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Islamic Finance


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What is the Difference Between Ijarah and Ju’alah?


Ijarah, by definition, is a contract of lease whose subject matter is a known service (khedmah), and in which the consideration (badal) becomes due on an incremental basis in proportion to the passage of time and effort exerted (services provided).

On the other hand, ju’alah is a contract of service whereby a party commissions another (a worker) with a task whose achievement is probabilistic rather than sure- i.e., the task may be achieved or may be not), and task undertaker (the worker) is entitled to the agreed amount (ju’l) only if the task is achieved.


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