Is leasing and contract hire permissible?

Q: Is leasing and contract hire permissible?

الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب

A: Leasing is a mode that is an acceptable form of trade in Islam. However, it is important that conditions of the lease contract do not contravene Shariah principles. Conventional leases and contract hire agreements tend to violate Shariah principles in at least one area, via the condition of interest in the event of delayed payment. There can also be other anomalies such as requiring the lessee to insure the asset and/or pay an excess in the event of loss. If the lease contract is free of such conditions it can be Shariah compliant.


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