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It is a unilateral promise from the client which

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It is a unilateral promise from the client which binds himself and not the financier. Such a promise is enforceable through the courts. 6 Issues in Murabahah Financing
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Promise to Purchase In fact, the Holy Qur’an and the Sunnah of the Holy Prophet are very particular about fulfilling promises: “And fulfill the covenant. Surely, the covenant will be asked about (in the Hereafter)” ( Bani Isra’il : 34) “O those who believe, why do you say what you not do. It invites Allah's anger that you say what you not do.” (al - Saf:2 to 3) Holy Prophet (PBUH) said: There are three distinguishing features of a hypocrite: when he speaks, tells a lie, when he promises, he backs out and when he is given something in trust, he breaches the trust. 7 Issues in Murabahah Financing
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Promise to Purchase Islamic Fiqh Academy Jeddah has made promises in commercial dealings binding on the promisor with the following conditions: 1. it should be one-sided promise. 2. the promise must have caused the promise to incur some liabilities. 3. If the promise is to purchase something, the actual sale must take place at the appointed time by the exchange of offer and acceptance. Mere promise itself should not be taken as the concluded sale. 4. If the promisor backs out of his promise, the court may force him either to purchase the commodity or pay actual damages to the seller. The actual damages will include the actual monetary loss suffered by him, but will not include the opportunity cost. 8 Issues in Murabahah Financing
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Securities Against Murabahah Price The security may be in the form of a mortgage or a hypothecation or some kind of lien or charge. Some Basic Rules 1. The security can be claimed rightfully where the transaction has created a liability or a debt. 2. No security can be asked from a person who has not incurred a liability or debt. 3. It is only after the commodity is sold to him by the financier on credit that the relationship of a creditor and debtor comes into existence. 4. It is also permissible that the client furnishes a security at earlier stages, but after the Murabahah price is determined. 9 Issues in Murabahah Financing
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Securities Against Murabahah Price v. If the security is possessed by the financier, it will remain at his risk, meaning thereby that if it is destroyed before the actual sale to the client, he will have either to pay the market price of the mortgaged asset, and cancel the agreement of Murabahah, or sell the commodity required by the client and deduct the market price of the mortgaged asset from the price of the sold property. vi. The sold commodity cannot be given back as security in deferred payment sale. 10 Issues in Murabahah Financing
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Guaranteeing the Murabahah Third party guarantee can also be given.
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