SS 51 – Options to Revoke Contracts Due to Incomplete Performance

This Standard aims to explain the situations in which buyers have the option to revoke contracts due to reasons of defect, deal fragmentation and breach of description and how such options are exercised in the activities of Institutions.

The word (Instit ution/Institutions) is used here to refer, in short, to Islamic financial institutions including Islamic Banks.

Scope of the Standard

This Standard covers options to revoke contracts due to reasons of defect, deal fragmentation and breach of description. It does not cover options to revoke arising from breach of trust (dishonest inducement, deception and overcharging) or options of due diligence (cooling-off options, and options to revoke due to non-payment) as they have separate Shari’ah standards dedicated to them. 2. Option to Revoke Due to Defect