An agreement that incorporates the sale of the leased asset (in an ijara contract) at the end of the lease period. In this configuration, ownership transfer is not an option (khiyar) given to the lessee. Two contracts are involved as follows: 1) ijara contract, 2) contract of sale (aqd bay’). Under the ijara contract, one party leases an object from the owner (the lessor) for an agreed amount of consideration (ujra or badal) over a specified period of time.

Ijara thumma bay’ is an Arabic term that translates as leasing and subsequent sale (hire purchase).