Assessment of Ta’widh and Gharamah in Islamic Financing Contract and Its Applicability Potential for Construction Works Contracts

Authors

  • Noor Aishah Mohamad Hamdan Department of Quantity Surveying, Faculty of Architecture, Planning and Surveying, Universiti Teknologi MARA, Perak Branch, Seri Iskandar Campus, Seri Iskandar, 32610 Perak, Malaysia,
  • Azila Ahmad Sarkawi Kuliyyah of Architecture and Environmental Design, International Islamic University Malaysia, Malaysia
  • Kuliyyah of Architecture and Environmental Design, International Islamic University Malaysia, Malaysia Kuliyyah of Architecture and Environmental Design, International Islamic University Malaysia, Malaysia
  • Ahmad Azam Othman Ahmad Ibrahim Kuliyyah of Laws, International Islamic University Malaysia, Malaysia

DOI:

https://doi.org/10.21834/ebpj.v5i15.2504

Keywords:

ta’widh and gharamah, late payment, interest,construction

Abstract

Ta'widh and gharamah are the Shariah compliant late payment charges primarily used for Islamic financial contracts. Seven identified themes were used to qualitatively compare and contrast between the Guidelines on Late Payment Charges for Islamic Banking Institutions (2012) against the provisions of interest for late interim payment from four Malaysian construction works contracts. The findings revealed similarities and differences for identification of Shariah compliance. Recommendations were made for the harmonisation of ta’widh and gharamah in the construction works contracts while ensuring its practical and legal applicability. The outcome is beneficial for Islamic organisations and Muslims involved with the construction works.

 Keywords: ta’widh and gharamah, late payment, interest,construction,

eISSN: 2398-4287© 2020. The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open access article under the CC BYNC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians) and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia.

DOI: https://doi.org/10.21834/ebpj.v5i15.2504

Published

2020-12-25

How to Cite

Mohamad Hamdan, N. A., Ahmad Sarkawi , A. ., Abdullah Habib , S. N. H. ., & Othman, A. A. . (2020). Assessment of Ta’widh and Gharamah in Islamic Financing Contract and Its Applicability Potential for Construction Works Contracts. Environment-Behaviour Proceedings Journal, 5(15), 255-262. https://doi.org/10.21834/ebpj.v5i15.2504

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