Glossary of terms

  • Justice.

  • A contract that is executed between two or more parties.

  • A non-refundable deposit or down payment on a sales contract in which the buyer has not paid the full price or taken possession of the goods. The buyer retains the right to cancel the sales contract.

  • The moral and ethical behaviour of a person or group.

  • Justice.

  • Islamic Jurisprudence.

  • Islamic commercial jurisprudence.

  • Any uncertainty or ambiguity within a contract, transaction or business dealing.

  • A narrative record of the sayings of the Prophet Muhammad (PBUH).

  • Lawful/permitted in Islam.

  • UnLawful/prohibited in Islam.

  • The transfer of money, debt or an obligation from one person to another.

  • A gift.

  • A bilateral lease contract allowing the transfer of the usufruct of an asset rather than the sale of the asset.

  • Lease with condition of acquisition at the end of the original lease agreement or in stages throughout the agreement.

  • Lease with transfer of ownership at the end of the original lease agreement.

  • The consensus of a majority of leading and qualified jurists on a Sharia’a matter.

  • An agreement often used to finance projects including manufacturing, construction and infrastructure where the payment is either deferred or immediate with the delivery of the project deferred until completion.

  • Suretyship or guarantee.

  • Commercial transactions.

  • Partnership contract where one party provides the funding and the other party manages the project. This product is a sub-set of Musharaka.

  • The party in a contract that provides the knowledge and skill required to complete the funded project.

  • A cost plus financing transaction which includes an agreed profit margin, the payment is deferred for an agreed period of time.

  • Negotiations of a sale.

  • A flexible partnership contract between two or more parties who all contribute capital towards the funding of a project or asset. Profits are pre- agreed with any losses being shared on the basis of the contributed capital.

  • A parallel contract to an existing Salam contract to hedge the Salam position. The contract is often for an outright sale with deferred delivery but could be arranged with payment at a later date using a Letter of Credit or guarantee to secure the payment.

  • The Islamic holy book and primary source of Sharia’a.

  • Party in a contract, such as a Mudaraba that provides the capital.

  • A pledge.

  • Islamic re-insurance undertaken to reduce excessive concentration risks by Takaful companies.

  • Generally translated as interest or usury but also means an excess or unfair gain. Riba is usually classified as either Riba al-fidl or Riba-am-naseeyah.

  • Is an exchange of commodities or money in unequal amounts.

  • Is a money for money exchange with a deferral, interest is charged for the deferral. Riba an-Naseeyah is the same as interest in the conventional market.

  • A Salam is a contract for the purchase of a commodity for immediate payment with deferred delivery.

  • The purchase and sale of currency at spot for equal value.

  • Islamic Law derived mainly from the Quran and Hadith.

  • Plural of the Arabic word Sakk meaning certificate. Sukuk is a certificate representing a participation and ownership rights in an underlying asset. Sukuk are often referred to as an Islamic Bond however there are some inherent differences.

  • Words or actions of the Prophet Muhammad.

  • Non-commercial donation or gift where there is no benefit or commercial advantage for the donor.

  • Islamic insurance comparable to mutual insurance with the insured donating their contribution to a mutual fund.

  • Purchase of a commodity on a Murabaha basis that is immediately sold on to a 3rd party at spot for cash.

  • A unilateral Promise, where an undertaking or promise is made by one party to do or not do something at a future date.

  • A contract of agency where a party/person is appointed to perform a specific task for a certain fee.

  • An obligatory donation to charity for those who can afford it.