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Aqd al-Muawadha


Arabic (عقد المعاوضة) for compensatory contract (commutative contract) whereby one party receives compensation/ consideration (iwadh) from another party in return for something (tangible object, service, etc.) the former presents to the latter. Such contracts include sale (ba’i/ bay’), lease (ijara), salam, murabaha, and wakala contracts. For contracts to be of a “commutative” nature, considerations or countervalues shall be exchanged by the two contracting parties.

For example, from the standpoint of object of sale, sale contracts (uqud al-ba’i/ uqud al-bay’) include: barter sale (muqaydha), currency exchange (sarf), spot sale, salam sale (immediate payment and deferred delivery), credit sale (deferred payment sale), and absolute sale. In terms of price (thaman), these contracts include murabaha sale (cost-plus sale), tawliya sale (resale at cost), wadhi’a sale (resale at a price below cost) and musawama sale (bargaining sale).

Aqd al-muawadha is a type of aqd al-tamleek.



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