Beyond Force Majeure: Rethinking Contractual Risk through the Lens of Shariah and Common Law Doctrines

Abstract

This article explores the limitations of the traditional force majeure doctrine in managing contractual risks and proposes a comprehensive framework that integrates principles from both Shariah and common law. While force majeure clauses in common law primarily serve to excuse non-performance due to unforeseen events, their rigid and narrow application often leaves parties exposed to inequities and unresolved risks. Shariah law, by contrast, emphasizes ethical considerations, risk-sharing, and judicial flexibility, focusing on public interest (maslahah) and avoidance of harm (darar). This study adopts a comparative legal research design to analyze how each legal system conceptualizes and addresses contractual risks beyond force majeure, including doctrines such as frustration, impossibility, and istihalah (transformation). The findings reveal that Shariah’s adaptable and equitable approach complements the common law’s strict contractual interpretations, offering valuable insights for hybrid and transnational contracts. By synthesizing these doctrines, the article advocates for a more flexible, fair, and resilient contractual framework that transcends mere excuse and promotes cooperation, risk-sharing, and contract adaptation in complex commercial environments. Contractual risk allocation traditionally relies on doctrines like force majeure to address unforeseen events that excuse performance. However, the growing integration of Islamic finance and common law-based commercial transactions invites a comparative exploration of how Shariah and common law conceptualize and manage contractual risks beyond force majeure. This article critically examines the similarities and divergences between the two legal traditions, explores complementary doctrines such as impossibility, frustration, and istihalah (transformation), and proposes a holistic framework to enhance contractual risk management in transnational contracts. The study underscores the potential for cross-jurisdictional enrichment, especially in contexts involving Islamic finance, hybrid contracts, and multicultural business environments.