The Application of Wa'd in Islamic Banking Contract
AbstractWa’d means a unilateral promise which connotes an expression of willingness of a person or a group of persons on a particular subject matter. In a commercial transaction, a promise has dual meaning. This is because, in a unilateral contract, the offer of the offeror is known as promise, while in a bilateral contract, the acceptance of the offeree is also known as promise. The application of promise can be seen in several Islamic transaction concepts for example in sale and purchase, murabahah, syirkah mutanaqisah, ijarah, takaful etc. The Malaysian Accounting Standards Board in its amendment to the Financial Reporting Standard i-1 2004 had mentioned about al-wa’d when defining Ijarah Muntahia Bittamleek which reads as follows: Ijarah Muntahia Bittamleek is an Ijarah contract with an undertaking by the lessor to sell the Ijarah asset to the lessee and/or an undertaking by the lessee to purchase the Ijarah asset from the lessor by, or at, the end of the Ijarah period. The sale and purchase is affected by a separate contract. ‘Undertaking’ is translated from the Arabic word “wa’d”. It is inadmissible for the unilateral promise (wa’d) as an alternative to a proscribed contract, such as selling goods that are not in one’s possession to be binding. This is because a binding unilateral promise (wa’d) is corresponding to a contract. Any views for making it binding upon both or either parties, explicitly or implicitly, by virtue of a memorandum of understanding, a central agreement, or any other circumvention, are not founded on any legitimate basis. Therefore this paper is aimed to define the concept of al-wa’d in the Islamic law with special reference to the views from the Islamic jurists. It also focuses on the concept of al-wa’d in Islamic financial contract. Besides, the paper will also highlight the concept of Wa’d in contemporary issues and its application to the current practice.Keywords: Wa’d, unilateral promise, contract (aqad), Islamic Financial Institution
Dec 30, 2011
How to Cite
MD ZAINI, Syeliya; MOHD ISA, Nosrah. The Application of Wa'd in Islamic Banking Contract. Management & Accounting Review (MAR), [S.l.], v. 10, n. 2, p. 27-45, dec. 2011. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/226>. Date accessed: 30 nov. 2022. doi: http://dx.doi.org/10.24191/mar.v10i2.226.