The pacta sunt servanda principle in Islamic law

By Liam Patrick Nicol, Joel Väisänen, Marc Orti Carceller  Perhaps shaping the earliest tenet of international law, the pacta sunt servanda principle is the basis of contract law within Islamic business and finance regulations. In this sense agreements must be kept, conferring legal certainty to the contract parties. Therefore, this rule permits the enforceability of …

Ribā Explained

By Isabella Latva, Samuel Geary and Jackielyn Perez Ribā is a concept which is prohibited (haram) under Sharia law. Commonly called usury in English. Mahmoud A. El-Gamal notes in the book Islamic Finance: Law, Economics, and Finance, that “the three-letter past-tense root of the term ribā is the Arabic verb ‘raba’, meaning to increase”1. This …