Understanding Islamic Contract Theory in Smart Contracts: Blockchain and Shariah Analysis

Abstract

This manuscript examines the integration of Islamic contract theory within smart contracts by analyzing the compatibility between blockchain technology and Shariah principles. The purpose of this study is to explore how fundamental Islamic contractual elements—such as consent (ijab and qabul), object of contract (ma‘qud ‘alaih), contractual capacity, and the prohibition of gharar, riba, and maisir—can be applied and enforced through smart contracts on blockchain platforms. The study adopts a qualitative doctrinal and conceptual research method, combining classical Islamic jurisprudence analysis with contemporary blockchain and smart contract literature. The findings reveal that smart contracts can support Shariah-compliant transactions by enhancing transparency, immutability, and automation, particularly in contracts such as murabaha, ijarah, and wakalah. However, several challenges remain, including legal enforceability, coding rigidity, oracle dependency, and potential Shariah non-compliance arising from ambiguity in contract execution. The study concludes that while smart contracts offer significant opportunities for strengthening Islamic financial contracts, Shariah governance frameworks, standardized contract templates, and collaboration between Shariah scholars and technology developers are essential to ensure compliance. This research contributes to the growing discourse on Islamic fintech by providing a structured Shariah analysis of smart contracts and highlighting pathways for their ethical and lawful implementation in Islamic finance.