Gharar in Islamic Law Assignment Example | Topics and Well Written Essays - 2500 words

Gharar in Islamic Law - Assignment ExampleFinally, even if the relevant agreements amounted to agreements to repair Riba, the principal sums advanced could validly be claimed (Usmani, 2001). Hence, Murabaha Agreements should be in accordance with Islamic law, all that is demand is certification by Islamic Banks Religious Supervisory Board and the principal amounts argon dispensed in accordance with the scathe of Murabaha Agreements (Usmani, 2001). The Gharar contains uncertainty in a contract or trade where the goods may or may not be available (the bird in the air or the fish in the water). It shows ambiguity in the consideration or terms of a contract. As much(prenominal) the contract would not be void. An example tainted with Gharar is an agreement to sell goods which have already been change (Vogel and Samuel, 1998). This paper finds Gharar in depth in three contracts. The three contracts that I have analyzed in this paper are somewhat car, property and stocks. The Bank ha s followed the methods of Islamic banking while still Gharar can be found in them. Elements of Riba and Gharar are present in the contr real documents. The transactions if carried out under the mentioned products (cars, stocks and property) ask Murabaha Financing. The important ingredients of the Murabaha Financing Agreement are The Preamble it is an integral part of the agreement Definitions incorporation of the terms a) Account b) Agency Agreement c) Agreement d) Client Financials e) Declaration f) Due dates g) Goods h) Murabaha Account i) Purchase terms j) credential k) Security Deposits Purchase and Sale Agreement Mode of Payment example of the Client Representation of the Institution General Covenants of the Client General Covenants of the Institution Warranties of the Institution Security Risk of Loss Takafol remediation Governing Law and Jurisdiction Set off Acceleration General Execution of document by the Counterparts ( The Institution and The Client) Dated Witnesses S chedule of Documents a) Agency Agreement b) Declaration c) Promissory Note d) Description of Security (Ghafoor, 1995). Murabaha Finance Agreement for Car The first contract is about Murabaha Finance Agreement for car. The contract is about a client bank agreement on buying a car in instalments unless there are several conditions for the client, which he has to adhere in order to get the car. A set ashore payment is given after which, monthly instalments are fixed for the customer. As this is a Murabaha contract, therefore it is substantial to know about Murabaha. Murabaha is a term in Islamic Fiqh and it refers to a particular kind of cut-rate sale having nothing to do with financing in its original sense. If a seller agrees with his purchaser to provide him particular commodity on a certain bring in added to his cost it is considered Murabaha transaction. The basic ingredient of Murabaha is that the seller discloses the actual cost he or she has incurred in acquiring the commo dity and then adds some profit thereon. This profit may be lump sum or may be in fraction (Al-Qardawi, 2001). In conventional financing, the moneyman lends money to the client on interest. After giving the interest bearing loan, the financier has nothing to do with its usage. In the case of Murabahah no money is advanced by the financier. Instead the