Chapter 3 - Applied Islamic Financial MAI5023 Dr Umiema...

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Applied Islamic Financial MAI5023 Dr. Umiema Abdujawad
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The nature of Fiqh Muamalat : All economic activities are legally permissible as long as these activities do not transgress any of the tenets of shariah. In line with this maxim, it is the unanimous opinion of all four major Islamic shariah School of thought (Hanafi, Maliki, Shafii and Hanbali (.
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General Principles 1 . No contract should be made for selling or buying forbidden products such as alcohol or any other forbidden substances . The Prophet Muhammad (saw) said , Meaning : " Surely, Allah and His Messenger have prohibited the sale of wine, the flesh of dead animals, swine and idols ," ) Reported by Bukhari and Muslim ( 2 . Likewise, no contract should be made for any financial deal on the basis of usury (riba (. Meaning : Allah has permitted trade and forbidden usury” (al-Baqarah: 275 (
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3 . Contract involves in gambling (maisir) is forbidden in Islam . Meaning : They will ask you concerning wine and gambling. Say: “in them is great sin, and some benefit, for men; but the sin is greater than the benefit . ) al-Baqarah: 219 ( 4 . Contract that involves major uncertainty (gharar fahish) is also forbidden and may make the contract voidable . Meaning : O ye who believe! Eat not up your property among yourselves in vanities, but let there be amongst you traffic and trade by mutual good-will, nor kill (or destroy) yourselves, for verily Allah hath been to you Most Merciful.” (an-Nisaa : 29 ( General Principles
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