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Ruling on Stipulating Payment of Remaining Installments in the Event of Quitting Work

Answered according to Shafi'i Fiqh by Darul Iftaa Jordan
We are the staff members of one of the institutions. We have established a provident fund to purchase commodities via Murabaha. A staff member is required to pay all remaining installments in case he quit work or was dismissed. What is the ruling of Sharia on this?

Answer:

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

The established principle in Islamic Jurisprudence is that the payment period in commutative contracts must be abided by. "It isn`t permissible to waive making payment according to the coming deadline." This is because the latter is dependent on the contract itself, so it must be abided by. Moreover, it is a right of the debtor, however, this right is sometimes waived by consent of the latter. Hanafie jurists are of the view that it is permissible that the installments become due when debtor fails to make payment if the creditor had stipulated this upon formation of contract. Ibn Nojaim said: "Even if the creditor said that whenever an installment is due and the debtor fails to pay, the remaining installments become due as well." {Al-Buhir Al-Raa`iq, V.6:P.133}.

This same ruling applies to the above question since provident funds were originally established in institutions to provide services to their staff members. One of these is selling commodities to the latter in installments. Most of these funds aim to facilitate for the staff members and not to make profits, so they charge a low percentage of Murabaha. Therefore, it is allowed for them to stipulate that a staff member pays all the remaining installments in the event of his quitting work or being dismissed. This is since he is no longer an employee and he could as well refrain from repayment.

In conclusion, there is an apparent benefit for the provident fund in stipulating that a staff member must pay the remaining installments in case of his quitting work or being dismissed. In addition, a staff member must abide by this stipulation because he had accepted it in the first place, and Allah the almighty says: " Come not nigh to the orphan’s property except to improve it, until he attains the age of full strength; and fulfil (every) engagement, for (every) engagement will be enquired into (on the Day of Reckoning)." {Al-Isra`, 34}. Also, the Messenger of Allah said: "Muslims must abide by their conditions (which they have made)." {Related by Bukhari}. And Allah the almighty knows best.

   

This answer was collected from the official government Iftaa Department of Jordan.

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