Fatwa ID: 01358

Answered by Mufti Mohammed Tosir Miah

Question:

Hiring a car and the subsequent perishing of the leased item

Answer:

In the name of Allah, the most Beneficent, the most Merciful.

Before I answer your questions I have mentioned below some basic rules and principles regarding Ijarah and leasing which has been derived from Mufti Taqi Uthmaani’s book “An Introduction to Islamic Finance” (p.159)

• Ijarah/Leasing is a contract whereby the owner of something transfers its usufruct to another person for an agreed period, at an agreed consideration.  

• The subject of Ijarah must have a valuable use. Therefore, things having no usufruct at all cannot be given on Ijarah.  

• It is necessary for a valid contract of Ijarah that the corpus of the Ijarah property remains in the ownership of the seller, and only its usufruct is transferred to the lessee.

• As the corpus of the Ijarah Assets remains in the ownership of the lessor, all the liabilities emerging from the ownership shall be borne by the lessor, but the liabilities referable to the use of the property shall be borne by the lessee.  

• The period of Ijarah must be determined in clear terms.  

• The lessee is liable to compensate the lessor for every harm to the Ijarah asset caused by any misuse or negligence on the part of the lessee.  

• The Ijarah asset shall remain in the risk of the lessor throughout the Ijarah period in the sense that any harm or loss caused by the factors beyond the control of the lessee shall be borne by the lessor.  

Keeping the aforementioned rulings in mind, we will now look at each of your question and the Sharee perspective of the situation. 

One thing which needs to be made clear is that this Ijarah transaction can only work if the actual owner of the car (Amr) permitted Zayd to lease the car out to you. If Amr did not give permission then this contract will be treated as a corrupt contract which will require you to pay for the entire damage to the car and also the going rate of the 5 days you leased the car for. (Mukhtasar Quduuri p.89)

1. As the damage to the vehicle was purely unintentional and a complete accident, from a Shar’ee point of view must I pay for the car?

2. If I must pay for the car, must I pay the market value or the price he purchased the car for?

3. If I must pay the market value, what date should the car be valued for and whose opinion or which method will be final in deciding the value?

As long as it was an accident and you were driving within the speed limit then you will not be liable to pay for the damage of the car.

4. Am I also liable for the hire charge that was agreed for two weeks of usage of the car(£170), considering that the incident happened on the 5th day of hire and the car was officially scrapped on the 7th day

5. If I am liable for the hire charges, how many days would I have to pay for and and what rate?

If you had stipulated that the contract period is for 14 days and each day I will pay £20 for example, then if the leased object was to perish after 5 days you would have been entitled to pay £100. However, as you did not stipulate a daily figure, you will be required to pay the entire amount. (Mukhtasar Quduuri p.88)

6. As I spent a lot of money retrieving the car and then the tow-truck driver was paid for his time, etc., would any of that be deducted from any sum of money I owe the owner?

7. Are there any other rulings that you can see as relevant or important relating to the situation above?

The lessee is responsible for the return of the transport to the place where the contract was made. (Badaaius Sanai p.209 v.4)

Therefore, it will be necessary for you to pay the amount which was required to release the car and transferring to where the contract was made.

Only Allah Knows Best

Mohammed Tosir Miah

Darul Ifta Birmingham