INCEIF CLASS

TOPIC 3
FN 6013 ISLAMIC FINANCE

Assoc. Prof. Dr. Asyraf Wajdi Dusuki

Head, Research Affairs
International Shari’ah Research Academy for Islamic Finance (ISRA)
 Concept of Wa’ad

Distinction between Wa’ad, Wa’daan &

2 Muwaadah

3 Application of Wa’ad

4 Hybrid Instruments

Shariah Parameters in Combination

5 of Contracts
Application of Hybrid Instruments in
Workshop 6 Islamic Finance
on Islamic
Banking
Operation 7 Issues

8 Conclusion
 Concept of Wa'd
• Al-Fayumi defines Wa'd (‫)َعذ‬
linguistically as a promise whether
good or bad. Lexically, Wa'd is defined as
notification of good or bad news.

• In al-Mawsu’ah al-Fiqhiyah Wa'd is defined as a

notification of good news in the future, while a
promise of bad news is called wa’id (‫)َعيذ‬
 Cont’d
• Mukjam al-Mustalahat al-Fiqhiyah formulates Wa'd as
informing the action of one party towards another party that
is due in the future.

• Muwaadah (‫ )مُاعذج‬is a bilateral promise that is agreed

upon by both parties. If the promise is unilateral then it is
called ‘idah (‫)عذج‬.

‫ فإن َعذ أحذٌما دَن األخش فٍزي انعذج‬,ً‫أن يعذ كم َاحذ صاحث‬
Fulfillment of Promise (‫)الىفاء بالىعد‬
• Wa'd is allowed because a person can voluntarily promise
a good deed in the future to another person.

• Ulama agree that the fulfillment of promise is required

(‫ )مطهُب‬religious-wise.

• However, is Wa'd binding and enforceable

from a legal point of view?
Is Promise Legally Binding and
enforceable ?
 Legal Status of Wa’d
• A promise without any intention of fulfilling it,
is not permissible (haram)
– deemed to be a liar and pretentious (munafiq)
person who are seriously condemned by the
religion.
• If the same promisor takes an oath to
convince the promissee
– will be subject to Allah’s condemnation
– a fine or compensation (kaffarah) to relieve him
from his false oath.

7
 Legal Status of Wa’d (2)

• If a promise with an intention of fulfilling it, the

jurists are divided whether its fulfillment is obligatory
or recommended.
• Those who opine the fulfilling a promise is obligatory
are further divided as to whether it is binding by
religion (mulzim diyanatan) or enforceable by the
court (mulzim qada-an).
• Islamic jurists have different views with regard to the
liability imposed to the parties of the promise.

8
 Legal Status of Wa’d (3)
VIEW 1:
Fulfilling a promise is recommended (mandub), not obligatory;
otherwise the promisor will be condemned (makruh).

 promise must be fulfilled for religious reason only and it is a

question of morality
 al-Zarqa’- a promise does not initially bind the person who
makes it (promisor), and it does not give any right to the
promissee.
 The Shafi’i, Hanbali and Zahiri Schools recommend the
fulfillment of a promise, even if it is subject to certain
condition.

9
 Legal Status of Wa’d (4)
VIEW 2:
Fulfilling a promise is obligatory by religion; otherwise the
promisor is deemed to be sinful. Its non-fulfiment will not be
enforced by the court.

 Hanafi, Shafi’i, Hanbali, and a few from Maliki schools - a

promise made by a person to the other is religiously binding
(mulzim diyanatan) but not a legal duty (mulzim qadha-an).
This is because wa’d is part of a voluntarily contract (‘aqd
tabarru’at). Therefore, the judge has no way of such
enforcement, because the second party has nothing more
than a moral right.
 Imam Nawawi - when a person promises another something
(provided it is not illegal) he should fulfill his promise.
 Al-Qarafi - promise is not binding at all

10
 Legal Status of Wa’d (5)
VIEW 3:
Fulfilling a promise is obligatory by religion and can be enforceable
by the court

 Ibn Al-‘Arabi - The promise is absolutely binding & must be

fulfilled by all means unless if its fulfillment is impossible.
 Ibn Shubramah made the fulfillment of promise as compulsory.
"‫ يكُن َعذا مهضما قضاء َدياوح‬,‫ َال يحَشو حالال‬,‫"أن كم َعذ تانتضاو ال يُحم حشاما‬
(Meaning: every concluded promise which does not allow prohibited thing,
and not prohibit permissible thing, is binding legally and religiously)
"‫"انُعذ كهً الصو َيقضّ تً عهّ انُاعذ َيجثش‬
(Meaning; all promises are binding, and the promisor is compellable in
fulfilling it)

11
 Legal Status of Wa’d (6)
VIEW 4:
Where a promise is subject to certain conditions, its
fulfillment is obligatory and enforceable although the
promissee has not acted upon the promise yet.

• Hanafi School - distinguished between absolute

promise and conditional promise.
• The latter is binding in contract of exchange to avoid
gharar (unknown element) in the subject matter of
promise.
• This rule is very similar to the concept of guarantee
established by kafalah contract.

12
 Legal Status of Wa’d (7)
VIEW 5:
Where a promise is subject to conditions, its fulfillment is obligatory
and enforceable only if the promissee has indeed acted on the
basis of the promise & incurred loss.

• Ibn Al-‘Arabi - if the promise results in particular consequence,

its fulfillment is obligatory; but if it is a promise per se without
any consequential effect, fulfilling it is not made obligatory.
• The enforceability of a binding promise judicially can be upheld if
it entails to the performance of promisee in reliance to the
promise. As such, fulfilling the promise is obligatory, or the
promisee will suffer loss or difficulties as a result of the non-
fulfillment. This is a preferred opinion in the Maliki School which
was expounded by Malik, Ibn Al-Qasim and Sahnun.
13
 FULFILMENT OF
PROMISE

Recommended Obligatory
1. The Shafi‟i School 1. Majority of Maliki jurists
2. Abu Hanifah • Ibn Al-„Arabi : absolutely
3. Some Maliki jurists • Malik, Ibn Al-Qasim and Sahnun:
4. Al-Qarafi (Maliki) - obligatory, or the promisee will
،‫إذا وعد أحدكن أخاٍ وهي ًيتَ أى يفي ولن يجئ للويعاد‬ suffer loss or difficulties
َ‫فال شيء علي‬ 2. Ibn Shubramah
A man asked the Prophet (S.A.W.), “Can I lie َ ‫يا أَيُّهَا الَّرييَ آهٌَُىا لِنَ َتقُىلُىىَ هَا ال َتفْعَلُى‬
‫ى‬
to my wife”. The Prophet said, “There is
no good in lying.” The man said, “Shall I َ‫ َك ُبسَ َهقْتاً عٌِْدَ اهلل أَىْ َتقُىلُىا ها ال َتفْعَلُىى‬,
make her a promise and tell her?” The ُ‫ُيسِيدُ ٱللََُّ بِڪُمُ ٱلۡيُسۡ َز وَلَا ُيسِيد‬
Prophet said, “It will not be held against
you
ٍۡۡ‫حسَج‬ َ ۡ‫ُسِىۡزَٱلدِّييِ هِي‬ ‫ٱلكُۡنعۡ ف‬ۡ‫عَلَي‬ ُ‫ڪُم‬ ِ‫وَهَا ب‬
َ‫جَعَل‬
promise (wa‟d) is like a gift (hibah) which is ‫ وإذا وعد‬،‫ إذا حدَّث كرب‬:‫آية الوٌافق ثالث‬
not binding on its promisor except after ‫ وإذا ائتوي خاى‬،‫أخلف‬
delivery has taken place

14
 Overview of Classical Juristic Opinions

• a promise per se (without any condition attached to it) is

binding
– its non-fulfillment amounts to lying and non-obedience which
is sinful to Allah.
– is binding by religion.
• If the promise is conditional upon fulfilling certain
condition, the opinion of Maliki School is well-justified.
– If the non-fulfillment causes difficulty or loss to the promisor,
then the promise become binding judicially and thus, is
enforceable against the promisor.

15
Overview of Contemporary Juristic Opinion

• Contemporary jurists have been posed with

many issues in financial products which
require them to exercise an ijtihad and
produce a new ruling (ifta’) to such effect.

16
 Sheikh Badr Al-Mutawalli Abdul First Conference of Islamic Banking in
Basit, Shari‟ah advisor of KFH Dubai (May 1979)
every unilateral promise that neither Fulfilling such promise may become
permit unlawful thing nor prohibit judicially obligatory in the event of
lawful thing is binding judicially and necessity, eg. if the non-fulfillment of
by religion (mulzim qada-an wa promise entails difficulties or loss to the
diyanatan promisee.

IJTIHAD & IFTA’ Sheikh Abdul Aziz bin Baz,

ON WA’D Mufti of Saudi Arabia
promises to sell are
2nd Conference of Islamic Banking in Kuwait (21- permissible provided that the
23 March 1983) goods that have been
pledged are owned by those
• Approved bilateral promise (muwa‟adah) who made the promise.
provided that: bank owns the goods& put in
possession, Bank sells goods to purchase
Islamic Fiqh Academy in
orderer with an agreed profit, Bank must bear
resolution no. 40-41
ownership risk until the goods are delivered,
Bank must accept redelivery if there is hidden Fulfilling a promise is allowed
defect in the goods subject to certain conditions
• also resolved - unilateral promise becomes as enumerated in the next
binding to the promisor -subject to the approval slides
17
of Shari‟ah supervisory committee
 Islamic Fiqh Academy Position on Promise

• a promise (wa’d) which is made unilaterally by

the purchase orderer or the seller is morally
binding on the promisor, unless there is a valid
excuse.
• It becomes legally binding if:
– it is made conditional upon the fulfillment of an
obligation, and
– the promissee has already incurred expenses on the
basis of such a promise.

18
 Islamic Fiqh Academy Position on Promise
(2)
• binding effect means such promise must be
fulfilled,
– otherwise a compensation must be paid for damages caused
due to the unjustifiable non-fulfilling of the promise.
• Mutual promise (muwa’adah) is also permissible
provided that the option is given to one or both
parties.
– Otherwise, it is not permissible, since mutual and binding
promise is like a sale contract which requires the seller to be in
full possession of the goods to be sold.
19
 What‟s the
difference
between Wa‟ad,
Wa‟adan and
Muwa`adah?
 Concept of Wa’d
• wa’d = a unilateral promise given by one party to
another to perform an obligation. E.g.
– a customer’s promise to buy the leased asset upon
expiry of the leasing (ijarah) period in the al-ijarah
thumma al-bay’ (Islamic hire-purchase) transaction.
– Other usage of unilateral promise in the form of sale
or purchase undertaking can also be found in
mushrakah mutanaqisah (diminishing partnership),
murabahah sale to purchase orderer and sukuk
structures.

21
 Concept of Wa’daan
• Wa’dan = 2 unilateral promises given by 2
different parties which are independents from
each other and subject to different independent
conditions. E.g.
– in certain Islamic-structured product, a customer
promises to sell securities to a bank for an agreed
settlement price with certain conditions.
– At the same time, the bank also undertakes to buy
the securities for certain price with another different
conditions.
22
 Concept of Wa’d
• Muwa’adah = bilateral promises that can be
conditional or unconditional with or without
consideration.
– Unconditional bilateral promise occurs when one
party undertakes to sell an asset during a particular
time, while the other party undertakes to buy it
during the same time.
– Conditional bilateral promises happen when one
party promises to sell an asset and another party
promises to buy the same asset if certain condition X
occurs.

23
Application of Wa’d in
Modern Transactions

 Wa’d as a Sign of Commitment

 Wa’d & Options
 Wa’d in Event of Default
& Total Loss
 Wa’d & Liquidity Facility
 Wa’d & Exit Mechanism
 Wa’d in Hedging and Risk Management
 Wa’d as a Sign of
Commitment

• This form of wa’d is to show parties’ commitment to

complete the transaction according to their ultimate
intention.

• This form of promise is used to formulate the basic

structures of murabahah, musawamah, salam and
istisna’ in today’s financial transactions.
How to ensure the
fulfillment of Hamish Jiddiyah
Wa’d?

Hamish Jiddiyah is a security deposit in case the

customer does not fulfill his promise, i.e. cancel the
purchase, the deposit will serve as a remedy to any
loss suffered by the bank.
 How different is
Hamish Jiddiyah form
downpayment (urbun)?  Both are defined as the amount paid by
the orderer of the purchase upon a
request from the purchaser to make sure that the orderer is serious in his demand for
the asset.

Urbun  is a down payment that is non-refundable and is constitutes as an initial

installment payed in the beginning of signing the contract

Hamish Jiddiyah  a payment made before the signing of the contract in case
the customer does not complete the transaction the amount of hamish jiddiyah is
going to be deducted by the amount of loss suffered by the bank
otherwise it is refundable
 Wa’d in Event of Default &
Total Loss
• Binding wa’d has been applied to mitigate the risk faced by the bank
and investors from events of default or total loss.

• In sukuk, it is applied through a Purchase Undertaking (Islamic put

option).

Ex.: Dubai Islamic Bank (as co-owner) will undertake to purchase SPV’s
share in the co-ownership assets at maturity or in case of event of
default or change in circumstances at a pre-agreed
exercise price.
 Wa’d Non-Fulfillment
• The opinion of the Fiqh academy states that in case a promising
party (wa’id) does not undertake his promise, the counterpart
(mustafid) can not force him to fulfill his promise but has the right to
ask for compensations over the actual losses (sharar fi’liy) incurred in
the court of law.
َ‫ فإوً يجثش قضاء عهّ إوجاص انعقذ أ‬,ً‫إرا تخهف أحذ طشفّ انمُاعذج عما َعذ ت‬
‫تحمم انضشس انفعهّ انزِ نحق انطشف األخش تسثة تخهفً عه َعذي‬

• Prof. Hussin Hamad states that the promisor can not be forced to
fulfill his promise, but the counterparty can ask for the appropriate
compensation based on occurred losses.
How Can Compensation
be determined in case of
Wa’d non-fulfillment?
AAOIFI standards on the issue of
Compensation:

1. Financial institutions have the right over the hamish Jiddiyah in

case of wa’d non-fulfillment

2. The amount of compensation is based on the detriment (dharar)

and actual losses (dharar fi’liy) that resulted from the wa’id action,
and not the opportunity lost.

3. As for Ijarah (leasing), the amount of actual loss can be

determined by the difference between the cost of leased asset and
the total amount of lease if tt was leased to another, or the selling
price if the leased object was sold to another
 What is Hybrid Contract?
)‫(الجمع بين العقود‬
 Hybrid contracts or
Combination of
contracts is a process
that takes place between
two parties or more; and
entails the simultaneous
conclusion of more than
one contract.
Forms of Combination of Contracts

Without imposing any of them as a condition in the

other, and without prior agreement (muata‟ah) to do so.

Imposing some of them as conditions in the others,

without prior agreement (muata‟ah) to do so.

Subject to prior agreement but without imposing any of

them as condition in the others.

Agreement to conclude the deal through any of the

different contractual forms decided in the future.
Forms of Combining Contracts
Having single lump sum counter value (‫)عىض‬
Ex. Selling a piece of land to the other and at the same time renting a
car to the same party for a specifies period both against RM1000

Concluded for separate values

Ex. Selling a house to the other for RM1000 and at the same time renting a car to the
same party for RM100 per month

Stipulated as conditions in the other contract

Ex. One party tells the other party I will sell you my house for RM10000 on
condition that you undertake to rent it to me for a RM1000 per year for
two years

Exhaustive contractual statement comprising a number of

successive parts and stages to realize the desire of both
parties to conclude the deal in question
Ex. Ijarah muntahiah bitamlik, diminishing musharakah, etc
Islamic Project Finance Through
Syndicated Financing
• It refers to the participation of a group of institutions in a joint financing
operation through one of the Shariah-permitted modes of financing.
• The accounts of the syndicated financing operation are kept independent
from the accounts of participating institutions.
• The main reasons for syndicated financing is to share the risk exposures
amongst the participating financial institutions, which may otherwise not
plausible to be assumed individually due to large exposure limitation
imposed by regulator.

What is Syndicated Financing?

Shariah Parameters on Syndicated
Financing

Shariah Compliant Shariah Compliant

Investment Financing
Activities Structure
 Can Conventional
institutions involve in
Islamic Syndicated
Financing?
YES!
• As long as subscription and
utilization of funds are arranged
according to Shariah-compliant
forms
 Can Conventional
institution become
the lead arranger?
YES!
• Only if the contracts, project
financed and the modes of
financing are all Shariah-
compliant
 Can IFIs partake to
finance a project which
is also partially financed
via conventional modes?
YES!
With a condition that the accounts and
lead manager arrangements of the two
types of financing are kept separate. It
is well known that usurious lending and
borrowing is a Shariah-banned practice
and the responsibility thereof falls right
on the party who commits it.
 Mudarabah Structure of Syndicated
Financing
Invest in the Provides
Development Financing

Share
Profits

Project to be Syndication Manager Participating Banks

Financed (Mudarib) (Rabbul Maal)
In Essence Mudarib Cannot Guarantee
Capital Nor Return Unless Negligence
or Misconduct!

How to Protect the Interest of

Investors (Rabbul Maal)?

Feasibility Study or Business Plan

( َِ‫ )دساسح انجذ‬as a form of
Accountability!
What is Feasibility Study or
Business Plan ( ‫? )دراسة الجدوى‬
• Feasibility studies aim to objectively and rationally
uncover the strengths and weaknesses of the existing
business or proposed venture, opportunities and
threats as presented by the environment, the resources
required to carry through, and ultimately the prospects
for success. In its simplest term, the two criteria to
judge feasibility are cost required and value to be
attained.
• As such, a well-designed feasibility study should provide
a historical background of the business or project,
description of the product or service, accounting
statements, details of the operations and management,
marketing research and policies, financial data, legal
requirements and tax obligations.
• Generally, feasibility studies precede technical
development and project implementation.
 Business Plan Makes
Mudarib Accountable
• If say under Business Plan, the Mudarib projects the return to be 12%
per annum, if there is a shortfall of 2%, then the Mudarib need to
compensate for the shortfall which he had earlier promised under the
Business Plan.
• This is the opinion of Sheikh Hussain Hamid Hassan based on legal
maxim:
‫أن انتغشيش تانقُل كانتغشيش تانفعم يُجة انضمان‬
“that deception by words entails compensation/indemnification in the
same way as deceiving by acts requires”
• For example, if someone digs a well or a hole on a thoroughfare and
covers it with some paper or palm leaves, then he will be responsible
for loss or damage caused to property or life of any one due to his act.
It means that he shall be responsible both under criminal and civil
laws. The same rule applies to a party who has presented a feasibility
study to lure a financial institution into extending financing to him on
the basis of his study should he fail to achieve the estimated returns
and the promised results
 Burden of Proof is on Manager
of Funds
• Producing evidence is the duty of the party which lodges a claim while
the party denying the claim is required to take oath that his stand is
correct (‫)انثيىح عهّ انمذّعي َانيميه عهّ مه أوكش‬. Jurists unanimously hold that Al
Muddai (the Claimant) refers to a person who claims occurrence of an
event which is not common or the norm.
• When applied in case of a Fund Manager who claims loss or destruction
of the Investment assets, it means that such a claim shall not be
acceptable unless he produces evidence that the assets have been
destroyed totally or partially or a loss has been incurred; and that the
above loss or damage or defect is not due to his default, negligence,
misconduct or breach.
• In other words, he should prove that the loss has happened for reasons
or circumstances beyond his capability to foresee or power to rectify.
• The reason for the above position is that the Investment Manager will be
considered to be claiming what is uncommon and abnormal.
• It is quite common and normal that an asset/fund taken by someone for
the purpose of investment remains intact or grows. Therefore the claim
that it has been destroyed or incurred a loss needs to be substantiated by
evidence.
Musharakah Structure of Syndicated Financing
Profit Shared according to
predetermined ratio

Finance the Select Joint

Development Committee

Project to be Form Musharakah

Joint Committee
Financed Partners

Shared according to
Loss
capital contributed
 Wakalah Structure of Syndicated Financing
Profit Shared according to
predetermined ratio

Invest on Appoint
Agent
behalf banks

Project to be Form Musharakah

Paid/Non-Paid Agent
Financed Partners
Pay remuneration

Shared according to
Loss
capital contributed
Case Studies on Islamic Shipping
Finance
 Case Studies on Istisna’
• This is an Istisna’ arrangement in relation
to construction of vessel for Brunei Gas
Carrier Sdn. Bhd.
• The structure involves BGC SPV as the
owner and user of the gas tanker but the
ownership is split between beneficial
(Orphan SPV) and legal (BGC SPV) to
justify the repayment of cost + profit.
• Essentially, the structure was designed to
ensure effective repayment mechanism
to the participants (financial
institutions).
 What is Orphan SPV?
• Orphan company - A company which has no identifiable shareholder/
owners - e.g., an SPV owned by a charitable trust. If the trust is a public
charitable trust, there is no identifiable beneficial owner of the SPV.
• In most UK securitisations, the SPV is structured as "an orphan subsidiary"
with the shareholding transferred to a charitable trust. Therefore, even
though there is no direct control of the originator on the SPV, it is a matter
of common knowledge that the SPV is a figment of the originator. The
originator does maintain operational control over the SPV.
• This ownership structure of the SPV is devised to avoid consolidation, both
from bankruptcy as well as accounting viewpoint.
• To avoid consolidation from legal and accounting viewpoint, the originator
must hold no equity interest, and no residual interest in the SPV.
Therefore, very convoluted methods are followed in UK practice for
extraction of the originator's profit from the transaction. These include:
deferred consideration, an intermediary trust holding legal interest on
behalf of both the originator and the issuing SPV, interest swap, retained
interest, management fee, brokerage, etc.
 Hybrid Structure of Syndicated Financing

Engage in
construction

(1) Lessor is the beneficial owner of the vessel

and the lessee is the registered owner and
operator of the vessel
Ship Builder
(2) Lessor will lease its beneficial interest in
the vessel
Forward Lease
Agreement ORPHAN SPV
(Mudarib/Purchaser
Istisna’ Agreement
/ Lessor
(1) Purchaser and the Seller agree that the
Seller will build the Vessel Mudarabah
Seller/Lessee (2) Purchaser agrees to pay the Istisna‟ cost as Agreement
the price for the Seller per forming the works
(3) Seller agrees to sell by way of Istisna‟ to
Purchaser its beneficial interest in the constructed
Vessel and Purchaser agrees to purchase the
constructed vessel for the Istisna; cost. Financiers
(Rabbul-
 Case Study on
Murabahah Shipping Facility to
Hay Denizcilik Ticaret
(Turkish-based Shipping Company)
 Case Studies on Murabahah
• This is an USD18 million Murabahah Shipping
Facility granted by Amsterdam-based Garanti
Bank International (GBI) to Turkish-based
Shipping Company, Hay Denizcilik Ticaret
(HDT).
• The structure involves GBI as the financier and
seller of the vessel. While HDT is the GBI’s
client to purchase the vessel.
• Essentially, the structure was designed to
based on the principle of Murabahah to the
Purchase Orderer (Murabahah Lil Amri Bi
Shirak)
 Murabahah
Arrangement
Vessel Purchase
Agreement to Purchase
Vendor
Vessel
Vessel Purchase Pay
Agent Confirmation at
cost
Murabahah price
Agency
Agreement

Pay on
(a) Identification
Murabahah deferred
Notice
Agreement sale
(b) Pay Deposit terms
Purchaser
(HDT)
 What is
the Shari`ah
Status on Combining
Contracts?
 Shariah Status
• It is permissible in Shariah to combine more
than one contract in one set, without imposing
one contract as a condition in the other, and
provided that each contract is permissible on its
own.

• Freedom of contracting & honoring

commitments is acknowledged in principle by
the general teachings and directives of Shariah –
unless such contracts and commitment lead to
violation of rulings.
 Cont’d
• Ibn Qayyim states “it is permissible in principle to form
up contracts and conditions, except for what has been
prohibited by Shariah”

‫”و األصل فى العقود و الشروط الصحة اال ما أبطله الشارع‬

”
‫أو نهى عنه‬

• Combining contracts in this manner is acceptable

unless it encounters a Shariah restriction that
entails its prohibition on exceptional basis.
 3rd Opinion
Ibnu Taimiah
Permissibility of
Indicates permissibility of
Contract Combining combining two contract having
separate values

)‫(عقذيه تعُضيه مختهفيه‬

2nd Opinion
1st Opinion
Some Hambali and Shafi’is
Majority of Hanafis, Shafi`is, & Fuqaha
Hambalis
Permissibility of combining two
The set of combined contracts can be
contracts for the same contract
judged in the light of its individual
components. value, even if the two contracts
differ with regard to Shariah
Hence, if the transaction comprises a Status and rulings.
number of contracts that individually
satisfies the permissibility requirements,
the combined contract is permissible.
 Exceptions
• Al-Shatibi indicates prohibition of combining contracts in
specific cases on exceptional basis.

 Combining could generate Shariah restrictions that do not

hold true when the combined acts are taken up individually.

• Ex.: combining sale & lending, marrying two

sisters, or marrying a woman and her aunt.
 Does not Not contradicting
include cases with underlying
banned by rulings &
Shariah ultimate goal

Not used as an Not used as a

excuse for trick to
practicing riba circumvent for
riba

Shariah Parameters/Controls on Contract Combining

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