Withdrawal from a Contract Following the Payment of Earnest Money: A Comparative Fiqh Study with Reference to the Civil Transactions Law

Abstract

This jurisprudential study examines the issue of “rescinding a contract after paying earnest money (ʿarbūn)”, a matter in which principles of contractual obligation, stipulation rules, and options in contracts intersect. It is one of the issues frequently raised in contemporary practice, particularly in modern sales and commercial transactions. This necessitates a sound juristic foundation and a connection to current transactional realities, while considering the regulatory developments governing this matter in modern legal systems, especially within the Saudi legal framework. The study aims to identify the Sharīʿah ruling on rescinding a contract after paying earnest money by presenting the juristic opinions across the four Sunni schools of law, analyzing the grounds of disagreement, and examining the textual and rational evidences on which these opinions are based. The discussion is conducted in light of the major fiqh principles and the maqāṣid-based considerations influencing juristic reasoning, while comparing these views with the modern legal position as stipulated in Article (44) of the Saudi Civil Transactions Law of 1445 AH. The researcher employed a comparative foundational methodology based on analytical induction of scriptural texts and juristic statements, followed by weighing these opinions in terms of their evidences, legal reasoning, and objectives. The study also utilized influential fiqh maxims, most notably: “The default in contracts is bindingness,” “Liability entails entitlement,” “No harm and no reciprocating harm,” and “Gain accompanies liability,” in addition to invoking the higher objectives of Sharīʿah in preserving wealth, achieving contractual justice, and protecting contractual intent from deception or inequity. The study concluded that permitting rescission after paying earnest money—while allowing the other party to retain the amount if explicitly stipulated or if actual harm is established—achieves an appropriate balance between obligation and flexibility, preserves the rights of both parties, and aligns with Sharīʿah objectives without undermining the essence or fairness of the contract. This conclusion is consistent with the Saudi legal approach, which renders the effect of rescission subject to the agreement between the parties. The researcher recommends that contracts explicitly clarify the disposition of earnest money and the consequences of rescission to ensure contractual precision and reduce disputes. The study also recommends enhancing juristic and legal awareness among parties to commercial contracts regarding this issue and its connection to established Sharīʿah and maqāṣid-based principles.