FIQH FOR ISLAMIC BANKING AND FINANCE (MIFB 6043)

ASSIGNMENT 1

The Application of Islamic Legal Maxims to Islamic Banking and Finance

Prepared by Mohamed Ibrahim Ismail Matric Number: A1111477M04

Session: 2011/2012 Semester: First Semester Date: 10 September 2011

Submitted to: Tuan Haji Dziyauddin bin Haji Ahmed

Contents
Introduction.1-2 Definition of Legal Maxims..2 Differences between Al-qawaid al-fiqh and usul ...2-3 Islamic Legal Maxims and Development of Islamic Finance.3-4 Leading Islamic Legal Maxims and their evidences from the Quran and Sunnah.5-8

Application of Islamic Legal Maxims to Islamic banking, Finance and business.9

Matters are determined according to their intentions...9-11 Hardship begets facility............11-12 Certainty cannot be overruled by doubt...12-13 The origin of all rules is permissibility.....13 Harm should not be inflicted nor reciprocated.....13-15 Freedom from liability is a fundamental freedom.15 Custom is a source of judicial decision.....15-16 Damage and benefit go together...16-17

Conclusion17-18 References.....19 Appendix.20-21

INTRODUCTION
The study of figh for Islamic economics is very important as the field of Islamic finance and banking gains momentum and expands throughout the globe. As Islamic banks and other Islamic financial institutions embarked upon new products, the role of Muslim Shariah scholars in the area of Islamic jurisprudence (fiqh) became paramount as there could be no products to be introduced if they were not approved by a knowledgeable Muslim Shariah scholar. Conventional banking system dominated the world for the last century, even though it existed before 1900; its effect was strongest after the imperialists took control most of the countries in the world. Along its other ideologies, it introduced the interest-based banking system to the Muslim nations which is against the Shariah principles. This riba-based banking system threatened the existence of Muslim nations, their business and economic activities and forced them to depend on the western banking which was meant to devour the wealth of the poor, enslave the weak people, and exploit the underprivileged. To prevent such exploitations to continue and prevail among the Muslims, some Muslim scholars such as Anwar Qureyshi, Muwdudi and others recognized the need for commercial banking based on profit and loss sharing. These scholars based their analysis on the branch of Islamic fiqh known as fiqh al-muamalat, which is a branch that studies rules and guidelines on the relationship between man and man on social and economic matters, man and other creatures of Allah and a man and his surrounding1 However since Muslims desperately need to distance themselves from a riba-based banking system and establish their own banking system which is based on Islamic Shariah, there came a pressing need to fully comprehend, analyze and understand shariah principles and Islamic fiqh to achieve this goal.
1

Dziyauddin bin Ahmed, (2007) Handbook on Fiqh Muamalat: Compilation of Class Notes on Fiqh Muamalat, IIUM, Kuala Lumpur

Among the useful tools which are used by Muslim scholars of Islamic fiqh to come up with new rulings including the innovation of shariah-based products, are Islamic legal maxims known as Al-qawaid al-fiqhiyyah () . These Islamic legal maxims are very important to the economic and business activities to the Muslim people since even when they are conducting their business activities they should behave according to the shariah and with a good intention to please Allah, insha Allah, it would be considered to be ibadah (worshiping Allah SWT) This paper would attempt to highlight the development of Islamic legal maxims, their evidences from the Quran and Sunnah and their application to economic and business matters especially to Islamic banking and finance.

Definition of Islamic legal maxims (Al-qawaid al-Fiqhiyyah)

According to Wahbah Zuhaili, These are principles which summarize a number of fiqh rules which are related to each other into maxims2. An example of such a maxim is: Certainty cannot be overruled by doubt.

Differences between usul fiqh and qawaid al-fiqh

Usul fiqh () Usul al-fiqh is a methodology of legal reasoning which derives legal rulings from primary sources of Shariah which is the Quran and Sunnah. The sources are read in an honest and unbiased manner to infer the intentions of Allah SWT. Usul al-fiqh talks about rules of interpretation, meaning and implication of commands and prohibitions and so forth3

Al-Zuhaili, W. (1996), Fiqh-al-Islami wa adillatuh, Damascus, Dar-al-fikr See also Kamali.M(n.d), Principles of Islamic jurisprudence, Islamic Text society, Cambridge

Al-qawaid al-fiqh )) These are defined as principles which summarize a number of fiqh rules which are related to each other into maxims. An example of such maxims is: Matters are determined according to their intention. It is quite important to understand that these Principles are derived from consolidated reading on
various rules of fiqh regarding various themes. They are short, epithetical expressions of Shariah goals and objectives.

Islamic Legal Maxims and Development of Islamic Finance

The text, either from the Quran or Sunnah, can be divided into two main categories 1. Text which explain certain issues in detail 2. Text which gives general guidelines and basic principles These different types of orientation have certain purpose to serve. The first from the first category usually addresses fixed issues and matters which are transcendental such as the system of belief and other issued which cannot be changed regardless of the time and place. For example in the area of crime and penalties () , the Quran legislated five specific offenses, murder, theft, highway robbery, adultery and slanderous accusations. The Quran also gave detailed rulings about marriage, inheritance and family matters. This is because the objective of such rulings is permanency and cannot be changed whatsoever.4 On the other hand, Islamic Shariah gave general guidelines in many areas which could change due to time, place and circumstances. The basic objective of the law in this case is to provide a room for flexibility which can lead to variations in interpretations. Thus various interpretations and flexibility makes application possible which would not have been possible had there been

Securities Commission Malaysia(2009) Islamic Commercial Law(fiqh al-Muamalat), LexisNexis, Kuala Lumpur

any rigidity in the text. Allah SWT says:

:) )

Allah intends for you ease and He does not want to make things difficult for you 5 Al-baqara: 185. Thus commercial law and finance fall within this second category where there is enough room for flexibility as long as it is in line with Shariah principles and complies with the basic objective of Shariah that is based on justice and fairness. The development of the Islamic banking and finance industry has raised many contemporary issues regarding Islamic commercial contracts and more in general the Islamic commercial law. These issues are needed to be in accordance with Islamic rulings. Most of the time, direct rulings from the texts could not be found as the nature of the texts itself has left the issues for different considerations. Hence, as a solution, application of legal maxims would help to develop the parameters of Islamic banking and finance and its general principles. 6

Taqi-u-Din, M. and Muhsin, M.(1982)The Noble Quran English Translation of the meanings

and commentary, King Fahd Complex, Madinah

6

Securities Commission Malaysia(2009) Islamic Commercial Law(fiqh al-Muamalat), LexisNexis, Kuala Lumpur p.71

Leading Islamic Legal Maxims and their Evidences ( ) from the Quran and Sunnah
1. Matters are determined according to their intentions )) The evidence for this legal maxim is from an authentic Hadith. The Prophet said: 7)) . (Deeds are judged by intentions and every person is judged according to his intention)8 quoted by Bukhari Hadith No: 6689 and Muslim Hadith No: 1907

2. Hardship begets facility () The evidence for this legal maxim is from the Quranic verses in which Allah SWT says: : ( ) : , :( ) And (Allah SWT) has not laid upon you in religion any hardship 9 Al-Hajj: 78 Allah intends for you ease and He does not want to make things difficult for you Al-baqara: 185. And in a Hadith the prophet said:
10

""

3. Certainty cannot be overruled by doubt () This maxim originated from a hadith where the prophet was reported to have said:
11

"

7 8

) ( :) ( : See 7 9 Taqi-u-Din, M. and Muhsin, M. op. cit., p.454 10 \ :

If one of you feels something in his stomach (fart etc) and then cannot differentiate if something came out or not? He should not go out of the mosque unless he hears a sound or finds a smell.12

4. The origin of all rules is permissibility () This legal maxim originated from this Quranic verse. Allah SWT says: : He it is Who created for you all that is on earth13 Al-baqara: 29

5. Harm should not be inflicted nor reciprocated )) The origin of the legal maxim is found both in the Quran and hadith. Allah SWT says: : And do not kill yourselves (nor kill one another). Surely Allah is Most Merciful to you14 Annisa: 29 In following hadith the prophet said:
15

"

Harm should not be inflicted nor reciprocated.16

11 12

) ( ) ( ) ( ) ( See 11 13 Taqi-u-Din, M. and Muhsin, M. op. cit., p.7 14 Taqi-u-Din, M. and Muhsin, M. op. cit., p.112 15 ) /( ) /( ) / ( /( ) ( ) ( : ,) /(

6. Freedom from liability is a fundamental principle () This origin of this maxim is founded on the Quranic verse declaring the original permissibility of all things. : :

Say ( O Muhammad ) : I find not in that which has been revealed to me anything forbidden to be eaten by one who wishes to eat it, unless it be Maitah ( a dead animal) or blood poured forth (by slaughtering or the like), or the flesh of swine(pork); for that surely is impure or impious(unlawful) meat (of an animal) which is slaughtered as a sacrifice for others than Allah (or has been slaughtered for idols or on which Allahs Name has not been mentioned while slaughtering ). But whosoever is forced by necessity without willful disobedience, nor transgressing due limits; (for him) certainly, your Lord is OftForgiving, Most Merciful.
17

Al-anam: 145

In this Quranic verse, it could be understood that everything is presumed to be permissible unless prescribed otherwise. Similarly, a person is deemed to be free from any liability unless there is evidence to show otherwise as the origin of man is free from any liability.

) 7. Custom is a source of judicial decision. ) The origin of this maxim is found in the Quran and Sunnah

16 17

See 11 Taqi-u-Din, M. and Muhsin, M. op. cit., p.195

: ( ) : And live with them (your wives) honorably18 An-nisa: 19 And the evidence from the hadith whereby Hinda the wife of Abu Sufyan complained to the prophet about the stinginess of her husband he then said to her:
19

"

Take for yourself and your children to suffice your needs according to what is customary 20

7. Damage and benefit go together21 () This maxim is based upon the hadith of the prophet saying: 22" Revenue goes with liability23 Even though this hadith was quoted by Ibn Majah, Nisai, Abu Daud and others and declared it to be an authentic hadith (), others such as Imam Al-Bukhari told that it is weak () and as we always seek refuge from Allah to falsely label upon the prophet what ) , yet the hadith is used as a he did not say( basis of legal maxim applied in financial transactions and business matters.

18

Taqi-u-Din, M. and Muhsin, M. op. cit., p.110 : 20 See 19 21 Majalla art. 86. see also Hasanuzzaman, S.(2007) the economic relevance of shariah maxims(alqawaid al-fiqhiyah), Scientific publishing, Jeddah 22 23 See 22
19

Application of Islamic leading maxims to Islamic banking, Finance, business and economic matters
Islamic legal maxims are the systematic exposition of the spirit of the legal text (nass) intended to guide man towards different situations in human society throughout the ages. They provide broad contours within which policy making can be persuaded and its validity judged. The legal maxims on the other hand are amendable to trade-offs and substitutions.24

1. Matters are determined according to their intentions )) That Quran reiterates that Muslims should demonstrate consistency in faith and practice and in words and deeds.

: :

O you who believe! Enter perfectly in Islam (by obeying all the rules and regulations of the Islamic religion)25 Al-baqara: 208

: :
Verily, Those who say: Our Lord is Allah (Alone) and then they stand firm26 Fusilat: 30

24

Hasanuzzaman, S.(2007) the economic relevance of shariah maxims(al-qawaid al-fiqhiyah), Scientific publishing, Jeddah 25 Taqi-u-Din, M. and Muhsin, M. op. cit., p.44 26 In Arabic Istaqamu(), stand firm; means they followed(really) the religion of Islamic Monotheism, believed in the Oneness of Allah, worshiped none but Him(Alone), and performed all that was ordained by Allah(good deeds), and abstained from all that was forbidden by Allah(sins and evil deeds)

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The rule embodied in this maxim has been applied by early jurists mostly on acts of rituals 27 but it is just as equally applicable to other spheres of activity. The liability of a person who finds somebodys goods lying in the way and picks it up will be contingent upon the intention with which he has picked it up. If he intends to hand it over to the owner and made it known to others he will be treated as trustee and will not be required to indemnify the owner in case the property is destroyed while in his possession. But if he has kept it as an owner he would be treated as usurper, ghasib ( )and will be required to indemnify the owner in case the property is destroyed.28 Let us consider an example of our time. The establishment of Islamic financial institutions and Islamic banks could be piety-driven aiming at improving the socioeconomic status of the

Muslims across the world and ensuring their well-being while avoiding riba-based banking system and unlawful gains whichever sort it is. On the oth er hand some Islamic banks may be established to exploit the needy, introduce artifice ( )to practice distorted forms of riba and maximize their profit in the name of Islamic banks. The difference between the two categories is the intention behind each category of them. The intention of the first category is to please Allah, acquire wealth and dispose it according to the Shariah while the intention of the latter is to amass wealth, enslave others and satisfy its selfish urges without morality and ethics. The following sub-maxim further highlights intentions and acts in financial transactions, business and economic matters. Contracts are to be understood in relation to their intention and substance, not by the words and phrases used ()

For example, kafalah implies coextensive liability while transfer of debt implies discharge of the principal debtor. If a contract of transfer of debt is made with the condition to hold the

27

Ibn Nujaym, pp. 10-12; Suyuti p. 8, sqq See also Hasanuzzaman, S.(2007) the economic relevance of shariah maxims(al-qawaid al-fiqhiyah), Scientific publishing, Jeddah p.6 28 Majalla, Arts. 769-770. See also Hasanuzzaman, S. (2007) the economic relevance of shariah maxims(al-qawaid al-fiqhiyah), Scientific publishing, Jeddah p.7

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principal debtor liable in case the transferee fails to discharge the debt, contract even though termed as a contract of transfer of debt will be treated as a contract of kafalah. Similar will be the treatment of a contract of kafalah in case the principal debtor is discharged after the contract of kafalah is signed.

Also it will not be permissible for Islamic banks to practice Musharakah and Mudarabah in such a way as to ensure fixed rate of return for the banks while the liability of bearing loss or an uncertain amount of remaining profit is transferred to the working partner. 2. Hardship begets facility () This legal maxim means difficulty is to be accompanied by easiness. Another similar maxim reads: necessity renders prohibited things permissible () This legal maxim is found to be of important relevance in modern Islamic finance. An example is the permission to deal with conventional banks for the Muslim minority living in non-Muslim countries. In this case, they might be allowed to temporarily use conventional banking due to the compelling need whereby no Islamic financial facilities are available for products like residential financing. Another example is the compulsory insurance protection whereby no takaful product is available to protect the risk. If Muslims are not allowed to take the insurance, they might be subjected to certain hardships. In order to avoid the hardship, they might be allowed to take insurance to cover that particular risk temporarily29. However, it must be emphasized that, although facility is granted in situations of hardship, it is not absolute. Such a grant must be limited to certain extent in order to preserve the original rule. Thus, the permissibility granted due to hardship is limited by anther maxim, that is: necessity is estimated by the extent thereof.) ) .Therefore, if permissibility is granted in case of hardship, it must be granted up to the extent required for meeting that hardship. If a person is allowed to deal with conventional banking products due to necessity,

29

ISRA (2011) ISLAMIC FINANCIAL SYSTEM principles and operations, ISRA, Kuala Lumpur

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the permission ceased with the availability of Islamic banking products. This is supported by this following sub-rule (sub-maxim) what is lawful for a reason becomes invalid when such reason disappears30 ()

3. Certainty cannot be overruled by doubt () The basic rule that resolves the conflict between doubt and certainty is contained in the maxim that reads: Certainty cannot be overruled by doubt. This maxim rejects the effect of doubt that disturbs the original position. This rule is of great significance in the event of controversy on rights and obligations of contending parts in the absence of a proof on either side. The benefit of doubt arising out of a controversial position can never go to a person on whom the onus of proof lies; thus the position of an indebted person even after his death will not be affected by doubt as to a probable discharge of debt. Likewise a claim as to the discharge of a debt will not be rejected on the basis of presumption to the contrary. The rule if read with the following sub-rule (sub-maxim), provides a broader canvas of its application. a. As to incorporeal matters that do not prove themselves, the basic principle (presumption) is that they do not exist() For instance, a partner has no right to assume a minimum rate of profit earned by his business partner and claim his share in that profit as different from the amount stated to have been actually earned by the partner. The sub-maxim provides that in case the working partner declares a certain amount of profit no more will be presumed unless the contrary is proved to be a fact.

30

Majalla, Art 34. See also Hasanuzzaman, S.(2007) the economic relevance of shariah maxims(alqawaid al-fiqhiyah), Scientific publishing, Jeddah p.7

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The above sub-maxim is further strengthened by another sub-maxim that says: No reliance (should be made) on mere imagination () Given the above sub-maxims, in case of loss in business a partner cannot allege willful neglect and require the latter to indemnify him for the loss unless he proves the contrary. Failing this proof the partner will not be personally made liable to the loss or to indemnify the other partner. Any doubt affecting his position of freedom from liability will be untenable. No arbitrary judgment of the contender would be acceptable.

4. The origin of all rules is permissibility () This principle is of crucial importance particularly in Islamic commercial law. It opens the way for inventions and wide room for innovations for different financial tools and instruments for financial transactions without necessarily finding the authority for their permissibility. Nevertheless, it must be ensured that the innovations do not transgress any of the agreed principles of the Quran and Sunnah. 5. Harm should not be inflicted nor reciprocated )) Essentially, this maxim states that, while engaging in the economic and business activities, a firm is prohibited from inflicting injury or causing grief to others. This guiding maxim when read with its sub-maxim, wrong is to be undone ( ) provides a guideline to regulate the entire financial system in such a way that prohibits harm imposition and discourages retaliation. If for example a customer has caused damage to the ATM of a bank, it is not permissible for the affected bank (or its representatives) to retaliate by damaging the car, the house or any other property belonging to the customer. If a customer has been denied to use his credit card or had his accounts frozen by a discretionary order from the management of a bank, the customer is not permitted to retaliate by causing damage to the equipment of the Bank. This is because such action is deemed to aggravate the damages without any benefits in return, hence it is harmful. The alternative is paying compensation to the same value of the damaged property or

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denied service so as to avoid further harm to the property of the owner or a service he is entitled to. This maxim allows individuals to act unilaterally to protect themselves or others from harm. For example, in case the buyer of perishable goods absents himself without taking possession of the purchased goods the seller, in order to protect himself and the from loss, has a right to unilaterally revoke the contract of sale and sell the goods to some other party lest commodity should perish. There may be situations in which a trade is not unlawful but involves both benefit and harm; such situations are governed by the following sub-maxims. Harm is eliminated to the extent that is possible () . A practical manifestation of this maxim is the validation of the option of defect ( ) in Islamic law, which is designed to protect the buyer against harm. Therefore, when a customer buys a car and then discovers that it is substantially defective, he has the option to revoke the contract. For there is a legal presumption under the Shariah, that the buyer concluded the contract on condition that the object of sale was not defective.31 The following sub-maxim presents the practical guidelines of harm elimination. Harm is not eliminated by another harm () . For instance, if a buyer gets a faulty article he is given the option to return the goods. But if the purchased article has developed similar fault while in possession of the purchaser he will lose his option to return the goods because, in order to protect himself from harm, he will also be harming the seller. This would amount to repelling harm by causing a similar harm. A greater harm is eliminated by means of a lesser harm () . This rule says that in cases where the choice is between two harmful alternatives the one fraught with less harm may be chosen. For a example a customer loses his credit card in a slot in an ATM

31

Abu Umar Faruq Ahmed et al. (n.d)Shariah Maxims and their application on modern financial transactions, Australia.

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machine, his card may be allowed to go waste rather than to dismantle the machine which has greater value than the credit card. But in case a very valuable case of jewellery is lost in a less expensive machine, the recovery, damaging the machine will be acceptable.

6. Freedom from liability is a fundamental principle () Thus in case of loss in a business, a partner cannot allege willful neglect and require the latter to indemnify him for the loss, unless he proves the contrary. Failing this proof the partner will not be personally made liable to the loss or to indemnify the other partner. Any doubt affecting his position of freedom from liability will be untenable. No arbitrary judgment of the contender would be acceptable. This maxim states that a person is innocent until proven guilty and any claim made against him should be rejected unless a proof is found and the person will remain in his original state. If for example, a bank claims that a given customer owes him a debt amounting to RM 500,000 the bank must actually prove that the mentioned customer owes him this amount. If it does not bring any proof, the customer will be free from liability. The proof should be enough for the matter to attain a degree of certainty.32

) 7. Custom is a source of judicial decision. ) This legal maxim rules that customary practices of society in terms of their words and action are acknowledged and recognized by shariah in the absence of textual injunctions, provided they have fulfilled the following requirements:

32

Securities Commission Malaysia (2009) Islamic Commercial Law (fiqh al-Muamalat), LexisNexis, Kuala Lumpur p.72-73

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a. The custom must not violate a divine text of the Quran and Sunnah or any other Shariah principle. b. The custom must be consistently applied and prevailing in the society ) ) c. The custom must have been in effect at the time the activity or transaction is carried out d. The two contracting parties must not have agreed to a condition contrary to the customary practice. If they have agreed to the contrary, then the customary practice is not recognized.33 With reference to contemporary Islamic financial transactions, a good example which is deemed to be a valid customary practice by scholars is the acceptance of the definition used in spot trading for cross border transactions. Even though the common understanding for spot trading from the Islamic financial transactions perspective is on the same day and within the contractual session () , the delay of two business days has now been recognized as spot transaction due to the prevalent market practice to facilitate the transfer of fund from one country to another.34

8. Damage and benefit go together () This legal maxim implies that if the merchandise not yet possessed by the buyer is lost, it is the seller but not the buyer who would have to bear the loss because the former enjoys possession. Or, in case the price of purchased goods still in possession of the seller increases, the increase will benefit the one who is deemed to be liable to suffer from an adverse fluctuation in price of the goods.

33

ISRA (2011) ISLAMIC FINANCIAL SYSTEM principles and operations, ISRA, Kuala Lumpur p.171 ISRA (2011) ISLAMIC FINANCIAL SYSTEM principles and operations, ISRA, Kuala Lumpur p.172

34

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The depositary who is liable to return the deposit is entitled to take away the profit of the deposit if the same has been invested, even though the permission (express or implicit) has been given by the depositor. But if the depositor lays down the condition of transferring profits to him he will have to bear the loss, when incurred, on these investments. The depositor is liable to bear the expenditure of safe-keeping because it is he who benefits from this safety.35

These rules are to be made applicable to all situations where an owner earns benefit from the property which he has transferred or intends to transfer fully or partially to others under a contract of sale, hire, lease, tenancy, agency, etc; or joins with another person with a view to earning through partnership (Shirka or Mudaraba) or sharecropping (Muzaraa)36

Conclusion
At the outset, an introduction to Islamic banking and finance as well as the legal maxims was developed. The paper highlighted the development of Islamic banking and legal maxims in the light of contemporary issues. The paper emphasized the importance of legal maxims and their crucial role in todays banking and finance activities. It further indicated the necessity for knowledge shariah scholars who mastered in the area of Islamic fiqh and contemporary issues for them to spearhead the ongoing efforts in the Islamic finance industry to device new products without violating shariah principles. As the paper underlined the importance of Islamic legal maxims, it shed light on the applications of such maxims in the financial and banking practices as well as other related business and economic matters. Great importance was given to maxims most commonly used
35

Hasanuzzaman, S.(2007) the economic relevance of shariah maxims(al-qawaid al-fiqhiyah), Scientific publishing, Jeddah p.43
36

Hasanuzzaman, S.(2007) the economic relevance of shariah maxims(al-qawaid al-fiqhiyah), Scientific publishing, Jeddah p.43

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in the area such as those concerning solving controversies, profit and loss sharing, preventing of unnecessary damage inflicted by either of the contracting parties, customary practices in financial transaction and other important issues. To achieve truly halal products and valid financial transactions according to the Shariah, the legal maxims, should be given greater consideration and a throughout analysis should be made to base banking and financial transactions upon legal maxims which are derived from the Quran and Sunnah. And to void any misinterpretation of the maxims they should be applied and analyzed in an honest and unbiased manner by qualified and knowledgeable Muslim shariah scholars in the area of fiqh.

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REFERENCES
Abu Umar Faruq Ahmed et al (n.d) Shariah Maxims and their application on modern financial transactions, Australia AI-Suyuti, JaIaIuddin Abd aI-Rahman(1959) Al-Ashbah wa'nnaza'ir, Cairo Al-Bukhari, Muhammad ibn Ismail :( n.d) Sahih Bukhari, Muhammad Said and Sons, Karachi Al-Zuhaili, W. (1996), Fiqh-al-Islami wa adillatuh, Damascus, Dar-al-fikr Dziyauddin bin Ahmed, (2007) Handbook on Fiqh Muamalat: Compilation of Class Notes on Fiqh Muamalat, IIUM, Kuala Lumpur Hasanuzzaman, S.(2007) the economic relevance of shariah maxims(al-qawaid al-fiqhiyah), Scientific publishing, Jeddah Ibn Maja, Muhammad b. Yazid:(n.d) Sunan, Muhammad Said and Sons, Karachi Ibn Nujaym, Zayn al-Abidin: (1270 H.)Al-Ashbah Wa'n-nazair, Calcutta ISRA (2011) ISLAMIC FINANCIAL SYSTEM principles and operations, ISRA, Kuala Lumpur Kamali.M (n.d), Principles of Islamic jurisprudence, Islamic Text society, Cambridge Majalla al-Ahkam al-Adliyya,(n.d) Reprint, Karachi Nasa'i, Ahmad ibn Shu'ayb: (n.d)Sunan, Lahore Securities Commission Malaysia (2009) Islamic Commercial Law (fiqh al-Muamalat), LexisNexis, Kuala Lumpur Taqi-u-Din, M. and Muhsin, M.(1982)The Noble Quran English Translation of the meanings and commentary, King Fahd Complex, Madinah

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Appendix Legal Maxims used in the paper

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