bare ownership

The right of ownership to an asset without the right to its usufruct.

Ijarah

A contract whereby the lessor transfers to the lessee in return for a payment or series of payments the usufruct of an Ijarah item for an agreed Ijarah period, with terms mutually agreed by the contracting parties.

Ijarah item

An item whose usufruct is the subject of Ijarah. The usufruct of an item may be the subject of Ijarah as long as the item is not derived from, does not involve the use of, and is not used to produce elements contrary to Shariah. Examples of items which may be contrary to Shariah are stolen vehicles, vats for producing alcoholic beverages, or slot machines for gambling.

Ijarah period

The duration of time over which the lessee is contracted to Ijarah an item from the lessor.

lessee

The party in an Ijarah contract receiving the usufruct of an item. Translated from the Arabic term "musta'jir".

lessor

The counterparty in an Ijarah contract giving the usufruct of an item. Translated from the Arabic term "muajjir".

reversionary interest

The residue of the Ijarah item that would revert to the lessor at the end of the Ijarah period.

Shariah

Islamic laws derived from Al-Quran and As-Sunnah.

usufruct

The right to use and enjoy the benefits accruing from an Ijarah item, so long as that use or enjoyment does not alter or diminish the essence of the item.