Salient features of wakalah

Disclosure of the agent’s authorization:

When the agent goes into an exchange with a third party and reveals that he is following up for the
principal– the rights and obligations emerging from that exchange (huquq al-'aqd) must be expected by
the principal; and any planned impact of the exchange (hukm al-'aqd) went into by the agent according
to the approval will be official on the principal. When the agent goes into an exchange with a third party
and doesn't reveal that he is following up in the interest of the principal – the rights and obligations
emerging from that exchange must be expected by the agent; and any proposed impact of the exchange
went into by the agent compliant with the approval will be official on the principal.

Dual Agency:

According to section 14.3 where an arrangement involves more than one principal as contracting parties
(whether or not the arrangement involves one or more transactions such as seller and buyer or lessor
and lessee), the agent may act for all of the principals. A person, in his capacity as agent for one
principal, may enter into a subsequent transaction with himself as the other contracting party (such as
the purchaser under a tawarruq deposit or the seller under tawarruq financing). According to Section
14.5 , a person shall perform the role as a dual agent , provided that the rights, liabilities and
responsibilities of the contracting parties, including the specification of the authorized tasks of the agent
is determined upfront, agreed by the principal(s), made known to and accepted by the agent. All of the
principals must agree to the appointment of the agent to act on their respective behalf.

Appointment of second agent or sub-agent/ another agent:

The principal may agree to the agent delegating another agent for the foremost's sake; or the
agent selecting another agent (sub-agent) for himself (introductory agent) to play out all or any
piece of the assignment. As indicated by section 14.8; the agent will not select a subsequent
agent or representative his job to a sub agent aside from with the assent of the guideline. At
the point when the principal selects more than one agent and means for the agent to act
together-the guideline should unequivocally uncover the aim; and every one of the agents must
play out the assignment together with different agents as ordered by the principal.
Rights and obligations of agent:

 The agent must watch the general enthusiasm of the in wakalah mutlaqah where the particular
condition on the topic has not been resolved.

 In the occasion of agent's offense (ta'addi), carelessness (taqsir), or penetrate of indicated

terms (mukhalafah al-shurut), the agent will be obligated and will make up for misfortune or
harm including any genuine expense endured by the principal.

 In the occasion that a penetrate of indicated terms brings about increases to principal, for
example, selling at a more significant expense or purchasing at a lower cost than that the agent
was approved for, the agent will reveal this to the principal and should not hold any segment of
the additions without the assent of the principal.
Wakalah Expense:

 A wakalah contract may be arranged for a fee (wakalah bi al-ujrah)

 If the wakalah contract is organized with an expense, the agent is qualified to get the
wakalah charge for completing the approved undertaking or matters that have been
appointed to him.
 The wakalah expense must be resolved and concurred at the hour of going into the
wakalah contract.
 The wakalah charge might be concurred as a fixed sum or as a rate proportion of a
specific sum or a sum connected to a benchmark.
 The wakalah charge might be paid in a way that is commonly concurred by the
 Contracting parties, for example, in one singular amount or in a few installments.
 In addition to the wakalah expense, the contracting gatherings may consent to an extra
charge, far beyond the first concurred charge (execution charge).
 The execution charge might be as abundance of a specific limit set for the approved
assignment.
 If the wakalah contract includes sub-agent, the principal and the underlying agent may
concede to the gathering that should pay the wakalah expense for the sub-agent.
 The agent may forgo his entitlement to the expense.

Application Of Wakalah with other contracts:

The wakalah contract may be applied with other contracts or arrangements including the
following:

 exchange-based contracts such as murabahah, Istisna`, and ijarah;

 partnership contracts such as Musharikah and mudarabah;
 murabahah to purchase ordered;
 ijarah muntahia bittamlik; or
 tawarruq

Arrangement of wakalah with kafalah:

An agent in a wakalah agreement may go into a different kafalah agreement to ensure the
exhibition of an third parties commitment towards the principal. As per segment 18.2 where an
agent goes into a different kafalah contract in agreement to section 18.1, the agent will at that
point expect the job of an underwriter (kafil). Wakalah 9 of 20 Issued on: 24 June 2016 area
18.3 states if a game plan includes wakalah and kafalah contracts is archived in one lawful
documentation, the accompanying conditions must be satisfied:

 Such arrangement is consistent with the inherent nature of wakalah and kafalah
respectively.
 The validity of wakalah and kafalah is not made contingent to the other; and
 The agent must not guarantee his own performance under a wakalah contract or
the investment capital or return under a wakalah for investment (wakalah bi al-
ishtithmar).

Arrangement of wakalah with rahn:

A wakalah contract may be arranged with collateral (rahn). According to section 19.2 the
collateral under a rahn contract shall only be liquidated in the event of misconduct, negligence
or breach of specified terms by the agent under its wakalah contract.
Application of wakalah bi al-istithmar
A wakalah agreement might be gone into with the end goal of venture (wakalah bi al-
istithmar).The agent must not ensure the capital or profit for the interest in any structure. In
case of agents’ wrongdoing, carelessness, or break of indicated terms that outcomes in a lower
benefit rate than the normal benefit pace of such venture, the agent will-

 Repay the investment capital.

 Pay the actual profit up to the event of breach.
 Compensate such loss and damage which the principal is entitled to.
For the evasion of uncertainty, break of determined terms alluded to in section 20.3 incorporates, yet
not restricted to, penetrate of the accompanying terms:

 the support will be put resources into such a way, that creates a specific expected benefit rate
and the operator breaks that condition which brings about a lower benefit rate than the normal
benefit; or
 the support will be put distinctly in a particular instrument or portfolio and the agent breaks the
condition by putting resources into another instrument or portfolio which brings about a lower
benefit than the normal benefit of the predetermined instrument or portfolio.

As indicated by section 20.5 in the occasion a break of condition brings about benefit to be
higher than the concurred anticipated benefit, the abundance benefit will be treated as per the
concurred terms and states of the presentation expense. On the off chance that the terms and
conditions are not specified, the principal will have the prudence to give the exhibition charge.
Wakalah 10 of 20 Issued on: 24 June 2016. The head under the wakalah bi al-istithmar
agreement may require the specialist to organize an autonomous outsider assurance on the
capital. With the end goal of passage 20.6, the accompanying prerequisites must be watched:

 The ensure will be executed as a different agreement to ensure misfortune or

consumption of capital; and
 Where the outsider underwriter is an element, it will not be a related gathering to the
specialist.
Dissolution (FASAKH) and completion (INTIHA’) of wakalah:
The principal may consent to the agent holding all or part of the abundance benefit as
execution expense if the genuine benefit is higher than the concurred anticipated benefit. If the
real benefit is lower than the concurred anticipated benefit, the specialist may offer hibah to
the principal to make up for the distinction. Such hibah must not be made compulsory other
agent. The agent may start the venture by propelling his own assets with the assent of the
principal. Regarding section 20.11, such progression by the agent must not be made as a pre-
condition for going into the wakalah contract. One the off chance that the agent puts aside a
segment of the speculation benefit as stores for the principal –

 the agent must get the principal’s earlier assent; and

 all benefit held in such holds has a place with the principal.

In the event that the capital gave under wakalah bi al-istithmar contract is to be contributed
together with different pools of assets having comparative orders, the capital must have the
option to be isolated from different pools of assets.
Dissolution of wakalah
 A wakalah contract shall dissolve under any of the following circumstances:
 demise, dissolution or loss of legal capacity of the principal.
 demise, dissolution or loss of legal capacity of the agent if the wakalah
 contract stipulates that the task shall be personally performed by the agent; the
principal loses his right to the subject matter of the wakalah.
 both contracting parties mutually agree to terminate the wakalah contract; the
principal exercises the option to terminate the wakalah contract due to misconduct,
negligence or breach of specified terms of the contract by the agent.
 the agent withdraws from the wakalah contract due to breach of Issued on: 24 June
2016 specified terms of the contract by the principal.
 Upon dissolution of the wakalah contract, any asset or rights entrusted with the agent
shall be returned to the principal, and the agent shall be entitled to a wakalah fee based
on the market rate for a similar task, or a fair portion of the agreed fee that
 commensurate with the task performed, or any rate mutually agreed between the
contracting parties

Completion of wakalah:

 A wakalah contract completes upon fulfilment of all obligations of the contracting parties
under the wakalah contract which include settlement by the principal of the wakalah fee.
 Satisfaction of the wakalah fee may be made through any of the following methods:
(a) full payment of the agreed sum by the principal;
(b) waiver of right to receive the outstanding wakalah fee by the agent;
(c) set-off (muqassah) of obligations between the contracting parties; or
(d) transfer of the obligation to pay the fee to a third party through transfer of debt
(hiwalah al-dayn).
 Upon completion of the wakalah contract, the contracting parties are free from any
contractual obligations under such wakalah contract1

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