The transfer (assignment/ hawala) of debt from one party (the debt transferor, or muheel) to another (the payer, debt obligor or muhal alaihi) to the benefit and order of the creditor (the debt transferee or muhal). The debt obligor is the party that accepts the debt transfer by the debt transferor, i.e., the original indebted party who transfers the debt to the debt obligor who, in turn, accepts the obligation to pay the transferred debt.
Hawala is a binding contract/ aqd lazim, i.e., it cannot be terminated unilaterally, but rather both parties have to agree termination in order for it to be effective. Shari’a requires that a transfer of debt come into force immediately. This means that it neither can be suspended for a period of time nor be contingent on a future occurring.
Notwithstanding, it is permissible to defer payment of a transferred debt to a preset future date.
Hawala is typically classified as restricted hawala and unrestricted hawala.
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