The Garden of Knowledge

بسم الله الرحمن الرحيم

 30 Rabi-al-Thaani 1444/25 November 2022

All praise is due to Allah, the Cherisher, Sustainer, Nourisher and Provider of the entire creation. May peace, blessings and salutations be upon our Beloved Prophet Muhammed ﷺ.

One of the most frequently asked questions to Shariah scholars is what makes Shariah contracts different to conventional contracts? What are the unique features of a Shariah contract? We explore some of these unique features below:

• In accordance with the core ethical criteria of Islamic business ethics, consumers should be protected from any unfair treatment or trade practices for example they should not be charged extraordinary prices based on their ethnicity or background. This is a practice we witness all over the world. When a foreigner is recognized in a country, locals tend to try and take advantage by raising the price.

• Transparency and disclosure requirements, fairness of terms in financial contract, promotion of services or conducts, recommendations or advices on the suitability of services or products are required. For example, there should be no injustice or hidden clause within contracts and there should be absolute transparency.

•   The use of threats, undue pressure, or other forms of coercion in the provision or payment of financial services or products is prohibited. For example consumers should not feel obliged or threatened in any way in the provision of financial services or any other service.

• It is unlawful to conspire with another person to fix elements of a financial service or product that are unfavorable and detrimental to the financial consumer. For example, forming alliances with close competitors to fix prices on rare services and products.  

•    Consumers shall not be misled or deceived about the nature, features, terms, or price of any financial services or products offered. For example, if a product or service does not meet national standard requirements and certification, it is unlawful to mislead consumers to think that they meet the national standards and certification. 

May Allah accept our efforts from us and grant us understanding In Sha Allah!