Islamic Muamalat Instruments – Key Vocabulary

50 vocabulary flashcards summarizing the key Islamic commercial law terms, contracts, and prohibited elements discussed in Dr. Zamzuri Zakaria’s lecture on Muamalat instruments.

Muamalat

The body of Islamic rules governing commercial and civil dealings among people.

Akad (Contract)

A Shariah-binding agreement that creates rights and obligations between two or more parties.

Ma‘qud ‘Alayh

The subject matter of a contract, i.e., the asset, service or right being exchanged.

Mal

Valuable property or wealth that can be owned, possessed and transacted.

Amal

Work, effort or services rendered in return for consideration.

Ribh

Profit; an agreed percentage share of gains in partnership contracts.

‘Ayn

A specific tangible asset or item.

Manfa‘ah

Usufruct; the benefit or use derived from an asset.

Mu‘awadat

Exchange-based contracts involving reciprocal transfer of value (e.g., sale, lease).

Shirkah

Partnership contracts in which two or more parties pool capital or labor and share profit and loss.

Tabarru‘

Gratuitous or benevolent contracts that transfer ownership without compensation (e.g., gift).

Amanah

Trust-based contracts where property is held in safekeeping without liability unless negligent.

Damanah

Guarantee-based contracts that make one party liable for another’s obligation.

Bay‘ (Sale)

A contract transferring ownership of an asset for a price.

Ijarah

Lease/hiring contract granting the right to use an asset or service for rent.

Ju‘alah

Reward contract promising payment for accomplishing a specified task.

Musyarakah

Equity partnership where all partners contribute capital and share profits and losses.

Mudarabah

Investment partnership where one party provides capital and the other management; profits shared, losses borne by capital provider.

Muzara‘ah

Share-cropping contract where landowner and farmer share agricultural produce.

Musaqah

Irrigation partnership where one party tends trees/crops and shares the harvest.

Takaful

Co-operative Islamic insurance based on mutual assistance and donation.

Qard

Benevolent loan that requires repayment of the principal only, with no interest.

‘Ariyah

Gratuitous loan of the usufruct of a non-consumable asset (e.g., lending a tool).

Hibah

Gift transferring ownership without consideration during the donor’s lifetime.

Wakaf

Endowment dedicating property perpetually for charitable or religious purposes.

Rahn

Pledge/collateral contract where an asset is held as security for a debt.

Kafalah

Suretyship in which a guarantor becomes liable for another party’s debt or obligation.

Hiwalah

Transfer of debt from one debtor to another.

Wadiah

Deposit of safekeeping where the custodian may not use the item.

Riba

Any guaranteed excess or interest generated in loans or certain exchanges, prohibited in Shariah.

Riba al-Duyun

Interest arising from debt or loan transactions (interest on money lent).

Riba al-Buyu‘ (Riba al-Fadl)

Excess in the exchange of similar ribawi commodities in spot trades.

Riba al-Nasi’ah

Deferred interest where the excess results solely from time delay in repayment.

Gharar

Excessive uncertainty, ambiguity or risk in the terms or subject matter of a contract.

Maisir / Qimar

Gambling or games of chance that give wealth to one party at the expense of another.

Zulm

Injustice, oppression or unfairness imposed on any party in a transaction.

Tadlis

Fraudulent concealment of defects or misrepresentation of goods to deceive a buyer.

Ghabn

Unfair pricing or deception leading to a party’s significant financial loss.

Bai‘ al-Najsh (Najsh)

Artificially inflating bids without intent to buy in order to deceive genuine purchasers.

Talaqqi al-Rukban

Intercepting traders outside the market to exploit their ignorance of prevailing prices.

Ihtikar

Hoarding essential goods to create scarcity and raise prices unfairly.

Speculation (in Shariah)

Trading or statements based on unfounded predictions intended to manipulate market prices.

Khiyar

Option allowing a contracting party to rescind the contract within a specified period.

Syuf‘ah

Pre-emption right enabling a co-owner to buy out a third-party purchaser to preserve joint ownership.

Laqit

A foundling or abandoned child granted specific legal protection and care.

Luqatah

Lost property that must be announced and safeguarded until claimed by its owner.

Marhun

The asset pledged as collateral in a rahn contract.

Musyarakah Mutanaqisah

Diminishing partnership where one partner gradually purchases the other’s share, commonly used in Islamic home financing.

Bay‘ Salam

Forward sale in which full payment is made in advance for goods to be delivered later.