Contractus trinus and Murabaha Offshoots for Usury: A Theoretical and Practical Approach with Regard to Islamic Case Law on Home Loans

• Jurisdiction: South Africa
• Citation: (2011) 23 SA Merc LJ 420
• Date: 25 May 2019
• Author: Nico P Swartz
• Published date: 25 May 2019
• Pages: 420-431

Contractus trinus and Murabaha Offshoots for

Usury: A Theoretical and Practical Approach

with Regard to Islamic Case Law on Home

Loans

NICO P SWARTZ*

University of Botswana

1 Research Methodology and Objectives

In the research methodology, a text-analytical reading of contractus trinus

and murabaha will be undertaken. Islamic judicature (court cases) serves as a

practical forum or playground in which the inf‌luence of the f‌inancial

implication of murabaha can be tested.

The objectives or hypotheses of this research is aiming at academicians,

economists, bankers, f‌inancial advisors, and the like in order to enable them to

make positive contributions (solutions) at policy level for f‌inancial contracts

such as housing loans. This research is about the discussion of the two

concepts – contractus trinus and murabaha – and their application in Islamic

case law on housing loans. The question, would the Islamic model been a

better alternative than the Conventional model regarding home-loans, is

answered successfully in this research.

2 Evolution of the Concept ‘Usury’ up to contractus trinus

The later years after the twelfth century were marked by the appearance of

a complete and systematic economic doctrine. This doctrine was that of canon

law. Canon law was a body of rules or prescriptions as to conduct. It presented

a system of economic thought. The canonist theory may contrast with or

resemble modern economics, such as the murabaha of Islamic f‌inance. It is

too important a part of the history of human thought to be disregarded.

1

The prohibition of usury was the central point of canonist teaching. It was

only during the middle of the fourteenth century that the incorporation of the

prohibition of usury in the civil law was formalised. Men failed to pay their

debt throughout history. According to the earlier barbarian codes, the

defaulting debtor was to become the slave of the creditor. As there was

seldom any limit f‌ixed to the period of servitude, the creditor could easily

obtain a quantity of labour far surpassing in value the amount of the debt. In

* Department of Law, University of Botswana, Gaborone. e-Mail: nico.swartz@mopipi.ub.bw.

1

Sir WJ Ashley 1966 An Introduction to English Economic History and Theory (1966) 377–81.

420

(2011) 23 SA Merc LJ 420

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