Islamic Contracts and Commercial Law
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Questions and Answers

What are the two reasons that make a contract non-binding?

  • Fuduli and sarf
  • Option and withheld contract
  • Agency and partnership (correct)
  • Riba and gharar

What is the meaning of fuduli in a contract?

  • A person who makes the disposition of property with the consent of its owner
  • A person who witnesses the contract
  • A person who makes the disposition of property without the consent of its owner (correct)
  • A person who negotiates a sale on behalf of the owner

What is the legal consequence of a Mawquf contract?

  • The contract is annulled
  • The contract is deemed void
  • The contract is binding and enforceable
  • The contract is pending or hanging (correct)

What is the golden principle in trading?

<p>The contract should not contain an element of riba, gharar, or maysir (D)</p> Signup and view all the answers

What is the Shariah definition of a sale?

<p>The exchange of a thing of value by another thing of value with mutual consent (C)</p> Signup and view all the answers

What happens to a contract that contains an element of riba, gharar, or maysir?

<p>The contract is void or voidable (D)</p> Signup and view all the answers

What is the term used to describe a sale by exchange of money for money?

<p>Sarf (B)</p> Signup and view all the answers

In a Murabahah sale, what is disclosed to the buyer?

<p>The profit amount but not the original cost price (C)</p> Signup and view all the answers

In a Musawamah sale, what is the status of the cost price and profit amount?

<p>The buyer knows neither the cost price nor the profit amount (A)</p> Signup and view all the answers

Which type of sale is based on the principle of trust (amanah)?

<p>Tawliyyah (A)</p> Signup and view all the answers

What is the term used to describe a sale by immediate payment against future delivery?

<p>Bay al-salam (C)</p> Signup and view all the answers

What is the main characteristic of a Bay al-istisna sale?

<p>Advance payment may or may not be applicable (C)</p> Signup and view all the answers

What is the core principle guiding the formation of contracts in Islamic commercial law?

<p>Preventing injustice to honest and legitimate trade and business (A)</p> Signup and view all the answers

What is the term used to describe the Islamic legal term for the branch of law dealing with contracts?

<p>Fiqh-al-muamalat (A)</p> Signup and view all the answers

What is the primary basis of the Sharīʿah law of contract?

<p>Rules for specific contracts (C)</p> Signup and view all the answers

What is the consequence of withholding crucial information in a contract?

<p>The contract becomes invalid (C)</p> Signup and view all the answers

What is strictly prohibited in Islamic contracts due to the principle of justice?

<p>Riba (B)</p> Signup and view all the answers

What type of contracts are strictly prohibited in Islamic law due to the principle of transparency?

<p>Contracts involving Gharar (D)</p> Signup and view all the answers

What must be determined at the time of the contract in Islamic law?

<p>The price of the commodity (B)</p> Signup and view all the answers

What is required of a person to have full capacity in Islamic law?

<p>Physical puberty and prudence in judgment (C)</p> Signup and view all the answers

What is permitted in Islamic law regarding minors?

<p>Minors can enter into beneficial agreements with guardian approval (A)</p> Signup and view all the answers

What is the definition of consideration in Islamic contracts?

<p>A legal benefit received by one person and a legal detriment imposed on the other (B)</p> Signup and view all the answers

What is the rule regarding the price in Islamic contract of money exchange?

<p>The price must be in existence and determined at the time of the contract (D)</p> Signup and view all the answers

What is required for a valid contract in Islamic law?

<p>The parties must be competent (D)</p> Signup and view all the answers

What type of contract is useful for a seller who wants to improve their liquidity position?

<p>Wadiah (D)</p> Signup and view all the answers

What is the purpose of a Bai Murabahah contract?

<p>To declare the cost and the profit (C)</p> Signup and view all the answers

What is Muamalat in Islamic finance?

<p>Civil contracts in Shariah (D)</p> Signup and view all the answers

What is the main principle of Trading Contracts in Islamic finance?

<p>Buying and selling of assets (C)</p> Signup and view all the answers

What is the main characteristic of a Wadiah contract?

<p>Selling a commodity at a lower price (C)</p> Signup and view all the answers

What is the main purpose of contracts in Islamic banking and finance?

<p>To mobilize deposits and apply funds (A)</p> Signup and view all the answers

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