In Arabic, it is originally known as a wa’ad ghair mulzim; a wa’ad (promise) in which the promisor (al-wa’ed) is under no legal and religious obligation to fulfill a specific act (effect) towards the promisee (al-maw’uood).

For example, murabaha (murabaha to the purchase orderer) can be executed using a wa’ad ghair mulzim where neither party promises or undertakes to enter into an effective contract when the object of sale has been procured by the seller. In other words, with a nonbinding promise the seller or orderer are under no shari’a or legal obligation to conclude the contract when the underlying commodity becomes in the possession of the seller.

A nonbinding promise can be attached to currency trading transactions, where a unilateral promise is permissible whether it is binding or nonbinding. Contracts with nonbinding promises are inherently much riskier than those that are embedded with binding promises.