Islamic commercial law: study guide one

Learning outcomes

Chapter 1: An introduction to Islamic finance

Define Islamic finance, whether in the form of banking, insurance or capital market segments.
Describe the salient features of Islamic finance, comprising interest-free transactions, uncertainty-free transactions, profit and loss sharing and the economic and monetary functions of money.
Illustrate how these features require the provision of different financial products to those supplied through conventional finance.
Explain how Islamic finance can satisfy financial needs without violating religious prohibitions.

Define the meaning of Shari'ah compliance.
Appreciate the importance of Shari’ah compliance in all financial activities of an Islamic financial institution.
Identify the key stakeholder interested in Shari’ah compliance.

Define the meaning of source of law from an Islamic perspective.
State the importance of source of law in Islamic law.
Distinguish between the primary and secondary sources of Islamic law.
Distinguish between Shari'ah (Divine sources of law) and Fiqh (Islamic substantive law or positive law).
Identify the most workable technique of law in developing contemporary Islamic commercial law.
Describe the early development of Islamic (Sunni) schools of law.

State the basis of interpretation in Islam.
Define the meaning of Ijtihad or interpretation.
Distinguish various forms of Ijtihad inclusive of both textual-based and human-based reasoning.
Identify the need of Ijtihad in modern times.
Demonstrate the practicality of Ijtihad in solving modern issues and problems.

Illustrate the flexibility of Islamic commercial law to meet financial need without resorting to lending for an interest.
Describe the relationship between traditional contracts and Islamic finance products and services.

Explain the reason(s) why some contracts are preferable over other contracts in Islamic finance.
Discuss briefly product development in Islamic financing using the traditional contracts.

Describe the objectives of Shari’ah standards.
Explain how to deal with different rulings arising from different interpretations of the sources and techniques of law.
Identify solutions to enhance Shari’ah compliance.

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