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Participatory Contracts Based on an Interest-Free Banking System and Their Implied Conditions: A Jurisprudential and Legal Perspective
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Hossein Eslami1   , Sayyed Mahdi Mirdadashi Kari2 , Ebrahim Delshad3 |
1- PhD student
2- Associate. , sm.mirdadashi1351@iau.ac.ir
3- Associate |
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Abstract: (4 Views) |
Participatory contracts within the interest-free banking system are considered key instruments for resource allocation, structured upon contractual partnerships between capital owners. Despite their standardized nature, the inclusion of unilateral and inequitable terms in these contracts has led to the neglect of customer rights and raised significant jurisprudential and legal challenges. This study, adopting a descriptive-analytical approach, examines participatory contracts and their implied conditions based on the principles of Imamiyyah jurisprudence, Iranian civil law, and judicial practice. The findings indicate that obstacles such as the lack of jurisprudential evolution in line with modern banking systems, the absence of effective implementation mechanisms for Islamic banking, and the incorporation of terms contrary to the inherent nature of contracts have collectively contributed to deviations from the objectives of interest-free banking. Furthermore, an analysis of sample contracts and judicial rulings reveals critical flaws, including the disbursement of non-compliant facilities, the use of blank signed forms, and the provision of new financing for the settlement of prior debts—factors that have resulted in inconsistent judicial decisions. In conclusion, a proposed model is introduced: the separation of participatory contract funds from commercial banks and their transfer to dedicated investment institutions, aiming to fully meet productive and economic development needs. Implementing this model necessitates a comprehensive revision of the Law on Interest-Free Banking Operations and the effective utilization of the country’s jurisprudential, legal, and executive capacities.
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Article number: 4 |
| Keywords: Participatory Contracts, Riba (Interest), Bank Interest, Islamic Banking, Implied Contractual Conditions, Banking Contracts, Transaction Jurisprudence, Iranian Civil Law |
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Full-Text [PDF 420 kb]
(2 Downloads)
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Article type: Research |
Subject:
Special
Received: 2025/09/17 | Accepted: 2025/11/11 | Published: 2026/05/31
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