Explanation of Article 395
The article clarified the validity of the settlement contract even if the rights included in the contract are unknown, under two conditions:
The first condition: the ignorance of the right must not prevent delivery. The second condition: it must be impossible to know it within a short period. The reason for the validity of the settlement despite the ignorance is that the parties intended to resolve the dispute; thus, the ignorance is overlooked to achieve this goal, avoiding the potential or ongoing dispute. It is mentioned in the Sunnah that two men came to the Prophet, peace be upon him, disputing over inheritances between them that had become obsolete with no evidence between them... the hadith, in which he said to them: Go and divide, then seek the truth, then draw lots, then reconcile. An example of this settlement is what is included in Article (39), and also when a creditor claims rights against a debtor arising from several transactions, and it is impossible for them to know their amount within a short period; they avoid the dispute between them by agreeing that the creditor waives these unknown rights in exchange for the debtor paying him a specific amount. However, if the ignorance prevents delivery, the settlement is not valid; because the subject matter would then be unspecified and not capable of specification, thus violating the condition of its validity; for example, agreeing to give compensation in exchange for waiving a percentage of the unknown claimed rights without specifying that percentage; here, the subject matter is unspecified and not capable of specification, as ignorance of the amount waived from these rights prevents the delivery of the remainder that was not waived by the settler; thus, the ignorance inevitably leads to a dispute. The article clarified that the short period in which it is possible to reach knowledge of the unknown disputed right, eliminating ignorance, varies according to the nature of the right; money differs from other movables and real estate, and the period also varies according to the amount of the disputed right; the rights may be intertwined in complex transactions that make it difficult to ascertain the amount of the right, or they may be less than that. The period also varies according to the location of the right; the transactions or rights may be within the country, making it possible to know them in a short time, or the dispute may be in transactions or rights outside the country, making the period to know them longer; and the estimation of this period is up to the court.
Related To
Article 395
Reconciliation shall be deemed valid even if it involves an unknown right, provided that lack of knowledge does not preclude delivery and the knowledge of such right cannot be attained within a short period of time due to the nature, amount, and location of the right.