The Emergence of the Islamic Legal System and its Impacts on the Contracting Costs in the Arabian Peninsula (An Introduction to Economic Analysis of the History of Islamic Jurisprudence)

Sharifzadeh, Mohammad Javad; Naderan, Elyas

doi:10.30497/ies.2010.1082

The Emergence of the Islamic Legal System and its Impacts on the Contracting Costs in the Arabian Peninsula (An Introduction to Economic Analysis of the History of Islamic Jurisprudence)

Authors

Mohammad Javad Sharifzadeh

Elyas Naderan

10.30497/ies.2010.1082

Abstract

The existence of a specific legal system, which precisely defines property rights and
contract rights, can play an important role in reducing the Contracting Costs. Before
the advent of Islam, Northern Arabian Peninsula lacked the Property and Contract
Laws and, consequently, a specific legal system. Thus, the contracting costs in that
era were high. The migration of the Prophet Mohammad (PBUH) to the Medina
created a suitable environment for the introduction of the Islamic legal doctrine.
However, the question is: whether the Islamic legal teachings could play the role of
a specific legal system in reducing contracting costs despite the prohibition of
writing
hadith
and consequently the verbal status of the Islamic legal teachings in
the first century AH. However, we should not forget that in this century the legal

verses of the Holy Quran were written and many of the senior and junior

Companions (

Sahabah
) were alive and have determining role in managing Islamic
courts, the facts that prevented a legal gap in the first century AH. Islamic legal

teachings contain a wide range of legal issues, especially issues related to property

rights and Contract rights. So by relying on the vast historical and jurisprudential

evidence we can reject the hypothesis that “Islam did not design and introduce a

specific legal system”.

Keywords

law and economics

Transaction Costs

Islamic Jurisprudence and Law

Arabian Peninsula

history of Islamic Jurisprudence and Jurists