Understanding Islamic Finance - Doha Academy of Tertiary Studies

488 Understanding Islamic FinanceFāsid: A voidable or defective contract (according to division of contracts with respect to legality asper Hanafi Fiqh) due to nonfulfilment of any condition required for valid contracts.Fatwah: A religious decree or edict; plural Fatāwa.Fiqh: Islamic jurisprudence; the science of the Sharī´ah. It is an important source of Islamic tenets.Frāidh: Obligations – acts that are obligatory for Muslims.Fuduli: A person who is neither guardian nor agent, or if he is agent, he transgresses the limitsprescribed by the principal in respect of a contract.Fulus: Coins of inferior metals.Ghaban: Misappropriation or defrauding others in respect of specifications of the goods and theirprices.Ghaban-e-Fahish: Excessive profiteering with deception – a person sells a commodity stating explicitlyor giving the impression that he is charging the market price, but actually he is charging anexorbitant price taking benefit of the ignorance of the purchaser – in such cases the purchaser has theoption to revoke the sale and get back the price paid (see Khiyar-e-Ghaban).Gharar: Literally, uncertainty, hazard, risk relating to major elements of a contract; technically, saleof a thing which is not present at hand, or the sale of a thing whose consequence or outcome is notknown, or a sale in which one does not know whether it will come to be or not, such as fish in wateror a bird in the air. It refers to an element of absolute or excessive uncertainty in any business ora contract about the subject of contract or its price, or mere speculative risk. It leads to undue lossto a party and unjustified enrichment of another, which is prohibited. Gambling is a form of Ghararbecause the gambler is ignorant of the result of the gamble. Selling goods without allowing the buyerto properly examine the goods is also a kind of Gharar. Some examples of Gharar are: selling goodsthat the seller is unable to deliver; selling known or unknown goods against an unknown price, such asselling the contents of a sealed box without exact information about its contents; selling goods withoutproper description; selling goods without specifying the price, such as selling at the “going price”.Ghārmeen: One head of the Zakat beneficiaries – broadly, those who are obliged to pay others’ debtsas sureties. An Islamic State can make up their loss by paying from Zakat proceeds.Ghāsib: Usurper of property of others.Habal-al-Hablah: Sale of what is in the womb of an animal; a sale where its subject matter is notclearly known – prohibited due to Gharar.Halal: Anything permitted by the Sharī´ah; permissible goods, valid earnings, etc.Hamish Jiddiyah: The margin reflecting firm intention of the promisee – earnest money taken froma person who intends to purchase a commodity from or enters into a contract with anyone to confirmhis sincerity to actually purchase the commodity when offered. In the case of breach of promise, thepromisee has the right to recover his actual loss incurred due to the breach.Haram: Anything prohibited by the Sharī´ah.Hawalah: Literally, transfer; legally, an agreement by which a debtor is freed from a debt by anotherbecoming responsible for it, or the transfer of a claim of a debt by shifting the responsibility from oneperson to another – contract of assignment of debt. It also refers to the document by which the transfertakes place, like a bill of exchange, promissory note, cheque or draft.Hibah: Gift – to give something in permanent ownership to another without any consideration inexchange.Hilah, Hiyal (plural): Ruses, tricks used in transactions to circumvent the basic prohibitions.