Financial Rights and How They Are Exercised and Transferred — practice questions

Correct answer: C. Clauses 3/1 and 3/2: Personal rights arise from the liability of another person, such as a debt payable by a debtor. Proprietary rights attach to specific property and give the owner direct authority over it; they may be primary (e.g. full ownership) or secondary (e.g. a creditor’s right in security). The owner of a proprietary right can directly enforce his right to specific property by permissible means, whereas the owner of a personal right cannot enforce it by claiming any specific property (Clause 3/2/3).

Correct answer: A. Clause 3/3/3: Rights to trade names, trading addresses, trademarks, copyrights, inventions and patents belong to their owners, have recognised monetary value in contemporary commercial custom, and are protected by the Shari’ah. Being financial rights, they may be disposed of or transferred for consideration, provided the transaction is free of Gharar, deception and fraud. A commercial licence may be disposed of for or without consideration unless specifically prohibited by law.

Correct answer: D. Clauses 4/1 to 4/3: Ownership of an asset or usufruct gives the owner the right of complete disposition, for or without consideration, except what Shari’ah prohibits. Ownership of a usufruct entitles the owner to use it directly or through another person, subject to the asset owner’s terms and liability for misuse, negligence or breach. A licence to use gives the licensee the right of personal use only, which cannot be transferred to a third party.