The Influence of the Role of Prevailing Custom in the Jurisprudential Ruling of the Theory of "Compensation of the Depreciation of Money"

Document Type : Research Article

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Abstract

There are a large number of jurisprudential issues whose significations and extensions the Divine Lawgiver has not clarified, hence referring them to prevailing custom. One of these issues is token money and its depreciation. Such concepts as token money, depreciation of money, settlement of debt, and demanding extra are all matters of prevailing custom, and their significations as well as their extensions are referred to it. The question is whether, in the case of settling a long-term monetary liability concurrent with the depreciation of money, the nominal value of the bill, i.e., the figures inscribed on it, should be taken into account. Is this idea supported by prevailing custom and the behavior of reasonable people, or is it necessary to consider the real exchange value and the real purchasing power of the amount borrowed? In spite of the dominant view of jurisprudents concerning the religious prohibition of demanding anything more than the nominal value, the article proves the hypothesis that, firstly, what customarily motivates people toward token money is its purchasing power and exchange value, not its nominal value. Therefore, this point should be taken into consideration when settling debts. Secondly, custom or reasonable behavior does not accept the theory of compensating for the depreciation of money absolutely and in all cases of inflation. Rather, it has shown different reactions toward different rates of inflation, issuing a particular ruling in each case.

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Journal of Islamic Law Research
Volume 9, Issue 2 - Serial Number 28
September 2009
Pages 287-319

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History

  • Receive Date: 20 November 2008
  • Revise Date: 07 January 2009
  • Accept Date: 24 January 2009

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