Derivatives

Option Credit Collar

November 14, 2021
Islamic Finance

Waqf Khairi

November 14, 2021

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Ijarah, by definition, is a contract of lease whose subject matter is a known service (khedmah), and in which the consideration (badal) becomes due on an incremental basis in proportion to the passage of time (as in the case of ijarat al-ayan) and effort exerted (services rendered as in the case of service ijarah/ ijarat al-khadamat).

On the other hand, ju’alah is a contract of service whereby a party commissions another (a worker/ artisan/ professional) with a task whose achievement is probabilistic rather than sure- i.e., the task may be achieved or may be not), and task undertaker (the worker) is entitled to the agreed amount (ju’l) only if the task is achieved.

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