fundamentals of shariah-3rd day

8/9/2019 Fundamentals of Shariah-3rd DAY

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FUNDAMENTALS OF SHARIAHFUNDAMENTALS OF SHARIAH

presented by

Ahmad Sanusi Husain

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME


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1. Participating Contracts- Types of Participating Contracts

- Essential Elements - Necessary Conditions

2. Supporting Contracts- Types of Supporting Contracts

- Essential Elements - Necessary Conditions

CONTENTSCONTENTS


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Shirkat (Partnership)

Shirkat Milk

(Holding Partnership)

Shirkat Uqud

(Contractual Partnership)

Shirkat Mufawada

(equal shares)Shirkat Inan

(unequal shares)

Shirkat A’amal (Abdan)

(Partnership in work)Shirkat Wujuh

(Receivable partnership)

Mudharabah

(Trustee Partnership)

Shirkat Amwal

(Partnership in capital)

Inheritance ( Faraid )Will (Wasiyyat )

TYPES OF PARTICIPATING CONTRACTSTYPES OF PARTICIPATING CONTRACTS


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PARTICIPATIN CONTRACTS

De!niti"ns "# Mushara$ah and Mudhara%ah

Mushara$ah is a general partnership whereby

two or more parties enter into a contract to eploittheir labour and capital !ointly and to share thepro"ts and loses of the partnership.

Mudhara%ah is a contract where the owner of

capital entrusts his funds to an entrepreneur whocontributes s#ills is business and the pro"tsgenerated is to be shared between them.


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There are "$e essential elements of %ushara#ah andsi of %udharabah as follows.

Mushara$ah Mudhara%ah

&i' partners &i' owner&s' of capital

&ii' capital &ii' entrepreneur

&iii' business &iii' capital

&i$' pro"t sharing and &i$' business

&$' contract &$' pro"t sharing

&$i' contract


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(&) Mushara$ah

There are 1( necessary conditions relating toits essential elements.

&1' Contract

There are three necessary conditions)i.e.*

&i' in de"nite and decisi$e language. +nthe

present or past tense) not futuretense nor imperati$e

&ii' acceptance must agree with o,erand

&iii' o,er and acceptance made at theone and


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&2' Partners must meet the following fournecessary conditions*

&i' capable of ta#ing responsibility) i.e.- of sound mind

- reached the age of puberty

- reached ma!ority &1 years old'


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&ii' not prohibited from dealing with theirproperties*

- not declared ban#rupts or

- not declared prodigals

&iii' no coercion is eerted on them

&i$' capable of appointing agents and beappointed as agents.


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&' Capital

There are "$e necessary conditions*

&i' any asset $alued in money

&ii' not debt

&iii' speci"c amount

&i$' from all partners &$' paid into capital fund


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&/' 0usiness

There are two necessary conditions*

&i' halal and &ii' managed by all the partners

&' Pro"t 3oss Sharing

There are two necessary conditions*

&i' according to proportion of shares oraccording to agreement infraction) ratio

or percentage) not in absolute amount. &ii' loss born by all partners according to

proportion of shares


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(') Mudhara%ah

There are 1( necessary conditions relating toits essential elements.

&1' Contract

There are three necessary conditions)i.e.*

&i' in de"nite and decisi$e language. +nthe

present or past tense) not futuretense nor imperati$e

&ii' acceptance must agree with o,erand

&iii' o,er and acceptance made at the


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&2' and &'

4wner&s' of Capital and Entrepreneur must meet thefollowing four necessary conditions*

&i' capable of ta#ing responsibility) i.e.

- of sound mind

- reached the age of puberty

- reached ma!ority & 1 years old'


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&ii' not prohibited from dealing with theirproperties*

- not declared ban#rupts or

- not declared prodigals

&iii' no coercion is eerted on them

&i$' capable of appointing agents and beappointed as agents.


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&/' Capital

There are "$e conditions*

&i' money only &ii' not debt &iii' speci"c amount &i$' from owner&s' of capital only

&$' paid to entrepreneur


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&' 0usiness

There are two necessary conditions.

&i' halal

&ii' managed by entrepreneur only

&(' Pro"t Sharing

The two necessary conditions are*

&i' pro"t shared according to agreement in

fraction) ratio or percentage) not inabsolute amount.

&ii' loss borne by owner&s' of capital only


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Appiati"n "# Mus*ara$ah and Mudhara%ahC"ntrats

%ushara#ah and %udharabah contracts may be

used by corporate as well as indi$iduals. They may be

applied in

all sectors of industry i.e. agriculture)

manufacturing)trading) ban#ing) transportation and other

ser$ices.

+n corporate sector they are used to create e5uity


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SUPPORTIN CONTRACTS

Supporting contracts most often used in connectionwith debt "nancing are as follows*

- rahn &pledge'- dhaman &guarantee'- wa#alah &agency'- wadiah &safe custody') and

- ibraa6 &rebate'


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There are "$e essential elements of pledge asfollows*

&1' Pledgor

&2' Pledgee

&' 4bligation or right to a claim &debt'

&/' Pledge &property pledged'

&' Contract * o,er and acceptance

(&) Rahn (ped+e)


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&1' and &2' Pledgor and Pledgee

Pledgor and Pledgee must meet three necessary

conditions as follows*

&i' They must be capable of ta#ing responsibility.

&ii' They must not be prohibited from dealing withtheir properties.

&iii' No coercion is eerted on them.


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&' 4bligation &debt'

There are two necessary conditions that must be

met*

&i' 7 debt must ha$e been established.

&ii' The debt must be #nown.


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&i$' +t must be owned by the pledgor.

&$' +t must be capable of being deli$ered8 it mustbe free from encumbrances.

&$i' +t must be #nown and speci"c by address)description or speci"cation.


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&' Contract

There are two necessary conditions of contract of

pledge *

&i' 7 pledge becomes a concluded contract by theo,er and the acceptance of the pledgor andpledgee. The o,er and acceptance must beabsolute and in de"nite and decisi$e language.

&ii' The acceptance must agree with the o,er.


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Other #eatures reatin+ t" the ped+ed

pr"pert*,

&i' 4ne pledge may be echanged for another.

&ii' +t is lawful to increase the debt that is securedby the pledge.

&iii' 4ne pledge can be ta#en as security for twodi,erent debts from two di,erent creditors.

&i$' 7 borrowed property can be used as a pledge


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&$' The pledgee has a right to possession of

the pledge until its redemption.

&$i' 7 pledge does not become necessary to

be returned when the debt is partly paid

o,. The pledgee has a right to hold it until the debt is paid in full.

&$ii' +t is in$alid for the pledgor or pledgee to

sell or pledge a pledged property without the

others6 consent.


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&$iii'The pledgor is forbidden from uplifting thepledge.

&i' The pledgee may on his own accord) release the

property from the pledge.

&' 4n maturity of the debt and the pledgor refusesto ma#e payment) the pledgee may apply to thecourt to compel the pledgor to sell the pledge inorder to pay the debt. +f the pledgor still refuses

to ma#e payment the court may sell the pledgeto pay the debt.


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The term 9haman is usually used in respect of debt&money or property' and there are "$e essential

elements) namely*

&1' 9hamin &guarantor'

&2' %adhmun lah &creditor'

&' %adhmun anh &debtor'

&/' %adhmun bih &debt'

&' Contract

There are se$en necessary conditions that must be met in

9haman.

(') -a#aah "r Dhaman (+uarantee)(') -a#aah "r Dhaman (+uarantee)


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&1' :uarantor :uarantor must meet two necessary conditions as

follows*

&i' ;e must be capable of ta#ing responsibility.

&ii' ;e must not be prohibited from dealing withhis

property.

&2' and &' Creditor and 9ebtor

- Creditor and debtor must be #nown to theguarantor.


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&' 9ebt

There are three necessary conditions of debt as follows*

&i' The debt must ha$e been established and certain&ii' +t must be obligatory) i.e. an obligation on the

debtor&iii' +t must be #nown in amount

&/' Contract

- Contract must be absolute and in de"nite anddecisi$e language.


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&'


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&1' and &2' Principal and 7gent

There are three conditions relating to principal andagent

as follows*

&i' They must be capable of ta#ing responsibility

&ii' The principal must be competent and ha$e theright to do in person what he authorises his agentto do

&iii' The agent must himself be capable of doing on hisown account what he is appointed to do for another


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&' 0usiness or


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&/' Contract

There is only one necessary condition relating to

contract.

- The contract must be in de"nite and decisi$e

language.

T*pes "# A+en*

- The property) right ) business or wor# concerning

which the agent is to perform may be general or

speci"c. +f it is speci"c) it must be speci"ed inthe

contract.

- 7n agent may recei$e fees for his ser$ices.


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Duties "# An A+ent

- 7n agent is a safe custodian for the things that isentrusted to him before deli$ery to the principal

or a third party.


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- Contracts of an agent is incumbent on hisprincipal in

the following matters*

= ;ibah &git'

= 3ending and borrowing

= 9ebt &deferred payment sale'=


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(.) /adiah (sa#e ust"d*)


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&1' and &2' 9epositor and Custodian

- 9epositor and custodian must be capable ofta#ing responsibility.

&' 9eposit- 9eposit must meet two necessary conditions)namely*

&i' +t must be capable of being managed by thecustodian.

&ii' +t must be capable of being stored8 it mustnot be

perishable.

&/' Contract- +t must be in de"nite and decisi$e lan ua e.


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T*pes "# /adiah

There are two types of


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&' +braa6 &rebate'&' +braa6 &rebate'

+braa6 arises out of a deferred payment sale where the

buyer ma#es an early redemption.

+braa6 has "$e essential elements) namely*

&1' Creditor &seller'

&2' 9ebtor &buyer'

&' 9ebt &deferred selling price'

&/' +braa6 &the partial refund of money paid'

&' Contract


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&1' and &2' Creditor and 9ebtor

The necessary conditions of creditor and debtor are thesame as those of buyer and seller in a contract of sale.

&' 9ebt

The debt as the selling price must meet these two

necessary conditions*

&i' 7bsolute in amount&ii' @nown currency


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&/' +braa6

There are two ways of dealing with +braa6) i.e*

&i' +t must not be stated in absolute amount orpercentage in the asset sale agreement8 or

&ii' +t may be stated in the 7S7 in an absolute amountand a #nown currency.


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Thank you

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

fundamentals of shariah-3rd day

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