Contract

This entry examines the notion and practice of contract within a broad context and in reference to the processes and instruments of Islamic finance and economics. Islamic law is known for its strong emphasis upon freedom of the parties wishing to bind themselves through a legal contract which thus allows the players in the financial and commodity markets to expand the scope of their business engagements and interactions. Contracts, as defined under the precepts of classical Islamic jurisprudence, bear similarities with the modern counterparts, whereas there are also some major differences underlined by the dictations of the main principles governing Islamic finance and business.