Unit specification for C2. Islamic Law of Financial Contracts - I

Unit description

C.2. Islamic Law of Financial Contracts - I

Specifications for Unit:

Year 01
Unit Code C.2
Offer S1, 2, 3
Attendance 0
Unit Name Islamic Law of Financial Contracts - I
Credit Points 1.00


Examiner To be decided
Moderator To be decided
Instructional Design To be decided


The Exchange Contract is the most basic of all contracts and the most important building block for a financial and economic system. Most of the financial products, services and instruments are based on this contract. Therefore a thorough understanding of the Shariah-acceptable way of exchange is called for to appreciate how the basic contract in its multifarious and varied forms could be used to design and develop financial pro and develop financial products and to provide financial solutions. 


This unit focuses on the Islamic law of contracts as it relates to economic and financial matters. In this first part of Fiqh Muamalat or Islamic law, the basic classical exchange contract and its variants are discussed. The module covers various forms of bai (exchange), such as, bai-bithman-ajil (credit sale), bai-murabaha (cost-plus sale), bai-salam (advance sale), bai-istisna (manufacture and sale), bai-istijrar (repeat sale), bai-sarf (currency sale), bai-al-dayn (debt sale), and its variant ijara (leasing) are covered. The principles governing these contracts as also their potential in terms of developing an Islamic economic and financial system are discussed.

Important Note:

1 This unit (C.2) is available through both internet and print delivery only. There is no personal contact component for this unit.
2 For details of the technical requirements and accessing Internet study materials, please click here
3 Students enrolling in this unit are not required to have prior knowledge of Islamic law, but must have successfully completed unit C.1 (Sources of Islamic financial law) as a prerequisite.


  On successful completion of this unit learners will be able to:
1 demonstrate knowledge of the Islamic law governing exchange contracts;
2 demonstrate understanding of the rationale and ethical principles underlying Islamic law governing exchange contracts;
3 demonstrate understanding of this basic contract and its variants could be used to develop financial products and services;
4 appreciate the frontier issues that are currently under debate among scholars;


Topic No. Weighting Description
1 25.00 Essential Features of Exchange (Bai); bai-bithman-ajil (credit sale), bai-murabaha (cost-plus sale); Brief Note on its Use in Islamic Trade Finance
2 20.00 Essential Features of bai-salam (advance sale), bai-istisna (manufacture and sale), bai-istijrar (repeat sale); Brief Note on Potential Applications in Business
3 20.00 Shariah Constraints on bai-sarf (currency sale) bai-al-dayn (debt sale); Brief Note on Implications for Business
4 10.00 Al-Khiyar and Islamic Options in Exchange; Brief Note on Potential Applications in Business 
5 25.00 Essential Features of Ijara (Islamic Leasing); Operating and Financial Lease; Floating Rate Ijara; Brief Note on Potential Applications in Business 

Texts: nil.

References: Recommended reference materials are provided and referred to in the Study Material.

Workload (Hours):

Directed Study 50
On-line Discussions 20
 Private Study 50
Assessments 30

 Assessment Details:

Assessment No  1 2 3 4
Due date WK 5 WK8 WK11 WK15
Full description Quiz 1 Reflection 1 Quiz 2 Reflection 2
Weighting 15.00 30.00 15.00 40.00

Other Requirements:

1 To receive a passing grade for this unit, students must demonstrate satisfactory mastery of all learning objectives for the unit. Normally, this would require students to pass all items of assessment.
2 All pieces of graded assessment in this unit will be graded using one of the letter grades as provided in the Grading System.
3 Final grades for this unit will be calculated by aggregating the weighted grade for each graded assessment item.
4 Assignment Extensions: You may submit your assignment within two weeks of the due date for assignments. If you are more than two weeks late with your submission, you will need to contact the unit team leader


US$ 100.00 for program that is administered on-line. You may additionally opt for Print Option under which printed copy of the On-line Study Material would be mailed to you. This option would involve an additional fee of 40 percent of the usual fee. 

Enrolment start dates:

Enrolment period Study period










Not Yet Available

Associated courses for this unit:

Credit Points: 1 (One)