IDEAS home Printed from
   My bibliography  Save this article

'Iwad As A Requirement Of Lawful Sale: A Critical Analysis


  • Saiful Azhar Rosly

    () (International Islamic University Malaysia)


This paper will argue that replacing ribOE with al-bayc does not mean that the latter can imply any form of sale (al-bayc) to justify Islamic legitimacy. Apart from the prohibition of uncertainties (gharOEr) in sale, the requirement of an equivalent countervalue (ciwaè) must also be met. Risk (ghurm) and liability (èaman) after sale and value-addition or effort (ikhtiyOEr) are the principal components of ciwaè. As such, any increase from sale must contain ciwaè, otherwise ribOE is implicated. In classical Islamic commercial contracts such as ijOErah, salam and muèOErabah, ciwaè is evident. However, the contracts of credit of al-murOEbaúah or al-bayc bithaman OEjil are widely used by Islamic banking practitioners. To prove Islamic legitimacy, this contract must show that the financiers assume the risk of ownership in making the sale. It must also show evidence that the seller is liable to the option of defect (khiyOEr alcayb). The same holds for bayc al-c¥nah and bayc al-dayn which are also widely used in Islamic money and capital markets in some Muslim countries.

Suggested Citation

  • Saiful Azhar Rosly, 2001. "'Iwad As A Requirement Of Lawful Sale: A Critical Analysis," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 9(2), pages 187-202, December.
  • Handle: RePEc:ije:journl:v:9:y:2001:i:2:p:187-202

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Iwad; Riba;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • K39 - Law and Economics - - Other Substantive Areas of Law - - - Other
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ije:journl:v:9:y:2001:i:2:p:187-202. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gairuzazmi Mat Ghani). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.