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Islamic Finance




Aqd Tawtheeq


Arabic (عقد توثيق) for a documentation contract (contract of security/ guarantee). Under shari’ah (Islamic law), accessory contracts/ subordinate contracts are contracts (uqud/ pl. of aqd) which do not exist by their own and are not independent of other contracts. These contracts do require the existence of another contract (other contracts) as a perquisite for them to come into existence. The essential purpose of such contracts is documentation and safeguarding of contractual rights.

Examples of aqd tawtheeq include rahn (collateralization), kafalah (suretyship), hawalah (assignment/ transfer of debt), and wakalah (agency or proxy).



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