B murabahah to the purchase orderer without an

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B. Murabahah to the Purchase Orderer without an Obligation In this type of murabahah, one of the parties (the purchase orderer) asks the other party (purchaser) to purchase an asset and promises that when the latter purchases the asset, the orderer will purchase it from him at a price including a mark-up profit thereon. This request is considered as a willingness to buy, not an offer. If the purchaser accepts this request, he proceeds to purchase the asset for himself under a valid sale contract between him and the vendor of the asset. In such instances, the purchaser should, after taking legal possession of
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A p p l i c a t i o n o f M u r a b a h a h U n i t 1 | 28 © INTERNATIONAL CENTRE FOR EDUCATION IN ISLAMIC FINANCE 2010/1431 AH SH1003 Shariah Rules in Financial Transactions CIFP the asset, offer it anew to the orderer according to the conditions of the first mutual promise. This is considered as an offer from the purchaser. When the asset is offered to the orderer, he shall have the option to conclude a sale contract thereon or to decline the purchase thereof, that is, the orderer is not obliged to fulfill his promise. If he chooses to enter into a contract thereon, it will be considered as an acceptance of the offer. A valid sale contract is made between the orderer and the purchaser. In the event that the orderer declines to purchase the asset, it will remain in the possession of the purchaser who shall be entitled to dispose of it by any permissible means. 1.5.3 GENERAL RULES REGARDING MURABAHAH TO THE PURCHASE ORDERER A. The Guarantee The creditor (purchaser) may ask the debtor (purchase orderer) to provide him with a guarantee. The debtor should in this case submit an acceptable guarantee. The ordered goods may be one of the acceptable guarantees for payment of the debt. B. Debts under Murabahah to the Purchase Orderer According to Shari'a rules, the settlement of debts under murabahah to the purchase orderer should not be connected to the disposition of the goods sold, whether the result of the sale is negative or positive. This is because when the sale is completed, the title is transferred to the orderer and the original purchaser holds title to the receivables. Hence, if the orderer sells the asset promptly or at any time prior to the due date of his debt to the purchaser, even if for double the price, he is not obliged to settle his debt unless the asset itself is pledged as collateral for this debt. In
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A p p l i c a t i o n o f M u r a b a h a h U n i t 1 | 29 © INTERNATIONAL CENTRE FOR EDUCATION IN ISLAMIC FINANCE 2010/1431 AH SH1003 Shariah Rules in Financial Transactions CIFP addition, the loss of value of the asset does not justify per se any delay in settlement of the debt, which becomes due. 1.6 MECHANISM OF MURABAHAH Murabahah is a dynamic tool that can be applied in several products offered by Islamic banks. Among the applications of murabahah are: 1.6.1 LETTER OF CREDIT BASED ON MURABAHAH In this application of murabahah, the customer requests the bank to open a letter
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  • Spring '14
  • Sharia, fiqh

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