Mastering Islamic Finance

4

Valid commercial contracts in Islamic finance

Introduction

Key conditions for validity of contracts

Integrity of contractual arrangements

Status and use of promises

Conclusion

INTRODUCTION

As with conventional trade and finance, Islamic finance recognises trade between two parties by virtue of binding agreements or contracts. The reasons for devoting a chapter to the topic of sharia-compliant commercial contracts are as follows:

1. Such contracts will be a feature of all transactions pertaining to sharia-compliant trade. It is therefore essential to understand the principles underpinning Islamic contract law.
2. While there are many similarities between modern-day English commercial law and sharia principles, there are some differences or ...