In Islamic finance, bilateral undertaking, or muwa’adah (مواعدة) in Arabic, refers to a promise which is issued by a counterparty against a promise issued by another in the same transaction. For example, in murabaha to the purchase orderer, each counterparty issues a promise: the client undertakes to buy the asset from the bank, while the bank undertakes to sell it to the client. However, it is a Shari’a condition that bilateral undertaking is permissible in murabaha transactions provided that one counterparty, at least, has a khyiar (option to rescind the contract). If such an option is not attached to the contract, bilateral undertaking is not permissible, as bilateral undertaking which is binding on both counterparties renders the contract an actual sale contract even before the underlying asset is available with the seller (in Shari’a, a man cannot sell what he doesn’t own at trade date).

In foreign exchange transactions, a bilateral undertaking to purchase and sell currencies is impermissible if the promise if binding. However, a unilateral undertaking is permissible, whether the promise is binding or not.

Bilateral undertaking is also known as bilateral promising or mutual promising.