissible dealings [74](#page=74). ### 5.2 The rent Rent is a critical and essential element of a lease contract. If the lessee is not obligated to pay any fees to the lessor, the contract is not considered a lease agreement but rather a lending contract (عقد الإعارة). A lending contract involves the free use of a non-consumable item for a specific period, with the expectation of its return. These contracts are generally non-binding and can be terminated by either party at any time [75](#page=75). #### 5.2.1 Seriousness and valuation of rent Rent must be serious and cannot be absolutely simulated or trivial. However, it can be undervalued, similar to explanations in the contract of sale [76](#page=76). #### 5.2.2 Nature of rent Rent can be in the form of currency money, property, debt, or the utilization of another thing [76](#page=76). #### 5.2.3 Determination or determinability of rent In compliance with general civil law principles, rent must be determined or determinable within the contract [76](#page=76). * If the rent is in currency, the contract must specify the exact amount [76](#page=76). * If the rent is something other than currency, the contract must specify its description and quantity [76](#page=76). * **Example:** The rent could be determined as "one Samsung TV, 40-inch LCD Screen" [76](#page=76). #### 5.2.4 Consequences of undetermined rent If the rent is not determined in the contract, the contract can be rescinded, but the lessee must pay rent for the past period based on the rent of an equivalent item [77](#page=77). #### 5.2.5 Payment terms The parties to the contract can agree on when rent is to be paid: immediately, at a later date (postponed), or in installments according to a schedule [77](#page=77). * In the absence of a specific agreement, rent is due once the lessee utilizes the leased property or is able to do so [77](#page=77). #### 5.2.6 Obligation to pay rent The lessee is not obligated to pay any rent unless they receive the leased property. If the lease term begins and the lessor fails to deliver the property, the lessee is not required to pay rent for that period [78](#page=78). * **Exception:** This rule does not apply if the property is not delivered due to a reason attributable to the lessee. For instance, if the lessor cannot deliver the property because the lessee is traveling, the lessee must pay rent even if they have not utilized the property [78](#page=78). ### 5.3 Term of the lease The term of the lease refers to the duration of the lease agreement, specifying when it begins and when it ends [79](#page=79). #### 5.3.1 Determination of the lease term The parties to the contract should determine the effective date and the termination date of the lease [79](#page=79). #### 5.3.2 Restrictions on the lease term Generally, there are no restrictions on the duration of a lease term, which can range from a few minutes to several years [79](#page=79). * **Exceptional Case:** If the leased property is a trust (وقف) or belongs to an orphan, the lease term should not exceed three years unless court permission is obtained. If the parties agree on a term longer than three years in such cases, the contract is only considered valid for three years [79](#page=79). --- # Subject matter of a contract of sale: the good The subject matter of a contract of sale encompasses both the goods being sold and the price to be paid, with a focus on the characteristics and conditions that the goods must satisfy [9](#page=9). ### 6.1 The subject matter of the contract of sale The subject matter of a contract of sale fundamentally consists of two key components: the good or the sold property, which is the object of the seller's obligation, and the price, which is the object of the buyer's obligation [9](#page=9). ### 6.2 Conditions for the good For the good to be a valid subject matter of a contract of sale, it must satisfy the general conditions for the subject matter of any obligation. These conditions include: 1. It must be an existing good or a future good that has the potential to exist [10](#page=10). 2. It must be an identified good or a good that is capable of being identified [10](#page=10). 3. It must be legitimate [10](#page=10). 4. It must be owned by the seller [10](#page=10). #### 6.2.1 An existing good or a future good The subject matter of a contract of sale can be either an existing good, such as a house already built, or a future good, like a house under construction. However, any dealing involving the estate of a living person is considered void; for instance, a son cannot sell property he expects to inherit from his father while the father is still alive [11](#page=11). #### 6.2.2 An identified good or a good that can be identified Goods must be identifiable for a contract of sale. Two types of goods are distinguished in this regard: * **Non-fungible goods** (قيمي): These are unique and not interchangeable items. An example is a piece of land, which is identified by its specific location and area [12](#page=12). * **Fungible goods** (مثلي): These are interchangeable items. An example is rice, which is identified by its grade, weight, and quality [12](#page=12). ##### 6.2.2.1 The sale by sample or modal When a perfect description of a good's quality is not feasible, such as for a toy made of plastic, the contract could be void due to an unidentified subject matter. A solution to this problem is the sale by sample, where the seller provides a sample of the good for the buyer to inspect [13](#page=13). > **Tip:** The sale by sample is a mechanism to ensure clarity and prevent contracts from being voided due to difficulties in describing quality. In a sale by sample, the seller presents a sample of the good to the buyer before the contract is concluded. If the buyer approves the quality of the sample and agrees to the contract, the goods delivered must be identical to this sample. The buyer must be afforded a reasonable opportunity to compare the delivered goods with the sample. If the goods are delivered before the buyer has verified their identicalness, they are not presumed to have been accepted for a reasonable period to allow for such testing [13](#page=13) [14](#page=14). If the delivered goods are not identical to the sample, the buyer has the option to approve or disapprove them [15](#page=15). * If the buyer approves non-identical goods, the seller is considered to have fulfilled their obligation [15](#page=15). * If the buyer disapproves non-identical goods, the seller is deemed to have breached their obligation. In this scenario, the buyer has several remedies: 1. Obtain identical goods from another merchant in the same quantity, either with court permission or without it in cases of necessity [15](#page=15). 2. Request the cancellation of the sale due to the seller's failure to meet their obligation [15](#page=15). 3. Ask for compensation [15](#page=15). In cases of disagreement between the parties regarding the identicalness of the sold goods to the sample, an expert must make the decision. If it becomes impossible to determine identicalness because the sample has perished, the following distinctions are made [16](#page=16): * If the sample perished while in the seller's possession, the buyer's determination prevails unless the seller can prove otherwise [16](#page=16). * If the sample perished while in the buyer's possession, the seller's determination prevails unless the buyer can prove otherwise [16](#page=16). This type of sale by sample is applicable only to fungible goods [16](#page=16). ### 6.3 Provisions of sale subject to testing Sales can be made subject to a testing period, during which the buyer can evaluate the goods [5](#page=5). * The parties should clearly define the testing period in the contract; if not specified, the customary period is assumed [5](#page=5). * The seller is obligated to enable the buyer to perform the test [5](#page=5). * The buyer retains the right to approve or reject the sale during the testing period, even if the test has not been fully conducted [5](#page=5). * To reject the sale, the buyer must notify the seller within the testing period [5](#page=5). If the testing period expires, the buyer had the opportunity to test the property, and they do not declare approval or rejection, they are presumed to have approved the sale, even if the test wasn't fully performed, as long as the item remains in their possession [6](#page=6). > **Example:** If a buyer receives a machine under a testing period, and after the period ends, they have not communicated their decision, the sale is considered approved, provided the machine is still with them. If the sold property is destroyed while in the buyer's possession during the testing period, the buyer must pay the stipulated price to the seller. Conversely, if the property is destroyed while in the seller's possession before delivery and for a reason unrelated to the buyer, the responsibility lies with the seller [6](#page=6). A sale subject to testing is binding from the date of the sale, not the date of approval [6](#page=6). #### 6.3.1 Legal capacity during the testing period If a buyer possesses the necessary legal capacity at the time of the contract but subsequently loses it during the testing period, the approval or rejection must be made by their custodian, guardian, or curator [7](#page=7). #### 6.3.2 Death of the buyer during the testing period If the buyer dies during the testing period before exercising their option to approve or reject the sale, the situation depends on whether the buyer has creditors whose debts exceed the value of the sold property [7](#page=7). * If the buyer has a creditor whose debt exceeds the value of the sold property, the option to approve or reject transfers to the creditor [7](#page=7). * If the buyer has no such creditor, the option transfers to the heirs. If some heirs wish to approve and others wish to reject, the sale is rejected [7](#page=7). #### 6.3.3 Use of the property during the testing period The buyer is not permitted to use the property sold during the testing period beyond what is customarily required for testing. Any use exceeding this customary extent will render the sale binding [7](#page=7). --- # Requirements for a defect to be covered by seller warranty The seller warrants the sold property against hidden defects, even if not explicitly stated in the contract, provided the defect meets specific criteria. If the buyer dies, this warranty transfers to their heirs. For a defect to be covered by a seller's warranty, it must satisfy three conditions: it must be old, serious, and hidden [56](#page=56). ### 7.1 The defect must be old A defect is considered old if it existed in the sold property before the contract of sale was concluded. It also qualifies as old if it occurred after the contract conclusion but before the property was delivered to the buyer. Additionally, a defect is considered old if it arose after the contract and delivery due to another pre-existing old cause within the property that existed while it was in the seller's possession [57](#page=57). > **Example:** If a person buys an animal infected with a disease, and the symptoms only appear after they receive it, the defect is considered old [57](#page=57). ### 7.2 The defect must be serious Not all defects are covered by the seller's warranty; those that are customarily allowed, typically being trifle, are not. Examples of such defects include rice straw in a package of rice. A defect is deemed serious in two cases: if it decreases the value of the sold property, or if it renders the property unfit for its intended purpose. Determining whether a defect is serious is a matter of fact for the trial judge to decide without higher court supervision [58](#page=58). ### 7.3 The defect must be hidden A hidden defect is one that a reasonable buyer could not detect upon inspecting the sold property at the time of concluding the contract. Essentially, it is a defect that only an expert could identify. The rationale behind the hidden defect warranty is not that the buyer is unaware of defects, but rather that these defects cannot be detected by a reasonable buyer at the time of sale [59](#page=59). When assessing if a reasonable person could have detected a defect during inspection, external surrounding circumstances must be considered, not personal circumstances. For instance, inspecting a property in a dark place is a relevant consideration. However, a buyer's personal condition, such as suffering from low vision, should not be taken into account [60](#page=60). There are exceptions where the seller shall warrant even apparent defects: 1. If the seller assured the buyer that the sold property was free from defects [60](#page=60). 2. If the buyer can prove that the seller intentionally concealed the defect [60](#page=60). ### 7.4 Circumstances where the seller is not responsible for hidden defects The seller is not responsible for hidden defects in the following three cases [61](#page=61): 1. If the sale occurs by auction conducted by judicial or administrative authorities [61](#page=61). 2. If the buyer was aware of the hidden defect at the time of sale through any means [61](#page=61). > **Applications:** > * The buyer might have been able to detect the hidden defect during pre-sale inspection [61](#page=61). > * The seller may have disclosed the hidden defect at the time of sale [61](#page=61). 3. If the buyer accepts the hidden defect after the sale. Evidence of such acceptance could include receiving the property after becoming aware of the defect, frequently using the property after learning of the defect, or selling the property to a third party after knowing about the defect [62](#page=62). ### 7.5 Consequences of finding a hidden defect If a buyer discovers a hidden defect in the sold property, they have two primary options [63](#page=63): * Rescind the contract and be reimbursed the sale price [63](#page=63). * Ratify the contract without demanding a price decrease [63](#page=63). There are exceptional circumstances where the buyer cannot rescind the contract and can only ask for a price decrease. These exceptions include [63](#page=63): 1. If the defective sold property was damaged while in the buyer's possession [63](#page=63). 2. If the buyer consumed the defective sold property [63](#page=63). 3. If a new defect arises in the defective property, unless the seller accepts the new defect. However, if the new defect is repaired, the buyer regains the power to rescind the contract [63](#page=63). 4. If the defective sold property is connected to another property of the buyer in a way that makes separation impossible, such as floor tiles [63](#page=63). ### 7.6 Time limits for warranty claims The buyer must sue the seller based on the warranty against hidden defects within one year of receiving the sold property. This period can be extended under specific circumstances [64](#page=64): 1. If the contract stipulates a warranty period longer than one year [64](#page=64). 2. If the seller commits fraud by attempting to conceal the defect [64](#page=64). --- # Conditions for a valid price in a contract of sale The price in a contract of sale is a monetary consideration that the buyer must pay in exchange for the seller transferring ownership of the sold property, and it must satisfy three crucial conditions to ensure the validity of the contract [24](#page=24). ### 8.1 The nature of price in a sales contract The price is one of the two essential pillars of a sales contract, alongside the sold property. It represents the buyer's obligation in return for the seller's obligation to transfer ownership [24](#page=24). #### 8.1.1 Determination of price As a general rule, the price is determined by the agreement between the seller and the buyer, which can be explicit or implied. If parties have a continuous dealing but fail to agree on a price for a specific transaction, the price will be what they have typically used in their past dealings [24](#page=24). * **Exceptions to party agreement:** In certain situations, one or both parties may lack the power to agree on the price. This occurs when property is sold at auction, where the seller has no role in price determination, or when the government imposes a compulsory price for specific goods, overriding the parties' discretion [25](#page=25). #### 8.1.2 Timing of price payment Generally, the price is due at the time of contracting. However, payment can be postponed or made in installments based on [25](#page=25): * An agreement between the parties [25](#page=25). * Custom [25](#page=25). If the price is postponed or in installments, the payment term, often referred to as 'الأجل', commences from the date the sold property is delivered, unless otherwise agreed [26](#page=26). > **Example:** On March 1st, A buys a car from B, agreeing to pay the price one month later. B delivers the car to A on March 15th. In this scenario, the price becomes due on April 15th [26](#page=26). #### 8.1.3 Partial payment and delivery If the buyer pays only a portion of the price, they generally cannot demand delivery of a corresponding part of the sold property if doing so would diminish the overall value of the property [26](#page=26). ### 8.2 Conditions for a valid price For a price to be considered valid in a contract of sale, it must meet three fundamental conditions [26](#page=26): 1. It must be currency money. 2. It must be determined or determinable. 3. It must be serious. #### 8.2.1 The price must be currency money The price must consist of currency money [27](#page=27). * If A sells their car to B in exchange for another car, this transaction is not a sale but a barter because the other car is not considered a price [27](#page=27). * Similarly, if A sells their car to B in exchange for gold, this is also considered a barter, not a sale [27](#page=27). The parties can agree that the buyer will pay the price immediately or at a later time, either in full at once or in installments. Payment can be made via cheque or in the form of an annuity for the seller's lifetime [27](#page=27). #### 8.2.2 The price must be determined or determinable If the price is not explicitly determined in the contract, the contract remains valid provided the price is determinable. However, if the price is neither determined nor determinable, the contract is considered void due to significant uncertainty [28](#page=28). ##### 8.2.2.1 When a price is NOT determinable A price is deemed NOT determinable if the parties agree to: * A "fair price" [28](#page=28). * A price "appropriate to the value of the sold property" [28](#page=28). * A price to be determined by the seller or buyer at a later time [28](#page=28). ##### 8.2.2.2 When a price IS determinable A price is determinable if the parties have agreed upon the grounds for its determination. There are two main applications for the concept of a determinable price [28](#page=28): 1. Market Price [28](#page=28). 2. Cost-plus sale, at-cost sale, and discount sale [28](#page=28). ###### 8.2.2.2.1 Determinable price: Market price If parties agree that the price will be the market price, the price is considered determinable, even if not determined at the time of contracting. It is determinable because the basis for its calculation has been established [29](#page=29). * If the market price fluctuates over time, the criterion will be the market price at the time of the sale [29](#page=29). * If there is no market in the locality where the contract is made, the market price will be determined by the market that custom dictates for estimating prices [29](#page=29). ###### 8.2.2.2.2 Determinable price: Cost-plus sale, at-cost sale, and discount sale In these types of sales, the price is determined based on the cost the seller incurred to acquire the property, a cost known to both parties. These are often called "honesty sales" because sellers are ethically and professionally bound to disclose the actual cost [30](#page=30) [32](#page=32). * **Cost-Plus Sale (بيع المرابحة):** The price is set as the actual cost the seller paid to obtain the property, plus a specified profit amount or percentage [30](#page=30). * **At-Cost Sale (بيع التولية):** The price is determined as the exact price the seller paid to obtain the property [30](#page=30). * **Discount Sale (بيع الوضيعة):** The price is set as the actual cost the seller paid to obtain the property, minus a specified loss amount or percentage for the seller [31](#page=31). These sales are valid because, though the price isn't fixed at contracting, it is determinable. If a buyer discovers the seller overstated the cost, the price will be based on the real cost, not the overestimated figure [32](#page=32). > **Tip:** The validity of cost-plus, at-cost, and discount sales hinges on the seller's honesty in disclosing the actual acquisition cost of the property. ##### 8.2.2.3 Buyer's right to rescind in honesty sales A buyer may rescind the sales contract in two scenarios concerning honesty sales [33](#page=33): 1. If, at the time of contracting, the buyer was unaware of the cost the seller paid to acquire the property, they can rescind the contract upon learning this information [33](#page=33). 2. If the seller concealed significant information about the sold property or the cost they incurred [33](#page=33). However, the buyer cannot rescind the contract in either of these cases if the sold property has been demolished, consumed, or transferred to a third party [33](#page=33). #### 8.2.3 The price must be serious The price must be genuine and intended to compensate the seller for transferring ownership, although it does not need to be equivalent in value to the sold property [34](#page=34). ##### 8.2.3.1 When a price is NOT serious A price is considered NOT serious if it is: * **Absolutely simulated:** The price is a sham, with no genuine intention to pay it. * **Trifle:** The price is so negligible or insignificant as to be meaningless. In these situations, the contract may be voidable [34](#page=34). ##### 8.2.3.2 When a price IS serious A price is considered serious even if it is undervalued. Undervaluation does not render the price invalid, as long as it is genuinely intended as payment [34](#page=34). > **Tip:** Focus on the *intention* behind the price. A price that is merely low is valid, but a price that is a sham or utterly insignificant is not. --- # Seller's obligations in a sale contract The seller's obligations in a sale contract are the duties they must perform to fulfill the agreement with the buyer. These include transferring ownership, delivering the property, and warranting against encumbrances and defects [41](#page=41). ### 9.1 Transfer of ownership The transfer of ownership is a primary obligation of the seller. The timing of this transfer depends on whether the property is movable or immovable [41](#page=41) [42](#page=42). #### 9.1.1 Movable property For movable property, the timing of ownership transfer depends on whether it is identified per se or by kind [42](#page=42). * **Identified per se (قيمي-بالذات):** Ownership transfers to the buyer immediately upon the conclusion of the contract, even if the property has not yet been delivered. This also applies to a "lump sale" as it is considered identified per se by its location [42](#page=42). * **Identified by kind (مثلي-بالنوع):** Ownership transfers only after the property has been sorted out (مفرز) [42](#page=42). Parties to the contract or special statutes may stipulate a different timing for ownership transfer [42](#page=42). #### 9.1.2 Immovable property (real estate) The ownership of immovable property is transferred through registration in the official real estate records [43](#page=43). * Even if the contract is not registered, it remains valid as its three pillars exist. However, the transfer of ownership is postponed until registration is completed [43](#page=43). * If the seller refuses to assist the buyer with the registration, the buyer can initiate a lawsuit. The available lawsuits are [43](#page=43): 1. **Authenticity of signature lawsuit (دعوى صحة التوقيع):** This is a formal suit to prove the signature on the contract belongs to the seller. It does not affect the origin of the right or the transfer of ownership, nor the contract's validity, enforceability, or invalidity. If the seller's signature is verified by the court, it simply confirms their authorship. The court summons the seller to verify the signature [44](#page=44): * If the seller appears and admits the signature, it is verified [45](#page=45). * If the seller appears but denies the signature, an expert will be used for verification [45](#page=45). * If the seller is properly notified but does not appear, the court will confirm it is their signature [45](#page=45). Once the signature is verified, the buyer can demand the seller fulfill their duty to transfer ownership by registration [45](#page=45). 2. **Validity and enforceability of the contract of sale lawsuit (دعوى صحة العقد أو دعوى صحة ونفاذ العقد):** This lawsuit serves as an alternative method to transfer ownership without registration in the official records. The buyer asks the court to confirm the contract's validity and order the seller to perform their obligation to deliver the property. The court verifies the existence and validity of the contract's pillars. If the contract is deemed valid, the buyer can register the court's decision in the official real estate records, thereby transferring ownership. This lawsuit can be filed by the buyer or their heirs against the seller or their heirs [46](#page=46). #### 9.1.3 General principles for ownership transfer The seller is obliged to take all necessary steps to transfer ownership of the sold property to the buyer [47](#page=47). * For movables identified by kind, the seller must sort them out within a reasonable period [47](#page=47). * For immovables, the seller must assist the buyer in registering the contract; otherwise, the buyer can sue [47](#page=47). * If the price is to be paid in installments, it may be agreed that ownership transfer is delayed until full payment, even if the property has been delivered. However, upon full payment, the buyer owns the property from the moment the contract was concluded [47](#page=47). ### 9.2 Deliver the sold property to the buyer The second obligation of the seller is to deliver the sold property to the buyer, who is now the new owner [48](#page=48). * If the buyer was already in possession of the property at the time of concluding the contract, this possession is considered delivery, unless otherwise agreed (Art. 386) [48](#page=48). * The seller must deliver the property in the same condition as it was at the moment the contract was concluded (Art. 380) [48](#page=48). #### 9.2.1 What to deliver? The seller is obliged to deliver not only the sold property but also any accessories that are necessary for its use or are customarily delivered with it, even if not explicitly stated in the contract (Art. 381) [49](#page=49). * **Example:** If a cellphone is sold, the seller is expected to deliver its battery as well [49](#page=49). #### 9.2.2 The place of delivery The parties to the contract should agree on the place of delivery (Art. 388) [49](#page=49). * In the absence of an agreement, custom will be resorted to [49](#page=49). * If neither agreement nor custom exists, the seller must deliver the property wherever it is located at the time of the contract [49](#page=49). #### 9.2.3 The method of delivery Delivery can be actual or assumed (Art. 385-387) [50](#page=50). 1. **Actual delivery:** * The seller enables the buyer to take possession of the sold property [50](#page=50). * It is sufficient that the buyer was able to take possession; actual takeover is not mandatory [50](#page=50). * Delivery must be consistent with the nature of the sold property [50](#page=50). * **Example (house):** Delivery is by vacating it and handing over the keys [50](#page=50). * **Example (laptop):** Delivery is by hand [50](#page=50). * **Example (eBook):** Delivery is by email or by making it available for download [50](#page=50). --- # Lessor's obligations in a lease contract This section outlines the primary duties and responsibilities of a lessor within a lease agreement [81](#page=81). ### 10.1 General overview of lessor's obligations The lessor's obligations in a lease contract are fundamental to the agreement and ensure the lessee's right to use and enjoy the leased property. These obligations include delivering the leased property, maintaining it, warranting its freedom from encumbrances, and warranting its freedom from defects [81](#page=81). ### 10.2 Deliver the leased property to the lessee The core essence of a lease contract lies in the lessor's commitment to deliver the leased property to the lessee. This obligation extends beyond the property itself to include any necessary accessories [82](#page=82). #### 10.2.1 Condition of delivery The lessor must deliver the leased property in a condition that enables the lessee to utilize it as intended by the contract [82](#page=82). > **Example:** If a car is rented, the lessor must deliver a functional car along with its key [82](#page=82). #### 10.2.2 Payment of rent and delivery If the parties agree that rent is to be paid in advance, the lessor is permitted to withhold delivery of the leased property until the lessee fulfills this payment obligation, even if the lease term has already commenced [83](#page=83). #### 10.2.3 Application of sales law principles Generally, the provisions governing a seller's obligation to deliver sold property apply mutatis mutandis to the lessor's duty to deliver leased property, unless the parties have stipulated otherwise [83](#page=83). ### 10.3 Maintain the leased property The lessor is obliged to undertake necessary repairs for any deficiencies that arise in the leased property and impede the lessee's ability to utilize it [84](#page=84). #### 10.3.1 Lessee's remedies for non-maintenance If the lessor fails to address a deficiency, the lessee has two primary recourse options: 1. Rescind the lease contract [84](#page=84). 2. Obtain court authorization to carry out the repairs personally and subsequently recover the expenses from the lessor [84](#page=84). #### 10.3.2 Urgent deficiencies In situations where a deficiency is urgent, and the lessee cannot reach the lessor, or the lessor is uncooperative after being contacted, the lessee may proceed with repairs without prior court permission. The lessee can then deduct the incurred expenses from the rent payments [84](#page=84). #### 10.3.3 Improvements to the leased property If a lessee obtains the lessor's permission to make improvements to the leased property, the entitlement to recover expenses depends on the nature of the improvement [85](#page=85): 1. **Value-increasing improvements:** If the improvements enhance the value of the leased property, the lessee is entitled to reimbursement for expenses, unless otherwise agreed [85](#page=85). 2. **Lessee-benefit improvements:** If the improvements primarily benefit the lessee, they are not typically entitled to recover expenses, unless stipulated otherwise [85](#page=85). #### 10.3.4 Lessor's right to prevent certain actions The lessor has the right to prevent the lessee from undertaking actions that could: 1. Cause damage or alter the leased property [85](#page=85). 2. Involve installing machinery or devices that might damage the property or decrease its value [85](#page=85). Should the lessee disregard these prohibitions, the lessor may seek court intervention to rescind the contract and claim compensation for any resulting damages [85](#page=85). ### 10.4 Warrant freedom from encumbrances The lessor must ensure the lessee's quiet enjoyment and undisturbed possession of the leased property throughout the lease term. This means the lessor cannot make alterations to the property that hinder the lessee's use [86](#page=86). #### 10.4.1 Lessee's remedies for breach of warranty If the lessor fails to uphold this obligation, the lessee can pursue two remedies: 1. Rescission of the contract [86](#page=86). 2. Compensation for rent paid for the remaining period of the lease term [86](#page=86). #### 10.4.2 Voidance of waiver clauses Any clause within a lease contract attempting to waive the lessor's warranty against encumbrances is considered null and void, and the contract remains valid [86](#page=86). ### 10.5 Warrant freedom from defects The lessor warrants against all defects present in the leased property that either prevent the lessee's use or diminish its utility, provided the lessee was unaware of these defects at the time of contracting [87](#page=87). #### 10.5.1 When a lessee is deemed aware of defects A lessee is considered aware of defects if: * The lessor explicitly notified them of the defects [87](#page=87). * The lessee inspected the property, and the defect was apparent upon inspection [87](#page=87). > **Example:** If a tenant rents a house and discovers there is no running water, this is a defect warranted by the lessor, unless the lessor had previously informed the tenant about this issue during the contract negotiation [87](#page=87). #### 10.5.2 Lessee's remedies for defects If a defect renders the leased property unusable, the lessee is entitled to: * Rescind the contract [88](#page=88). * Recover any rent paid [88](#page=88). #### 10.5.3 Voidance of defect waiver clauses Similar to encumbrances, any clause in a lease contract attempting to waive the lessor's warranty against defects is considered null and void, and the contract remains valid [88](#page=88). ### 10.6 Lessee's obligations (overview) While this section primarily details the lessor's duties, it's important to note the corresponding obligations of the lessee, which include paying rent, preserving the property, using it according to the contract, and returning it at the end of the term [81](#page=81) [89](#page=89). ### 10.7 Pay the rent The primary obligation of the lessee is to pay the rent agreed upon in the contract by the stipulated deadlines. As the debtor in the rent payment obligation, the lessee is also responsible for any expenses incurred in fulfilling this payment duty [90](#page=90). > **Example:** If the contract specifies that rent payment should be made via a paid electronic service, the lessee bears the cost of using that service [90](#page=90). --- # The lessee's obligations under a lease agreement This section outlines the primary responsibilities that a lessee must adhere to as stipulated by a lease agreement [89](#page=89). ### 11.1 Payment of rent The fundamental obligation of the lessee is to pay the rent as agreed upon in the contract and within the stipulated timeframe. As the debtor in the rent payment obligation, the lessee is also responsible for any expenses incurred in fulfilling this duty. For instance, if the lease agreement specifies that rent should be paid via an electronic service, the lessee bears the cost of using that service [90](#page=90). ### 11.2 Preservation of the leased property This obligation, while a manifestation of the general doctrine of good faith, is explicitly stated in the civil code. The standard of a reasonable person is used to determine whether the lessee has adequately preserved the leased property. If there are multiple lessees, each individual is accountable for their own negligence or misconduct [91](#page=91). ### 11.3 Utilization of the leased property according to the contract The lessee is only permitted to use the leased property in the manner agreed upon in the contract. For example, if a lease contract specifies a house is for residential use, the lessee cannot operate a business headquarters from it [92](#page=92). In the absence of a specific agreement, the lessee is entitled to use the leased property in a way that is: * Consistent with its intended purpose [92](#page=92). * Consistent with custom [92](#page=92). > **Example:** If the leased property is a residential house, the lessee cannot convert it into a restaurant [92](#page=92). Failure by the lessee to fulfill this obligation entitles the lessor to claim compensation for any resulting damages [92](#page=92). Furthermore, the lessee may not alter the leased property without the lessor's permission, unless the alteration is: 1. Necessary [93](#page=93). 2. Does not result in any damage to the lessor [93](#page=93). > **Example:** If a renter finds a room excessively hot and dark due to a lack of a window, they might argue that installing a window is necessary. However, this change may not be permissible if it compromises the lessor's privacy, such as by allowing neighbors to see into the property [93](#page=93). If the lessee violates this obligation by making an unnecessary change or a change causing damage without the lessor's consent, the lessee must reverse the alteration at the end of the lease term, unless otherwise agreed [93](#page=93). The lessee cannot prevent the lessor from undertaking any actions deemed necessary to maintain the leased property. If performing maintenance affects the lessee's ability to use the property, the lessee may rescind the contract. If the lessee does not rescind the contract during the maintenance period, they are entitled to a reduction in rent but can no longer rescind the lease [94](#page=94). > **Example:** If the lessor of a house discovers a collapsing ceiling in a room requiring immediate repair, the lessee cannot prevent the lessor from hiring workers to enter the house for repairs. However, the lessee has the option to rescind the contract. If the lessee chooses not to rescind during the maintenance, they can only claim a rent reduction, not rescission [94](#page=94). If an act by an administrative authority completely deprives the lessee of the use of the leased property, the lease is rescinded, and the lessee is not obligated to pay rent from the date they became unable to use the property [95](#page=95). > **Example:** The expropriation of the leased property would completely prevent its use by the lessee [95](#page=95). If an act by an administrative authority partially deprives the lessee of the use of the leased property, the lessee may rescind the lease and is not obliged to pay rent from the date they notify the lessor [95](#page=95). > **Example:** Imposing a curfew during afternoon hours in the district where a leased property used as a restaurant is located would partially deprive the lessee of its use [95](#page=95). The lessee is obliged to: 1. Perform repairs that are agreed upon or required by custom [96](#page=96). 2. Clean the leased property by removing dust and rubbish [96](#page=96). The lessee is entitled to rescind the lease contract in two additional scenarios: 1. If fulfilling the contract would result in evident damage to the life or property of the lessee or those associated with them [96](#page=96). 2. The occurrence of a circumstance that prevents them from performing the contract [96](#page=96). ### 11.4 Return of the leased property The lessee is obligated to return the leased property to the lessor upon the expiration of the lease term. If the lessee violates this obligation by retaining the property after the lease expires, they must pay [97](#page=97): * Rent estimated based on the rent of a similar item (اجرة المثل) [97](#page=97). * Compensation for any damages the lessor may have suffered [97](#page=97). The lessee is obliged to return the leased property in the same condition it was at the time of receipt. Consequently, the lessor can compel the lessee to remove any improvements they may have made without permission, even if these improvements have increased the property's value [98](#page=98). --- # Determinable price in contracts of sale The price in a contract of sale must be either determined or determinable for the contract to be valid; otherwise, it will be void [28](#page=28). ### 12.1 Conditions for a determinable price A price is considered not determinable if the parties agree on vague terms such as "a fair price," "a price appropriate to the value of the property," or if either party is to determine the price at a later date. Conversely, a price is determinable if the parties agree on the grounds for its determination [28](#page=28). #### 12.1.1 Market price If parties agree that the price shall be the market price, the price is determinable because the ground for determination is established, even if the exact amount is unknown at the time of contracting. If the market price fluctuates, the criterion shall be the market price at the time of sale. If there is no market at the location of the contract, the market price will be determined by the market that is custom used for price estimation [29](#page=29). #### 12.1.2 Cost-based sales These types of sales determine the price based on the cost the seller incurred to obtain the property, which must be known to both parties [30](#page=30). * **Cost-plus sale (بيع المرابحة):** The price is set as the actual cost paid by the seller plus a specified profit margin (a sum of money or a percentage) [30](#page=30). * **At-cost sale (بيع التولية):** The price is set as the same price the seller paid to obtain the property [30](#page=30). * **Discount sale (بيع الوضيعة):** The price is set as the actual cost paid by the seller minus a specified loss (a sum of money or a percentage) for the seller [31](#page=31). These sales are often referred to as "honest sales" due to the ethical and professional obligation of the seller to disclose the actual cost. They are valid because the price is determinable, though not fixed at the time of contracting. If a buyer discovers the seller overestimated the cost, the price will be based on the real cost [32](#page=32). The buyer can rescind the contract in two scenarios: 1. If the buyer was unaware of the seller's cost at the time of contracting and discovers it later [33](#page=33). 2. If the seller concealed significant information about the property or the cost incurred [33](#page=33). However, rescission is not possible if the sold property has been demolished, consumed, or transferred to a third party's ownership in these cases [33](#page=33). > **Tip:** The core principle behind cost-based sales is transparency; the buyer must be informed of the seller's costs for these contracts to be valid and enforceable. ### 12.2 The price must be serious A serious price is one intended to compensate the seller for the transfer of ownership, though it does not need to be of equal value to the property itself. A price is not considered serious if it is absolutely simulated or trifle. However, an undervalued price is still considered serious [34](#page=34). #### 12.2.1 Simulated price (الثمن الصورى) Simulation can be absolute or relative. * **Absolute simulation:** Occurs when the contract states a price, but no payment is actually made. This is often done to conceal gift contracts or to shield property from creditors. If the intent is to conceal a gift, the contract is treated as a gift, not a sale. If the intent is to defraud creditors, the sale is ineffective [35](#page=35). * **Relative simulation:** Involves two prices: a fake declared price and a real concealed price. While the contract specifies the declared price, the parties intend for the buyer to pay the real, hidden price. Relative simulation does not invalidate the sale; the real price is the enforceable one [36](#page=36). #### 12.2.2 Trifle price (الثمن التافه) A trifle price is too low to be considered fair consideration for the transfer of ownership [37](#page=37). > **Example:** Selling a car worth 10,000 OMR for only 10 OMR would likely be considered a trifle price [37](#page=37). In such cases, the contract is not treated as a sale but may be considered a gift contract due to the trivial consideration, suggesting the owner intended to donate the property [37](#page=37). #### 12.2.3 Undervalued price (الثمن البخس) An undervalued price is a serious price accepted by the seller as consideration, but it represents a significant loss to the seller [38](#page=38). The distinction between a trifle price and an undervalued price lies in the intention of the parties. While both are low prices, a trifle price is not intended as consideration, whereas an undervalued price is an accepted consideration. The existence of an undervalued price indicates extreme inequity in the contract [38](#page=38). --- # Distinguishing between extreme and slight inequity in pricing This section delves into the crucial distinctions between extreme and slight inequity in pricing within a sale contract, focusing on their definitions, implications, and legal treatment as outlined in the provided document. ### 13.1 The concept of inequity in price Inequity in price refers to a situation where the agreed-upon price in a sale contract is significantly or slightly lower than the fair market value of the sold property. This concept is primarily discussed in the context of an "undervalued price," which is a serious price accepted by the seller but constitutes a significant loss to them [38](#page=38). ### 13.2 Types of inequity in price The document distinguishes between two main types of price inequity: extreme inequity and slight inequity [39](#page=39). #### 13.2.1 Extreme inequity Extreme inequity occurs when the price is so low that no expert would suggest it as a fair price for the sold property. This signifies a substantial disparity between the property's value and its sale price [39](#page=39). * **Definition:** The price is excessively low, making it unreasonable even for an expert to propose as fair [39](#page=39). * **Example:** A house worth 10,000 OMR is sold for 5,000 OMR [39](#page=39). * **Islamic Jurisprudence Perspective:** Extreme inequity, in Islamic jurisprudence, is defined as the price being lower than four-fifths (4/5) of the fair price [39](#page=39). #### 13.2.2 Slight inequity Slight inequity occurs when the price is lower than the fair price, but a reasonable expert might still consider it a justifiable price. This indicates a smaller, though still present, disparity [39](#page=39). * **Definition:** The price is below the fair market value, but within a range that an expert might deem reasonable [39](#page=39). * **Example:** A house worth 10,000 OMR is sold for 9,500 OMR [39](#page=39). ### 13.3 Legal implications of extreme inequity While the existence of extreme inequity alone does not invalidate a contract under general law it can be a ground for rescission if it is caused by fraud committed by the other party to the contract [40](#page=40). * **General Rule:** A contract is generally considered valid even with extreme inequity in price, provided it is not due to fraud [40](#page=40). * **Grounds for Rescission (if caused by fraud or specific property types):** The contract of sale may be rescinded if the undervalued property falls into certain categories [40](#page=40): 1. Owned by an interdicted person (محجور) [40](#page=40). 2. A trust property (وقف) [40](#page=40). 3. Public property [40](#page=40). ### 13.4 Undervalued price and its treatment An undervalued price is a serious price accepted as consideration but represents a significant loss to the seller. The key difference between a trifle price and an undervalued price lies in the intention of the parties: a trifle price is not intended as genuine consideration, while an undervalued price is accepted consideration, albeit at a loss [38](#page=38). > **Tip:** It's crucial to differentiate between a price that is simply low and a price that is so low it suggests a lack of genuine intent to exchange value, which is the essence of the distinction between triffling and undervalued prices. ### 13.5 Distinguishing from trifle and simulated prices The concepts of extreme and slight inequity are further contextualized by understanding other types of non-serious prices: * **Trifle Price:** A price too low to be considered fair consideration for transferring ownership. The contract might be considered a gift due to the trivial consideration. For example, selling a car worth 10,000 OMR for 10 OMR would likely be considered trifle [37](#page=37). * **Simulated Price:** This involves a price that is not genuinely intended to be paid or is a misrepresentation of the actual price. * **Absolute Simulation:** The contract states a price, but nothing is paid. This is often used to conceal gift contracts or shield property from creditors. If used to conceal a gift, the contract is treated as a gift; if to deceive creditors, the sale is ineffective [35](#page=35). * **Relative Simulation:** Two prices exist: a fake declared price and a real concealed price. The contract is not invalidated, but the real, concealed price is enforceable [36](#page=36). > **Tip:** While a trifle price indicates a lack of serious intent for consideration, an undervalued price signifies accepted consideration that results in a loss for the seller, distinguishing it from a simulated or gift transaction. --- This section delves into the nuances of how inequity in pricing is perceived and its implications within contractual contexts, particularly concerning leases. While the provided text does not directly use the terms "extreme inequity" or "slight inequity" in pricing, it discusses concepts like undervaluation and simulated prices for rent, which directly relate to the degree of fairness or unfairness in the consideration exchanged. The focus is on how deviations from a fair market price are treated legally and contractually. ### 13.1 Understanding Rent as Consideration in Lease Contracts Rent is identified as an essential element of a lease contract; without it, the agreement would be classified as a lending contract (عقد الإعارة), which is a gratuitous use of a non-consumable item for a specific period, with the understanding of its return. A lending contract is generally non-binding, allowing either party to terminate it at any time [75](#page=75). #### 13.1.1 Requirements for Rent For rent to be valid, it must meet certain criteria: * **Seriousness:** Rent cannot be absolutely simulated or trivial. This implies a baseline level of genuine consideration [76](#page=76). * **Valuation:** While rent cannot be absolutely simulated, it *could* be undervalued. This distinction is crucial for differentiating between a legally problematic price and one that is merely unfavorable to one party. The document refers to an explanation of these terms within the context of a contract of sale for further clarification [76](#page=76). * **Nature of Consideration:** Rent can be in the form of money or any other asset, such as property, a debt, or the utilization of another thing [76](#page=76). #### 13.1.2 Determination of Rent To comply with general civil law principles, rent must be determined or determinable at the time the contract is made [76](#page=76). * **Monetary Rent:** If the rent is monetary, the contract must specify the exact amount [76](#page=76). * **Non-Monetary Rent:** If the rent is something other than money, the contract must detail its description and amount. For instance, rent could be specified as "1 Samsung TV 40'' LCD Screen" [76](#page=76). #### 13.1.3 Consequences of Undetermined Rent If the rent is not explicitly determined in the contract, the contract can be rescinded. In such cases, the lessee is obligated to pay rent for the period prior to rescission, based on the rent of an equivalent item [77](#page=77). #### 13.1.4 Payment of Rent The parties can agree on when rent is to be paid, such as immediately, at a later date (postponed), or in installments according to a schedule. If no specific payment schedule is agreed upon, rent becomes due once the lessee utilizes the leased property or is able to do so. Crucially, the lessee is not obligated to pay any rent until they receive the leased property. If the lessor fails to deliver the property at the start of the lease term, the lessee is not liable for rent during that period. However, this protection does not apply if the delay in delivery is due to a reason attributable to the lessee, such as being unavailable to receive the property [77](#page=77) [78](#page=78). ### 13.2 Distinguishing Undervaluation from Simulation The core of distinguishing between "slight" and "extreme" inequity in pricing, as it relates to rent, hinges on the legal concepts of **undervaluation** and **simulation**. #### 13.2.1 Undervaluation Undervaluation implies that the agreed-upon rent is lower than the actual market value or the worth of the leased property's utilization. The text explicitly states that rent *could* be undervalued. This suggests that a price being less than ideal or even significantly below market value does not automatically invalidate the lease. It represents a "slight" to moderate form of inequity where the contract remains valid, but one party is receiving a less advantageous bargain. The implication is that parties are free to contract on terms that are not perfectly equitable, as long as the consideration is genuine [76](#page=76). #### 13.2.2 Simulation Simulation, in contrast, implies that the stated price is not the true price intended by the parties. This can manifest in two ways: * **Absolute Simulation:** Where a contract appears to have a price, but in reality, there is no intention to pay any price, or the stated price is purely fictitious. This would render the contract non-binding as a lease. * **Relative Simulation:** Where the parties agree on a genuine price, but they conceal it by substituting another price in the contract. The text states that rent "cannot be absolutely simulated or trifle". This indicates that a completely fabricated or nonsensical price renders the contract invalid as a lease. If rent is absolutely simulated, it likely falls outside the scope of a lease agreement and might be considered a donation or another form of contract depending on the underlying intent. This scenario represents an "extreme" form of inequity because the core element of consideration for the lease is absent or misrepresented to the point of nullity [76](#page=76). #### 13.2.3 Legal Consequences of Pricing Inequity * **Undervalued Rent:** A contract with undervalued rent is still considered a valid lease. The inequity is present but does not fundamentally undermine the contractual agreement [76](#page=76). * **Simulated Rent:** A contract with absolutely simulated rent is not a lease contract. It is deemed a lending contract if gratuitous or potentially another contract if a different disguised price was genuinely intended. This represents a more severe form of pricing inequity that invalidates the lease status [75](#page=75). > **Tip:** When analyzing pricing in contracts, differentiate between a price that is simply a bad deal (undervalued) and a price that is not genuinely intended or is entirely fictitious (simulated). The former is permissible, while the latter can nullify the contract's nature. > **Example:** If a house is leased for one thousand dollars per month, but its market rental value is two thousand dollars per month, this is an instance of undervaluation (slight inequity). The lease remains valid. However, if the contract states a rent of one thousand dollars, but the parties secretly agree that no money will actually be exchanged, or that only a nominal amount of one dollar will be paid, this is an absolute simulation (extreme inequity), and the contract would not be recognized as a lease. --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Lease | A contract where the lessor agrees to allow the lessee to use a leased property in exchange for a consideration, without transferring ownership. | | Lessor | The party in a lease agreement who grants the right to use the leased property. | | Lessee | The party in a lease agreement who obtains the right to use the leased property. | | Consideration (in lease) | The value exchanged in a lease contract, which can be money or any other form of benefit, given by the lessee to the lessor for the utilization of the property. | | Consensual Contract | A contract that is finalized upon the agreement of the parties' minds, not requiring a specific formal written document for its validity. | | Bilateral Contract | A contract where both parties have mutual obligations to fulfill towards each other, as opposed to unilateral contracts where only one party is bound. | | Commutative Contract | A contract where each party receives an equivalent value in return for fulfilling their obligation, such as the lessor receiving consideration and the lessee receiving property utilization. | | Executory Contract | A contract where the performance of obligations occurs over a period of time, making time an essential element, unlike executed contracts where performance is immediate. | | Pillars of the Contract of Lease | The essential components or foundations required for a valid contract of lease, typically including mutual assent, subject matter, and cause. The absence of any of these pillars renders the contract null and void. | | Mutual Assent | The agreement of wills between the parties to a contract, specifically the lessor and the lessee, to enter into a lease agreement. This involves one party making an offer and the other party making an acceptance that is identical to the offer. | | Declaration of Will | The expression of a party's intention to enter into a contract. This can be explicit, conveyed through words, writing, or customary signs, or implicit, demonstrated by an action that unequivocally indicates the party's intention. In very exceptional circumstances, silence may also constitute a declaration of will according to general civil law rules. | | Vices of Consent | Defects or flaws that can invalidate a contract by affecting the free and informed agreement of the parties. These vices must be absent for a declaration of will to be valid. | | Legal Capacity | The legal qualification or competence of individuals to enter into contracts. Both the lessor and the lessee must possess the necessary legal capacity for a lease contract to be valid. | | Power to Dispose | The legal authority of the lessor to alienate or transfer rights concerning the leased property. If a lessor lacks this power, the lease contract may be suspended and only become valid upon ratification by the true owner. | | Subject Matter of a Contract | The totality of the objects of the obligations that arise from a contract. In the context of a lease contract, this encompasses both the utilization of the leased property for a specific period and the rent to be paid. | | Utilization of the Leased Property | The use and enjoyment of the property by the lessee for the duration specified in the lease agreement. This constitutes the object of the lessor's obligation. | | Rent | The payment made by the lessee to the lessor in exchange for the use and enjoyment of the leased property. This is the object of the lessee's obligation. | | Immovable | Refers to real estate or property that cannot be moved, such as land and buildings. Its ownership transfer typically requires registration in official records. | | Registration | The formal process of recording a contract or deed in an official registry, such as the real estate registry, which is often necessary for the transfer of ownership of immovable property. | | Authenticity of Signature Lawsuit | A legal action filed by a buyer to prove that the signature on a sales contract belongs to the seller. This lawsuit does not affect the validity or ownership transfer of the property itself, but rather confirms the seller's agreement to the contract's terms. | | Validity and Enforceability of the Contract of Sale Lawsuit | An alternative legal action where a buyer requests the court to confirm the contract's validity and compel the seller to fulfill their obligation to transfer ownership of the sold property, potentially bypassing the need for direct registration. | | Accessories | Items that are necessary for the use of the sold property or are customarily delivered with it, even if not explicitly mentioned in the sales contract. The seller is obliged to deliver these along with the main property. | | Actual Delivery | A method of transferring possession of the sold property where the seller makes it physically possible for the buyer to take control of the item. This can involve handing over keys for a house or the item itself for a movable good. | | Assumed Delivery | A form of delivery where the buyer is legally considered to have received the property, even if physical possession has not yet occurred. This often happens when the buyer already has possession of the property in a different capacity, such as renting it before purchasing. | | Lump Sale | A sale where a specific group of fungible goods is priced and sold as a single unit without individual weighing, counting, or measuring. This type of sale is valid even if the subject matter is not precisely identified at the contract's inception, provided its location is determinable. | | Fungibles | Goods that are interchangeable with other goods of the same type and quality, such as grains, liquids, or standardized manufactured items. Only fungibles can be the subject matter of a lump sale. | | Legitimate Good | A good that falls within the scope of permissible dealings. This excludes things that are inherently beyond ownership (e.g., sunrays, seawater) and those prohibited by law or religious doctrine (e.g., drugs, wine). | | Sale of Future Things | A sale that concerns an item that does not yet exist at the time the contract is made. The seller is not the owner at the moment of contracting, but no other specific individual is the owner either. | | Sale by a Non-Owner | The sale of a specified item that is currently owned by a person other than the seller. This type of sale is initially suspended and does not bind the true owner. | | Ratification | The act by which the real owner of a property, whose item was sold by a non-owner, approves and confirms the sale. Ratification can be explicit (a clear statement of consent) or implicit (behavior indicating consent), and it makes the sale valid from its original conclusion date. | | Void Contract | A contract that is considered null and without legal effect. In the context of a sale by a non-owner, the contract becomes void if the real owner refuses to ratify the sale. | | Leased Property | The specific item or asset that is being rented out in a lease agreement. This property must exist or be capable of existing in the future, be clearly identifiable or determinable, and be legal to rent. | | Determinable Property | A leased property that is not precisely specified in the contract but can be identified or determined at a later date. For example, a car identified by make and model, but not its specific license plate number. | | Legitimate Property | The leased property must be an item that is legally permissible to be rented or traded. Items outside the scope of legal commerce, such as illegal substances or gambling machines, cannot be the subject of a lease. | | Serious Rent | The rent agreed upon in a lease contract must be genuine and not merely a sham or a trivial amount. While the rent can be undervalued, it cannot be entirely simulated or non-existent. | | Determinable Rent | The rent amount or description in a lease contract that is not explicitly stated but can be ascertained at a later time. This ensures that the financial obligation of the lessee is clear. | | Lease Term | The duration of the lease agreement, specifying the exact start date and end date of the rental period. This defines the timeframe for which the lessee has the right to use the property. | | Testing Period | A specified duration within a contract of sale during which the buyer has the right to examine the goods and decide whether to approve or reject the sale. If not explicitly determined, the customary period is assumed. | | Approval of Sale | The buyer's formal acceptance of the goods and the contract of sale, typically occurring after a testing period or by implied consent through inaction. | | Rejection of Sale | The buyer's formal refusal of the goods and the contract of sale, which must be communicated to the seller within the designated testing period. | | Subject Matter of Contract | The totality of obligations that arise from a contract. In a contract of sale, this encompasses both the good being sold and the price to be paid. | | Good (Sold Property) | The physical item or property that is the object of the seller's obligation in a contract of sale. It must meet specific conditions to be valid subject matter. | | Price (Money) | The monetary value that is the object of the buyer's obligation in a contract of sale, exchanged for the good. | | Existing Good | A good that is currently in existence at the time the contract of sale is made. This can include tangible items like a house or a car. | | Future Good | A good that is not yet in existence at the time of the contract but is expected to come into existence. An example is a house under construction. | | Identified Good | A good that is specifically and uniquely determined, either by its individual characteristics or by a clear process for its determination. | | Non-fungible Good | A good that is unique and not interchangeable with other goods. Its identification relies on specific attributes like location and area, such as a particular piece of land. | | Fungible Good | A good that is interchangeable with other goods of the same kind and quality. Identification is typically based on grade, weight, and quality, such as a quantity of rice. | | Sale by Sample | A type of sale where the seller provides a sample of the good to the buyer before the contract is concluded. The delivered goods must be identical to this sample. | | Hidden Defect | A defect in a sold property that a reasonable buyer could not detect upon inspection at the time of concluding the contract, often requiring expert knowledge to identify. | | Old Defect | A defect that existed in the sold property before the contract of sale was concluded, or occurred before delivery due to a pre-existing cause while in the seller's possession. | | Serious Defect | A defect that either significantly decreases the value of the sold property or renders it unfit for its intended purpose, excluding defects that are customarily allowed or considered trivial. | | Customarily Allowed Defects | Defects that are generally accepted or considered minor and do not typically warrant coverage under a seller's warranty, such as a small amount of rice straw in a package of rice. | | Apparent Defects | Defects that are readily observable and detectable by a reasonable buyer during a normal inspection of the sold property at the time of sale. | | Judicial Auction | A sale of property conducted by a judicial authority, where the seller's warranty against hidden defects may not apply. | | Administrative Auction | A sale of property conducted by administrative authorities, which may also be an exception to the seller's warranty against hidden defects. | | Rescind the Contract | The buyer's right to cancel the sale agreement and receive a full reimbursement of the purchase price due to a covered hidden defect. | | Ratify the Contract | The buyer's decision to uphold the sale agreement despite a hidden defect, potentially with a request for a price reduction. | | Warranty Period | The specified duration during which a seller is responsible for covering defects in the sold property, which can be extended by contract or in cases of seller fraud. | | Price | The monetary consideration that a buyer is obligated to pay in exchange for the seller's obligation to transfer ownership of the sold property. | | Explicit Agreement | A price determination that is clearly and directly stated by both the seller and the buyer in their contract. | | Implied Agreement | A price determination that is not directly stated but can be inferred from the conduct or past dealings between the seller and the buyer. | | Auction Sale | A type of sale where the seller has no role in determining the price; the price is set by competitive bidding among buyers. | | Compulsory Price | A price for certain goods that is imposed by the government, which both the seller and the buyer must adhere to, overriding their ability to negotiate. | | Postponed Payment | An arrangement where the payment of the price is deferred to a later date than the time of contracting, as agreed by the parties or dictated by custom. | | Installment Payment | A method of paying the price over a period of time in several smaller amounts, rather than a single lump sum. | | Currency Money | The price must be paid in legal tender recognized by the relevant jurisdiction, distinguishing a sale from a barter transaction. | | Barter | An exchange of goods or services for other goods or services, rather than for money, which is not considered a sale contract. | | Determined Price | A price that is precisely fixed and known by both parties at the time the contract of sale is concluded. | | Determinable Price | A price that is not fixed at the time of contracting but can be ascertained based on agreed-upon criteria or a method specified in the contract. | | Transfer of Ownership | The legal act of passing ownership of the sold property from the seller to the buyer. The timing of this transfer depends on whether the property is movable or immovable, and if movable, whether it is identified by kind or per se. | | Movable Property | Goods or items that can be physically moved from one place to another. For movable property identified by kind, ownership transfers only after the specific items are sorted out and designated for the buyer. | | Immovable Property | Real estate, such as land and buildings, which cannot be moved. Ownership of immovable property is typically transferred through official registration in a real estate record. | | Identified Per Se | Property that is specifically identified and unique, such as a particular car or a specific piece of art. Ownership of such property transfers to the buyer as soon as the sale contract is concluded, even before delivery. | | Identified by Kind | Property that is not individually specified but is defined by its type or category, such as a certain quantity of grain or a specific model of a product. Ownership transfers only when the specific items are sorted out and allocated to the buyer. | | Registration of Contract | The formal process of recording a sale contract for immovable property in an official real estate registry. This step is crucial for the legal transfer of ownership for real estate. | | Validity and Enforceability of Contract Lawsuit | A legal action where the buyer requests the court to confirm the overall validity of the sale contract and order the seller to fulfill their obligations. If the court finds the contract valid, its decision can be registered to transfer ownership of immovable property. | | Delivery of Sold Property | The seller's obligation to physically hand over the sold property to the buyer. This includes the property itself, any necessary accessories, and must be done at the agreed-upon place and in the same condition as when the contract was made. | | Deliver the leased property | The lessor is obligated to provide the lessee with the rented property, including any necessary accessories, in a condition that allows for its intended use. This obligation is fundamental to the lease agreement. | | Maintain the leased property | The lessor must repair any issues or deficiencies that arise in the leased property which hinder the lessee's ability to use it. If the lessor fails to make repairs, the lessee may have legal recourse, including rescinding the contract or obtaining court permission to make repairs and recover expenses. | | Warrant the freedom from encumbrances | The lessor has a duty to ensure the lessee's quiet enjoyment and possession of the leased property throughout the lease term. This means the lessor cannot make alterations that impede the lessee's use, and any clause attempting to waive this warranty is void. | | Warrant the freedom of the leased property from defects | The lessor guarantees that the leased property is free from defects that prevent or diminish its use, unless the lessee was aware of these defects at the time of contracting. If a defect renders the property unusable, the lessee can rescind the contract and recover payments made. | | Improvements | Modifications made to the leased property. If improvements increase the property's value and were made with the lessor's permission, the lessee may be entitled to recover expenses, unless otherwise agreed. Improvements benefiting only the lessee generally do not entitle the lessee to expense recovery. | | Compensation | A sum of money paid to an injured party to make up for a loss or injury suffered. In lease agreements, this can be awarded for damages or for rent paid during a period of non-use due to defects or lessor interference. | | Rent Payment | The primary obligation of the lessee is to pay the agreed-upon rent punctually. The lessee bears responsibility for any expenses incurred in fulfilling this payment obligation, such as fees for electronic payment services. | | Preserve the Leased Property | The lessee has a duty to maintain the leased property in good condition. This obligation is assessed using the standard of a reasonable person. If multiple lessees exist, each is accountable for their individual negligence or misconduct. | | Utilize the Leased Property According to the Contract | The lessee must use the leased property strictly as stipulated in the lease agreement. If no specific use is defined, the lessee may use it in a manner consistent with its intended purpose or common practice. Unauthorized changes to the property are prohibited unless necessary and do not cause damage to the lessor. | | Lessor's Maintenance Access | The lessee cannot prevent the lessor from undertaking necessary maintenance on the leased property. If maintenance significantly impacts the lessee's use, they may have the right to rescind the contract or, if they choose not to rescind, to a rent reduction. | | Administrative Authority Impact | If an administrative action completely prevents the lessee from using the property, the lease is rescinded, and rent payment ceases from that point. Partial deprivation may allow the lessee to rescind the lease and cease rent payments from the date of notification to the lessor. | | Repairs and Cleaning | The lessee is obligated to perform repairs as agreed or as customary, and to keep the leased property clean by removing dust and debris. | | Rescission of Lease | The lessee may be entitled to rescind the lease agreement if continuing the contract poses a significant danger to their life or property, or if unforeseen circumstances prevent contract performance. | | Return of Leased Property | Upon the expiration of the lease term, the lessee must return the leased property to the lessor. Failure to do so may result in liability for rent based on a comparable property and compensation for any damages suffered by the lessor. The property should be returned in the same condition as it was received. | | Market Price | A determinable price where the parties agree that the price will be based on the prevailing market value of the goods at the time of sale. If no market exists at the place of contract, the criterion will be the market that custom dictates for price estimation. | | Cost-Plus Sale | A type of sale where the price is determined by adding a profit margin (a sum of money or a percentage) to the actual cost incurred by the seller to obtain the property. | | At-Cost Sale | A type of sale where the price is set at the exact amount the seller paid to acquire the property, with no additional profit or loss. | | Discount Sale | A type of sale where the price is determined by subtracting a certain amount of money or a percentage from the seller's actual cost to obtain the property, representing a loss to the seller. | | Simulated Price | A price that is not genuine. Absolute simulation means no price is paid, often to conceal a gift or shield assets from creditors. Relative simulation involves a fake declared price and a real, concealed price, where the real price is enforceable. | | Trifle Price | A price that is so low it cannot be considered fair consideration for the transfer of ownership, suggesting the intention was likely a gift rather than a sale. | | Undervalued Price | A serious price that the seller accepts as consideration, but which represents a significant loss to the seller. It is an accepted consideration, unlike a trifle price, and indicates extreme inequity in the contract. | | Extreme Inequity | This occurs when the price of a property is so low that no expert would suggest it as a fair price. For example, selling a house worth 10,000 OMR for 5,000 OMR would be considered extreme inequity, as no reasonable expert would value it at that price. | | Slight Inequity | This occurs when the price is lower than the fair market price, but some experts might still consider it a reasonable price. For instance, selling a house worth 10,000 OMR for 9,500 OMR represents a slight inequity, as a reasonable expert could potentially value it at that price. |