‘WAAD’ OR
PROMISE: WHY IT IS INCONSISTENT WITH ISLAMIC CONTRACTUAL FRAMEWORK
In one of the previous posts, we raised up an issue
pertaining to the use “waad” or promise in Islamic finance and how it seems
that this concept has been widely employed to achieve some objectives aimed at
helping one party but denying justice to the other side in a transaction. For a
start, Islamic law right from the outset has recognized a distinction between a
promise and a contract (‘aqd) where a contract has been viewed more important
than a promise at least in the context of external binding effect. However even
in the case of contracts, Islamic law does look at the nature of the contracts
concerned when it comes to the question of their external binding effect that will define whether the court will
enforce the ensuing obligations or not.
