Derivatives
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July 16, 2020
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Option Alpha
July 16, 2020

The state in which a contract (aqd) is devoid of any option (khiyar) that may allow one of its parties or a third party to void the contract after it is entered into. As such, the contract (in this case, aqd lazim or a binding contract) takes effect once it is concluded and neither party can revoke it for whatever reason.

Luzum (لزوم العقد) is an Arabic word that implies, in its literal sense, durability, persistence, stability and permanence, among others, while in its legal meaning it denotes bindingness.

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