SS 15 – Jua’lah

The purpose of this standard is to elaborate the definition of Ju’alah, to distinguish it from Ijarah, to describe its elements, conditions, legal status in the Shari’ah, fundamental rules, and applications in the transactions of Islamic financial Institutions (Institution/Institutions), irrespective of the institution acting as the general offeror (demanding performance) or as the worker (under an obligation to perform), even when this is through another, parallel Ju’alah.

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

Scope of the Standard

This standard sets out fundamental rules of the Shari’ah on Ju’alah and its application in activities for which the extent of the work required cannot be precisely determined for it continues throughout the determined period. It is for this reason that it does not cover the contract of Ijarah for employment/service or leasing, just as it does not cover maintenance contracts or stipulations of maintenance in relation to other contracts, such as the requirement of maintenance in a sale contract or an Istisna’a contract (construction contract). 2. 2. Definition of Ju’alah

Definition of Ju’alah

Ju’alah is a contract in which one of the parties (the Ja’il) offers spec- ified compensation (the Ju’l) to anyone (the ’Amil) who will achieve a determined result in a known or unknown period. 3. 3. Permissibility of Ju’alah

Permissibility of Ju’alah

Ju’alah is permissible deeming the determination of the end result to be realised through it as sufficient, and it is not affected by the uncertainty that prevails with respect to the subject-matter of the contract, that is, the work to be done. It is for this reason that Ju’alah is suitable for activities for which Ijarah, which requires that the desired work be clearly specified, is not.