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The question

Is the penalty clause which stipulates that all bonds become due upon delay in paying any installment considered a late payment fine?

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Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

A "fine" is a loss, and in financial terms, it is what is required to be paid as a disciplinary measure or compensation, or it is the legal penalty resulting from a violation of the law. The Islamic Fiqh Academy has permitted penalty clauses in all financial contracts, except for contracts where the original obligation is a debt, as this constitutes clear usury. The Academy also permitted the acceleration of all installments upon the debtor's failure to pay any due installment, unless the debtor is in financial hardship. Therefore, the stipulated condition is valid.

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

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Where this answer came from
Source platform
Ftawy
Original fatwa ID
109413
Added here
. This is when the answer was added to El Fatwa, not the fatwa's date.
Text
Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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Read the full answer on Ftawy