IQIF Practice Questions - IBFIM Intermediate Qualification In Islamic Finance Exam

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According to the Shariah standards of Bank Negara Malaysia, how does a Wa'ad (unilateral promise) differ from a Mu'ahadah (bilateral promise/agreement) in terms of its binding nature?

Wa'ad is binding only if it is written, whereas Mu'ahadah is binding even if oral. Wa'ad is binding on the promisor upon execution, whereas Mu'ahadah is not binding until cash is exchanged. Wa'ad is a unilateral promise binding on the promisor, whereas Mu'ahadah is a bilateral promise that may lead to a contract and is binding on both parties once agreed. Wa'ad is morally binding only, whereas Mu'ahadah is legally enforceable in Shariah court.

Correct Answer:

Wa'ad is a unilateral promise binding on the promisor, whereas Mu'ahadah is a bilateral promise that may lead to a contract and is binding on both parties once agreed.

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