Ju’alah (also transliterated ju’ala or jua’ala/ jua’alah) is a commutative contract in which one the parties (known in Arabic as al-ja’il) offers to pay a specified amount (compensation or in Arabic al-ju’l) to whoever (the worker or in Arabic al-amil) performs a specific task or achieves a predetermined result in a specified or unspecified period of time. Ju’alah has many practical applications particularly in activities where the extent of work is unknown or cannot be specified for certain. However, the uncertainty of work under ju’alah is of a proportion that can be ignored or overlooked as it doesn’t affect the contract in a significant manner. Among the key applications of ju’alah are the following:

• Exploration of minerals and extraction of water: ju’alah may be used for the exploration of minerals and the extraction of water by making the entitlement to compensation (reward or ju’l) contingent upon the discovery of minerals or water without specifying the amount of time or the extent of the period for such works.
• Collection of debts: ju’alah can be used as a basis for debt collection by making the entitlement to compensation contingent upon the collection of the whole amount of debt. Once the collection is made, the collector becomes entitled to the entire amount of compensation. In cases where only part of the debt is collected, the compensation may be made proportionate to the amount of debt collected.
• Discoveries, inventions and designs: ju’alah can be used to reward scientific research and discoveries, inventions, designs, etc, by making the compensation contingent upon the realization of research results or discoveries, the registration of inventions, or the preparation of designs or drawings in accordance with the conditions set by the offeror.
• Brokerage: ju’alah can be used in business related to brokerage and intermediation by making the entitlement to compensation contingent upon the actual attainment of customers or contracts through brokers or intermediaries.
• Arranging for shari’a-compatible financing facilities: the work or effort provider can undertake to obtain from an Islamic bank or a shari’a-compliant financier some financing facilities (loans, syndicated financing, etc) to the benefit of the offeror. This is permissible by shari’a on the condition that the contract of ju’alah, itself, is valid (in terms of its subject matter). That is the subject-matter of ju’alah must be valid: (1) debts have to be compliant with shari’a; they can be created based on murabaha with deferred payment, or ijarah with deferred rental, etc, (2) Loans must be free from riba (interest-free), and (3) Transactions involving letters of guarantee or documentary credit should be free from riba (whether interest was stipulated in corresponding contracts or charged based on customary practice among parties).