SS 38 · Trade

SS 38: Online Financial Dealings

What this standard is about

Islamic contracts were designed in an age of face-to-face trade. Today, deals are made on websites and apps. This standard confirms that online contracts are valid in Islamic law and sets the rules for them: how offers and acceptances work on a screen, when exactly an online contract begins, how possession works for things bought online, and how institutions must protect customers who deal with them electronically.

It covers commercial websites used for contracting, online access services (such as internet banking subscriptions), the rules of the contract session, and the expression of offer and acceptance in digital form.

Why it exists

Without clear rules, every online Islamic transaction would be open to dispute: did the customer really agree? When did the deal start? Did the buyer truly take possession? The standard answers these questions so that online banking and trading rest on the same solid ground as traditional dealing.

The key rules, simply put

Launching a commercial website for contracts is allowed, as long as the site avoids forbidden activities.
Online contracts are valid if they follow the same Shariah rules that apply to ordinary transactions.
Offering online access services (for example, internet banking) on a subscription basis is permissible, including under shared-hiring arrangements.
Institutions must take steps to prevent their online services from being used for forbidden purposes.
A contract session held by live audio or video follows the same rules as a face-to-face session.
Written online communication (messages, emails) is treated like contracting by correspondence, with defined rules for how long an offer stays open.
An offer and acceptance can take any form that shows mutual consent — there is no required wording.
A detailed message that clearly states rights and commitments counts as an offer. A conditional or vague message counts only as an invitation to deal.
Clicking "accept" is a valid acceptance, as long as the website does not ask for a further confirmation step.
The contract takes effect the moment the offer is accepted — even if the offeror has not yet learned of the acceptance.

An everyday example

A customer applies for Islamic home financing through the bank's website. He reads the terms, fills in the form, and clicks "I accept." Under this standard, his click is a valid acceptance, and the contract is concluded at that moment — provided the underlying financing itself follows Islamic rules.

Words to know

Halal — permissible under Islamic rules.
Majlis al-aqd — the contract session: the setting (physical or virtual) in which offer and acceptance meet.
Offer and acceptance — the two statements ("I sell / I buy") that conclude a contract.
Qabd (possession) — taking control of what was bought, physically or constructively (for example, through registration).

Source

AAOIFI Shariah Standard No. 38 — full text in the 2015 Shariah Standards book — https://aaoifi.com/download/24233/