Islamic Finance Law from A-Z
Habal al-habalah
A type of sale practiced by the Arabs during the Jahiliyyah, in which the essence of the agreement between the two transacting parties, depended on a pregnant she-camel giving birth to a female calf which would subsequently become pregnant itself. The habal al-habalah transaction was prohibited by the Prophet, according to several well-known reports, ostensibly because of the extreme uncertainty (see gharar) in the essence of the contract, given that neither of the contractual parties can be even remotely certain that a pregnant she-camel would successfully give birth to a another she-camel, which would subsequently mature and become pregnant itself.
Hadith
(pl. ahadith) A successively transmitted report of an utterance, deed, affirmation or characteristic of the Prophet Muhammad. Ahadith are the source texts by which the Sunnah is preserved.
Halal
Permissible, lawful; said of a deed which is not prohibited by Allah, opp. haram.
Hamish gedyyah / Jiddiyah
The margin reflecting firm intention of the promisee – earnest money taken from a person who intends to purchase a commodity from or enters into a contract with anyone to confirm his sincerity to actually purchase the commodity when offered. In the case of breach of promise, the promisee has the right to recover his actual loss incurred due to the breach.
Haqq
lit. truth, right. Al-Haqq, the Truth, is one of the names of Allah. In the Fiqh of financial transactions, the term haqq signifies a right which a party possesses, for example the creditors right to payment.
Haram
Impermissible, unlawful, opp. halal.
Hawalah
Bill of exchange, promissory note, cheque, draft. Tech: A debtor passes on the responsibility of payment of his debt to a third party who owes the former a debt. Thus the responsibility of payment is ultimately shifted to a third party. hawalah is a mechanism which can be usefully employed for settling international accounts by book transfer. This obviates, to a large extent, the necessity of physical transfer of cash. The term was also used, historically, in the public finance during the Abbaside period to refer to cases where the state treasury could not meet the claims presented to it and it directed its claimants to occupy a certain region for a certain period and procure their claims themselves by taxing the people. This method was also known as tasabbub. The taxes collected and transmitted to the central treasury were known as mahmul (i.e. carried to the treasury) while those assigned to the claimants or provinces were known as musabbab.
Hawl
The term hawl is used by the jurists to describe the amount of time which must pass before a Muslim in possession of funds equaling or exceeding the exemption limit (nisab) must pay Zakah on his wealth. In the case of cash, gold and silver it is one Islamic year i.e. a lunar year of app. 354 days.
Hibah
Gift, donation. Tech: Transfer of a determinate property (mal) without any material consideration. Muslims have been exhorted by the Prophet to donate gifts to others. This is one of the important values of a Muslim society. It is intended to cultivate love and co-operation among citizens rather than rivalry and competition.
Hisbah
Hisbah is a term used by the classical jurists, among them Ibn Taymiyyah, to describe the function of regulating the market place which is to be carried out by the Islamic authority (often called the muhtasib in this sense). Hisbah includes taking whatever steps may be needed in order to maintain a fair and orderly market place. Historically, various Islamic rulers have undertaken the duty of hisbah by supervising activities ranging from the inspection of eateries for sanitary conditions to the investigation of fraud. The basis of hisbah is the Prophet's customary inspection of the marketplace of Madinah.
Hukm
(pl. ahkam) In Fiqh, the Sharia ruling (e. g. obligatory, recommendable, neutral, reprehensible, or forbidden) associated with any action.
Husah
(lit. pebbles) A type of sale practiced by the Arabs in the Jahiliyyah and prohibited by the Prophet Mohammed in which the sale was determined by the casting of pebbles. Classical commentators mention three forms of the husah sale: 1) the seller would say to the would-be purchaser, "when I throw the pebbles in my hand, then the deal is closed and binding on you," 2) the seller would say to the would-purchaser, "I shall sell you the commodity which your pebbles hit" or 3) in a land sale, the seller would say, "I shall sell you the plot of land whose dimensions are defined by the extent to which you throw this pebble." The husah sale--like the habal al-habalah sale was ostensibly prohibited because of the gharar (uncertainty) which characterized the contract which governed it.
Husnal Qadha
Gracious payment of loan/debt: repaying a loan in excess of the principal without a precondition; individuals’ discretion; not to be adopted as a system in which a creditor, lender or an investor has expectation of getting some reward on the debt.
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