Islamic Finance Law from A-Z

Plural of Hadith, traditions of the holy Prophet of Islam describing his utterances, actions, instructions and actions of others (Companions) tacitly approved by him.

Determinate property; property that is not Dayn; generally the commodities of material value in themselves; plural ‘Aay¯an.

Agreed rent or wage in Ijarah or Ujrah contracts.

Commission, fees or wages charged for services rendered or work done.

The institution of ombudsman, a social regulatory body empowered to check imbalances in the market for the purpose of re-establishing a better semblance of market-driven exchanges in the light of the principles of justice.

A basis for safe-keeping of deposits (Am¯anah) on which no profit can be sought.

One who performs a task, an agent. One who deserves compensation for some task which he does, such as the mudarib (manager) in a mudarabah contract or a zakat collector.

Aqd is a central term in Islamic financial law, which essentially means, "contract." 

A contract in which one party loans another the use of some item for an indefinite period of time. Ariyah is generally used to refer to the neighborly lending of small articles. 

Generally ajr means compensation or wage. In an ijarah (lease) contract, the ajr is the price paid by the hirer to the hired party in exchange for the services which the latter renders. 

A hired-worker who is contracted to perform a specific task in a specific amount of  time by one party, such as a cook or a servant. 

The prevailing rate; the price which is normally paid for a given service. 

One who has been entrusted with the property of another for a reason other than safe-keeping (wadi`ah), such as a tenant who rents an apartment or the mudarib in the mudarabah contract. 

The six kinds of substances (gold, silver, dates, wheat, salt and barley) which, when exchanged in kind, must be exchanged in equal measure and with immediate transfer of possession. If these conditions are not met, then the exchange is considered to be riba (interest). 

Lit: Basic needs. Tech: In relation to the law of zakat, the shariah has exempted those assets which are required to fulfill one's basic needs. Also spoken with regard to economic role of the Islamic state. The Islamic state is responsible to provide for the basic needs of all citizens, should some of them fall short of the means.

An invalid contract – one which does not fulfil the conditions relating to offer and acceptance, subject matter or the consideration and possession or delivery of the subject matter or involves some illegal external attributes like the involvement of Riba, Gharar or Qimar.

A contract in which none of the parties has a unilateral right to revoke (without the consent of the other).

Gratuitous loan. The loan is about  a particular piece of property, the substance of which is not consumed by its use, without anything taken in exchange. In other words, it is the gift of usufruct of a commodity that is not consumed on use. It is different from Qard, which is the loan of fungible objects which are consumed on use and in which the similar and not the same commodity has to be returned. It is also a virtuous act like Qard. The borrowed commodity is treated as a liability of the borrower, who is bound to return it to its owner.