A Comparative Analysis of the General Theory of Arsh in Islamic Jurisprudence and the Principle of Price Reduction in the CISG

The examination of traditional legal institutions is a prudent approach to ensure effective contractual remedies. "Arsh" is one such institution that predominantly arises in relation to the option of defect. This paper aims to review the perspectives of Islamic legal scholars on Arsh in order to establish it as a general theory. However, it should be noted that this review does not propose a structural alteration in the nature of Arsh; rather, it intends to conduct a jurisprudential inquiry into the subject-matter. With regard to the nature of the general theory of Arsh, it can be categorized as a form of damages and compensation resulting from a breach of contract and contractual liability. In such cases, it aligns with the relevant legal principles. The basis of damages in the general theory of Arsh also exhibits a dual nature. While it is rooted in contractual compensation, if such compensation cannot be adequately provided, civil and obligatory liability may be invoked. One of the well-established legal-historical principles in the Civil Law system is the rule of Price Reduction, which bears resemblance to the institution of Arsh (i.e., the financial difference between a defective and non-defective item that is compensated to the customer) in the Islamic legal system. It is noteworthy that the foundation of Price Reduction lies in the principle of Commutative Justice, which serves as the basis for contractual liability in the realm of contract law.