Islamic Finance Law from A-Z
Kafalah
Guarantee; literally, Kafalah means responsibility, amenability or suretyship, legally, in Kafalah, a third party becomes surety for the payment of debt. It is a covenant/pledge given to a creditor that the debtor will pay the debt or any other liability.
Khiyar
(lit. Option, choice) the option extended to one or more of the parties in a sales contract to rescind the sale, upon the appearance of a defect, for example. The jurists have traditionally recognized several different types of khiyar, including khiyar al-ru`yah, khiyar al-`ayb, khiyar al-shart, khiyar al-majlis, khiyar al wasf.
Khiyar al-ru`yah
Option to revoke a sale contract to be exercised on seeing the goods.
Khiyar al ‘Ayb
Option of defect – goods can be returned if found defective – option automatically available to the buyer.
Khiyar al-Shart
A right, stipulated by one or both of the parties to a contract, to cancel the contract for any reason within a fixed period of time.
Khiyar al-Majlis
Option for the contracting session; the power to annul a contract possessed by both contracting parties as long as they do not separate.
Khiyar al Wasf
Option of quality – where goods are sold by specified quality, if that quality is absent, the goods can be returned.
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