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The Principles and Practices of Shariah in Islamic Finance - page 36 / 49





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66. The purchase orderer would apply to the IFI, an order to purchase an asset with identified specifications. The purchase orderer may provide the IFI with information pertaining to the asset specifications in terms of price, availability and market location. However, the IFI reserves the right to conduct its own assessment on the asset ordered to be purchased.

Asset specification by the purchase orderer

67. Assets purchased by the IFI according to the purchase orderer’s requirements may be delivered to the purchase orderer prior to the conclusion of the Murabahah contract.

Delivery of asset to the purchase orderer prior to Murabahah contract

68. Loss or damage of goods in the possession of the purchase orderer prior to the conclusion of the Murabahah contract due to negligence of the purchase orderer shall be borne by the purchase orderer.

Liability of purchase orderer

69. The purchase orderer has a recourse to the supplier through the IFI for any defect of asset or good delivered to the purchase orderer based on the defect option (Khiyar al-Ayb).

Recourse for defect

Illustration 19: Defective Asset Not Valid as the Object of Murabahah

A purchase orderer requests for an IFI to finance the purchase of a completed residential property identified by the purchase orderer under a Murabahah contract. After processing the application, it was found that the property was certified not fit for occupancy by building authorities due to structural defects. The object of sale is found to be of non-satisfactory quality and hence would not qualify for the IFI to provide Murabahah financing to the customer until and unless rectification to the property is carried out by the supplier to obtain the certificate of fitness.


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