Sharia Terms Glossary

Sale Exchanging money with money and also called purchase.
Curious (Fadooli) Selling others’ belongings without their legal permission.
Profit (Murabaha) Selling something with its cost plus some declared profit.
Repay (Wafaa) Selling something provided that seller repays the price and gets the commodity back.
Exchange Selling cash by cash.
Commercial Insurance An agreement between two parties where the first party declares to compensate the second party for any material loss that might be caused by any accident provided that the second party pays some premium to the first party.
Anan Anan company is a contract between two or more where they share both money and effort.
Sale Interest (Ribaa) It is the uncompensated interest in a money-to-money exchange.
Ibdhaa Donating money to someone to trade and profit goes to the owner.
Softagah To give someone money to secure his way provided he repays his money in his country when coming back.
Cost of Purchase The basic cost or price of commodity plus freight, insurance, transportation, customs expenses, etc.
Benefit The service provided by a person or utilizing something against some cost by leasing or free of charge by lending or by will.
Mortgage Retaining something to secure some debt until fully repaid.
Donation Donating something or benefit free of charge.
Ownership Owning something or putting it in custody and possession.
Obligatory Contract A contract that cannot be terminated at the discretion of one of its parties.
Guarantee Sharing liability of someone by someone else.
Unconditional Modharaba Sharing trade without constraints of time and place or type of trade or parties thereof.
Installment Sale A type of Naseeah sale where the commodity is sold and price is delayed in full or at part and to be paid in pre-defined installments.
Eenah Sale This type of sale has various types, the most famous of which is to sell a commodity at a price to be repaid on a specific date and repurchases the commodity with less price and gets the original price at the end of the agreed period. Then, the difference in the two prices is interest (ribaa).
Murabaha Sale To purchase some thing for someone at an agreed profit.
Salam Sale To sell something not yet available at a ready payment.
Deception in Sale Deception by hiding the faults of a commodity.
Co-operative Insurance It is a donatory fund to which a group of individuals participate and if any of this group suffers any loss due to some risk, this individual gets compensated from that fund by distributing the loss among all donors
Simple Credit put some amount by a bank at the disposal of its customer to avail of when necessary.
Loans Interest It is the most vivid type of ribaa (interest) where some amount is added to the original amount without a selling process involved. It is the interest taken by a creditor in lieu of delay.
Wage It is the money given against some specific utility as agreed between two parties.
Value It is the value assigned for something without any increase or deduction.
Hibah (Donation) To give money or something to someone without return.
Profit It is the increase incurred from sale.
Eligibility The qualification of human being to obtain rights and perform duties.
Letter of Credit It is a letter issued by a bank to pay a debt of any of its bankrupt customers during a specific period.
Moqayazah Exchanging a commodity with another.
Conditional Motharabah It is some type of motharabah that is bound by time, e.g. for a year, or by location, or some sort of trade, as to trade in electrical equipment.
Two Sales in One To tell someone that you sell him something in cash for some price and in installments for some other price and they leave each other. On that, we have two contracts on the same commodity with two different prices and no specific agreement on either time or contract.
Selling on Sale To competitively sell something to someone with less price or to offer something better for the same price after initial selling is performed.
Naseeah Sale To sell something on credit.
Istisnaa A contract where labor is involved as to agree with a tailor to sew a cloth with specific details provided that the fabric is from the tailor.
Islamic Bank It is a financial banking institution that gathers money and deploys it in compliance with Islamic sharia laws.
Real Estate It is that that cannot be transferred, such land, or that can be shifted but with some changes, such as buildings and trees.
Lending To temporarily grant benefit of something without any return.
Deposit To put someone’s money with another to keep.
Will To grant possession of money or benefits after death.
Debt The liability caused by loan, credit purchase, etc.
Right It is anything assigned by law to someone to be qualified for some authorities or obligations.
Promissory Note It is an official document where a debtor commits to pay a specific amount on a specific date to some creditor or promissory note holder.
Optional Contract A contract that can be terminated upon the wish of either of its parties.
Proxy An authorization granted to someone on some transferable authority.
Leasing Selling utility, or granting ownership on some utility against some money for a specific period.
Tawliyah Sale It is to sell something for the same cost without profit.
Wadheeah Sale It is to sell something for price less than its cost.
Insurance تIt is a type of security where the insurer is committed to pay money to the insured in case a risk is realized.
Dignity Company A contract between a group of respectful people who have no money. Alternatively, they buy on credit and sell in cash and distribute profits as and when guaranteed.
Honesty Availability of money of others with someone, like deposits or leased properties.
Price The money given in substitute for the sold commodity.
Loan Giving money to someone to utilize and repay later.
Utilized Money A thing that can be utilized without being consumed, such as a house.
Deposit To put someone’s money with someone else to keep.
Endowment (Waqf) To keep the original property and use its utilities.
اLiability An abstract location in a person where debts and obligations lie.
Cheque An order issued to a bank to pay some money to someone to its holder.
Termination To cease a contract or deem it to be null and void.
Modharaba It is a contract where profit is shared provided that money is given by one party (money owner) and work is performed by the other party (worker). Here, profit is distributed as initially agreed.
Awakil Relatives of someone from the side of father such as cousins and brothers and their sons.
Mowalat Contract A contract between an un-heired person and someone who accordingly commits to pay for the liabilities of that person after his death in return for all his wealth.