Islamic Law of Contract

Literally, the word 'aqd (contract) is derived from the Arabic verb 'aqada which means to tie, to conclude or to ratify. Al-'aqd as a verbal noun means al-rabt which denotes tying or correlating. Muhammad Qadri Basha defines 'aqd technically as the connection of an offer (ijab) emanating from one of the two contracting parties with the acceptance (qabul) of the other party in such a way that constitutes an implication on the subject matter. As a result of this connection, both parties fall under obligation to one another. Muhammad Abu Zahran defines it as a connection between two sayings (of the two contracting parties) from which arises a legal ruling which is applicable to one party or both of them. It can be said that the above two definitions emphasise that 'aqd is made of a connection between the words of the offeror and the words of the offeree which thereafter creates legal consequences on the subject matter and constitutes contractual obligations binding upon the contracting parties.

Exchange Contracts

Musawamah (bargain sale) is defined as a sale contract without disclosure of the cost price and profit margin. Hence, the price is determined by bargaining without reference to the item's cost to the seller.

Is It Permissible for a Person (Principal or Agent) to Quote a Price for Goods Before Taking Ownership of Them?
Is It Permissible for KFH to Buy Goods at the Prevalent Market Rate With a Possibility of Discount and Then to Sell Them to a Third Party on the Basis of Murabahah or Musawamah?
Can a Bank Choose to Execute a Sale at a Negotiated Price Rather Than Cost Plus Markup?
Is It Allowed for KFH to Purchase a Commodity from a Company Which Has Already Promised to Enter into a Deal with a Buyer?
Resolution No. 174: Adding a profit rate to the price quote of a commodity that the client wishes to purchase in murābaḥah
Can a Contractor Renegotiate to Get a Lower Price from Its Subcontractors without Passing the Discount to the Customer Who Accepted Its Original Price?
Can the Murabahah Seller Raise the Markup if the Deal Involves Advance Payment That Will Extend the Deal’s Timeline?
If the Goods Arrive before the Documents, and the Intermediate Seller Doesn’t Know the Actual Price, Can the Deal Be Switched to Musawamah?
Making the Original Seller the Bank’s Agent to Sell the Purchased Products to a Previous Prospective Customer
Must the Intermediate Seller in Murabahah Pass a Discount on to the Purchase Undertaker?
Selling Goods Based On Its Specifications
Shortfall in a Good Sold by a Calculation of the Amount
The Buyer Discovers a Defect in the Goods
Using Murabahah to Finance Charitable Projects
(الاتجار في حقوق الملكية الفكرية (الحقوق المعنوية
What is the Difference between Musawamah and Murabahah?
Should a Sale Contract Clarify Whether the Sale is Murabahah or Musawamah?
Is the Seller Responsible if the Buyer Sells the Purchased Good to a Sinner?
Is It Allowed to Bargain in an Istisna‘ Contract?
Is It Allowed to Use LIBOR as a Benchmark?
Some Aspects of Two Contracts in One
Issues in Deferred Payment Documentary Credits
Is Good Inspection Obligatory in Both Musawama and Murabaha Contracts?
What is the ruling on khiyar al-shart (annulment option) for the buyer that is implemented in a number of Islamic financial institutions?
What are the Rulings of Providing Special Advantage to Customers of Murabahah?
ورود المستندات قبل البضاعة في اعتمادات تمويل المرابحة
Murabaha - Standard (104)
Murabaha - Standard (107)
Murabaha - Standard (1) - Bank Bilad

Bay' al-murabahah literally means increase in capital or profit trading. Technically, it is defined as a sale in which the mark up is disclosed to the purchaser as per the seller's purchase price for a trust-sale of a certain specified asset, excluding monetary assets such as debt. It may be contracted either on a cash basis or deferred payment basis. The main distinctive feature that distinguishes it from other kinds of sales is that the seller in a murabahah contract expressly discloses to the purchaser how much cost he has incurred, and how much profit he is going to earn in addition to the cost.

Can an Islamic Bank Share the Commissions Obtained by Its Correspondent Banks from Exporters on an LC?
Can the Commission the Bank Charges for Opening an LC Be Added to the Expenses Included in the Murabahah Price?
Letter of Credit
Obtaining LCs Without Adequate Funds
Taking Commission On Issuance and/or Confirmation Of LCs
Dual Promise in Commodity Murabaha
Can a False Statement Be Made to the Authorities to Facilitate Tawarruq?
Can the Bank Inform the Investor of His Expected Profit in Commodity Murabahah with Variations Based on the Currency Used?
Contract Of Sale And Currency Trading
Sukuk Murabahah of a Company That Mines Gold
Tawarruq Using Cement as the Commodity
Can a Murabahah Deal Be Combined with a Foreign Currency Exchange?
Can Usufruct or a Service Be Purchased and Then Resold to a Third Party?
Transfer of Contract With The Intention of Absconding One’s Responsibilities
With respect to acceptable Murabaha sales, are the transactions described below permissible from a Shariah point of view?
تحديد سقف تمويلي لاستغلاله في تمويل صغار المهنيين بصيغة المرابحة
تمويل حق الامتياز التجاري بالمرابحة او الاجارة
مشروعية تمويل الأقارب في عمليات المرابحة
المرابحة بين الشركة الأم والشركات التابعة
المرابحة على بضائع مخزنة بمخازن مملوكة للبائع
شراء كمية البضاعة المطلوبة على دفعات في حالة المرابحة
شحن البضاعة باسم البنك دون أمره
Is It Permissible to Accept Guarantee and Pledge from the Purchase Undertaker in Murabahah Sales?
Who Bears the Fine in Murabahah Deals When the Customs Department Levies It on the Goods Due to a Delay in Receiving the Goods?
What Are the Shariah Rules of Delivery Terms in the Case of Exports and Imports in Murabahah Deals?
Is It Permissible for KFH to Engage in a Sale in Which a Customer Promises to Buy Goods from KFH Once KFH Purchases Them from the Exporter?
Is It Permissible for KFH to Sell Equipment to a Company Including Its Assembly on the Condition That Assembly Expenses Be Included in the Price of the Sale?
Is It Permissible for KFH When Selling Equipment to a Manufacturing Company to Ask for a Certain Percentage of the Company’s Annual Profits in Addition to the Price of Sale?
Is It Permissible for KFH to Deduct Expenses from the Customers’ Accounts After the Value of Goods Has Been Already Assessed in Murabahah Letters of Credit?
Is It Permissible for Someone to Buy from His Employer on Cash and Sell to His Own Company on Credit?
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Literally: al-wadi'ah means decrease and diminishment. Technically: a sale in which the subject matter is exchanged at a discount from its original price, i.e., selling at a specific loss; also called: bay' al-hatitah or al-naqisah. If bay' al-wadi'ah satisfies all the required conditions then it is permissible. It is one form of trust sale (bay' al-amanah). Jurists also used the term wadi'ah for a loss and for discount of a debt. For further details see ISRA Compendium.

Underlying Concept for Islamic Block Discounting Transaction

Literally: to appoint someone to a position of authority and responsibility regarding some matter. Technically: to resell at cost price with no profit or loss. It is a type of trust sale, for the seller is trusted regarding his reporting of his purchase price. For further details see ISRA Compendium.

Ijarah Sukuk And Shari’ah-compliant Securities As Underlying Assets In Tawarruq Transactions
Murabaha - Standard (1) - Bank Bilad

Istisna' (Manufacturing Sale): Literally, the word Istisna' is derived from the Arabic verb istasna'a which means to request someone to manufacture an asset. Technically, bay' al-istisna' (hereafter istisna'a) is defined as a contractual agreement with a manufacturer to produce items with specified descriptions at a determined price, and manufactured from his own materials with his own effort. If the materials needed are not provided by the manufacturer as they are from mustasni'a (the person who requests the construction of an item), the contract is considered a lease contract. See ISRA Islamic Financial System: Principles and Operations for further details.

Can the Buyer Resell the Subject Matter of a Salam Sale or Istisna‘ before It Is Delivered?
Leasing Combined With Property Development
Can a Contractor Be Fined for a Delay in Completing a Job if No Damage Results from the Delay?
Can a New Contractor Take Over a Construction Project Started by another Contractor?
Can a Project Manager Invite Bids from Contractors and also Submit Its Own Bid for the Same Project?
Can an Islamic Company Build a School for a Client Who Will Run It as a Mixed-Gender Operation?
Can the Client Pay the Contractor the Full Fee That the Contractor Paid the Sub-Contractor, Plus a Certain Percentage?
Can the Customer Ask the Bank to Take His Place in a Construction Contract?
Can the End Customer Guarantee the Work of the Contractor in a Construction Contract?
Can the Public Be Invited to Invest in an Unbuilt Real Estate Project If the Land and Designs Are Ready?
Contractual Price of Istisna'a Linked to the Period of Execution
Guarantee From A Contractor
If the Customer Negotiates Design Changes after a Construction Contract Has Been Signed with the Bank, Does That Affect the Bank’s Agreement with the Builder?
Is it Legal to Combine a Construction and Lease-to-Own Contract?
Is it Permissible to Pay a Contractor a Down Payment Followed by Periodic Installments to Build a Building?
Issue Of Partial Completion in Istisna'a
Resolution No. 129 (14/3): Muqawalah and Construction Contract
Parallel Istisna’: Contractual Relationship
Permissibility Of Muqawalah in Construction
Selling Condominiums before They Are Completed
Selling What is Purchased by Istisna‘ Before Its Delivery
When a Government Agency Hires a Contractor to Build Housing for Citizens, Is It Lawful for the Citizens to Request Changes to the Basic Plan if They Agree to Pay for Them?
Who Bears the Expenses for Executing New Building Code Requirements Imposed after the Construction Contract Has Been Signed between the Subcontractor and the Bank?
Who Bears the Expenses for Inadvertent Mistakes in Administering a Building Contract?
Bank entering into a real estate project as a partner participating by land and as project manager
Government addition of extra conditions after contract signature
The bank's right to obtain delay penalty
Grant the customer the option to pay cash or on deferred basis
Payment of the contractor's remuneration in full, then let the beneficiary pays it in installments and add a specific rate
Request of usury-based banks to construct institutions of their own
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Salam (Delivery) Literally: from sallama: to give, deliver; to advance (a loan) also meaning giving, advance (taslif) and leaving. Technically: sale of a commodity of mentioned specifications that the seller undertakes to supply at a deferred date in exchange for advance payment. The advance payment is called the capital of the salam contract. Or, salam contract refers to a sale contract whereby the seller undertakes to sell some specific commodities to the buyer at an agreed future date in exchange for a price fully paid in advance on a spot basis. See ISRA Islamic Financial System: Principles and Operations for further details.

Can Promises Be Exchanged to Conduct a Second Salam Sale upon Delivery of the Subject of the First Salam Sale?
Can the Buyer Resell the Subject Matter of a Salam Sale or Istisna‘ before It Is Delivered?
Parallel Salam
The sale of a commodity (Muslam Fih) in a Salam sale before taking possession of it
Considering the previous loan as a purchase price of Salam
General provisions of Salam contract
تنفيذ عقد السلم على صفقات
وجود عيوب في السلعة في حالة السلم
عقد السلم والغاء ازالة الغبن وترك أمر الفصل فيه حسب الاتفاق مع العميل
قواعد وأحكام بيع السلم
مراجعة هامش الربح وفق تغيير سعر العائد المصرفي السائد في السوق
A Call Option on a Commodity
Is It Permissible for the Buyer in Salam Contract to Sell the Goods Purchased to a Third Party Who Will Take His Place in the Contract?
RESOLUTION No. 85/2/9: 'AS-SALAM (FORWARD SALE WITH IMMEDIATE PAYMENT) AND ITS MODERN APPLICATIONS
RESOLUTION No. 74/5/8: SHARI'A APPLICATIONS FOR THE ESTABLISHMENT OF THE ISLAMIC MARKET
Resolution No. 72: The Corporation’s commitment, by a promise, to sell a commodity of certain specifications. The promise is fulfilled by delivering the commodity purchased through a salam contract or another contract.
Resolution No. 74: The purchase and sale of crude oil by an istiṣnāʿ contract
Resolution No. 152: The Trade Line Scheme that the Corporation wishes to use in dealing with its clients
قرار رقم 147 (5/16) بشأن السلع الدولية وضوابط التعامل فيها
In a salam contract, to what extent is the buyer allowed to obtain a promise to buy at a specific price from a third party
Salam: Mitigating The Risks Of Changes In Circumstances
The Issue Of Pricing The Subject Matter Of A Forward Sale Contract
Selling The Subject Matter Of Salam Before Its Possession
Purchasing Printed Material with Agreed Specifications for Deferred Delivery
Signing a Contract to Sell Something to the Government before Owning the Product
Purchasing Printed Material with Agreed Specifications for Deferred Delivery
Is it Permissible to Enter in a Salam Contract for a Third Party?
Is It Allowed for KFH to Appoint Another Bank as Its Agent to Purchase a Commodity Through Salam Contract and then Sell It to itself at a Pre-agreed Price?
قواعد وأحكام بيع السلم
عقد السلم والغاء ازالة الغبن وترك أمر الفصل فيه حسب الاتفاق مع العميل
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It is a contractual arrangement that consists of two different and independent contracts; one in which the bank is a buyer and the other in which the bank is a seller. The two contracts cannot be tied up and performance of one contract should not be contingent upon the other. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Can Promises Be Exchanged to Conduct a Second Salam Sale upon Delivery of the Subject of the First Salam Sale?
Can the Buyer Resell the Subject Matter of a Salam Sale or Istisna‘ before It Is Delivered?
Parallel Salam

Dayn (Debt): Literally: dayn is any future liability on a person, without it being in any particular form, money or something else. Technically: jurists use the term 'debt' in two senses: general: an absolute obligatory right for which a person is liable in the future; private (according to the majority of jurists): any monetary obligation on a person that is incurred due to an exchange transaction, damage to property, loan taken, personal injury, or the rights of Allah, such as zakah. Bay' al-dayn is the sale of debt which can be either against a debt or other than a debt, to the debtor or other than the debtor, on a cash basis or a deferred payment basis.

Can the Buyer Resell the Subject Matter of a Salam Sale or Istisna‘ before It Is Delivered?
Exchanging a Deferred Payment Bond in a Currency Other Than the Currency Used to Issue the Bond
RESOLUTION No. 101 (4/11): DEBT SALE AND LOAN DEBENTURES AND THEIR ISLAMIC SUBSTITUTES IN PUBLIC AND PRIVATE SECTORS
Murabahah Purchase of a Factory with Its Outstanding Debt
Selling Construction Materials by Murabahah
Selling Construction Materials by Murabahah
Structuring a Construction Contract as Murabahah with a Mark-up Charged on Payment for Labor
قرار رقم 158 (7/17) بشأن بيع الدين
تحويل عملية مرابحة فاسدة إلى قرض حسن
Taking the Place of the Owner in a Forced Sale
Is It Allowed for a Partner in a Deferred Payment Sale to Sell Its Share to a New Partner?
Is Trading Allowed in Shares That Represent Mostly Receivables and Cash?
What Is the Ruling on Buying and Selling Shares That Represent a Mix of Tangible Assets and Debts?
After Buying a Person’s Debts, Is It Allowed to Give Him a Gift?
Is it Allowed to Manage the Surplus Liquidity of the Islamic Financial Institutions by Purchasing Government Sukuk that are Approved By Bank Negara Malaysia?
Is It Allowed to be a Lead Manager for Sukuk that are not Tradable in the Secondary Market?
Is it permissible for us to buy the debt owed to one of our customers by other parties?
Is it allowed to sell a portion of debts to the bad debt market at a price slightly less than what is owed by the client?
Is it Allowed to Lease out a Real Estate to a Customer and Grant Him the Right to Sublease the Real Estate?
Application of Tawarruq in Sukuk Commodity Murabahah
Sale of Debt Arising from Services
Financial Market Instruments as Underlying Asset in Deferred Transaction
Is it Permissible for the Bank to Purchase the Share of a Partner in a Limited Company and Sell it on Murabahah Basis?
Is It Allowed for KFH to Manage Surplus by Purchasing Government Bonds Based on Bay’ al-Dayn?
Is It Allowed to Purchase Shares of a Company Whose Assets Are Mainly Debts and Cash and Sell Them Through Murabahah to the Purchase Undertaker?
Buying and Selling of Shares in a Company
Labor Services on Murabahah Basis
شراء البنك حصة أحد الشركات في شركة عادية محدودة وبيعها مرابحة لأحد الشركاء

Sarf (Money Exchange): Literally: to turn; turn away; spend; sarrafa: to shift something from one state to another; insarafa: to leave. Technically: a sale of money for money; for example, to sell gold for gold or for silver, or to sell gold or silver for base-metal coins. Malikis define sarf as a sale of one medium of exchange for another. If the exchange is of the same medium of exchange, for example, gold for gold or silver for silver, they do not call it sarf; rather, it is murabalah if the counter-values are exchanged by weight. If they are coins, and the exchange is by number and face-value, the exchange is called mubadalah. See ISRA Islamic Financial System: Principles and Operations for further details.

The Purchaser Opens an LC for Delayed Payment in a Foreign Currency; the Bank Gives a Better Rate for Holding the Money till the Payment
The Bank Charges a Fee for an LC as Compensation for Missing out on the Difference in Currency Exchange Rates
Can the Bank Inform the Investor of His Expected Profit in Commodity Murabahah with Variations Based on the Currency Used?
Contract Of Sale And Currency Trading
A Forex Option
A Promise of Parallel Purchase and Sale of Gold
A Promise to Buy or Sell Currency at a Future Date
A Promise to Buy or Sell Gold or Silver at a Future Date
Are Currency Option Contracts Legal?
Can a Murabahah Deal Be Combined with a Foreign Currency Exchange?
Can the Bank Use Two Different Rates to Sell Foreign Currency?
Charging One Price for a Simple Sale of Foreign Currency and another Price for a Foreign Exchange plus Remittance
Depositing Gold with a Moneychanger and Authorizing Him to Sell It to Himself or Someone Else on Behalf of the Depositor
Exchanging a Deferred Payment Bond in a Currency Other Than the Currency Used to Issue the Bond
Extent Of Permissibility Of Trading In Currencies
Forward Foreign Currency Transaction
Giving a Customer Facilities to Buy Foreign Currency
Is It Permissible for Two Parties to Agree to a Currency Exchange at a Price Different from the Prevailing Rate?
Is it Permissible to Charge a Fee for Cashing a Check in a Foreign Currency?
Is It Permissible to Settle an Undeferred Liability in Gold with Cash?
Is the Exchange of Two Different Currencies Considered Like an Exchange of Gold for Gold?
Mitigating The Risk Of Foreign Exchange Fluctuations
Paying for a Foreign Currency Purchase by Offsetting a Debt
Right To Buy Currencies
T+2 Delivery in Foreign Exchange Transactions
Using an Overdraft Facility at a Bank to Buy Foreign Currency
Which Day’s Exchange Rate Should Be Used in Repaying the Bank for Withdrawals on a Bounced Foreign Check?
Who Should Bear the Exchange Difference when Cashing a Check in a Foreign Currency?
A Promise to Sell Currency in the Future
What is the Shariah Ruling on a Bilateral Promise to Buy a Certain Amount of a Specific Currency at a Fixed Price During a Specified Period?
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Inah (sale and Repurchase) Literally, ˜inah is a loan or an advance payment. It is said in Arabic: tana al-rajul (the man bought on credit). Technically, scholars gave different definitions to ˜inah due to their differing opinions regarding its forms, which will be mentioned later. However, the most famous definition given to it by classical scholars was: A situation whereby a person sells a commodity to another for a specific price with payment delayed until a fixed date, then he buys it back from the other person at a lower price in cash. However, Al-Mawsu'ah Al-Fiqhiyyah (The Juristic Encyclopedia) defines it on the basis of the essence of engaging in it: that it is a loan in the form of a sale in order to make the increase appear lawful. Or Technically: when one sells a commodity for a delayed payment and then buys it from the buyer for a lower price in cash. Some said: it is a loan in the form of a sale, to legitimize the excess. The majority of jurists have forbidden this sale, but al-Shafi and Ibn Hazm permitted it. See ISRA Islamic Financial System: Principles and Operations for further details.

Bai' 'Inah Transactions In The Money Market
Is It Permissible for KFH to Buy Back a Real Estate Property That Was Sold to a Customer on Deferred Payment Basis?
Can a Seller of Goods by Delayed Payment Buy Some of Them Back from the Buyer by Cash Payment?
Is It Permissible for KFH to Purchase Goods Back from the Bank and Then Sell Them to the Same Customer Who Could Not Afford to Pay the Bank for It When the Commodity Arrived?
When Does It Become bayÑ al-ÑÊnah If KFH Sells a Good for a Deferred Payment and Then Buys It After That for a Cash Payment?
Is It Permissible to Finance a Deal in Which There Exist a Suspicion of Bay’ Inah?
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 148th Meeting
The Purchase Undertaker by Deferred Payment Wants to Sell the Good before Completing the Payments
Pre-murabahah Transaction
Murabahah Transaction With A Foreign Company
Murabahah With Exporting And Importing Companies
Revisiting The Rulings On Bai' 'Inah
In a salam contract, to what extent is the buyer allowed to obtain a promise to buy at a specific price from a third party
A Sale and Buy Back without Collusion or Prior Agreement
A Sale and Buyback Deal on Real Estate
Buying a Good When the Importer Can’t Pay for It; Then Selling it to Him
Buying from a Subsidiary and Selling to the Parent Company
When Manufacturing Occurs between Sale and Buy Back
The Agent Buys the Good Back from the Principal
Sale and Buy Back without Stipulation
One Department of the Bank Buys a Commodity in Cash from a Customer Who Bought it by Deferred Payment from Another Department of the Bank
One Department of the Bank Buys a Commodity in Cash from a Customer Who Bought it by Deferred Payment from Another Department of the Bank
After Selling a Commodity for Cash, the Seller Offers to Buy It Back at a Higher Price for Deferred Payment
Can the Buyer of a Commodity Lease It Back to the Seller with a Promise to Sell It Back to Him at the End of the Lease Term?
Can an Islamic Bank Sell Goods to a Company and then Buy Them from Its Subsidiary?
Can a Financial Penalty Be Imposed for Breach of a Promise to Buy?
Is It Allowed for a Customer To Be the Executor of His Own Construction Contract?
Is It Allowed for a Partner to Sell Commodities to Other Partners?
What Parameters for the Financial Independence of Subsidiary Companies Affect the Legality of Transactions with Them?
Is it allowed to offer tawarruq on shares instead of construction materials (iron and cement)?
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Tawarruq (Monetization/ Cash Financing/ Cash Procurement): Tawarruq is the infinitive (masdar) of the verb tawarraqa (to eat leaves); it is said as tawarraqa al-hayawan (i.e., the animal ate the leaves). Literally: from wariq: silver; also dirhams, which are coined from silver. Awraqa: to become rich. Some say it refers to both minted and non-minted silver (al-fidhah al-madhrubah or al-fidhah ghayr al-madhrubah). Tawarruq was, therefore, used by earlier generations for the purpose of seeking silver money, while it is used nowadays for seeking paper money, and that is a valid literal usage derived from the same word. Hence, the monetisation beneficiary is called mutawarriq. Technically: tawarruq is a term commonly used in the books of the Hanbali school of law while other schools mention the form of tawarruq under the rubric of bay' al-ajal and bay' al- 'inah (sale and buyback). Hence, the technical meaning varies according to its different types. The Al-Mawsu'ah al-Fiqhiyyah Al-Kuwaytiyyah (Fiqh Encyclopedia of Kuwait) defined tawarruq as buying a commodity with deferred payment and selling it to a person other than the buyer for a lower price with immediate payment. See ISRA Islamic Financial System: Principles and Operations for further details.

Can a False Statement Be Made to the Authorities to Facilitate Tawarruq?
Deposit And Financing Products Based On Tawarruq
International Commodity Murabahah
Resolution No. 179 (19/5): Tawarruq: its meaning and types [Organised Tawarruq Impermissible in 2009]
Prohibition of Al-Tawarruq Al-Munazzam in 2007
Rules Of Tawarruq
Tawarruq Using Cement as the Commodity
Tawarruq When the Bank Does Not Involve Itself in the Customer’s Resale of the Good
Tawarruq With a Conventional Bank
Using Cars as the Commodity in Tawarruq
What Is the Shariah Ruling on the Following Process of Tawarruq?
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 151st Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 146th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 144th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 134th Meeting
The Purchase Undertaker by Deferred Payment Wants to Sell the Good before Completing the Payments
التورق المصرفي: اعتماد صيغة التورّق أسلوبًا في التمويل
Revisiting The Rulings On Bai' 'Inah
Sale Of The Tawarruq Asset By The Customer To The Third Party: Issue Of Delivery And Payment
What is Shari’ah Opinion Concerning the Use of Tawarruq in Financing some Needs?
Is it Allowed to execute a tawarruq transaction in order to pay off the debt if the objective is to realize the interests of both parties, especially the indebted customer?
Is It Allowed to Buy and Sell Commodities of Metals in the Bases of Tawaruq?
What is the Ruling on Providing a Tawarruq Transaction to a Company, a Percentage of which is Owned by the Provider?
What is the Ruling of Conducting Tawarruq by Selling Islamic Sukuk or Shares on a Deferred Murabahah Basis?
Is it allowed to offer tawarruq on shares instead of construction materials (iron and cement)?
Is it Allowed to supply a company of a line of credit (in the form of tawarruq transactions) to finance a construction project?
What are the permissible means to restructure a conventional debt in order to conform to the Shari’ah principles?
What are the rules governing Tawarruq operations?
Is there any mechanism to adopt to reschedule the customers’ debt so that the monthly payment is reduced and the number of years is increased?
Is it permissible for us to buy the debt owed to one of our customers by other parties?
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Literally: to take a lot of something; originally, a Persian word; jazf: something of unknown weight or volume. Technically: bay’ al-juzaf: the sale of something of unknown weight or volume. It is a legal sale with conditions; the madhhabs differ over the details. For further details see ISRA Compendium.

The Buyer Discovers a Defect in the Goods

Literally: loyalty (al-wafa') is the antonym of treachery. Technically: when a person in need of cash sells real estate or an asset on the condition that the seller be allowed to get the commodity back upon paying its price. It is also called a trust sale (bay' al-amanah), and the Shafi'is called it a returned mortgage (al-rahn almu'ad). Other names for it are permissible sale (al-bay' al-ja'iz), transactional sale (bay' al-mu'amalah), the sale of obedience (bay' al-ta'ah). Bay' al-wafa' is a defective sale according to the Malikis and Hanbalis and the early Hanafi and Shafi'i scholars. Some of the later Hanafi and Shafi'i scholars consider it permissible, and some said that it is, in fact, rahn (pawning) and takes its attendant rulings. The Islamic Fiqh Academy of the OIC issued a resolution declaring that the reality of this sale is that it is “a loan with added benefits”, so it is a ruse to circumvent the prohibition of riba. It is invalid according to the majority of the jurists; thus, it remains a prohibited contract. For further details see ISRA Compendium.

RESOLUTION No. 66/4/7: BAY'AL-WAFA (DEBT GUARANTEE SALE)
A Sale and Buyback Deal on Real Estate
What Is the Ruling on the Islamic Lease Sukuk for the Government of Bahrain?
Is it Allowed to invest in projects that include loopholes related to bay’ al wafa’ (sale with the right of repossession)?
Is it allowed to buy petroleum equipment from the producer and sell it by murabahah to the client along with a guarantee by the producer?
المشاركة بعد شراء أسهم

Ijarah (Leasing): Literally: the reward given for service rendered. It is derived from the root word ajara to recompense, compensate or to give a consideration or return. Ajr (wage) when used in the context of ijarah means the reward given for work or a service, or a compensation given by the lessee for usufruct in a lease contract. An ajir (worker) (pl. ujar') is a person whose labour is the usufruct, i.e., the subject matter of a lease contract. He could also be called musta'jar (hired) or mu'ajjir (lessor), the owner of the leased property. On the other hand, a musta'jir (lessee) is the beneficiary of the services of a worker or of the leased property. Technically: a contract for transfer of ownership of usufruct for compensation. Some said: sale of a known usufruct for a known compensation. Thus, the lease contract belongs to contracts of financial exchange. Scholars agree that leasing is a lawful contract. The majority of jurists rules that a lease is a binding contract, and they stipulated as a condition for its validity that the usufruct and the compensation must be known. With regard to the time that lease contracts become effective, they are classified into three categories: immediately effective leases, leases effective from a future date, and leases made contingent upon a future event. See ISRA Islamic Financial System: Principles and Operations for further details.

Resolution No. 137 (3/15): Sukuk Al-ijarah
A Client Pays Full Rent at the beginning of the Month but Leaves in the middle
A Tenant Requests Early Termination of a Lease Agreement
Appointing Lessee to Buy Insurance on the Leased Asset
Buying an Asset That Is Leased to a Third Party
Can a Building Be Rented Out before It Is Built?
Can a Contractor Sub-Contract a Job?
Can a Fee Be Charged to Transfer a Lease Agreement from One Tenant to Another?
Can a Landlord Give Selective Discounts to Some Renters?
Can a Tenant Cancel a Lease Agreement before Using the Usufruct?
Can One Partner Lease his Half of a Jointly Owned Asset to Another Partner?
Can the Building Owner Pay Tenants to Leave before the Lease Expires?
Can the Lessor Invest the Tenant’s Security Deposit?
Can the Lessor Unilaterally Modify the Lease to Pass on Increased Costs?
Can Usufruct or a Service Be Purchased and Then Resold to a Third Party?
Does the Client or the Contractor Have the Right to the Subcontractors’ Reduction of Charges after the Bid Has Been Accepted?
Does the Manager of a Real Estate Portfolio Have to Pay the Investors Rent for the Use of Office Space in a Portfolio Building?
Financing Interval
Gifting an Asset at the End of a Lease
Hibah In Al-Ijarah Thumma Al-Bai’
Leasing an Asset to Someone Who May Use It for Unlawful Acts
Leasing Combined With Property Development
Insurance Expenses Paid by Lessee
Leasing Fund: Calculating Zakah
Maintenance Expenses: Maximum Allowable Amount
Penalty on Non-Fulfillment of Ijarah
Renting Property to a Non-Muslim Embassy
Selling or Buying Something Leased to a Third Party
Setting the Sale Price of a Hire-Purchase Property before the Sale
Sublease
+ more

Literally: compensation for a given service. Technically: it is the compensation stipulated for one who completes a task that is either known or unknown and difficult to precisely determine. Conditions for ju'l are that it must be lawful wealth of stipulated type and amount, deliverable, and owned by its promissor. For further details see ISRA Compendium.

Can an Islamic Bank Charge a Fee for Issuing a Letter of Guarantee?
Charging Fees For The Issuance Of A Letter Of Guarantee (LG)
Is it Lawful for the Government to Provide a Guaranteed Minimum Profit on a Project?
Agent: With Or Without Fees?
Charging a Fee to Change the Name on the Promissory Note for a Car
Charging the Customer a Fee to Fix a Mistake Made by the Bank
Selling Traveler’s Checks
Can One Party Take Two Separate Roles in One Investment Operation?
RESOLUTION No. 103 (6/11): MAINTENANCE CONTRACT
قرار رقم 189 (4/20) بشأن استكمال موضوع عقود الصيانة
الضريبة المترتبة على الشركات التي يؤسسها المصرف الإسلامي الأردني خارج الأردن
تقاضي البنك مصاريف من العميل لفتح الحساب الجاري وإمساكه
أخذ البنك عمولة مقابل الخدمات المصرفية
A Service Warranty Agreement for a Car
Commissions on Third-Party Insurance Policies
Bank as a Mudharib: Ruling on Commission on Investment
The Bank Acts as the Car Dealer’s Agent for Collecting Installment Payments from Customers with Accounts at the Bank
Can a Sales Agent Be Paid a Fixed Fee Plus an Incentive Commission?
Can an Islamic Bank Charge a Car Seller for the Vehicle Inspection if He Cancels the Sale after the Inspection?
Can an Islamic Bank Charge a Fee for Issuing a Bank Draft?
If a Customer Cancels the Sale of His Used Car to the Bank after the Title Has Been Transferred, and the Bank Allows It, Can the Bank Charge Him for the Inspection Expenses It Incurred?
Can the Bank Stipulate That the Purchase Orderer Pay Administrative Fees in Addition to the Cost of the Good and the Profit Markup?
Can a Car Dealer Charge the Bank a Commission for Referring a Prospective Buyer to the Bank?
Can the Employer Delay Payment of the Monthly Salary of an Employee under Probation?
When the Lessor in a Lease-to-Own Contract Also Undertakes Design Work and Gets Project Licenses, Can It Charge the Customer for these Services in Installments?
Is It Allowed to Appoint an Agent to Find Properties for Sale, Buy Them on Behalf of the Principal, and Collect the Rent on His Behalf?
Is It Permissible in a Lease Contract to Impose Fees on the Lessee for Ads and Promotions?
Is It Allowed to Pay a Person for Helping to Obtain an Investment License?
Is It Allowed to Stipulate a Fixed Salary for the Entrepreneur in Mudarabah Plus a Percentage of the Profit?
Is It Allowed for a Partner to Stipulate a Fixed Salary for Managing the Company and Then Distribute the Profits According to Agreement?
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RESOLUTION No. 73/4/8: AUCTION CONTRACTS
Why Do Some Scholars Distinguish between Loans and Other Liabilities When Money Is Scarce?
Is There Any Shari‘ah Limit to a Seller’s Profits?

Partnership Contracts

Musharakah (Partnership): The Arabic word musharakah is a derivative from the root word sharaka, which literally means sharing, and mixing shares of two or more parties to make them interchangeable. Technically, Hanafi scholars define musharakah as contract between partners on both capital and profit. The Malikis define it as permission to transact where each of the partners permits the other to transact with the partnership property while at the same time retaining his own right to transact with the same property (Al-Dardir, Al-Sharh Al-Kabir, 3/348). Shafi'i scholars define partnership as confirmation of the rights of two or more people over a common property (Al-Sharbini, Mughni Al- Muhtaj, 3/221). According to Hanbali scholars, it is the amalgamation of rights or the freedom to use (Ibn Qudamah, Al-Mughni, 5/3). See ISRA Islamic Financial System: Principles and Operations for further details.

Resolution No. 148 (6/16): Al-Kafalatu Al-tijariyyah (Commercial Guarantee)
Obtaining LCs Without Adequate Funds
Resolution No. 156 (5/17): The Completion Of Sukuk Al-Musharakah: The Components Of Its Assets
Can One Partner Lease his Half of a Jointly Owned Asset to Another Partner?
Can the Public Be Invited to Invest in an Unbuilt Real Estate Project If the Land and Designs Are Ready?
Issue Of Partial Completion in Istisna'a
Finance jointly with a usurious financer
Can a Trucking Company Charge Its Truckers a Commission for Acting as an Intermediary with the Government?
Is it Lawful for the Government to Provide a Guaranteed Minimum Profit on a Project?
What Is the Ruling on the Agreement for Purchase and Resale of a Plane Where KFH Purchases It Through a Partnership and Sells It Through Murabahah?
Guarantees As Separate Contracts in Musharakah, Mudarabah & Wakala
Syndicated Financing Between Islamic And Conventional Institutions
Can an Islamic Bank Partner with a Conventional Bank in a Lawful Project?
Can One Party Take Two Separate Roles in One Investment Operation?
What’s the Shariah Ruling Regarding Buying a Specific Commodity Based Upon a Customer’s Promise to Buy the Commodity by Deferred Payment?
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 146th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 143rd Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 135th Meeting
Resolution No. 104: The permissibility of participating with University A to develop a cure for cancer
Resolution No. 114: The permissibility of the lessee participating in the profit or loss when the leased asset is sold
Resolution No. 117: A partnership agreement between Al Rajhi Corporation and Company A
Asking the Customer for a Share of His Profits as Payment for a Murabahah Sale
Can One Buy Shares of Jointly Owned Property and then Sell Them to One of the Partners by Murabahah?
Joint Purchase Followed by a Murabahah Resale to One of the Partners
دفع الزكاة عن أرباح أموال المساهمين أو الاحتياطيات
مسؤولية العميل عن التأمين في معاملات المشاركة
عمل وديعة مخصصة من دون خلطها بأموال المصرف
السحب المبكر من وعاء المضاربة
احتساب نتائج المشاركة
Legal Constraints on Buying Shares of Limited Liability Companies
+ more

Mudarabah (Silent-Partnership Enterprise) Literally: Form derivation of daraba; one of its meanings is to travel across the earth. The literal meaning of the word mudarabah was used in the Quran: "... and others who travel in the land seeking of the bounty of Allah" (Al-Qur'an, 73: 20). "... but when the prayer is ended, they disperse abroad in the land and seek Allah's grace..." (Al-Qur'an, 62: 10). "... there is no blame on you in seeking bounty from your Lord ..." (Al-Qur'an, 2: 198). Technically: a type of partnership for profit in which one partner (the rabb al-mal) provides capital and the other partner (the mudarib) contributes his labour. The profit will be shared between them according to the terms they agree to. See ISRA Islamic Financial System: Principles and Operations for further details.

Who Bears the Loss in a Mudarabah Venture?
Hibah In Inter-Bank Mudharabah Investment Contract
If the Bank is the Mudarib, Are Its Employees’ Salaries and Allowances Deducted Before Calculating the Profit?
Transfer of Contract With The Intention of Absconding One’s Responsibilities
Can a Mudarib Sell What He Owns to His Principal without Seeking the Principal’s Permission?
Not Stating The Remuneration For The Agent
Guarantees As Separate Contracts in Musharakah, Mudarabah & Wakala
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 150th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 146th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 144th Meeting
RESOLUTION No. 76/7/8: PROBLEMS OF ISLAMIC BANKS
Resolution No. 115: The permissibility of entering into a partnership agreement with a client to import some goods
الجوائز النقدية أوالعينية
تمويل رأس المال العامل من خلال الوكالة بالاستثمار
التأمين على الديون والحياة
(كسر الوديعة (التخارج
الأرباح من وديعة الاستثمار
العائد على ودائع الاستثمار
عمل وديعة مخصصة من دون خلطها بأموال المصرف
أرباح المضاربة في حالة سحب الوديعة قبل انقضاء مدة المضاربة
توزيع الجوائز النقدية لودائع الاستثمار
توزيع الأرباح الناتجة عن عملية الاستثمار
إمكانية صياغة صكوك مشاركة تمويل محفظة
Murabahah Debt Restructuring with Central Banks as Guarantor
Guaranteeing the Shares of Participants of Profit-Sharing Funds and Clearance Funds
Profit Sharing Fund
Wadiah And Mudharabah Current Account
Special Investment Account
Can a Company Partner Be an Employee of the Same Company?
Does Profit-and-Loss Sharing Apply to the Shareholders’ Reserve Funds?
+ more

Literally: zara’a originally meant ‘to grow’ but also refers to sowing of seeds. The Form III derivation means to engage in a sharecropping deal. Technically: cultivation partnership; the owner of a piece of land allows a farmer to grow a crop on it in return for a specified fraction of the total yield (not the yield from a certain part of the land). The Malikis and Hanbalis consider a muzara’ah contract to be permissible and lawful; the Shafi’is permit it with certain conditions; Abu Hanifah and Zufar ruled that muzara’ah is unlawful without qualification. For further details see ISRA Compendium.

Literally: Form III derivation of saqy: to water or irrigate. Technically: an agricultural partnership by which the owner of an orchard turns over a specified number of, fruit-bearing trees to another who will tend them in exchange for a   majority of scholars have permitted it, except Abu Hanifah. For further details see ISRA Compendium.

Literally: Form III derivation of gharasa: to plant. Technically: to give access to uncultivated land to a farmer to plant for a specified period, with the land and trees to be shared between them. The Syrians call it munasabah and mushatarah. It can take three forms: 1) a lease; 2) ji’alah; 3) a combination of the two. Jurists agree overall as to the validity of mugharasah for trees on a lease basis. They differed over the validity of conducting it on a partnership basis. For further details see ISRA Compendium.


Agency Contract

Wakalah (Agency) Literally, the term wakalah or wikalah is a noun of the word wakkala which has several meanings, including performing a task on behalf of others, preservation and delegation of a job to another. Technically: a wakalah refers to authorising another person to undertake any dealings on one's behalf. According to the AAOIFI Shari'ah Standard, Standard No. 23, Clause 2/1, wakalah is the act of one party delegating the other to act on its behalf in what can be a subject matter of delegation. The wakalah is basically a nonbinding contract, whereby the principal or the agent may withdraw at any time by a mutual agreement, unilateral termination, discharging the obligation, destruction of the subject matter and the death or loss of legal capacity of the contracting parties. See ISRA Islamic Financial System: Principles and Operations for further details.

Can an Islamic Bank Share the Commissions Obtained by Its Correspondent Banks from Exporters on an LC?
Can the Guarantor Charge for the Guarantee?
Deposit And Financing Products Based On Tawarruq
International Commodity Murabahah
Depositing Gold with a Moneychanger and Authorizing Him to Sell It to Himself or Someone Else on Behalf of the Depositor
Is it Permissible to Charge a Fee for Cashing a Check in a Foreign Currency?
Maintenance Expenses: Maximum Allowable Amount
Can the Bank Give the Customer’s Representative the Documents Needed to Clear the Goods through Customs?
Can the Seller’s Agent for Collecting Payments Act as the Guarantor of the Buyer?
If the Customer Cancels the Documentary Credit, How is the Fee Calculated?
There Are Two Common Ways to Execute a Murabahah Sale; Are They Both Legal?
Who Has the Right to Profits Earned on Investment of Funds Sequestered to Secure an LC?
Agency Contract: Minimum Selling Price And Maximum Credit Period
Agency: Role Declaration
Agent = Buyer = Seller
Agent As The Guarantor
Agent Assuming The Role Of A Surety
Agent: With Or Without Fees?
Appointing An Agent To Sell On Deferred Terms
Appointment Of Agents
Autonomous Agency Notice
Being The Agent Of An Exporter
Can a Mudarib Sell What He Owns to His Principal without Seeking the Principal’s Permission?
Can the Owner Hire an Agent to Manage the Leasing of His Property for a Specified Percentage of the Rent That Includes Maintenance and Insurance Costs?
Not Stating The Remuneration For The Agent
Stipulating Conditions In An Agency Contract
Tasks Of An Agent: Selling On Deferred Terms
The Dual Role Of Agent-Buyer
Is It Allowed That the Agent Guarantee to Collect the Sale Price Within a Specified Period And Hand It to KFH Administration During the Specified Period?
Changing a Check in a Foreign Currency; What Day’s Price Should Be Recorded?
+ more

Can a Broker’s Fee Be Recovered if a Sale is Terminated?

Benevolent Contracts

Hibah (Gift): Literally: to give something to another without compensation, whether the thing is wealth or not. Technically: to immediately transfer possession without compensation. Some said: to transfer possession of a tangible asset for free or without compensation, for the lack of compensation is a condition for this classification. See ISRA Islamic Financial System: Principles and Operations for further details.

Hibah In Inter-Bank Mudharabah Investment Contract
Hibah In Al-Ijarah Thumma Al-Bai’
Can High Net-Worth Accountholders Be Promised Special Privileges?
Giving Hibah As Compensation For Delayed Payments
Resolution No: 13 (1/3)[1]: Concerning The Islamic Development Bank’s inquiries
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 165th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 158th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 148th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 147th Meeting
Giving a Rebate for Early Payment in a Deferred Purchase Sale
Resolution No. 184: Gifts offered by the Corporation to its clients for purchasing traveller’s checks
The End Buyer Wants to Pay the Original Seller a Sum to Settle a Price Dispute between the Original Seller and the Intermediate Buyer
الجوائز النقدية أوالعينية
Hibah In The Takaful Industry
Accepting Hibah from The Customers
Hibah In Loan (Qardh)
Offering a Discount for Paying on Time in a Deferred Purchase Sale
The Buyer Intends to Resell the Goods; Can the Buyer Stipulate a Discounted Price on Any Unsold Items in Case the Seller Lowers His Prices?
Can a Property Be Bought from a Company and Leased Back to It, Ending with a Gift of the Property to It?
Is It Allowed To Give the Leased Car to the Lessee or Sell It to Him for a Nominal Price at the End of the Lease Contract?
After Buying a Person’s Debts, Is It Allowed to Give Him a Gift?
Is It Allowed to Take the Profit Given by Central Banks for the Deposit of Surplus?
Is it Allowed for KFH to Involve in an Ijarah Financing with a Promise to Give the Assets to the Lessee?
Surplus Sharing from Sale of Ijarah Asset between Lessor and Lessee
Surplus Sharing from Sale of Ijarah Asset between Lessor and Lessee
Practice of Islamic Financial Institutions in Transferring Mudarabah Investment Profit to Customer to Avoid Displaced Commercial Risk
Liquidity Management Instrument Based on Qard
Hibah in Takaful
Nomination Based on Hibah under Takaful Scheme
Hibah in Interbank Mudarabah Investment Contract
+ more

Literally: what is given to a person one loves. Technically: wealth given or sent to someone to honour him. Some said: a transfer of wealth to someone for free (which would make it identical to a hibbah). Some added that the transfer occurs during the lifetime of the giver, in order to differentiate it from a bequest. Some stipulated that the gift must be tangible wealth and that it be delivered to the place of the recipient. It has been made legal by the Qur’an, the Sunnah and ijma’ (consensus). For further details see ISRA Compendium.

Can a Landlord Give Selective Discounts to Some Renters?
Giving a Customer Facilities to Buy Foreign Currency
Can High Net-Worth Accountholders Be Promised Special Privileges?
Are Promotional Contests That Offer Prizes a Form of Gambling?
Can an Islamic Bank Provide Aid to Certain Clients in Return for Keeping Accounts with the Bank?
Resolution No. 179: The Corporation issuing a free Iyābā card for subscribers to the Visa gold card
Resolution No. 184: Gifts offered by the Corporation to its clients for purchasing traveller’s checks
Can the Primary Seller Give a Performance Award to the Murabahah Buyer for Retail Sales of Its Products and Ignore the Middleman?
الجوائز النقدية أوالعينية
الجوائز النقدية أو العينية على الحسابات
أرباح حساب الحج
تحويل عملية مرابحة فاسدة إلى قرض حسن
توزيع الجوائز النقدية لودائع الاستثمار
توزيع جوائز للحسابات الجارية والادخارية
Is Comprehensive Auto Insurance Allowed?
Can a Sales Agent Be Paid a Fixed Fee Plus an Incentive Commission?
What is the Rule When an Unrestricted Investment Deposit Holder Wants to Withdraw His Deposit before the End of the Deposit Period?
Can Sellers Give Lucky Draw Coupons in Order to Give Prizes to Shoppers with More Purchases?
Can an Islamic Bank Give a Credit Card as a Prize to Murabahah Buyers and Add the Cost of the Card to the Murabahah Base Price?
Can Contests with Prizes Be Used to Encourage Tenants of Properties Owned by an Islamic Bank to Open Accounts with the Bank to Facilitate Rent Payments?
Can an Islamic Bank Give Some Current Account Holders Special Privileges?
Can Lucky Draw Prizes Be Used as a Marketing Tool?
What Is the Ruling on a Lucky Draw Contest That Requires no Purchase to Participate but Is Run by a Conventional Bank?
Can an Islamic Bank Give Gifts to Holders of Accounts Having Funds above a Certain Amount?
Can Employees Accept Gifts from Representatives of Companies Doing Business with Their Employer?
Is It Allowed to Deprive an Employee of Contractual Benefits for Reasons not Directly Related to His Job Performance?
Is It Allowed to Accept Gifts from Usurious Institutions?
Is It allowed to Sponsor Some Types of Sports?
Is it Permissible to Distribute Gifts to those who Open Accounts at Banks?
Is it allowed to use an advertisement statement in a Murabahah contract regarding an enjoyment of some privileges?
+ more

Tabarru': Literally: a voluntary act; a gift which is not preceded by a request. The word tabarru' is derived from the verb tabarra'a, carries the meaning of contribution, gift, donation or charity. Technically: grant of an asset or usufruct by a mature and responsible person, either immediately or at a later time, without compensation with the intention of charity, all that the donor seeks is blessing and reward from Allah (s.w.t). Contracts of this kind are called tabarru'aat (gratuitous contracts). They include endowments, gifts, donations, loans of assets accompanied by gifts of their yield, and other good deeds.  

What Should Be Done with Small Cheques Issued to Accountholders Who Cannot Be Located or Contacted?
What to Do with Profits from Investment Accounts Closed by Their Owners when the Old Address Is not Valid?
Can an Islamic Bank Provide Aid to Certain Clients in Return for Keeping Accounts with the Bank?
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 165th Meeting
The Purchase Undertaker Requests the Intermediate Seller to Pass on Insurance Compensation for Damaged Goods
أرباح الودائع بالعملة الصعبة
Fatwa On Co-operative Insurance: The Decision Of The Council Of Head Of Scholars Of Saudi Arabia (No. 51)
Resolution No. 9 (9/2): Concerning Insurance And Reinsurance
An Insurance Company Pledges to Collect Debts and to Pay the Debts It Can’t Collect
Insurance of a Debt
Can an Islamic Bank Exempt Orphans from Paying Certain Standard Fees?
What if the Purchase Undertaker Renovates the Property He Promises to Buy before the Bank Buys It?
An Islamic Bank Contribute to a Charitable Project from Its Profits or Zakah Fund?
Can an Adult Open an Account for a Minor with Restrictions on the Right to Withdraw from It?
Is it Allowed For an Islamic Bank to Accept Government Compensation for Lost Income Due to Force Majeure?
Is it Allowed to Oblige Customers to Give Donations trough Additional Amount on sale Price?
Takaful Model Based on Tabarru` and Wakalah

Qard is the transfer of ownership in fungible wealth to a person upon whom it is binding to return wealth similar to it as defined by AAOIFI Shari'ah Standard No. 19. The essence of qard is to provide on loan the wealth or property to one who will gain from this act. By giving, the receiving party will employ and consume it in pursuit of his aims and then return back its equivalent value.

Resolution No. 179 (19/5): Tawarruq: its meaning and types [Organised Tawarruq Impermissible in 2009]
Can the Lessor Invest the Tenant’s Security Deposit?
Which Day’s Exchange Rate Should Be Used in Repaying the Bank for Withdrawals on a Bounced Foreign Check?
Leasing Combined With Property Development
An Islamic Bank Has an Account in Foreign Currency with a Foreign Bank and Vice Versa. Can They Treat Each Other’s Deposits as Non-Interest Loans for Investment?
The Islamic Development Bank inquiry regarding financing long-term infrastructure projects
Can the Bank Impose Charges on Withdrawals from a Current Account?
Can the Bank Impose Restrictions on Withdrawals from a Current Account?
Can Two Banks Agree to Allow Each Other Overdraft Privileges as Interest-Free Loans?
Investments Using Funds in Accounts Set aside for Insurance on Leased Apartments
Is It Lawful for a Debtor to Offer to Pay Part of a Debt before the Due Date on the Condition That Extra Time Be Given to Pay the Rest?
Providing Customers No-Interest Loans to Trade Currency for Profit
Resolution No: 13 (1/3)[1]: Concerning The Islamic Development Bank’s inquiries
Borrowing Gold to Sell It; with Periodic Settlements with the Original Owner
Can a Creditor Make His Loan Conditional on the Borrower Buying from or Selling to the Creditor?
Can a Lender Stipulate a Reciprocal Loan as a Condition for Lending?
Can an Islamic Bank Allow a Client with a Large Account to Remain Overdrawn for a While?
Can an Islamic Bank and Conventional Bank Loan Each Other Money if the Loans Bear No Interest?
Can an Islamic Bank Charge Borrowers for Administrative Expenses Related to Managing the Loans?
Can an Islamic Bank Give an Interest-Free Loan to a Company That Plans to Use It for Currency Speculation?
Can an Islamic Bank Provide Aid to Certain Clients in Return for Keeping Accounts with the Bank?
RESOLUTION No. 101 (4/11): DEBT SALE AND LOAN DEBENTURES AND THEIR ISLAMIC SUBSTITUTES IN PUBLIC AND PRIVATE SECTORS
Can Two Companies Loan Each Other Offsetting Interest-Free Loans in Two Different Currencies?
How to Treat an Overdraft on an Investment Account?
Is an Exchange of Deposits a Type of Loan with an Added Benefit?
Resolution No. 83: Amānah (Safekeeping) Precious Metals Accounts
Resolution No. 106: an overdraft agreement
الجوائز النقدية أوالعينية
رهن محل تجاري للبنك وتمكينه من الانتفاع بنصف مردود المحل المرهون
إنفاق حصيلة الإيرادات الناتجة من الفوائد المحرمة وغرامات المدينين المعسرين المماطلين
+ more

Wadiah (Deposit): Literally: from wada'a: to leave something; awda'ahu malan means to leave property with someone so that it will be with him. Technically: property left with a person for safekeeping. The Hanbalis added the stipulation without compensation. Some said: property left with a person as a trust.

Can the Agent for Investment Be the Guarantor of the Funding Recipient?
Can a Conventional Bank Deposit be Used as Pawn for the Benefit of Islamic Banks
If a Current Account Holder Incurs a Debt with the Islamic Bank, Is It Considered an Advance on the Bank’s Debt to the Customer?
The Owner of an Investment Deposit Account Relinquishes His Account to Other Depositors for an Agreed Price
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 150th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 147th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 145th Meeting
قرار رقم 143 (1/16) بشأن زكاة الحسابات المقيدة وشركات التأمين الإسلامية والتأمينات النقدية ومكافآت نهاية الخدمة
قيام البنك بإيداع وديعة لدى أحد البنوك الذي يبيعه أجنبية بسعر شراء البنك المركزي
أرباح حساب الحج
نموذج للقرض الحسن
(كسر الوديعة (التخارج
حساب فترة الوديعة الاستثمارية
الأرباح من وديعة الاستثمار
العائد على ودائع الاستثمار
عمل وديعة مخصصة من دون خلطها بأموال المصرف
أرباح المضاربة في حالة سحب الوديعة قبل انقضاء مدة المضاربة
توزيع الأرباح الناتجة عن عملية الاستثمار
Wadiah And Mudharabah Current Account
Can an Islamic Bank Take a Deposit in a Conventional Bank as Security for a Loan?
Is Someone Entrusted with a Deposit Liable if It Gets Lost or Stolen?
How to Treat a New Deposit in a Mudarabah Investment Account?
What is the Ruling on Withdrawal of a Deposit Made in Foreign Currency from an Investment Account Before the End of the Deposit Period?
Is It Allowed to Take the Profit Given by Central Banks for the Deposit of Surplus?
Adaptation (Takyif) of Wadi`ah Yad Dhamanah as Qard
Hibah in Wadi`ah Contract
Current Account Product Based on Wadi`ah Yad Dhamanah and Mudarabah Contracts
Deposit Product Based on Wadi`ah and Mudarabah Contracts
Priority of Depositors in Recovering Deposit in the Event of Winding Up of an Islamic Banking Institution
Application of Conventional Overdrafts to Cover Insufficiency in Wadi`ah Current Account
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The Arabic word means the charity given for the sake of Allah. Technically charity is to transfer the ownership in life without compensation seeking only the reward from Allah. The term alms is used to refer to Zakat al-Fitr (the donation made to the poor at the end of Ramadan). For further details see ISRA Compendium.

What Is to Be Done with Tellers’ Positive Discrepancies?
What Should Be Done with Small Cheques Issued to Accountholders Who Cannot Be Located or Contacted?
What to Do with Profits from Investment Accounts Closed by Their Owners when the Old Address Is not Valid?
Can an Islamic Bank Receive Interest from the Central Bank?
Can Interest Be Used to Pay Taxes?
Resolution No. 124: The impermissibility of paying the interest amounts accumulated from correspondent bank accounts to beneficiaries other than the poor and Islamic charities
Resolution No. 149: The Corporation usage/disposal of (inactive) small-balance accounts with the guarantee of such accounts
Resolution No. 150: Paying or receiving interest from correspondent banks
Insurance Compensation for Damaged Goods Exceeds the Actual Loss; What to Do with the Excess?
Overcompensation by the Insurance Company above the Actual Damage
تحويل الأموال المجنبة من وحدة مصرفية إلى أخرى
دعم منظمة من الكسب غير المشروع
المبالغ العائدة كأرباح من البنوك الخارجية
الفوائد المصرفية التي يضطر البنك لإيداعها في المصارف الربوية
الصرف من صندوق الإيرادات قيد التصفية (تسبيقات مالية) على موظفي البنك
الصرف من صندوق الإيرادات قيد التصفية على مستخدمي البنك
الصرف من صندوق الإيرادات قيد التصفية على موظفي البنك
اقتناء أضحية العيد من صندوق الإيرادات قيد التصفية
استعمال العائد الذي يتلقاه بنك البركة من بنك الجزائر لتسديد حصة البنك في شركة ضمان الودائع المصرفية
استعمال الفوائد المحصّلة من بنم الجزائر في تسديد حصة بنك البركة الجزائري في شركة ضمان الودائع
شطب الديون الهالكة في حالة الأموال التي تدفع لأوجه الخير
صيغة الشرط الذي يضمن بالعقود لإلزام العميل بالزيادة التي تضاف لحساب مخصص الديون المتعثرة
إنفاق حصيلة الإيرادات الناتجة من الفوائد المحرمة وغرامات المدينين المعسرين المماطلين
غرامة التأخير للعملاء في حالة المماطلة في سداد مبلغ الاعتماد
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
ربط تقديم مساعدة مالية لمدرسة المكفوفين بتسديد ديون العميل المستحقة للبنك
إعادة جدولة الديون
Judgement Of The Court With Regard To Penalties On Delayed Payments
Can a Penalty Clause for Late Payment Be Added to an Islamic Banking Contract?
Is it Lawful to Financially Penalize a Rich Debtor Who Delays Payment?
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I’arah (loan of a tangible asset) is an alienation of usufruct for free. In other words, i’arah is a gratuitous contract. Thus, it differs from a lease contract because lease is an exchange contract. That means i’arah is of wider parameters than a lease, for there are certain things that can be loaned but cannot be leased. For further details see ISRA Compendium.

Literally: wasiyyah: to link one thing with another; to instruct or advise; a promise taken from someone to do something on behalf of the principal during his life or after his death; to assign wealth to another. Technically: a charitable transfer of wealth, either tangible property or usufruct, to be effective after the death of the donor. Some said: instruction for power of attorney or a donation of wealth after death. It is legal and established by evidence in the Qur’an and Sunnah and by ijma’ (consensus). It can be either restricted or unrestricted. Unrestricted: to say: “I have made a bequest of such-and-such to so-and-so. Restricted: to say: “If I die from this illness, or in this town, or on this journey, then so-and-so will have such-and-such.” For further details see ISRA Compendium.

فتح حساب مشترك بالتضامن بين طرفين تجمعهم علاقة نسب
Hibah In The Takaful Industry
If a Person Makes a Bequest to Set Up a Waqf for the Needy, Are His Children Eligible if They Become Needy?

Resolution No. 179 (19/5): Tawarruq: its meaning and types [Organised Tawarruq Impermissible in 2009]
Rules Of Tawarruq
Can the Bank Impose Charges on Withdrawals from a Current Account?
Can the Bank Impose Restrictions on Withdrawals from a Current Account?
Use of Qardh Hasan in Financing
Qard Principles in Islamic Finance

Security Contracts

Kafalah (Guarantee): Literally: kafalah is assurance, its original meaning is related to joining and commitment. Technically: Jurists differed about the definition of guarantee based upon their differing opinions on its resulting effect. The majority of Hanafis defined it as: joining the liability of the warrantor to that of the principal in claims regarding personal injury, debts or material assets. A second definition of theirs: joining the liability of the warrantor to the liability of the principal for a debt. They consider the first definition to be more valid. The Malikis, the Shafis in their most famous opinion, and the Hanbalis define a guarantee as: the commitment by an adult of sound mind to make sure that a person who is required to appear in court does so. Guarantees are divided into two types: a guarantee of money, and most jurists call it Daman; or it could be a guarantee of a person, which some call it: guarantee of body or guarantee of face. It is in general legitimate, based upon the Qur'an, the Sunnah and the consensus of Muslim jurists. The Shari'ah Advisory Council of Bank Negara Malaysia defines kafalah as a guaranteed contract on a certain asset, usufruct and/or service provided by a guarantor to the parties involved. Generally, kafalah means a guarantee or to take on the responsibility for the payment of a debt or for a person's appearance in court. The majority of Muslim scholars view that the terms daman and kafalah carry the same meaning. However, some scholars confine the definition of daman to a guarantee of property while the term kafalah means guarantee of al-nafs or oneself. Classical jurists defined kafalah as a conjoining of the guarantor's liability to the liability of the guaranteed (Al-Sharbini, Mughni Al-Muhtaj, 2/198). It may also be defined as a contract which combines one's liability with another person's liability. Legally, in kafalah, a third party becomes surety for the payment of debt unpaid by the person originally liable. The degree or scope of suretyship should be known and should not come with preconditions. It is a guarantee given to a creditor that the debtor will pay the debt, fine or any other liabilities. See ISRA Islamic Financial System: Principles and Operations for further details.

Can an Islamic Bank State in an L.C. or Letter of Guarantee That the Fee Charged by a Conventional Bank Shall Be Obtained from the Beneficiary?
Resolution No. 148 (6/16): Al-Kafalatu Al-tijariyyah (Commercial Guarantee)
Can the Guarantor Charge for the Guarantee?
Resolution No. 12 (2/12): Letter of Guarantee
Can the End Customer Guarantee the Work of the Contractor in a Construction Contract?
Guarantee From A Contractor
Permissibility Of Muqawalah in Construction
A Fee for Renewal of a Bank Guarantee
Can a Trucking Company Charge Its Truckers a Commission for Acting as an Intermediary with the Government?
Can an Islamic Bank Ask a Client to Provide a Conventional Bank as a Guarantor?
Can an Islamic Bank Charge a Fee for Issuing a Letter of Guarantee?
Can the Agent for Investment Be the Guarantor of the Funding Recipient?
Can the Intermediate Seller Request a Guarantee from the Purchase Undertaker That Imported Goods Will Arrive in Good Condition?
Can the Seller’s Agent for Collecting Payments Act as the Guarantor of the Buyer?
Charging Fees For The Issuance Of A Letter Of Guarantee (LG)
Credit Guarantee
Is an Application for Documentary Credit That Lacks Detail Valid?
Is it Lawful for the Government to Provide a Guaranteed Minimum Profit on a Project?
Is it Lawful to Ask the Guarantor for a Guaranteed Check as a Security Deposit?
Issuing Kafalah In Relation To Conventional Banks
Issuing LGs For Soft Loans
Kafalah Renewal Fee
LGs From Conventional Banks for Project Finance
Should an Islamic Bank Offer a Guarantee for a Contractor Doing a Job for a Riba Bank?
Types Of Guarantee That Can Be Taken
What is the Proof That a Bank Can Charge for the Expenses of Issuing a Letter of Guarantee?
Who Has the Right to Profits Earned on Investment of Funds Sequestered to Secure an LC?
Agent As The Guarantor
Agent Assuming The Role Of A Surety
A Correspondent Bank Wants to Charge the Islamic Bank a Fee for Its Part in Issuing a Letter of Guarantee. Can the Islamic Bank Tell It to Charge the Customer?
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Literally: daman: to put something into something that contains it. Standing surety is derived from this meaning because the guarantor encompasses the obligor’s liability and adds it to his own. Technically: daman is used by jurists to mean standing surety (kafalah). Therefore, they defined guarantee as: merging of one liability with another in respect of demand for performance of an obligation. Alternatively: to assume responsibility for the financial obligation of another, or to ensure the appearance of the person liable for it, or of a instance, to undertake responsibility for the compensation of a destroyed tangible asset. This is what is meant in the hadith “[Entitlement to] profit goes with responsibility”. It also includes a guarantee to do the stipulated work in a labour partnership and to entitle the financial compensation in a credit partnership. The technical meaning of daman is more general than that of kafalah. The types of daman vary depending on the financial transaction to which it is applied. For further details see ISRA Compendium.

Can the Lessor Invest the Tenant’s Security Deposit?
Charging Fees For The Issuance Of A Letter Of Guarantee (LG)
Credit Guarantee
Can a Buyer of Real Estate Stipulate the Right of Annulment if any Problems Are Found with the Property?
Is It Allowed to Buy Cars from an Agent on the Condition That the Agent Will Extend a Guarantee to Buyers for Possible Defects and Be Financially Responsible for the Buyers?
Charging a Fee for a Guarantee
Resolution No. 119: The purchasing client providing a security deposit to guarantee the good usage of the property
Can an Islamic Bank Sequester Funds in the Account of a Customer Who Applies to Open an L.C.?
Is It Lawful for the Bank to Ask the Purchase Orderer to Guarantee It against Damages Caused to the Bank by the Primary Seller?
The Buyer Guarantees the Reliability of a Fraudulent Exporter. Who Is Liable?
The Purchase Undertaker Wants to Avoid the Expense of a Third-Party Inspector of the Goods before Shipment
رهن محل تجاري للبنك وتمكينه من الانتفاع بنصف مردود المحل المرهون
تحويل رهن عقاري لفائدة بنك تقليدي
استعمال الفوائد المحصّلة من بنم الجزائر في تسديد حصة بنك البركة الجزائري في شركة ضمان الودائع
Double Guarantee in Murabahah
Murabahah: Guarantee by The Customer for Damages
What Is to Be Done if the Supplier Is Unable to Deliver Some of the Sold Goods?
When the Goods Arrive before Their Shipping Documents
Transporting Goods with a Guarantee against Loss
Guaranteeing the Shares of Participants of Profit-Sharing Funds and Clearance Funds
Profit Sharing Fund
Shares: Guarantee
Third Party Guarantee – Without Consideration
In a salam contract, to what extent is the buyer allowed to obtain a promise to buy at a specific price from a third party
Appointing the Original Seller as an Agent, and Making Him a Guarantor for the Price
Third Party Guarantee – With Consideration
Selling Goods Recorded as Accounts Receivable before the Invoice is Settled
What Constitutes Possession (Qabd)?
Is Storage in Public Warehouses with Certificates Detailing the Specifications of the Commodities Considered Possession that Allows Resale?
Who Bears Unexpected Demurrage Charges in a Murabahah Contract?
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Al-rahn: Literally: rahn is an Arabic noun derived from the word rahana which means either constancy and continuity, or holding and binding. Technically: rahn, which is also termed as pawning, mortgage, collateral, charge, lien and pledge, refers to taking a property as a security against debt, whereby the secured property can be utilised to repay the debt in the case of nonpayment.

Leasing Combined With Property Development
Is it Permissible to Pay a Contractor a Down Payment Followed by Periodic Installments to Build a Building?
Permissibility Of Muqawalah in Construction
مشروعية تسجيل السيارة ورهنها لصالح البنك قبل توقيع عقد المرابحة
Is It Permissible for the Seller to Keep the Good Sold By Deferred Payment as Collateral Until the Buyer Pays the Complete Price?
Types Of Guarantee That Can Be Taken
Can a Conventional Bank Deposit be Used as Pawn for the Benefit of Islamic Banks
If a Current Account Holder Incurs a Debt with the Islamic Bank, Is It Considered an Advance on the Bank’s Debt to the Customer?
Pawning For The Benefit Of A Conventional Bank
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 139th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 160th Meeting
RESOLUTION No. 74/5/8: SHARI'A APPLICATIONS FOR THE ESTABLISHMENT OF THE ISLAMIC MARKET
Resolution No. 119: The purchasing client providing a security deposit to guarantee the good usage of the property
Can the Seller in a Murabahah Sale Retain the Goods as Security until the Buyer Pays for Them?
Investment Deposit Account As Pawn in Murabaha Financing
Murabahah Purchase of a Factory with Its Outstanding Debt
بيع رهن لطرف ثالث كضمان
رهن محل تجاري للبنك وتمكينه من الانتفاع بنصف مردود المحل المرهون
تحويل رهن عقاري لفائدة بنك تقليدي
اعتماد نموذج عقد رهن العقاري
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
التمويل العقاري
Delayed Payments In A Murabahah Contract
Resolution No. 50 (2/6): Rulings on Installment Sales
Cancelling A Murabahah Contract
Sale and Buy Back without Stipulation
Can an Islamic Bank Take for Security Stocks Issued to a Conventional Bank as Security for an Interest-Based Loan?
Can an Islamic Bank Take a Deposit in a Conventional Bank as Security for a Loan?
Can an Islamic Bank Allow a Shareholder to Mortgage Its Shares as Security for an Interest-Best Loan?
Is It Allowed to Take Security for a Debt before the Debt is Incurred?
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Urbun refers to a sale in which the buyer deposits earnest money with the seller as partial payment of the price in advance but agrees that he will forfeit the deposit money if he fails to ratify the contract, in which case the seller can keep it.

Right To Buy Currencies
Is it Permissible to Pay a Contractor a Down Payment Followed by Periodic Installments to Build a Building?
Permissibility Of Muqawalah in Construction
What’s the Shariah Ruling Regarding Buying a Specific Commodity Based Upon a Customer’s Promise to Buy the Commodity by Deferred Payment?
Is It Allowed to Buy Agricultural Products or Any Minerals Other Than Gold or Silver Which Is in the Actual Possession of the Seller?
A Prospective Customer Has Already Made a Down Payment to the Supplier
RESOLUTION No. 72/3/8: DOWN PAYMENT SALE (EARNEST SALE)
Can Earnest Money Be Kept if the Purchase Orderer Reneges on the Deal?
Can Murabahah Occur if the Prospective Buyer Has Already Given the First Seller a Down Payment?
The First Seller Demands Earnest Money from the Purchase Undertaker
The Purchase Undertaker Wants to Pay the Difference in Price between What the First Seller is Charging and What the Intermediate Seller is Willing to Pay
قرار رقم 143 (1/16) بشأن زكاة الحسابات المقيدة وشركات التأمين الإسلامية والتأمينات النقدية ومكافآت نهاية الخدمة
What Is to Be Done in Murabahah about Anomalies in Delivery of the Subject of the Sale?
A Commodity Purchase Option
A Purchase Undertaking and Earnest Money for Murabahah
A Purchase Undertaking and Earnest Money for Murabahah
A Difference in Profit Share of Jointly Owned Property
Can the Customer of a MurÉbaÍah Car Sale Use the Trade-In Price of His Old Car as the Down Payment for the New Car?
Can Earnest Money Be Paid before the Contract?
Can the Bank Take a Non-Refundable Deposit from a Buyer before the Actual Sale?
Can a Deposit Be Taken before the Sale if It Is Counted as Part of the Final Price?
What Parameters Can Make It Lawful to Pay Earnest Money to a Car Dealer to Book a Sale?
Is It Allowed to Appoint the Supplier as an Agent to Collect Earnest Money from the Client in a Murabahah Transaction?
What is the Shariah Ruling in the Earnest Money Left by the Buyer?
Is it Allowed to Contract on a Commodity with a Customer that is Binding to Another Party?
Is it Allowed to Contract a Murabahah whereby the Customer Has Paid an Amount to the owner of the Asset?
What is the criterion for cancelation of the initial agreement in the Murabahah transaction between the customer and the supplier or the car dealer?
Is it permissible to request the client to pay a fee as a guarantee to show his commitment to purchase the property that he promised to buy?
Is it allowed for a house owner to take an amount of money from the purchase undertaker as an assurance of the latter’s seriousness?
Deposit Payment in Islamic Hire Purchase
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Resolution No. 65/2/7: Deferred Instalment Sale
Delayed Payments In A Murabahah Contract

Supporting Contracts/Principles

Hiwalah (Debt Transfer): Literally: derived from tahwil: to shift something from one place to another; the reflexive form, tahawwala, means to move oneself from one place to another. Technically: assignment of debt from the liability of the original debtor to the liability of a third person so that the original debtor becomes free of liability; for example, Party A owes Party B 100 dinars, but at the same time Party C owes Party A 100 dinars. Party A may refer Party B to Party C for payment. Party A is called the muhil (transferor); Party B is the muhal (referred); Party C is the muhal 'alayhi (transferee); and the debt is called muhal bihi (transferred). See ISRA Islamic Financial System: Principles and Operations for further details.

Transfer of Contract With The Intention of Absconding One’s Responsibilities
Can an Islamic Bank Charge a Fee for the Expenses Incurred in Processing a Customer’s Transfer of Debt?
Debt Transfer at Par
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 139th Meeting
RESOLUTION No. 84/1/9: GOLD TRADE, SHARI'A SOLUTIONS FOR COMBINED CASH AND TRANSFER PAYMENTS
Charging a 25% Commission for a Money Transfer
Resolution No. 71: Issuing money transfers (remittances) by telex and mail
Resolution No. 123: A client’s commitment to pay his brother’s debts
Resolution No. 186: The permissibility of transferring the debts owed to the Corporation from one client to another client
Issuance Of An LG Under A Murabahah Transaction
Can a Bank Charge a Fee to Print out an Account Statement or Receive a Wire Transfer on Behalf of a Customer?
What is the ruling on charging a nominal fee for withdrawing an investment deposit before the end of its period?
What is the Shari‘ah Rulings in Transporting Money For a Sum of Money?
Is it Allowed for the Lessee of the Real Estate to Purchase it from the Company According to an Agreement between them?

Ibra: Literally, ibra' means mutual estrangement and removal, as in I was absolved of debt when it was removed from me. It can also be defined as to release, eliminate or purify and to remove. Technically, ibra' means an act of absolving or dropping one's financial rights (to collect payment) from a person who has the obligation to repay the amount borrowed from him.

Is It Permissible for KFH to Grant a Deduction from the Full Amount of a Murabahah Contract to a Customer Who Wants to Pay the Loan Ahead of Time?
Discount For Early Payment
Ibra’ Clause In Financing Agreement
Ibra’ In Variable Rate Bai` Bithaman Ajil Product
A Discount for Accelerated Payment in a Delayed Payment Contract
Is It Permissible to Contract a Sale of Goods That Have a Defect on the Condition That the Defect Be Explained to the Him Before the Contract Is Concluded?
Is It Permissible to Make a Contract on Goods with a Stipulation That the Seller Is Free From Responsibility for Any or All Defects?
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 142nd Meeting
Giving a Rebate for Early Payment in a Deferred Purchase Sale
Additional Conditions In A Murabahah Contract
Can a Discount be Claimed for Early Payment in a Delayed Payment Sale?
Defects In The Subject Matter
Rebate for Paying the Debt Ahead of Schedule
Resolution No. 65/2/7: Deferred Instalment Sale
Early Settlement
What if an Islamic Bank Gives a Rebate to a Customer Who Pays a Debt Early, and Other Customers Expect the Same Treatment?
Can a Dealer Buy Back Cars from Customers and Pay the Bank the Outstanding Balances, on the Condition that the Customers Buy New Cars from the Dealer?
Is it permissible to give an unconditional rebate to Murabahah costomers?
Is it allowed to buy petroleum equipment from the producer and sell it by murabahah to the client along with a guarantee by the producer?
Is it allowed to sell a portion of debts to the bad debt market at a price slightly less than what is owed by the client?
Is it allowed to give a discount (Ibra) to a client who bought a land through Murabahah and wishes to settle his debt early?
Two Forms of Ibra’ in a Financing Agreement
Ibra’ in Home Financing Product Linked to a Wadi`ah or Mudarabah Deposit Account
Cash Back Rebate on Credit Card Annual Fee
What Is the Ruling on Reducing the Debt Owed by a Customer When the Debt is Paid Before the Due Date?
RESOLUTION No. 64/2/7: INSTALLMENT SALE
Advancing Instalments in Murabahah Transactions
الموافقة على خصم الاعتماد مؤجل الدفع من البنك المراسل
Ibra’ in Islamic Financing

Wa'd (Promise): A promise or undertaking. A promise, such as the one found in purchase and sale undertakings used in certain Islamic finance transactions; a promise to buy or sell certain goods in a certain quantity at a certain time in the future at a certain price.

Can Promises Be Exchanged to Conduct a Second Salam Sale upon Delivery of the Subject of the First Salam Sale?
Dual Promise in Commodity Murabaha
Sale And Buy-back Agreement (Repo)
A Hire-Purchase Agreement with More than One Associated Promise
A Forex Option
A Promise of Parallel Purchase and Sale of Gold
A Promise to Buy or Sell Currency at a Future Date
A Promise to Buy or Sell Gold or Silver at a Future Date
Right To Buy Currencies
A Promise to Sell Currency in the Future
Penalty on Non-Fulfillment of Ijarah
Promise to Lease and Transfer Ownership
Purchase-Lease-Sale
Setting the Sale Price of a Hire-Purchase Property before the Sale
Is it Legal to Combine a Construction and Lease-to-Own Contract?
Issue Of Partial Completion in Istisna'a
What is the Shariah Ruling on a Bilateral Promise to Buy a Certain Amount of a Specific Currency at a Fixed Price During a Specified Period?
Discount For Early Payment
Forward Foreign Currency Transaction
Ibra’ Clause In Financing Agreement
Ibra’ In Variable Rate Bai` Bithaman Ajil Product
Resolution No: 13 (1/3)[1]: Concerning The Islamic Development Bank’s inquiries
A Shari‘ah-Compliant Alternative to an Option Contract
Is It Allowed for KFH to Purchase a Commodity from a Company Which Has Already Promised to Enter into a Deal with a Buyer?
Would KFH Be Held Responsible in Case the Shipping Company Acknowledged That the Goods Were Sound But Then Failed to Make the Delivery?
Is It Permissible to Contract a Sale of Goods That Have a Defect on the Condition That the Defect Be Explained to the Him Before the Contract Is Concluded?
Will Shipping the Goods on the Request of the Purchase Undertaker Be Considered as Only Taking Possession Without Ownership?
Is It Permissible to Deliver the Goods Which Have Arrived Before Their Documents to the Client in a Murabahah Agreement?
What Are the Shariah Rules Governing Letter of Credit?
What’s the Shariah Ruling Regarding Buying a Specific Commodity Based Upon a Customer’s Promise to Buy the Commodity by Deferred Payment?
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Hybrid Contracts

AAOIFI Financial Accounting Standard 8 (FAS 8), Ijarah and Ijarah Muntahia Bittamleek, states that when a lease does not include a promise that a legal title will pass to the lessee, it is classified as operating ijarah and if there is a promise, it is al-ijarah al-muntahiyah bittamlik. For further details see: ISRA, Islamic Financial System; Principles and Operations.

LCs: Partial Coverage
A Hire-Purchase Agreement with More than One Associated Promise
Resolution No. 44 (6/5): Alternatives to Hire Purchase
Extension Of Leasing Period
Leasing Software
Promise to Lease and Transfer Ownership
Purchase-Lease-Sale
Sale And Lease Back
Is it Legal to Combine a Construction and Lease-to-Own Contract?
Issue Of Partial Completion in Istisna'a
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 155th Meeting
Resolution No. 110 (4/12): "Lease Ending with Ownership and Leasing Bonds"
Car Rental Ending in Partial Transfer of Ownership
إخراج الزكاة في حالة التأجير المنتهي بالتمليك
توزيع أرباح الصكوك في أثناء فترة عمل المشروع وقبل الفراغ منه
Is It Allowed to Stipulate an Option to Either Buy Leased Property at the End of the Lease Period or Renew the Lease?
Can a Property Be Bought from a Company and Leased Back to It, Ending with a Gift of the Property to It?
Is it Permissible for an Islamic Bank to Lease Infrastructure to a Government Ministry?
Is Hire-Purchase of a Car Lawful at a Nominal Final Selling Price?
What is the Ruling on a Lease Agreement That Culminates in Ownership?
Is It Allowed To Give the Leased Car to the Lessee or Sell It to Him for a Nominal Price at the End of the Lease Contract?
Is It Allowed To Require the Lessee To Get Comprehensive Insurance for the Car and Assign the Lessor as the Policy’s Beneficiary?
Is it Permissible to Make an Advance Rental Payment at an Agreed-Upon Percentage In a Real Estate Lease Contract Ending with a Promise to Own the Real Estate?
Is it Allowed to Hide the Profit Portion of the Mudarib in a Mudarabah Contract?
What are the Conditions for Issuing Sukuk?
Rulings of Sukuk Al-Ijarah
What is the opinion on KFH Malaysia’s Automobile Departments Products?
Is it permissible to buy a property from a company fully owned by KFH and then sell it by Murabahah contract to a client?
Resolution Regarding the Lease Agreement Between Aviation Lease and Finance Company (ALAFCO) and Al-Shuruq Company
Resolution Regarding the Lease Agreement Between Aviation Lease and Finance Company (ALAFCO) and Al-Shuruq Company
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Technically: a type of partnership in which one of the partners undertakes to gradually buy the share of the other partner until the buyer completely owns the property or project. It is a contemporary financial transaction invented by Islamic banks as a way to invest their wealth. It basically consists of two contracts: 1) an initial contract of partnership; 2) a sale contract. It is permissible on condition that sale and purchase are not conditions of the partnership contract; rather the client undertakes to purchase by a separate promise. The purchase and sale should be executed by a separate contract, and neither contract should be made a condition of the other. For further details see ISRA Compendium.

Is It Permissible for Two Parties to Agree to Buy a Commodity on the Condition That One of Them Promises to Buy the Other’s Partner’s Share By Deferred Payment?
Increasing A Murabahah Contract’s Period And Consideration
Resolution No. 136 (15/2): Al-musharakah Al-mutanaqisah And Its Shari’ah Rules
House Purchase by Diminishing Partnership
Is it Allowed to Enter in a Diminishing Partnership with a Party Appointed as an Agent to Manage the Asset?
Resolution No. 122 (4/13): Musharakah Mutanaqisah (Diminishing Partnership) in the Light of New Contemporary Contracts
Application of Ijarah Mawsufah fi al-Zimmah Concept in Financing for House under Construction Based on Musyarakah Mutanaqisah
Application of Wa`d as a Mechanism in Dealing with Customer’s Default in Financing Based on Musyarakah Mutanaqisah
What’s the Committee’s Opinion Regarding the Following Proposals: Accepting Deposits, Execution of Banking Services and Financing & Investment Operations?
What's the Shariah Opinion Regarding the Proposed Amendments to the Diminishing Musharakah Contract Concerning the Period and Iqalah?
Diminishing Musharkah Framework After Amendments
Is it Permissible for the Bank to Invest in an Existing Real Estate Project in Exchange for a Specified Share of the Profits?
What’s the Shariah Opinion Regarding Investing in a Fund that Trades in Shares of Listed Companies Whose Activities Are Permissible But Sometimes Involved in Riba Transactions?
تحديد الايجار سلفا بأجرة المتر المربع للبناء المتفق على انشائه
مساهمة البنك في مشروع عقاري قائم مقابل حصوله على نسبة من الدخل
الدخول مع أحد المصانع في مشاركة متناقصة
الدخول مع مصنع في مشاركة متناقصة لإضافة خط إنتاج جديد
عملية مشاركة متناقصة تنتهي بالتمليك لاستيراد ماكينات لمصنع
منتج مشاركة متناقصة لحصة شائعة من أصل المتعامل
الضابط لإعادة بيع حصة البنك للعميل عند مشاركته بأصل من عنده
تمويل المشاركة المتناقصة على أساس تحديد أجرة المتر المربع من البناء
عقود المشاركة المتناقصة
Financing Based on Musyarakah Mutanaqisah

 

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