An agreement (ijarah) that incorporates the sale of the leased asset (in an ijarah 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) ijarah contract, 2) contract of sale (aqd ba’i). Under the ijarah contract, one party leases an object from the owner (the lessor) for an agreed amount of consideration (ujrah or badal) over a specified period of time.
Ijarah thumma al-ba’i is an Arabic term that translates as leasing and subsequent sale.
