SHARIAsource

This fatwa concerns shari'a guarantees, and defines a shari'a guarantee as a guarantee between parties based on shari'a principles. The fatwa specifies that a contract that can be used as a shari'a guarantee is a Kafalah bil ujrah, the provisions of which include:

1. the object of the contract can, in whole or in part, be a financial obligation that emerges from a shari'a transaction, or anything else guaranteed, based on shari'a principles;
2. statement of consent and acceptance must be enunciated by the parties to show their intention to enter into a contract;
3. the contract fee must be stipulated in the contract, and agreed to by the parties; and
4. a Kafalah bil ujrah is binding and cannot be terminated unilaterally.