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The Principles and Practices of Shariah in Islamic Finance - page 30 / 49

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47. In the event where the purchase orderer is appointed as the agent of the IFI based on a Wakalah contract, where several quotations are given by the purchase orderer for the IFI to consider, the IFI shall clearly specify to the purchase orderer the quotation which the IFI has chosen.

Illustration 13: Disclosure of Purchase Price

A purchase orderer requested an IFI to finance a purchase of specified equipment. The purchase orderer who has specialized knowledge of the equipment was required by the IFI to provide several quotations of such equipment by different suppliers to ascertain a fair value of cost of purchase. Based on established industry standards of the equipment, the IFI agreed to purchase the specified equipment based on one of the few given quotations. The quotation thus becomes the purchase cost in the Murabahah sale to the purchase orderer. This selected quotation shall be disclosed to the purchase orderer.

  • 48.

    The IFI shall disclose to the purchase orderer the mark-up to be added to the purchase price. The mark-up could either be a fixed amount or a percentage of the purchase price.

  • 49.

    Any defect caused by force majeure in the asset which is discovered by the IFI or the purchase orderer before delivery of the asset shall be communicated to the other contracting party. Both the IFI and the purchase orderer may either mutually agree to adjust the terms of the contract or rescind it.

Disclosure of specific quotation selected for the cost

Defect disclosure

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