Flexibility and Sharīʿah Compliance of Islamic Financial Contracts: An Evaluative Framework

Moqbel, T. and Ahmed, H. 2020. Flexibility and Sharīʿah Compliance of Islamic Financial Contracts: An Evaluative Framework. Arab Law Quarterly. 35 (1-2). https://doi.org/10.1163/15730255-BJA10052

TitleFlexibility and Sharīʿah Compliance of Islamic Financial Contracts: An Evaluative Framework
TypeJournal article
AuthorsMoqbel, T. and Ahmed, H.
Abstract

Although the key distinguishing feature of Islamic finance is compliance with Sharīʿah, there is criticism from various quarters on the Sharīʿah compliance of its products. However, there is no objective way to assess the Sharīʿah compliance of Islamic financial contracts. This article develops a structured framework for analysing Sharīʿah compliance of Islamic financial contracts by deconstructing them and developing principles of evaluation based on concepts from Islamic legal theory. Other than providing a framework to assess Sharīʿah compliance of Islamic financial contracts, this article also alludes to an important issue regarding the contracts’ flexibility. Using concepts from Islamic legal theory, the article classifies different contractual stipulations according to their legal weight, and identifies how legal perspectives on the requirements of compliance can determine the flexibility of contracts. An evaluative framework is used to assess the Sharīʿah compliance of an actual muḍārabah (silent partnership) contract and finds it to be defective.

KeywordsIslamic finance; Sharīʿah compliance; Islamic legal theory; flexibility of contracts; muḍārabah
JournalArab Law Quarterly
Journal citation35 (1-2)
ISSN0268-0556
Year2020
PublisherBrill
Publisher's version
License
CC BY 4.0
File Access Level
Open (open metadata and files)
Digital Object Identifier (DOI)https://doi.org/10.1163/15730255-BJA10052
Web address (URL)https://brill.com/view/journals/alq/aop/article-10.1163-15730255-BJA10052/article-10.1163-15730255-BJA10052.xml
Publication dates
Published22 Jul 2020

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Permalink - https://westminsterresearch.westminster.ac.uk/item/v0140/flexibility-and-shar-ah-compliance-of-islamic-financial-contracts-an-evaluative-framework


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