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</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</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</p> Signup and view all the answers

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

    <p>Sarf</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</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</p> Signup and view all the answers

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

    <p>Tawliyyah</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</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</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</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</p> Signup and view all the answers

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

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

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

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

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

    <p>Riba</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</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</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</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</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</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</p> Signup and view all the answers

    What is required for a valid contract in Islamic law?

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

    What is the purpose of a Bai Murabahah contract?

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

    What is Muamalat in Islamic finance?

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

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

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

    What is the main characteristic of a Wadiah contract?

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

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