The table below gives a comparison of Hawalah, Wakalah, and Kafalah based on various resources, including academic publications and industry reports published by professional associations. These three service-based contracts were compared and contrasted according to three main characteristics: the definition, legality and condition of each contract. In some cases, specialized intermediaries are needed to conclude contracts on behalf of their clients or to dispose of their clients` assets. Trade could stop if businessmen and merchants could not use the services of agents and were expected to do everything themselves. 1. Guarantor who is in his good spirit, has legal capacity and gladly gives his consent and consent to the contract. 2. The principal debtor must be a person capable of entering into a contract and must voluntarily consent to the transfer of the debt, i.e. no coercion should be required because coercion invalidates the transfer. Wakalah refers to a contract in which a party (Muwakkil) authorizes a party other than its representative (wakil) to perform a specific task in matters that can be delegated, either voluntarily or by charging a fee of 1. The language of the contract must be intended for the offer and acceptance of the transfer of debts and may be oral or written. AAOIFI (2010) Shariah Standard No.
23 defines Wakalah as “the act of a party delegating the other to act on its behalf, which may be an object of delegation.” Muslim scholars have reached a consensus on the admissibility of Wakalah, based on the evidence of the Qur`an and the Sunnah of the Prophet Muhammad (peace and blessings of Allah be upon him). This is because people need support to perform certain tasks that they cannot do on their own. The main purpose of an agency contract (Wakalah) is to facilitate economic exchanges and transactions between a client and third parties if the client is unable to do so personally or is unwilling to do so himself. Similarly, the agency contract is also required because the client does not have the knowledge, expertise or time to perform certain tasks several times. In such a situation, he must delegate someone who assumes certain responsibilities on his behalf. For example, a real estate agent is hired to sell or buy a particular property on behalf of the client. The agency contract is also required in some cases where someone deals with different clients in their different locations. For example, Takaful agents (Islamic insurance companies) or travel agencies are hired to serve different customers in different locations. There are other opinions regarding the terms of the Hawalah Treaty, but the author mainly emphasizes the opinion of the Hanafites. Wakala deposit is usually referred to as a Shariah-compliant contract, in which the client authorizes an Islamic bank to invest their money in Shariah-approved activities in order to make a profit. The agency contract (Wakalah) can be divided into two types: general agency and specific agency The effect of Hawalah is that the creditor can no longer demand debts from the original debtor, since the claim must be made against the new debtor, which is mentioned in the Hawalah 3 contract. The article of the Treaty of Wakalah must be known to the agent and it is not permissible to delegate anyone to do unknown things.
More recently, AAOIFI Sharia Standard No. 5 has established that safeguards are allowed with respect to exchange agreements and property agreements. The word “Wakalah” literally has several meanings, including feeding, delegating, authorizing, preserving, and performing a task on behalf of others. Technically, Wakalah refers to a type of contract where one person (the principal) delegates another person to perform certain tasks on their behalf. In other words, it is an agency contract that authorizes an agent to conduct and conduct certain business on behalf of a principal. There are two parties to the Treaty of Wakalah: the client (also known as Muwakkil) and the agent (also known as Wakeel). Basically, Wakalah is a kind of responsibility, while the agent must perform his delegated task in the same way that the trustee fulfills his responsibility. There are various legally recognized forms of financing contracts in Islam, and Hawalah, Wakalah and Kafalah are the three most commonly used concepts in modern Islamic banking. To a large extent, Hawalah and Wakalah are similar in that these contracts involve the transfer and control of risk. The main difference between Hawalah and Kafalah is that the principal debtor is released from debts under the Hawalah Treaty, while Kafalah is not. There are four (4) conditions related to the basis of the Wakalah Treaty Of ijma`, the lawyers agreed that Wakalah is allowed and recommended, based on the concept of ta`awun.
If the payment is not mentioned, in this case it is referred to the practice of the people. For example, a lawyer or broker is entitled to his salary based on people`s common practice. Wakalah is a non-binding contract. A general body is a type of contract in which a principal delegates to an agent full authority to carry out a series of transactions on his or her behalf. For example, a client may hire an agent to buy the house, rent it to others, and collect the rent monthly. A business manager could be an example of a general agency. Because he has full authority to perform a number of tasks on behalf of the company. The proof of admissibility is derived from the text of the hadith and the ijma of Al-Quran.
One of the texts reads as follows: “. So send one of you to the city with this silver coin from you and let him see what the best food is and bring you supplies from it… (Sura AlKahf, verse 19) Hawalah means “change” or “transfer” and generally refers to the transfer of debts from the original debtor to the legal entity. In Kafalah, there are four (4) basic rules and conditions that the parties must abide by when the representative acts under certain conditions; For example: Keep buying the house at a certain price and at a certain time. Kafalah is an Arabic word for responsibility, accessibility or guarantee. It is often an action of someone who adds up to another person and commits to taking responsibility with person 4. The offer and acceptance may be expressed orally or through appropriate documents or other methods accepted by normal business practices and not in violation of the principles of Sharia law. Wakala is widely used in Islamic finance, where a representative is appointed to carry out transactions on behalf of another person. The Agency Act or wakala Law aims to facilitate economic exchanges if they are hindered by distance, size and number or if the client is unable or unwilling to act personally.
Ibn Al-Qudamah defines Kafalah as a combination of the responsibility of the guarantor with the responsibility of the guarantee. Thus, guilt would be fixed on both Wakala refers to the concept of a businessman ordering another to act in his place or as his representative. It has long been customary to appoint an agent to facilitate business transactions. Wakala is the most important element in Islamic partnerships and also in modern law, the relationship between partners is called the principal-agent relationship. 4. Guaranteed Item or Asset. This asset must be a real asset that can be confiscated by the guarantor. It should be property that is legally owned and can be sold if the debtor fails to comply with its obligations. If no conditions are defined for the transaction; For example, the agent does not receive a specific price or time. 2.
Debtor, he does not have legal capacity and may even be a minor, mentally ill or bankrupt. 5. Debts must be fungible and must be binding. If this debt meets both conditions, the debt can be transferred. (1) The Muwakkil approves a particular Wakil and informs him of his appointment. According to AAOIFI Sharia Standard No. 5, Kafalah are guarantees intended to guarantee obligations and protect the amount of debt, either from irretrievability or default The hadith reported by Al-Bayhaqi, in which the Prophet صلى الله عليه وسلم said: “The delinquency of wealthy debtors is a form of transgression, that is, when one of you has transferred his debt to a rich person, let him accept the transfer of debt” (Narrated by Ahmad and the author of six books of the Hadith, as well as by Ibn Shaybah and Al-Tabarani in his `Awsat on the Authority of Abu Hurayrah).. .