Assalaamu alaikum,
As you can see, this injunction is specifically in the case of a contract of a commercial nature. It is not referring to testimony in general. Indeed, there are examples of women's testimony being accepted as valid (for example, there are many ahadith that are related on the testimony of a single woman). It is also not necessary to produce two male witnesses for everything that happens. In a normal court of law, the judge listens to various different people with different parts of information, as well as physical evidence. Each man and woman relates what they know. It is not necessary that each occurrence have two witnesses who agree on all points. The judge then needs to consider all the evidence as a whole and try to come to a just and wise decision.
If you read the descriptions of how the Prophet (PBUH) dealt with matters brought before him to judge, he would question different people (including women) to try to get to the truth. He did not request that each statement be verified by witnesses. However, in cases where the punishments were more severe (like death), he did ask for witnesses that the accused had committed the offence. A confession from the accused was also accepted as proof.
(smile) I am sure I have not covered all points. I just wanted to point out that the necessity of two witnesses is not a universal one. It depends on the situation.
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Wa alaikum salaam wa rahmatullah.
The Law of two witnesses is an important and well known law for confirming theft and killing. In case of crimes related with sex like adultery 4 eye-witnesses are necessary so much so that an accusation of adultery without bringing FOUR witnesses shall make the accuser punishable with 80 lashes. For proof, read the verse 4 of Surah Al Noor (chapter 24). Also many such cases were judged by the prophet salla Allaho alaihi wa sallam with four witnesses. Then a special law was revealed to judge a case between spouses (husband and wife). That means: If a husband accuses his wife of committing adultery and the husband has no witnesses to confirm the case, then he will swear 5 times with special words as revealed in verses 6-7 of Surah al Noor. The other spouse (wife in this case) can escape the punishment by swearing 5 times in special words as are revealed in the verses 8-9 of Surah al Noor.
There are other cases where only one woman's words are accepted. That is in case of her divorce and zihaar. For e.g. a man divorced his wife with three divorces together at one time, in their house when none other than they heard the words of divorce. The husband denied his giving of divorces, in front of people. Now the woman is in a hard situation. If she lives with him, their relation will be adultery. If she wants to leave him she has no proof of divorce. So Allah, The Greatest of judges, revealed the law of Zihaar in Surah Al- Mujadilah (58, the fighting woman) in which the woman's words were accepted by Allah and Allah's Prophet (salla Allaho alaihi wa sallam) without any witnesses.
Confession of sin by the sinner is always accepted and doesn't need witnesses.
But the Prophet salla Allaho alaihi wa sallam didn't rush to punish such a person. Rather he used to ask him in detail to confirm that his crime was punishable.
There is a wonderful story of Ali radhi Allaho Ta'ala anhu regarding TWO witnesses. When he was calipha (the Ruler of the Muslims), he, once, lost his armor in the darkness of the night. He was riding his horse when the armor fell down from him. He tried to find it but wasn't possible in darkness. So he went home. Next day he came to the place to take his armor, but a zhimmi (a Christian who used to live under the Islamic Rule) had already picked up the armor. Ali raa told him that it was his armor. But the Zhimmi insisted that it was his own armor. Then the two went to the Judge Shureh. The Judge heard the story, and said to Ali raa, " Ameer al mo'mineen, I believe that you are true, but I cannot decide the case without two witnesses".
Ali raa brought his son, Hasan raa and his freed slave as witnesses. They said to the judge that it was Ali's armor. The Judge said that "son" is not accepted as a witness for his father, therefore Ali raa had to bring another witness. On hearing this Ali raa said to the Zhimmi, "you can keep this armor because I have no other witness." The Zhimmi said, " ash-hadu an laa ilaha illa Allaho wa ash-hdu anna Muhammad ar Rasoolullah, this is surely God' Deen, very strange that the Calipha is judged by the court and the decision is given in favor of me". He accepted that Ali raa was true in his statement and that the armor belonged to him.
By the application of the law of Justice sincerely, the Zhimmi was impressed so much that he became Muslim! Ali raa said to the new muslim, " As you have acceptd Islam, therefore now this armor and this horse are gift for you".