عربي
Home


Resolutions of Iftaa' Board


Resolutions of Iftaa' Board

Resolution No.(124): “The Penalty Clause in Debts“

Date Added : 27-10-2015

 

Resolution No.(124),(11/2008): “The Penalty Clause in Debts“

Date:29/11/1429 AH, corresponding to 27/11/2008 AD.

 

All perfect praise be to Allah, The Lord of The Worlds; and may His blessings and peace be upon our Prophet Mohammad and upon all his family and companions.

During its seventh session held on the above given date, the Iftaa` Board reviewed the penalty clause stated in some of the contracts that it had reviewed.

After thorough study and deliberation, the Board decided the following:

Giving the creditor the power to receive pecuniary charge and to claim it in case the debtor failed to repay him is called the penalty clause. This provision is invalid and renders the contract invalid, because it is from the Riba (usury/interest) of Jahilliyaah (the days and traditions of ignorance), and it is forbidden as stated in the Holy Quran. Whereas, Allah Says (what means): “but God hath permitted trade and forbidden usury.” (Al-Baqarah/275).

Receiving a pecuniary charge from the debtor in case of delay in payment is tantamount to stipulating it upon the conclusion of the contract. This is because it is the kind of Riba that the Arabs used to have at that time. They used to tell a debtor, “You either settle the debt, or add an interest.” {Kindly refer to Tafseer At-Tabari vol.3, pp.275}.

The penalty clause is an increase on the original value of the debt against delay in repayment. This increase is forbidden and invalid, whether it was stipulated in the contract such as the penalty clause, or was stipulated upon the deadline of the repayment.

Therefore, the penalty clause pertaining to debt settlement is parallel to acknowledging Riba upon concluding the contract, and this is forbidden in Islamic Sharia. And Allah Knows Best.

 

Chairman of the Iftaa` Board, the Grand Mufti of Jordan/ Dr. Nooh Al-Qodat

Vice Chairman of  the Iftaa` Board, Dr. Ahmad Hilayel/ Member

Sheikh Abdul-Kareem Al-Khsawneh/Member

Dr. Sa`eid Hijjawi/  Member

                   Dr. Mohammad Khair Al-Essa/ Member

                                                              Judge Sari Attieh/ Member

          Dr. Abdurahman Ibdaah/ Member

       Dr. Mohammad Oklah/ Member

               Dr. Abdunnasser Abulbasal/ Member

                                            Dr. Mohammad Al-Khalayleh/ Executive Secretary of the Iftaa Board        

 

Decision Number [ Previous | Next ]


Summarized Fatawaa

What is the Islamic ruling regarding a person finding buried treasure, whether gold or artifacts, and what is their share of it?

If the buried treasure is Islamic, it is considered Luqta (lost property), and the finder must announce it to locate its owner. If all efforts to find the owner fail, the finder may take ownership of it. If the treasure is non-Islamic and consists of gold or silver, zakat must be paid on it, which is one-fifth of its value. And Allah Knows Best.

Are minors obliged to fast?

A male under the age of puberty isn`t required to fast, but his guardian should order him to fast if he was able to endure the hardship until being used for fasting in general. And Allah Knows Best.

Is it permissible to give the expiation due on the vow of anger to one person?

The expiation for the vow of anger-and that of the oath-is to be given to (10) needy persons, or a needy family of ten individuals, but giving it to one person is impermissible.

Is hair extension permissible?

All Perfect Praise is due to Allah, The Lord of The Worlds 

It is impermissible for the man and the woman to apply a human`s hair as extension, but using artificial hair is permissible for the married woman after obtaining the approval of her husband so long as non-Mahrams don`t see her. And Allah Knows Best.

See More