RESOLUTION NO. 40-41(2/5&3/5)


Quote -The Council of the Islamic Fiqh Academy, holding its Fifth Session, in Kuwait City (State of Kuwait), from 1st to 6th Jummada al-Oula 1409 H (10 to 15 December 1988),

Having taken cognizance of the papers presented by members and experts of the council regarding “Discharging a promise and Murabaha for the orderer of purchase”, and

Having listened to the discussions on the these two subjects;


First:  Murabaha sale by purchase orderer is permissible on goods already in the physical possession of the seller, as required by Shari’a, provided the seller carries the risk of loss before delivery or the consequences Of returning the purchased goods because of concealed defects or any other reasons justifying the return of the goods after their reception, provided the conditions of the sale are met and with the absence of any impediments.
Second: According to Shari’a, a promise (made unilaterally by the purchase orderer or the seller), is morally binding on the promisor, unless there is a valid excuse.  It is however legally binding if made conditional upon the fulfillment of an obligation, and the promisee has already incurred expenses on the basis of such a promise.  The binding nature of the promise means that it should be either fulfilled or a compensation be paid for damages caused due to the unjustifiable non-fulfilling of the promise.

Third:  Mutual promise (involving two parties) is permissible in the case of Murabaha sale provided that the option is given to one or both parties.  Without  such an option, it is not permissible, since in the Murabaha sale, mutual and binding promise is like an ordinary sale contract, in which the prerequisite is that the seller should be in full possession of the goods to be sold, in order to be in conformity with the Hadith of the Prophet (PBUH) or biding the sale of anything that is not in one’s possession.

The Council of the Academy, having noticed that the major part of the activities of many Islamic Banks were geared to financing operations of Murabaha on the purchase orders;


First:  The activities of the Islamic Banks shall be extended to cover all the development mechanism of the economy particularly by sponsoring industrial and commercial projects, through individual initiatives or equity participation or Murabaha with other partners.
Second: The practical aspects of Murabaha on purchase orderer to be studied by Islamic Banks with the aim of working out the basis for safeguarding against any pitfall in the process of application and to help upholding general Shari’a rules as well as those governing operations of Murabaha for the orderer of purchase.

Verily, Allah is All-Knowing – Unquote

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