Beyond Formal Validity: Explicit Contract as an Instrument of Maqashid Objectification in Islamic Finance

Abstract

The legal principle al-umur bi maqashidiha holds that the legal assessment of an act cannot be separated from the purpose underlying it. However, the application of this principle in the context of Islamic financial institutions confronts a fundamental structural problem: the purposes and intentions of the contracting parties are inherently internal and cannot be directly accessed by law, whereas legal evidentiary mechanisms can only operate on facts that are outwardly manifest (zahir). This article argues that this structural tension can be bridged through the instrument of contract. A contract formulated explicitly and comprehensively has the potential to serve as a medium that transforms what was originally an internal purpose referred to in the context of a contract as maqashid al-aqd into a declaration of will that can be identified, verified, and evaluated under law. This research employs a normative legal approach with a conceptual method, analyzing the construction of the al-umur bi maqashidiha principle and testing it in the context of the murabahah contract as the most dominant financing contract in Indonesian Islamic banking. The findings show that an explicit contract performs two principal functions, a declarative function, which openly states the purpose of the transaction, and a verificative function, which provides an objective basis for the legal assessment of contract performance. Each element of the murabahah contract mandated by DSN-MUI Fatwa No. 04/DSN-MUI/IV/2000 constitutes a layer of intent objectification that strengthens the reflection of the parties’ maqashid al-aqd in a form that can be verified outwardly. The implications of this framework touch upon two dimensions at once, institutional sharia compliance and consumer protection.