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The Orphans Fund Development Foundation has Canceled the Penalty Clause
Author : The General Iftaa` Department
Date Added : 05-07-2023

The Orphans Fund Development Foundation has Canceled the Penalty Clause

 

In reference to what was published on the website of the General Iftaa` Department and the fatwas it issued prohibiting the penalty clause in Murabaha contracts, the Orphans Fund Development Foundation has responded by deleting the sixth clause from its Murabaha contracts, which include the penalty clause. This was included in a letter from the Director of the Foundation Dr. Faisal Al-Hiary- (Number MA / 1/4/2290), (1st of June, 2009)-addressed to the Grand Mufti. The letter reads as follows:

 

"Since the sixth clause in the Murabaha contract used by the Foundation has not been activated from the time the Foundation started providing Murabaha services in 1988, and in order to avoid any ambiguity that may arise in the Murabaha contract, I would like to inform you that the management of the Foundation has decided to delete the sixth clause and adhere to the general rules stipulated in the Civil Code, in this regard."

 

The Grand Mufti thanked the Director of the Foundation, saying:

"I thank you for deleting the sixth clause from the Murabaha contract used at your institution, and I hope that Allah will reward you well for that. You have removed an obstacle for those who deal with your noble institution, which is keen on earning halal/lawful profits. Your institution is the first among institutions to take into account the provisions of Islamic Law, and I hope that other financial institutions will follow your example, and to you is the reward of being the first good doer in this regard."

 

Afterwards, the Director of the Foundation attached a copy of the new Murabaha contract to his letter, which showed that it was free of the penalty clause and was acceptable from the standpoint of Sharia. However, the employee in charge of executing the Murabaha contract is responsible for applying the Sharia conditions and not neglecting them. And Allah Almighty knows best.

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Summarized Fatawaa

What is the ruling of Islamic Law on obtaining financing from Islamic banks by bringing invoices in prior arrangement with the seller, then taking the cash after the financing is approved — with the purpose of settling debts and buying a car?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
It appears from the transaction described that its underlying purpose is to obtain cash through resorting to a legal artifice (ḥīlah/tawarruq-style trick), and it is not permissible to engage in such trickery or to coordinate with the various parties merely to obtain liquidity. This is because such artifices bring the sale closer in reality to a ribā-based (usurious) transaction, even if it outwardly appears otherwise.
The Prophet ﷺ said: "Do not commit what the Jews committed, thereby making lawful what Allah has made unlawful through the flimsiest of tricks." This was related by Ibn Baṭṭah in his book Ibṭāl al-Ḥiyal (p. 47), and many scholars have graded it as ḥasan (sound/acceptable).
We have already explained the impermissibility of engaging in such deceptive dealings with Islamic banks in Fatwa No. 516, so please refer to it. And Allah, the Exalted, knows best.

Does Laylat al-Qadr move between the nights of Ramadan?

Laylat al-Qadr is definitely in Ramadan, and it is most likely in the last ten nights, especially on the odd-numbered nights.
For this reason, the Prophet ﷺ commanded observing worship in the last ten nights, and he himself used to dedicate those nights to worship. Many people put special effort into the 27th night of Ramadan, and they are rewarded in any case, whether they actually coincide with Laylat al-Qadr or not, because worshiping on any night of Ramadan carries great rewards.
 

Does the intention (niyyah) of the principal (muwakkil) suffice for the sacrifice (dhabḥ) of the udhiyyah?

Praise be to Allah, and peace and blessings upon our master, the Messenger of Allah.
If a person appoints an agent (wakīl) to perform the slaughter (dhabḥ) on their behalf, the intention (niyyah) of the principal (the one appointing the agent) suffices, and there is no need for the agent to have this intention himself. In fact, even if the agent is unaware that he is performing the sacrifice on someone's behalf as an udhiyyah (sacrificial offering), this does not affect its validity. And Allah, the Most High, knows best.

What is the ruling on eating from one`s Udhiyah?

In the Name of Allah, and may peace and blessings be upon our Master, the Messenger of Allah.
 
The Udhiyah (sacrificial offering) is divided into two categories: the vowed sacrifice (Al-Mandhurah) and the voluntary sacrifice (Al-Tatawwu').
 
First: The Vowed Sacrifice (Al-Mandhurah)
This refers to a sacrifice that has become strictly obligatory due to a formal vow (Nadr). It is completely impermissible for the person offering it, or any members of their family whom they are financially obligated to maintain, to eat any of its meat or fat. Furthermore, it is unlawful for them to personally benefit from its hide, wool, or any other part of it. If they happen to eat any portion of it, the offerer is legally obligated to give an equivalent amount of meat or its monetary value to charity. (As noted in Tuhfat al-Muhtaj by Imam Ibn Hajar al-Haytami,Vol. 9/P.364).
 
Second: The Voluntary Sacrifice (Al-Tatawwu’)
This is a recommended, non-obligatory sacrifice. The person offering it is fully permitted to eat from its meat, distribute portions as charity to the poor, and give pieces as gifts to those who are well-off. However, it remains a mandatory requirement to donate at least a minor portion of it to charity; this should not be less than approximately half a kilogram of raw, uncooked meat. And Allah the Almighty Knows Best.

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