Murabaha Agreement Template: A Comprehensive Guide

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A murabaha agreement is a contract that outlines the terms and conditions of a sale between two parties, where one party (the seller) purchases an asset and then resells it to the other party (the buyer) at a markup. This markup is the seller’s profit. The agreement is based on Islamic law and is often used in Islamic finance.

Key Components of a Murabaha Agreement Template

Murabaha Facility Agreement  PDF
Murabaha Facility Agreement PDF

A well-structured murabaha agreement template should include the following essential components:

1. Parties to the Agreement

Seller: The party who purchases the asset and resells it to the buyer.

  • Buyer: The party who purchases the asset from the seller.

  • 2. Description of the Asset

  • Detailed description: A clear and comprehensive description of the asset being sold, including its specifications, condition, and any relevant documentation.
  • 3. Purchase Price

    Cost price: The price at which the seller purchased the asset.

  • Markup: The profit margin added to the cost price to determine the selling price.
  • Selling price: The total price at which the seller will sell the asset to the buyer.

  • 4. Payment Terms

    Payment schedule: The agreed-upon timeline for the buyer to make payments to the seller.

  • Payment methods: The acceptable methods of payment, such as cash, check, or electronic transfer.
  • Late payment penalties: Consequences for late payments, including interest or fees.

  • 5. Delivery Terms

    Delivery date: The agreed-upon date for the seller to deliver the asset to the buyer.

  • Delivery location: The place where the asset will be delivered.
  • Risk of loss: The party responsible for the asset during transportation.

  • 6. Default and Remedies

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    Default: The circumstances under which either party may be considered in default of the agreement.

  • Remedies: The actions that either party may take in response to a default, such as termination of the agreement or seeking legal remedies.

  • 7. Dispute Resolution

  • Dispute resolution mechanism: The agreed-upon method for resolving disputes between the parties, such as mediation, arbitration, or litigation.
  • 8. Governing Law and Jurisdiction

    Governing law: The laws that will govern the agreement.

  • Jurisdiction: The court or tribunal that will have jurisdiction to hear disputes arising from the agreement.

  • 9. Entire Agreement

  • Entire agreement clause: A statement that the agreement constitutes the entire understanding between the parties and supersedes any prior or contemporaneous agreements.
  • 10. Signatures

  • Signatures of the parties: The signatures of both the seller and the buyer, indicating their acceptance of the terms and conditions of the agreement.
  • Design Elements for a Professional Murabaha Agreement Template

    To create a murabaha agreement template that conveys professionalism and trust, consider the following design elements:

    Clear and concise language: Use simple and straightforward language that is easy to understand. Avoid technical jargon or legal terms that may be unfamiliar to the parties.

  • Consistent formatting: Use a consistent format throughout the template, including font size, line spacing, and paragraph alignment.
  • Headings and subheadings: Use headings and subheadings to organize the content and make it easier to navigate.
  • White space: Use white space effectively to create a visually appealing and readable document.
  • Professional layout: Choose a professional and clean layout that is easy on the eyes.
  • Error-free content: Proofread the template carefully to ensure that there are no errors in grammar, spelling, or punctuation.

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  • By incorporating these key components and design elements, you can create a professional and effective murabaha agreement template that meets the needs of both the seller and the buyer.