The Application of Ujr

Introduction

The paid amount for service rendered is ‘ujr
Could arise from contract of wakalah, kafalah, ijarah and other contracts pending on circumstances .
‘ujr represents what someone is entitled to receive either due to nature of contract or occurrence if events that would trigger the payment of ‘ujr, though not it was not intended in the contract.

Definition

Same as above.
Even rental payment (‘ujrah) will also come under this.

Fees or wages are essentially the payment paid by the service seeker to the service performenr as the counter value (‘iwad) for the services. The ‘ujr necessarily need not be money.

Conditions of ‘ujr

Three conditions
1.‘Ujr shall be a property which is fixed or known and of value (from shari’ah perspective)

The difference of opinion is only for the venue of settlement.
View 1- Hanafi (more suitable according to author)
Must Specified Clearly -If Object not easily portable & require additional cost of transportation.

View 2- Abu Yusuf & Shaybani
No need to specify - the location of contracting is the location.-no need to specify.

For the ‘ujr to be anything other than money
View 1- Abu Yusuf & Muhammad al-Shaybani
Prohibited –as this would lead to uncertainity

View 2- Abu Hanifa
Allowed – on the basis of istihsan or equity principle. Based on Qur’an “And the mothers should suckle their children for two whole years for him who desires to make complete the time of suckling; and their maintenance and their clothing must be-- borne by the father according to usage” [al-Baqarah: 233]

Islamic commercial law – mixture of both.

Conditional reduction
View 1: Majority
Prohibited- But if allowed should be for the price of the equivalent (determined from the market)
View 2: Abu Yusuf & Muhammad al-Shaybani
Allowed: as qualification of time is just to fix a certain time for performance. As long as ‘ujr is fixed and agreed it is ok.
Stipulation by AAOIFI – for floating rental, first period of rental should be fixed then the rental for subsequent periods could determined according to a benchmark. The benchmark or formula should not be subjective to dispute. E.g?

2.‘Ujr as cash or kind or benefit
For service- if it is different from the counter value of the service.
Hanafis – minority view for services exchanged in the same category.

3.‘Ujr as a part of services or part of end product of work (shuyu’)
View of Malikis (minority). Even Hanbalis tend to support this view. Derived from the basis of mudarabah and musaqah.

Why the majority declined? – wisdom

In present modern application, the view of Maliki and Hanbalis is to be preferred.

Prohibited elements of ‘ujr

a.Cannot be something unknown unless structured under ju’alah
b.Cannot be applied to contracts of exchange which are based on a profit margin

Types of “ujr

1.Payment to service provider for services performed
E.g. Kafalah, wakalah, ju’alah and hire contract
Ijarah – Benefit & rental
Ujr – Fee & services
2.Payment to service provider for the services given or offered
This is someone who provides some assets for leasing purposes.
‘ujir mithi – silent on the question of any payment. Example?