Pawning - Rahn


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Islamic Jurisprudence about Pawning (ar-Rahnu)

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Pawning - Rahn

  1. 1. Rahn/Pawning<br />1<br />
  2. 2. Definition<br />Arabic Term: Constancy, or to holding and binding ness<br />Legally: holding an item in liau of a legal right that may be satisfied from that item<br />Shafii: Taking a non-fungible property as insurance against a fungible debt, whereby the debt may be extracted from the held property if it is not repaid<br />The Hanbali: The contract thus a Pawned object is a property used as insurance for a debt, so that the debt may be extracted form the property if it is not possible to recollect from the debtor<br />2<br />
  3. 3. Definition (2)<br />Maliki: it is the act of taking a valued property from its owner, as a means of insuring a loan that ha matured or is about to mature<br />3<br />
  4. 4. General Characterization<br />voluntary charitable contract (Tabarru&apos;)<br />gifts, simple loans, deposits, loans, ad pawning<br />the necessity of delivery to make the contract final follows from the voluntary charitable nature of the contract<br />a juristic rule: &quot;voluntary charitble acts are not fully concluded prior to receipt&quot;<br />4<br />
  5. 5. Forms of pawning<br />A pawning may originate with the debt-generating contract<br />All Jurists render such a valid<br />A pawning may originate after the debt is established<br />Jurists also agree that is valid<br />A pawning may also be originated prior to establishment of a debt<br />valid - malikis and hanafis - analogy with guaranty<br />not valid - shafiis and most of the Hanbalis - view that insurance of a legal right may not precede its establishment - analogy to testimony<br />5<br />
  6. 6. Legality<br />Quran: Al baqarah: 283.<br />Hadith: &quot;The prophet bought some food from a jew, and he pawned his iron shield with him&quot; or &quot; the prophet pawned a shield with a Jew in Madinah, and he took from him some barley for his family&quot;.<br />hadits Abu Hurayrah: &quot;pawned riding animals may be mounted in exchange for their expenses, and the milk of pawned dairy animals in exchange for their expenses; and the one who rides or drinks is thus responsible for the animal&apos;s expenses&quot;.<br />6<br />
  7. 7. Legality (2)<br />Ijma: Muslims have also reached a consensus that pawning is permissible.<br />7<br />
  8. 8. Cornerstones, components and conditions <br />8<br />
  9. 9. the debtor<br />9<br />
  10. 10. the creditor<br />10<br />
  11. 11. the pawned object<br />11<br />
  12. 12. the debt<br />12<br />
  13. 13. hanafis: offer and acceptance<br />13<br />
  14. 14. non hanafis<br />contracting parties<br />Eligibility<br />hanafi and maliki - same as eligibility of sales<br />shafii and hanbali - same as those trading or making charitable contributions<br />contract languages<br />hanafi: a pawning contract may neither be suspended by any condition, nor deferred to a future date<br />Shafiis<br />Valid conditions<br />Nugatory conditions<br />Conditions that render dhe contract defective<br />14<br />
  15. 15. non hanafis (2)<br />underlying debt<br />hanafi<br />Must be binding and matured as a liability on the debtor<br />the pawned object must make it possible for the creditor to extract repayment of his debt<br />must be known to all parties<br />Shafii and Hanbali<br />The liability must be an established and matured fungible debt<br />the debt mus be matured or about to be matured<br />the debt must be known in amount and characteristics<br />Maliki<br />All fungible binding liabilities are eligible for use in pawning contracts except for two: (1) the price of salam, and (2) part of a currencies exchange contract<br />15<br />
  16. 16. non hanafis (3)<br />pawned object<br />is a property of the debtor that is held by the creditor in lieu of the underlying debt<br />eligibility for sale<br />being a property<br />being valued<br />being known<br />being owned<br />not being attached<br />being separate<br />being clearly identified<br />16<br />
  17. 17. Receipt of the pawned object<br />legality<br />All jurists agree that receipt is a condition in the pawning contract, based on the verses (2:283)<br />they differed over the classification of this condition as one of contract completion or as a bindingness condition<br />Jumhur Non Maliki: ruled that receipt is not a validity condition in a pawning contract, but rather deemed it a condition of bindingness.<br />Maliki: ruled that receipt is a condition of contract completion, and not a condition of validity or binding ness.<br />17<br />
  18. 18. Receipt of the pawned object (2)<br />means of recepit<br />immovable real estate is established either through physical receipt or through removal of impediments to such receipt<br />movable pawned objects<br />Most hanafis: removing impediments to receipt of the pawned objects<br />Abu Yusuf, Shafii and Hambali: that the receipt in pawning is the same as receipt in sales, which requires only granting access for real estate and other immovable objects, but ruquires physical receipt for movable objects.<br />18<br />
  19. 19. Receipt of the pawned object (3)<br />conditions of receipt<br />permission of the debtor<br />Eligibility of contracting parties<br />permanency of receipt<br />19<br />
  20. 20. specific consequences of pawning conditions<br />Pawning an unidentified property share<br />Pawning connected or occupied properties<br />Pawning fungible liabilities<br />Pawning leased or lent non-fungibles<br />Pawning Borrowed items<br />Pawning the property of others<br />Pawning a pawned item<br />pawning part of an indebted estate<br />Pawning perishables<br />Pawning fruit juices<br />20<br />
  21. 21. specific consequences of pawning conditions (2)<br />Pawning religious books<br />21<br />