Oral Construction Agreements for Village-Owned Housing in Aceh

The Theory of Ijārah ʿalā al-Aʿmāl

Abstract

This article examines the legal and governance consequences of oral construction arrangements used for village-owned rental housing in Darussalam Sub-district, Aceh Besar. It combines a qualitative socio-legal case study with doctrinal analysis of Indonesian construction-contract principles, village procurement governance, and the Islamic contract of ijārah ʿalā al-aʿmāl. The field evidence shows that village officials negotiated project scope and budget with a local contractor, construction was undertaken by four workers, payments were made progressively, and completion deadlines were agreed but were not reduced to a sufficiently detailed written instrument. Delays and workmanship problems subsequently generated additional costs and uncertainty over responsibility. The article makes three arguments. First, the case involves at least two distinct contractual layers—the relationship between the gampong and the contractor, and the contractor’s separate relationship with workers—and liability should not be collapsed across them. Second, an oral agreement is not automatically invalid under either general contract principles or Islamic law; the critical problem is evidentiary and governance weakness, especially where village funds, public accountability, quality specifications, milestones, variations, supervision and remedial liability are involved. Third, ijārah ʿalā al-aʿmāl supports clear specification of the service, remuneration, duration and responsibility for negligent performance, but it should be integrated with Indonesia’s positive-law framework for village procurement. The study concludes that village-funded construction should use a written contract containing measurable specifications, milestones, payment conditions, variation procedures, inspection rights, delay consequences, defect liability and dispute-resolution clauses. Such formalisation would improve both Sharia contractual certainty and accountable management of village assets.