What is the ruling on working in a management that concludes contracts containing clauses stipulating late payment fees upon non-payment of rent, and late payment penalties (3% of the contract value) in supply contracts?
First item: It is impermissible, because the penalty (interest) is Riba al-Jahiliyya (pre-Islamic interest). If the rent is established as a debt, it is not permissible to increase it upon delayed payment.
Second item: This is a penalty clause in a supply contract, and it is permissible for the supplier if the other party does not fulfill their commitment or is delayed, provided that its estimation is based on the actual damage incurred by the affected party, and there is no valid excuse for the other party.
Regarding a person's work in this administration: If their work directly involves forbidden and invalid contracts, then it is not permissible; otherwise, it is permissible.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- 162224
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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