...STANDARDS BOARD Technical Release i-4 Shariah Compliant Sale Contracts © Malaysian Accounting Standards Board 2010 1 TR i-4 This Technical Release (TR) contains material in which the International Accounting Standards Committee Foundation (IASCF) holds copyright and which has been reproduced in this Statement with the permission of IASCF. Copyright in the International Financial Reporting Standards (including Interpretations), International Accounting Standards Board (IASB) Exposure Drafts, and other IASB publications belong to IASCF. All rights are reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing to MASB or as may be expressly permitted by law or under terms agreed with the appropriate reprographics rights organisation. No part of the materials incorporated in this publication, the copyright of which is held by IASCF, may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing to IASCF or as may be expressly permitted by law or under terms agreed with the appropriate reprographics rights organisation. TR i-4 Shariah Compliant Sale Contracts is issued by the MASB in respect of its application in Malaysia. 2 TR i-4 CONTENTS paragraphs INTRODUCTION IN1–IN6 MASB TECHNICAL RELEASE i-4 SHARIAH COMPLIANT SALE CONTRACTS OBJECTIVE SCOPE SUBJECT OF SALE Recognition...
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...Term Paper on What is investment and debt/trade financing modes followed by Islamic Banks in Bangladesh. Do they conform to shariah rules. If so, how and if not, why not. Give your own conclusion/concluding remarks / recommendation. Course code: Fin-5502 Subject: Submission of Term Paper Dear Sir, I am very much delighted that I am submitting herewith my term paper titled “what is investment and debt/trade financing modes followed by Islamic Banks in Bangladesh. Do they conform to shariah rules. If so, how and if not, why not ” under the reference of my term paper for partial fulfillment of MBA Program on the Comparative Banking. As of the requirement, I have closely studied the topic and tried my best to make this paper meaningful. I believe and hope that you will find this report informative and insightful. Your valued assessment of my assignment would help me in the enhancement of my skill, knowledge and efficiency. Any further clarification, if needed, regarding the paper will be instantly responded. Regards. ___________________ Saima Sultana Acknowledgement In preparing this report, I am beholden to the most venerable teacher Mr.x, Faculty, Department of Business Administration, IIUC for his guidance and supervision for furnishing this term paper. I am very much pleased on him for his continuous encourage to undertake the term paper, to collect, analyze data and finally editing, presentation of...
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...Islamic Contract Law TYPES OF COMMITMENTS 1. Wa‘d – • • • – وunilateral promise One party binds itself to perform a function for another Does not normally create legal obligation Legal obligation is created: • • Genuine need of the masses – (ر Contingent promise ا س )رد ا ز ن ز ا إذ ا 2. Muwaa‘ada – ا ة • • • • – bilateral promise Two parties performing two unilateral promises on the same subject Use of two unilateral promises can lead to a forward contract, which is impermissible Not allowed and non–enforceable according to majority (AAOIFI, IFA and others) Some Hanafi/subcontinent scholars allow it provided no other prohibition (excessive gharar or short selling) 3. ‘Aqd – – contract Promises do not constitute a contract • Difference between a contract and a bilateral promise is there is no proprietary transfer in bilateral promise ENFORCEABILITY OF PROMISES • • • Islam prohibits rolling 2 contracts into one (safaqah-fi-safaqah). Modern financial transactions often need to combine 2 contracts into one eg Hire Purchase. As Islam prohibits client signing agreement binding him to 2 contracts at the same time eg rent and purchase, how can a bank structure an Ijara Mortgage where there is a rental element and purchase element? How can a Bank offer an Islamic Mortgage yet still prevent itself having to hold huge assets on the balance sheet and potentially suffer massive losses on property disposals? Solution is to make client...
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...INTRODUCTION The contract law principles in Shariah Law are not different from English contract law principles. In English law, ‘contract is an agreement enforceable by law’. According to Islamic law, a promise may not be legally enforced although it is strongly recommended by religious and moral values to be fulfilled.[1] In Islamic law, contract is known as ‘aqd’ which means tie or bond. It means a contract binds the parties together. From the definition, the term ‘aqad is more or less of the equivalent of the technical term of contract in Western Jurisprudence. However, ‘aqad does not necessarily involve agreement (which is a necessary element in a conventional contract) because the term is also used to describe a unilateral juridical act which is binding and effective without the consent of the other party. Islam emphasizes on fulfilling contractual obligations. Allah says in the Quran, “O ye who believe, fulfil all of your obligations”[2] and also similarly in this surah which is stated “…So fulfil your engagement with them to the end of their term, for Allah loves the righteous”[3] Under Islamic law, to be a valid contract, there must have some elements in the contract. Those elements are sighah (ijab and qabul), contracting parties and subject matter. The first element is sighah (ijab and qabul) or offer and acceptance. There are three kinds of offer which are verbal offer (kalam), offer by conduct (‘amal’) and offer in writing...
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...KULLIYYAH OF ECONOMICS AND MANAGEMENT SCIENCES ‘Comparison of Principles of Sale Contract between Conventional and Shari’ah Laws’ LAW 3512 COMMERCIAL LAWS (SECTION 3) Any form of cheating or attempt to cheat is a serious Offence which may lead to dismissal Introduction We are blessed as a human being on the earth as the only creature created by God who has the ability to think upon choosing between alternatives. Humans are associates with many labels and beliefs that they uphold throughout their life. Major differences of choosing between alternatives would be based on their framework of thinking mostly derive from their religions or beliefs. Speaking from Malaysia context, Islamic belief would be a stronger influence for Malaysian citizens before embarking into any decision. Although, Malaysia is known as the Islamic state but Malaysia still uphold conventional laws as the supreme laws for the state over Islamic Laws which ruled by the Federal Court. Islamic Laws would only covers family laws, inheritance and few specific issues among muslims[1]. We would further discuss on the framework of sale contract from Islamic and conventional point of view. Take a look around and it is apparent in our daily lives that transactions need to occur for us to carry on sustaining our needs and wants. As humans we ought to want things and we need to have goods that are essential for our daily lives in order to carry on living our lives...
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...interpretation. It should be noted that BBA is a Murabahah product but the product name of BBA was given by BBMB to differentiate between a short term (below 12 months) and long-term (above 12 months) tenor financing products. Murabahah is for short term meanwhile BBA is for a long term financing products. 2.0 BAI’ BITHAMAN AJIL (BBA) 2.1 DEFINITION The Majallah refers to BBA as the Bai’ al Muajjal. In Pakistan the term is called Bai’ al-Muajjal, in Bangladesh it called bay’al-Muazaal. BBA means a "deferred payment sale". It is a sale contract in which the payment of the price is deferred and payable at a certain particular time in the future. It is a mode of Islamic financing used for property, vehicle, as well as financing of other consumer goods. It can be implicated in any sale contract, including Musawamah and Murabahah but it is not applicable for a Salam contract, as the payment of Salam must be settled in full at the beginning of the contract. Technically, this financing facility is based on the activities of buying and selling. The furniture that you wish to purchase for example, are bought by the bank and sold to you at an agreed to price, after the bank and you determine the tenure and the manner of the instalments. The price at which the bank sells you the furniture will include the actual cost of the furniture and will...
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...Islamic Modes of Finance Theory and Key Shariah Principles Modes Of Finance • Two are ideal modes which provide an alternative to interest banking and if implemented on a national level will result in much fairer distribution of wealth in society 1. Mushaarakah – رآ (equity finance) 2. Mudhaarabah - ر (equity finance - sleeping partner) • Two are not ideal as they replicate the effects of conventional banking but nevertheless are tolerated in Shariah 3. Ijaarah - ( إ رةleasing) 4. Muraabahah - ( اcost plus pricing) We will also briefly analyse Salam - , Istisnaa‘ – ع Tawarruq – رق اand 1 Mushaarakah • “Mushaarakah” literally means sharing • “Mushaarakah” is derived from “shirkah” which means “being a partner”. • Mushaarakah is “a joint enterprises formed for conducting business in which all partners share the profit according to an agreed ratio while the loss is shared according to the ratio of investment” • It is an ideal alternative for interest based financing with far reaching effects on the economy. Types of Shirkah SHIRKAH SHIRKAT-UL-MILK joint ownership SHIRKAT-UL-‘AQD joint enterprise OPTIONAL via joint purchase NON OPTIONAL inheritance SHIRKATUL-AMWAAL SHIRKATUL-‘AMAL SHIRKATUL-WUJOOH mushaarakah Mushaarakah • The term Mushaarakah has been introduced recently by those who have written on the subject of Islamic modes of financing • It is normally restricted to a particular type of “Shirkah”, i.e. Shirkat-ul-amwaal...
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...Introduction In this assignment I’m going to discuss about the problems arose between the parties, advice to the parties and look into the possibilities available for the parties. The main problem arose in this question is on lease and license. Throughout this assignment I have discussed the difference between lease agreement and license agreement, formalities and characteristics of lease agreement and license agreement with deciding Common Law cases and also legal rights nd equitable rights available for the parties. A lease or a license is a contractual agreement between lessor or licensor and another party (lessee or licensee) that binds both parties to the terms of the agreement. FACTS * Erik, the personal agent of Neil who owns two apartments rented one of two apartment to a young couple Sona and Ben starting from 5th July 1998 for years * The couple approach to Erik with one of their close (Edwin) who wanted to rent a single room. * Edwin was given one of two keys to the room as there was a bad pipe that needed to be visited by the plumber. * The plumber comes to the Edwin’s room and checks the pipe whenever he can. * Neil arrived a month later and announced an increment in the rent. * Neither the couple nor their friend agreed to increment in the rent. * Sona and Ben argued that they have a lease agreement while Neil objected this statement. * Edwin did not wish to pay the rent as per the agreement and asserted that he will only explain...
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...BEST CONSULTING, LLC PROFESSIONAL SERVICES AGREEMENT This Professional Services Agreement (“Agreement”) is entered into effective as of the (the “Effective Date”), by and between Best Consulting, LLC (“Supplier”) and (“Client”). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Client and Supplier hereby agree as follows: Nature and Scope. Client hereby agrees to retain Supplier to perform consulting services related to the selection of a Public Relations firm and the development of a Crisis Management Plan. Client recently had several customers report the contraction of salmonella as a result of food that was eaten at one of the Client’s establishments. Goals, Expectations, and Responsibilities. Supplier will evaluate and provide recommendations to several suitable Public Relations Firms. These evaluations will consist of interviewing and analyzing several firms and presenting the Client with the most appropriate options to select from. It will be up to the Client to make final decisions regarding the Public Relations Firm that is chosen and what level of engagement commences as a result of the Supplier’s findings. Client will also make final decisions regarding the design, development, and implementation of the crisis management plan. Client agrees to participate as requested in consulting activities. This includes calling meetings, providing meeting sites and amenities, and providing information...
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...The Enforcement of Rights under Collective Agreement Introduction Historically, the relations between employers and employees were accompanied by numerous conflicts which were determined by natural factors. In fact, the conflicts between the management and employees were and still are inevitable since, even thought they work in the same organizations, they still have different purposes. It is obvious that the major goal of employees is to get the maximum payment for their labor and to have guarantees of social protection in case of some accidents, illnesses, retirement, etc. while managers and the owners of companies attempt to get the maximum profit from their organizations exploiting employees possibly reducing the cost of the labor force and increasing the effectiveness and productivity of labor. As a result, the functioning of both parties within the same organizations is based on different approaches to the job each of the parties does. No wonder such a difference leads to the numerous conflicts when one of the parties or both want to protect their own interests since this inevitably affects the interests of the opposing party. In such a situation, the necessity to develop some common rules of the game is obvious. This is why in the course of the development of relationships between employers and employees the legal basis of their relations was created. In this respect, it is necessary to underline that employees, being initially in a deprived position, attempt to protect...
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...entered into a written employment contract to hire Dennis Winkel. The contract provided for an annual salary, insurance benefits, and other employment benefits. Another doctor, Dr. Quan, also practiced with Dr. Vranich. About nine months later, when Dr. Quan left the practice, Vranich and Winkel entered into an oral modification of their written contract whereby Winkel was to receive a higher salary and a profit-sharing bonus. During the next year, Winkel received the increased salary. However, a disagreement arose, and Winkel sued to recover the profit-sharing bonus. Under Montana law, a written contract can be altered only in writing or by an executed oral agreement. Dr. Vranich argued that the contract could not be enforced because it was not in writing. Does Winkel receive the profit-sharing bonus? Did Dr. Vranich act ethically in raising the defense that the contract was not in writing? Winkel v. Family Health Care, P.C., 205 Mont. 40, 668 P.2d 208, Web 1983 Mont. Lexis 785 (Supreme Court of Montana) (Cheeseman 2010, p. 158) Cheeseman, H. (2010). Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues. Upper Saddle River: Pearson Prentice Hall. Issue Under Montana law, a written contract can be modified only in writing or if an oral agreement had been executed. Was the oral agreement between Vranich and Winkel executed? Is the contract unenforceable? Did Vranich...
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...the expiration date, a Big Time manager forwarded a drafted agreement via e-mail, which covered the terms of the agreement. Chou received and responded to the draft in agreement with the terms; however, Big Time did not respond and months later Big Time was no longer interested( Melvin, 2011). The proposed contract existed immediately following the agreement to exclusive rights. The contract from that point was valid for 90 days following the agreement, which obstructed Chou’s ability to negotiate with other distribution outlets. The elements, which validate a contracts formation consist of an offer, BTT offered $25,000 to Chou for exclusive negotiation rights, acceptance Chou accepted the offer and monetary compensation, and finally the consideration for BTT exclusive negotiation rights to the game and Chou $25,000 (Melvin, 2011). The Big Time Toymaker manager drafted an agreement before Chou took initiative; therefore, based on the manager’s initiative resulting in labeling the e-mail with Strat Deal, insertion of key terms, a distribution agreement with prices, times, and various obligations proved mutual assent ( Melvin, 2011). Even without the formal word contract, the e-mail set the tone for an agreement. No matter what e-mail is a valid source of communication; therefore, the impact of the choice of communication remains relevant because the transfer of communications constituted an extension of the...
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...P18-6 (Long-Term Contract with Interim Loss) On March 1, 2010, Pechstein Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,400,000. The building was completed by October 31, 2012. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2010, 2011, and 2012 are given below. 2010 2011 2012 Contract costs incurred during the year $2,880,000 $2,230,000 $2,190,000 Estimated costs to complete the contract at 12/31 3,520,000 2,190,000 –0– Billings to Fabrik during the year 3,200,000 3,500,000 1,700,000 Instructions (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2010, 2011, and 2012. (Ignore income taxes.) (b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2010, 2011, and 2012. (Ignore incomes taxes.) (a) Computation of Recognizable Profit/Loss Percentage-of-Completion Method 2010 Costs to date (12/31/10) $2,880,000 Estimated costs to complete 3,520,000 Estimated total costs $6,400,000 Percent complete ($2,880,000 ÷ $6,400,000) 45% Revenue recognized ($8,400,000 X 45%) $3,780,000 Costs incurred 2,880,000 Profit recognized in 2010 $ 900,000 2011 Costs...
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...Several months ago the Federal Aviation Administration (FAA) placed a solicitation for a one year construction contract to build a ten story office building for the FAA in the downtown area of Washington, DC. My company, Bell Construction, Inc. was awarded the $8 million contract in December of 2010. Our contracting officer, John Blair was responsible for administering the contract and ensuring that we met the completion date of December 30, 2011. My company officially started the project on January 2, 2011. The project went well for a couple of months considering we had our occasional bad weather of snow, rain and high winds but we had more than enough time to complete the project. As time went on the contract started to experience a couple of bumps in the road in terms of minor delays which were caused by the government or shall I say our contracting officer John Blair. In May of 2011, John informed us that the project will be delayed because the paperwork on his end was not complete and for safety purposes needed to halt the project. I found this to be totally unprofessional and unacceptable. Four months into the project and the foundation has been laid along with three levels of the building having already been completed and he was now concerned about our safety. John did not provide us with a reasonable timeframe as to when the work will restart or if we will be given an extension for completion. He asked us to standby for a couple of weeks until he gets more information...
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...GUJARAT UNIVERSITY SYLLABI OF THREE YEARS LL.B. PROGRAMME WITH CREDIT BASED SYSTEM (As prescribed by the BAR COUNCIL OF INDIA and as per the Rules of Legal Education, 2008) Effective from the academic year 2011-12 THREE YEARS’ LL.B. POGRAMME First LL. B. Semester – I FIRST LL.B. - SEMESTER 1 (MONSOON) PER WEEK CORE COURSE 101 SUBJECTS Law of Tort including MV Accident And Consumer Protection Laws Criminal Law Paper – I (General Principles of Penal Law) Criminal Law Paper – II (Specific Offences) Law of Contract Special Contract Constitutional History of India Use of Law Journals and Legal Software LECTURES 4 OTHERS 1 TOTAL 5 CREDITS (SEM)29 5 CORE COURSE 102 CORE COURSE 103 CORE COURSE 104 CORE COURSE 105 FOUNDATION 106 F SOFT SKILL 107 K 4 4 4 4 1 1 1 1 1 1 1 1 5 5 5 5 2 2 5 5 5 5 2 2 1 Semester – I Monsoon Semester CORE COURSE 101 : LAW OF TORT INCLUDING MV ACCIDENT AND CONSUMER PROTECTION LAWS Objectives of the course : With rapid industrialization, tort action came to used against manufacturers and industrial unit for products injurious to human beings. Presently the emphasis is on extending the principles not only to acts, which are harmful, but also to failure to comply with standards that are continuously changing due to advancement in science and technology. Product liability is now assuming a new dimension in developed economics. In modern era of consumer concern of goods and services, the law of torts has...
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