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Exotic Cliquet

August 13, 2022
Islamic Finance

Methqal

August 14, 2022

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Arabic (خيار الرد) for an option (khiyar) to return an object of sale to the seller due to defect (‘ayb/ ‘aib)- that is, because it turned out to be defective. For example, a person purchased a car from another, and it transpired that the car was not working properly due to some hidden defect (a defect unseen at the time of sale). In this case, the buyer has the right to return the car to the seller and recoup the price (thaman) he had paid, based on khiyar al-radd.

It is also known as khiyar al-radd bil ayb/ khiyar al-radd bil aib.

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