Islamic Finance
Hikr
September 27, 2021
Finance
Single-Asset Autocall
September 27, 2021

A type of sale (ba’i) which is lawful in substance and description but is concluded by, or with the intervention/ consent of, a third party who neither has an absolute right of ownership, over the property being sold or bought nor is properly authorized to act on behalf of the buyer or seller. A prime example of this sale is bay’ al-fuduli (unauthorized agent sale).

In Islamic shari’a, al-bay’ ghair al-manhi ‘anhu (sale not proscribed; permissible sale) can be generally classified as:

  • effective and binding: a sale that is lawful in substance and description, not involving others’ rights, and not providing for khiyar (option).
  • effective and non-binding: a sale that is lawful in substance and description, but allows for khiyar (option).
  • Yet inactive or not yet effectuated (mawquf): a sale that involves others’ rights.

Al-mawquf is an Arabic term that means “yet inactive”, “pending approval” or “not yet put into force”.

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