Settlement of Debts by Set-Off : Appendix C - Definitions

Transcription

1. Shari ’ah Standard No. (4): Settlement of Debts by Set-Off Appendix (C) Definitions Debt and Loan A debt is any liability that is not in terms of a specified or defined item, whatever the cause of its establishment, i.e. whether its origin is in cash or in a commodity, or in a particular described benefit such as the benefit of using particular things or services of persons. For instance, the consideration in deferred sales and loans is described as a debt. The relationship between a loan and a debt is that the latter is more general than the former, since every loan is described as a debt but the converse is not true. Not all debts originate from a loan. In this sense, a loan is but one cause of the creation of debt. Due Debt A due debt is a debt that is immediately payable or that is payable on the creditor’s demand, whether on its original due date or, if it has been rescheduled and deferred, on its rescheduled due date. Deferred Debt A deferred debt is a debt the payment thereof is due at a certain time in the future, and it may also be due in periodic instalments over time. Description A description is a condition that distinguishes particular specimens of the same species from one other. For examples, conditions such as good quality and poor quality, or mortgage of security or personal guarantees, letters of guarantee and the freezing of the amount of cheques for payment which are attached to the debt are considered descriptions. Ibra` (discharge) An act by a person to discharge another person from a liability (owed by the latter to the former) 117
2. Shari ’ah Standard No. (4): Settlement of Debts by Set-Off Reconciliation (Sulh) An agreement to solve dispute between parties. Iqalah (Mutual Rescission of Contract) Revocation of a contract and cancellation of its effects with mutual consent of both parties. 118