Ijtihad is a principle of Shariah (Islamic law). There is general acceptance among the religious scholars, the ulema, that the source of this principle of ijtihad in the Shariah is a Hadith narrated by Muaz ibn Jabal, a senior companion of the Prophet and recorded by a number of traditionists, like Abu Dawood, At-Tirmizi, An-Nasai, Ibn Majah and Imam Ahmad. The Hadith is as follows:

Muaz ibn Jabal said that when the Prophet sent him to Yemen as governor, he asked him how he would decide matters. Muaz replied that he would decide in accordance with the Book of God. Then the Prophet asked him what he would do in case he did not find the required guidance in the Quran. Muaz replied that he would seek guidance in the Hadith. The Prophet asked him what he would do if he failed to find guidance regarding the matter in the Hadith as well. Muaz replied that in that situation he would exercise his judgment to the best of his ability. The Prophet then placed his hand on his chest and said, “May God be praised, for granting this ability to Muaz".

This Hadith is regarded as the fundamental source of the principle of Ijtihad. When we examine this Hadith, we learn exactly when a Muslim is allowed to do ijtihad in Islam—he or she is permitted to do so only when no guidance is available for that particular situation in the Quran and Hadith.

Source: Spirit of Islam February 2014