Contract of Al-Ijarah

Though there are various definitions of Al-Ijarah given by the scholars of jurisprudence, they all agree that this contract is a contract on using the benefits or services in return for compensation. In our context, Al-Ijarah refers to a contract to hire, rent or lease. We see the evidence of hire in the story of Musa (Al-Qasas: 26-27) where Musa was hired by his father-in-law to provide a service.

There are two main types of subjects in an Ijarah contract:

  1. Tasks, where the compensation is for effort expended of skill used (by an employee or a contractor), and
  2. Property, where the compensation is for the use of a property (such as a car or a house).

An Ijarah contract cannot be cancelled unless both parties agree to it or if one of the parties fails to deliver.

The pillars of an Ijarah contract are:

  1. Presence of two parties
  2. Offer and acceptance
  3. Reimbursement or compensation
  4. Specified usage

Without any of the above the contract is not valid. A point to note here is the necessity to specify the reimbursement and the usage. If these are missing, the contract is valid only if the two parties agree on them later.

There are a number of conditions attached to an Ijarah contract that will be discussed next.

Sources:

Kharofa, 146-147
Abdelhaleem, 11

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11 Comments

Filed under Contracts and Transactions

11 responses to “Contract of Al-Ijarah

  1. Pingback: Concepts in Islamic Economics and Finance » Difference Between a Jua’alah and an Ijarah

  2. abdallah ali agabna

    please provide me with the subject ijara contract for research purposes as I fininshed my MBA in Sudan and will be preparing for p.h.d
    Thank you.
    Regards.
    Abdallah ali

  3. FINANCE, personal finance, business finance, Financial economics, Experimental finance, Financial instruments – best web resources for finance, search information site.
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  4. Derya

    hi,

    could you please provide me with a full ijarah contract and how it works in more detail. I would need this for my master’s thesis which is about islamic finance in denmark.

    thank you

  5. Mehreen

    hi please provide me data about Ijara in details as i need it to write an article on Ijara Issues in MBA final semester as soon as possible i will be grateful to Tank You regards

  6. shafeeq

    i want know more information about operating and finance leasing. more importantly the difference between these two leases. is Finance leasing allowed in islam? how far Finance leasing has been recognized in islamic countries?

  7. ali abbas

    what is the difference between ijara and conventional leasing

  8. ana muslimah

    need s0me 0pini0n…
    what its that mean by “al ijarah in debt security”?
    any topics is related?~~

  9. This article is really helpful for getting a general knowledge about Islamic Economics. However, you can read this one for more information about;

    http://islam-economy.org/islamic-economics/income-sharing/rent/

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