Flexibility and Shari'ah Compliance of Islamic Financial Contracts: An Evaluative Framework

Moqbel, T; Ahmed, H

doi:10.1163/15730255-bja10052

Flexibility and Shari'ah Compliance of Islamic Financial Contracts: An Evaluative Framework

Moqbel, T; Ahmed, H

Authors

T Moqbel

Professor Habib Ahmed habib.ahmed@durham.ac.uk
Professor

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.

Citation

Moqbel, T., & Ahmed, H. (2020). Flexibility and Shari'ah Compliance of Islamic Financial Contracts: An Evaluative Framework. Arab Law Quarterly, 35(1-2), 92-115. https://doi.org/10.1163/15730255-bja10052

Journal Article Type	Article
Acceptance Date	May 12, 2020
Online Publication Date	Jul 22, 2020
Publication Date	Jan 1, 2020
Deposit Date	May 29, 2020
Publicly Available Date	Aug 27, 2020
Journal	Arab Law Quarterly
Print ISSN	0268-0556
Electronic ISSN	1573-0255
Publisher	Brill Academic Publishers
Peer Reviewed	Peer Reviewed
Volume	35
Issue	1-2
Pages	92-115
DOI	https://doi.org/10.1163/15730255-bja10052
Public URL	https://durham-repository.worktribe.com/output/1269674

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Publisher Licence URL
http://creativecommons.org/licenses/by/4.0/

Copyright Statement
Advance online version © Tareq Moqbel and Habib Ahmed, 2020. This is an open access article distributed under the terms of the CC BY 4.0 licence.