The Binding Nature of Wa’ad (Promise) and Its Application in Islamic Finance
Mushtaq Ahmad Qazi

Abstract
Murabaha, Ijara, Musharakah or any other Islamic financial transaction as inherited from Islamic jurisprudence, was not tailored to fit readily the needs of financiers for substituting financing techniques. The present shape of Islamic financial transactions have been evolved from the original contracts of the same names, with many additions and alterations. One of the modern day additions to the original Islamic financial transactions is the series of "promises or undertakings". Therefore, Wa’ad (Promise) plays a central role in the transactions used by Islamic financial institutions and without re-defining the boundaries of the nature of Wa’ad (Promise) in these transactions, the whole Islamic financial system would collapse or, at least, would be irreparably damaged. This paper discusses the binding nature of Wa’ad (Promise) in Shariah (Islamic Law) both from Diyanata (moral) and Qada’a (legal) angles, in the context of the modern Islamic financial system by analysing the faxed and flexible sphere of Shariah (Islamic Law).

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