All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad, sallallaahu 'alayhi wa sallam, is His slave and Messenger.
The basic principle is that it is forbidden to sign a condition that includes resorting to man-made laws for judgement, but these conditions are now widespread, and prohibiting the signing of the contracts that contain such a condition causes harm and extreme hardship to the people.
Indeed Allah has not placed upon His Slaves in the religion any difficulty, and He wants easiness for them and not hardship.
Therefore, we hope that there is nothing wrong with signing a contract that includes that condition, while a person should hate it in himself while signing it, and should intend in his heart that he will resort to it for judgment when necessary in matters that are in accordance with the Sharee’ah; and this is permissible.
The articles of man-made laws are not all contrary to the provisions of Islamic law: they include: honesty, loyalty, mastery of work and not transgressing others without a just cause, and justice and equality between the people in matters of life: all these things and the like are so many in our Sharee’ah and are stipulated by all laws.
Shaykh Ibn ‘Uthaymeen discussed an issue in Ash-Sharh Al-Mumti’, in which he said:
“Is it permissible to refer for judgement to those who judge by man-made laws if we are right, or should we leave our rights to be lost? The answer is: Ibn Al-Qayyim mentioned at the beginning of the book At-Turuq Al-Hukmiyyah that some jurists said, 'We do not refer to them for judgement.' He [Ibn al-Qayyim] said, 'This cannot reform the conditions of the people, especially given that there are many who rule with other than what Allah has revealed. So you may refer to them for judgement, but if you were judged with other than what Allah has revealed, then you do not accept it, but to leave the rights of the people to be lost, then no. Because there may be properties and many heirs, so it is not permissible to lose them just because this person judges by [man-made] laws. Rather, we resort to him for judgement then if he judges with the truth, then the truth is acceptable from any person, otherwise no.”
Whatever the case may be, in our view if someone needs to sign a contract that includes such a condition, then he may sign it while hating it (in his heart) and he should intend that he accepts the rulings that are in accordance with the Sharee’ah and that he does not accept (he is not pleased with) what Allah has not revealed and he does not approve of it, but he was obliged to sign the whole contract [that included that condition].
For more benefit, please refer to Fataawa 348955, 384595, 340921, and 237532.
Allah knows best.