Justifications for recognition of open price term in islamic law

Farzaneh Akrami, Sakina Shaik Ahmad Yusoff

Research output: Contribution to journalArticle

Abstract

Contrary to traditional rules for determination of price at the time of formation of the contract, the concept of open price term allows parties to form a valid sale contract although the price is not specified. This is to protect parties from contractual risks in modern trade. Open price sale contracts are now widely used throughout the world at different levels; governmental, business to business, business to consumer and in many cases in deals made by non-business individuals. In such circumstances, when open price term is the widely used alternative to the rule of fixed price, there are some laws that do not seem to accept this method of contracting. Based on certain principles, Islamic rules require parties to fix the price at the time of formation of the contract. Thus the concept of open price term is rejected by the Islamic rules. As such, countries whose rules are based on Islamic law cannot have open price to cater to the needs of contemporary trade methods. Thus, through a doctrinal research method, this study aims to justify the possibility of accepting open price term as a key element in today’s world trade, in accordance with the Islamic law.

Original languageEnglish
Pages (from-to)307-319
Number of pages13
JournalInternational Journal of Applied Business and Economic Research
Volume15
Issue number26
Publication statusPublished - 1 Jan 2017

Fingerprint

Justification
Islamic law
Fixed price
Business to business
Research methods
Contracting
World trade

Keywords

  • Islamic law
  • Islamic principle of la dararwa la dirar
  • Islamic principle of maslihah
  • Islamic principle of nah? al-Nab? c anil b?ic Al-Qarar
  • Open price term
  • Sale contract

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics

Cite this

Justifications for recognition of open price term in islamic law. / Akrami, Farzaneh; Shaik Ahmad Yusoff, Sakina.

In: International Journal of Applied Business and Economic Research, Vol. 15, No. 26, 01.01.2017, p. 307-319.

Research output: Contribution to journalArticle

Akrami, Farzaneh ; Shaik Ahmad Yusoff, Sakina. / Justifications for recognition of open price term in islamic law. In: International Journal of Applied Business and Economic Research. 2017 ; Vol. 15, No. 26. pp. 307-319.
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