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Deutsche Bank and the Use of Promises in Islamic Finance Contracts

31 Pages Posted: 11 Nov 2013  

Karim Ginena

Hamad Bin Khalifa University

Jon M. Truby

Qatar University - College of Law; Newcastle University Law School

Date Written: 2013

Abstract

This paper examines the concept of a promise, an essential tool for Islamic financial transactions that has facilitated the development of structured Sharī‘ah-compliant financing arrangements and mitigated much of the risk that Islamic financial institutions encounter. The study explores jurists’ opinions regarding the extent that unilateral and bilateral promises are religiously binding and enforceable in a court of Islamic law. It classifies bilateral promises (muwā‘adah) into non-binding non-enforceable promises and binding enforceable promises, and contends that the latter category takes the constructive ruling of a contract (fī ḥukm al-‘aqd). The paper argues that Islamic contracts can be added to a future time or made contingent upon the fulfillment of a condition so long as they meet some general guidelines.

Keywords: unilateral promise, bilateral promise, contract, wa‘d, binding, Islamic finance

JEL Classification: K12, L14, P34, F30, G3, P4, P43

Suggested Citation

Ginena, Karim and Truby, Jon M., Deutsche Bank and the Use of Promises in Islamic Finance Contracts (2013). Virginia Law & Business Review, 7(4), 620-649, 2013. Available at SSRN: https://ssrn.com/abstract=2352770

Karim Ginena (Contact Author)

Hamad Bin Khalifa University ( email )

CIEF
Qatar Foundation
Doha, POBox34110
Qatar

Jon M. Truby

Qatar University - College of Law ( email )

College of Law
Qatar University
DOHA, 2713
Qatar
0097444035253 (Fax)

HOME PAGE: http://www.qu.edu.qa/law/dr_jon.php

Newcastle University Law School ( email )

Newcastle upon Tyne, NE1 7RU
United Kingdom

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