Context & Objective: The interaction between law and economics utilizes microeconomic tools to evaluate the efficiency of legal rules and human behavior under the constraint of resource scarcity. Integrating the economic analysis of law into Islamic jurisprudence (Fiqh) requires identifying compatible indigenous frameworks. While extensive literature exists independently on both the economic analysis of law and the foundational jurisprudential concept of bināʾ al-ʿuqalāʾ (the established continuous practice and consensus of rational people irrespective of their religious affiliation), the systematic intersection of these two domains remains underexplored. The primary objective is to conceptualize how the findings of the economic analysis of law can be systematically incorporated into Islamic legal deduction. The central problem revolves around utilizing economic models of human behavior to propose optimal rules for regulating private relationships, evaluating the systemic effects of current legal frameworks, and maximizing the functional efficiency of these rules within the boundaries of established Islamic jurisprudence. Method & Approach: A doctrinal legal methodology is employed to investigate the integration of economic principles into jurisprudential reasoning. The scope of the inquiry is strictly restricted to private contract law, explicitly excluding matters of criminal and public law to maintain analytical precision. The methodological execution relies on a focused case study approach, selecting three specific contemporary legal challenges within contract law. For each selected issue, the structural legal and economic dimensions are sequentially analyzed to evaluate the feasibility of aligning the outcomes of modern economic analysis with the established practice of rational people. Findings: The integration of economic analysis with rational practice yields distinct legal outcomes across the three examined contractual issues. First, in the context of īfāʾ-i dayn (the precise fulfillment or discharge of a financial debt), economic analysis demonstrates that the time value of money fundamentally alters the subject matter of the legal obligation. Returning the mere nominal value of a monetary debt after severe inflation does not constitute fulfillment under rational practice; instead, rational actors inherently demand the preservation of purchasing power. Second, concerning taʿdīl-i qarārdād (the adjustment of a contract), long-term agreements subjected to severe, unforeseen inflation suffer a critical loss of economic equilibrium. Economic analysis identifies this structural imbalance as a tangible detriment, prompting rational practice to invoke the rule of lā ḍarar (the fundamental jurisprudential maxim prohibiting the infliction or reciprocation of harm). This rational recognition of financial harm justifies interventions such as judicial contract adjustment, mandatory renegotiation, or the granting of termination rights. Third, regarding the hierarchy of remedies upon a breach, traditional frameworks often prioritize forced ijrā-yi taʿahhud (the specific performance of an obligation) through judicial channels before permitting contract termination. Economic analysis reveals that mandating prior judicial enforcement generates excessive transaction costs and market inefficiencies. Rational practice consequently favors granting the aggrieved party an immediate, concurrent right of termination to bypass judicial friction, a stance further supported by jurisprudential rules aimed at maintaining market stability and preventing disruptions in commerce. Conclusion: The data and behavioral models generated by the economic analysis of law function as concrete manifestations of the established practice of rational people. When economic analysis accurately reflects how rational actors navigate legal and financial realities, these behavioral norms operate either as independent legislative evidence to derive new legal rulings or as interpretative mechanisms that clarify the factual grounds and scope of existing jurisprudential rules. This methodological integration allows Islamic legal deduction to adapt dynamically to modern economic realities. However, the utilization of economic analysis must be cautiously balanced against broader legal tenets. Economic efficiency cannot be the sole determinant of legal validity; it must remain subordinate to the overarching intellectual foundations of Islamic law and fundamental principles of contract law, ensuring that the pursuit of efficiency does not compromise essential non-economic protections and equitable legal principles.
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Shahbaz Ghahfarrokhi,S . (2026). Application of Economic Analysis of Law in Islamic Legal Reasoning. Journal of Islamic Law Research, 27(3), 2205-2230. doi: 10.30497/law.2026.249157.3892
MLA
Shahbaz Ghahfarrokhi,S . "Application of Economic Analysis of Law in Islamic Legal Reasoning", Journal of Islamic Law Research, 27, 3, 2026, 2205-2230. doi: 10.30497/law.2026.249157.3892
HARVARD
Shahbaz Ghahfarrokhi S. (2026). 'Application of Economic Analysis of Law in Islamic Legal Reasoning', Journal of Islamic Law Research, 27(3), pp. 2205-2230. doi: 10.30497/law.2026.249157.3892
CHICAGO
S Shahbaz Ghahfarrokhi, "Application of Economic Analysis of Law in Islamic Legal Reasoning," Journal of Islamic Law Research, 27 3 (2026): 2205-2230, doi: 10.30497/law.2026.249157.3892
VANCOUVER
Shahbaz Ghahfarrokhi S. Application of Economic Analysis of Law in Islamic Legal Reasoning. Journal of Islamic Law Research. 2026;27(3):2205-2230 (In Persian). doi: 10.30497/law.2026.249157.3892