Unilateral and Bilateral Promise — practice questions

Correct answer: D. Clauses 2/1 and 2/2: A unilateral promise is given when a party informs another of its resolute intention to act in the future in the other’s interest, the promisee having the option to avail itself of it. A bilateral promise is the exchange of two back-to-back promises between two parties, each promising to perform an act in the future relating to the same subject matter. Promises on different subject matters are addressed separately in Clause 3/7.

Correct answer: B. Clauses 3/1 to 3/3: A promise to perform an impermissible act, such as a ruse to circumvent Riba, is prohibited. Any promise in a loan contract procuring a benefit for the lender beyond repayment is prohibited even if made in a separate document, and any promise in a sale resulting in a repurchase (’Inah or reverse ’Inah) is prohibited whether made with, before or after the sale, including through a colluding intermediary. Murabahah, Ijarah Muntahia Bittamleek and diminishing Musharakah promises are permitted (Clause 5).

Correct answer: A. Clause 3/4: It is permissible to promise to perform an action or transaction, and fulfilling it is a religious obligation, so that breaking it without excuse is a sin. However, a promise is legally binding only where there is a real need for enforcement, such as when the promisor causes the promisee to incur a liability as a result of the promise, for example where a merchant buys a specific item solely in reliance on a customer’s resolute promise to buy it.