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Islamic Finance


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Uqud al-Isqatat


Arabic (عقود الإسقاطات) for contracts (uqud– plural of aqd) that are designed to release a party from a specific obligation. Isqat (إسقاط) involves the waiver/ dropping of rights against others (debtors, borrowers, etc.) whether gratis (without charge) or for a specific consideration in return. Release without charge or compensation is an absolute release (isqat mutlaq) which may take the form of release from debt (dayn/ dain), repudiation, dropping of retaliation penalties (such as talion), waiver of the pre-emptive right (haqq al-shufa’ah), etc. Release with charge (isqat bi iwadh) involves a commutative exchange (i.e., the other party will have to pay or present some consideration/ compensation in return for the release).


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