SHARIAsource

This fatwa acknowledges that undertakings often form part of a financial and business transaction, and that the shari'a financial industry, as well as society in general, would benefit from an explanation of contractual obligations in shari'a financial and business transactions.

The fatwa states that such undertakings are binding and enforceable, provided the following conditions are met:

1. The party making the undertaking (wa'id) has legal standing (ahliyyat al-wujub wa al-ada');
2. In the event an undertaking is made by a party without legal standing, the validity of the undertaking depends on the permission granted by their guardian; and
3. The wa'id must have the ability and authority to make an undertaking (mau'ud bih).

Moreover, that:

1. the undertaking (wa'd) must be in writing in a contractual agreement;
2. the undertaking must be related to something that must be met or implemented by the person to whom the undertaking is made (mau'ud);
3. the thing promised (mau'ud bih) may not conflict with shari'a;
4. the contents of point 2 may also not conflict with shari'a; and
5. the mau'ud must already have met or implemented the condition in point 2.