36 Questions
What is the meaning of gharar in Islamic finance?
Risk and uncertainty
What are the types of sales in Islamic finance?
Valid sales and invalid sales
What are the prohibited elements in Islamic financial contracts?
Riba, gharar, gambling, fraud, uncertainty/ignorance
What is riba in Islamic finance?
The premium paid by the borrower to the lender
What are the types of riba?
Riba al-nasiah, riba al-fadl, riba al-qard
What is the meaning of ghubn in Islamic finance?
Fraud
What are the invalid sales in Islamic finance?
Sales of undeliverable goods, liabilities, non-existing objects, and gharar sales
What is the meaning of jahalah in Islamic finance?
Uncertainty/ignorance
What is riba al-fadl in Islamic finance?
The excess over and above the loan paid in kind
What is riba al-qard in Islamic finance?
The benefit or profit of late payment
What is riba al-yad in Islamic finance?
The benefit derived from the duration between delivery and acceptance of the contracted item and price
What are the defective sales in Islamic finance?
Sales of unknowns, property before receiving it, two sales in one, conditions in sales, suspended conditional sales, sales of absent items, and sales with a forbidden price or time
What is the meaning of gharar in Islamic finance?
Risk and uncertainty
What are the types of sales in Islamic finance?
Valid sales and invalid sales
What are the prohibited elements in Islamic financial contracts?
Riba, gharar, gambling, fraud, uncertainty/ignorance
What is riba in Islamic finance?
The premium paid by the borrower to the lender
What are the types of riba?
Riba al-nasiah, riba al-fadl, riba al-qard
What is the meaning of ghubn in Islamic finance?
Fraud
What are the invalid sales in Islamic finance?
Sales of undeliverable goods, liabilities, non-existing objects, and gharar sales
What is the meaning of jahalah in Islamic finance?
Uncertainty/ignorance
What is riba al-fadl in Islamic finance?
The excess over and above the loan paid in kind
What is riba al-qard in Islamic finance?
The benefit or profit of late payment
What is riba al-yad in Islamic finance?
The benefit derived from the duration between delivery and acceptance of the contracted item and price
What are the defective sales in Islamic finance?
Sales of unknowns, property before receiving it, two sales in one, conditions in sales, suspended conditional sales, sales of absent items, and sales with a forbidden price or time
What are the two types of sales in Islamic finance?
Valid and invalid sales
What are some examples of invalid sales in Islamic finance?
Sales of undeliverable goods, liabilities, non-existing objects, and gharar sales
What are some examples of defective sales in Islamic finance?
Sales of unknowns, property before receiving it, two sales in one, conditions in sales, suspended conditional sales, sales of absent items, and sales with a forbidden price or time
What is riba in Islamic finance?
The premium paid by the borrower to the lender
What are the different types of riba in Islamic finance?
Riba al-nasiah, riba al-fadl, and riba al-qard
What is gharar in Islamic finance?
Risk and uncertainty
What are some other prohibited elements in Islamic finance contracts besides riba and gharar?
Gambling (maysir), fraud (ghubn), and uncertainty/ignorance (jahalah)
What is riba al-nasiah in Islamic finance?
Interest on loans
What is riba al-fadl in Islamic finance?
The excess over and above the loan paid in kind
What is gharar sales in Islamic finance?
Sales that expose the contracted item/price/benefits to unknown events
What is fraud (ghubn) in Islamic finance?
Manipulating the fact of contracted item
What is uncertainty/ignorance (jahalah) in Islamic finance?
Unknown contracted item
Study Notes
Prohibited Elements in Islamic Finance
- Islamic financial transactions must follow Islamic contract laws and regulations and should not have any prohibited elements.
- Any defect in Islamic contracts law may cause the invalidity or defectiveness of the contract.
- Types of sales include valid sales (satisfying all conditions and cornerstones) and invalid sales (violating one or more conditions and cornerstones).
- Invalid sales include sales of undeliverable goods, liabilities (including debts), non-existing objects, and gharar sales.
- Defective sales include sales of unknowns, property before receiving it, two sales in one, conditions in sales, suspended conditional sales, sales of absent items, and sales with a forbidden price or time.
- Prohibited elements in Islamic financial contracts include riba, gharar, gambling (maysir), fraud (ghubn), and uncertainty/ignorance (jahalah).
- Riba, technically referring to the premium paid by the borrower to the lender, is completely prohibited under Islamic law and is a source of unjustified advantage.
- Prohibitions of riba are mentioned in both the Quran and Hadith, with riba al-nasiah (interest on loans) being a significant type of riba.
- Riba al-fadl refers to the excess over and above the loan paid in kind, and riba al-qard refers to the benefit or profit of late payment.
- Riba al-yad refers to the benefit derived from the duration between delivery and acceptance of the contracted item and price.
- Gharar, meaning risk and uncertainty, may occur when the contracted item/price/benefits of the contract are exposed to unknown events.
- Prohibited elements also include fraud (manipulating the fact of contracted item) and uncertainty/ignorance (unknown contracted item).
Test your knowledge on the prohibited elements in Islamic finance with this informative quiz. Explore the types of sales in Islamic contracts and learn about invalid and defective sales. Discover the various elements that are prohibited in Islamic financial contracts, including riba, gharar, gambling, fraud, and uncertainty/ignorance. This quiz will help you understand the importance of following Islamic contract laws and regulations to avoid invalidity or defectiveness of the contract. Brush up on your knowledge of Islamic finance and take this quiz
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