Combination of Contracts — practice questions

Correct answer: D. Clauses 2/2 and 3: Combining more than one contract in one set is permissible provided none of them is imposed as a condition in the other and each contract is permissible on its own, unless a specific Shari’ah restriction prohibits it. Combined contracts may be concluded simultaneously and may carry a single lump-sum counter-value (e.g. selling land and renting a car for one thousand dinars) or separate values (Clauses 2/2/1 and 2/2/2).

Correct answer: B. Clauses 4/1 and 4/4: Combined contracts must not include cases explicitly banned by Shari’ah, such as combining sale and lending, and must not contradict each other in their rulings and objectives. Examples of contradictory combinations are gifting an asset while selling or leasing it to the same person, combining Mudarabah with lending the Mudarabah capital to the Mudarib, currency exchange with Ju’alah, Salam with Ju’alah for the same value, and leasing with selling (traditional hire-purchase). Murabahah with agency and Ijarah with a separate gift promise are recognised structures (Clause 7/1).

Correct answer: A. Clause 4/3: Combination of contracts must not be used as an excuse for Riba, for example by concluding a loan that simultaneously yields other gains to the lender, such as stipulating that the borrower offer the lender accommodation in his house or give him a present, or by imposing excess repayment in quantity or quality. A nominal rent or omitting the condition from the written contract does not cure the benefit accruing from the loan (see also Clause 6/3/2 on Muwata’ah for Riba excuses and Shari’ah Standard No. (19)).