Stipulations in Lease Contracts

Answered by Shaykh Taha Abdul-Basser

Question: Is leasing a car permissible? What about stipulations within the lease contract?

Answer: Wa ‘alaykum as salam,

Leasing vehicles (in the US) is in essence permissible (halal) as such contracts are contracts for the transfer of the use (usufruct, manfa’a) of the vehicle, from the owner-lessor to the lessee for the duration of the lease term, in consideration of rental payments.

Because leasing agreements may differ from make to make and–as the questioner indicated–many leasing agreements have stipulations that are void, those considering entering into them should have their contracts reviewed by a faqih prior to execution.

Such stipulations in general may be considered to have been voided (mulgha) and may be separated from the lease, which is still valid. This is the preponderant position (qawl rajih) according to the Hanabila as Imam al-Hijjawi states in Zad al-Mustaqni’.

Benefit (fa’ida): The lessor’s use of terms and techniques from the world of interest-bearing lending in order to set rental payment amounts does not invalidate the lease or make it impermissible to enter into the lease.

Wassalam
Taha Abdul-Basser