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The Principles and Practices of Shariah in Islamic Finance - page 41 / 49

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Purchase orderer as ’sagent

Appointment of the purchase orderer as an agent to purchase on behalf of the F

  • 0

Agency in Murabahah

  • 89.

    The IFI may appoint the purchase orderer as its agent (Wakil) to purchase the asset from the supplier on behalf of the IFI. Illustration 21: Purchase Orderer Buying on Behalf of Seller An international company requests an IFI to finance the import of raw materials from Finland. Due to the inability of the IFI to conduct a market survey for the best quotations, the IFI appointed the same company to conduct the market survey and purchase the asset on its behalf. This arrangement requires two separate contracts. Firstly, the IFI signs a Wakalah (agency) contract with the company so that the latter would act as an agent for the IFI. Subsequently, the IFI would enter into a Murabahah contract with the company. Both contracts are separate as the parties involved are acting in different capacities.

  • 90.

    As a purchasing agent of the IFI, the customer may advance his own money for partial payment of purchase price to the supplier. The amount advanced shall be off-set by the IFI from the selling price to be concluded with the customer.

  • 91.

    The appointment of the purchase orderer as an agent by the IFI based on a Wakalah contract to acquire the asset from the supplier shall be in a separate contract from the Murabahah contract.

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