Shariah Law refers to a Muslim religious law. In essence, once you are able to understand Sharia Law, you will be in a much better position to fully understand Middle Eastern cultures and their ways. It may also be known as Islamic or Muslim law and comes from a literal interpretation of information from the Qur’an. Sharia law is able to set all of the laws that govern the behaviors of every person, including moral, criminal and civil behavior. If these laws are not adhered to, punishments for each infraction are listed as well.
Aqd is a principal of contract law, also mandated by the Qur’an. It requires the terms of a contract with a fellow Muslim to be binding. The literal translation refers to connecting the words or actions from two or more parties as a mutually agreed upon event. This can be a specific act, such as marriage, divorce, employment or a singular act. It can also refer to a commitment to perform these acts in the future. Its translation in English is a basic, non-specific contract. The varying types of contracts that Islamic financial institutions enter into are always expected to be morally and legally acceptable, according to the Qur’an.
Aqd-al-Bay is a contract for sale. This could be any item, service or good that is legally and morally acceptable, and agreed to by all parties. By committing to the Aqd-al-Bay, each party is agreeing to all of the terms and conditions listed within. Islamic loans could be classified in this way, as could Islamic financing and any agreement or contract that relates to Islamic financial institutions in any way.
Aqd-al-Muawadah is a different type of arrangement between parties. With this, varying forms of compensation are exchanged as the result of good or services. This may be more closely related to a barter system as opposed to a traditional payment for services rendered, although that is certainly not going to always be the case.
Aqd Ghair Lazim is another type of contract, as evidenced by the Aqd at the beginning of the phrase. However, it is unique in that there is an ability to granted to either party to be able to revoke terms of the contract, as long as both parties agree. This would be particularly useful for non-specific Islamic loans obtained through Islamic financial institutions, or when the Islamic financing may be subject to change.
Aqd Lazim is the exact opposite of the Aqd Ghair Lazim. The terms of this contract guarantee that neither party at any time will ever be able to change or differ from the terms of the contract. The Aqd Lazim is a very firm contract and it would be particularly advantageous for all of the involved parties to be very sure that everyone is in agreement with the terms, because there are no options after it has been in effect. It would be very beneficial, on the part of the lender, to have this type of contract for all of the Islamic loans or Islamic financing that is offered.
Contracts are a very important item in the Muslim culture, and it is a world where a person is strongly judged by their words, their actions and their adherence to religious tenets. It is important to remember these guidelines if the possibility of doing business exists.