The Issue of sequence and Pre-Signingin Contract Execution: A Comparison of Shari'ah Rules and Current Practice

The Issue of sequence and Pre-Signingin Contract Execution : A Comparison of Shari'ah Rules and Current Practice
Assoc. Prof. Dr. Asmadi Mohamed Naim, Islamic Finance and Banking Unit, College of Business, Universiti Utara Malaysia (UUM)
ISRA Research Paper (No. 12/2010)

"Pre-signing refers to the event in which the customer signs a series of Shari'ah transactional documents (including legal documents) at a single sitting; and, thereafter, the bank shall sign the same documents at a separate sitting on a later date. Pre-signing of all the transaction documents is a questionable issue, as it represents a departure from the familiar sequence of offer and acceptance. The aim of this paper is to evaluate the current practices of Islamic banks in conducting pre-signing and analyze the Shariah implications. In doing this, the paper first discusses the pillars of contracts in the Shari'ah and reviews some fatwas on pre-signing. It then shares the findings from a survey conducted on pre-signing practices by Islamic banks in Malaysia. In the analysis section, four situations of pre-signing are highlighted and the Shariah implication of each is discussed."

The Issue of sequence and Pre-Signingin Contract Execution: A Comparison of Shari'ah Rules and Current Practice