The Fiqhī Appraisal of Multi-Contract Transactions (ʿUqūd Mujtamiʿah) inContemporary House Finance: A Comparative Study of the Four Sunni Schoolsand Diminishing Mushārakah

Abstract

Contemporary Islamic home financing institutions rely heavily on hybrid contractual structures-most prominently Diminishing Mushārakah (Mushārakah Mutanāqiṣah)-that integrate partnership (sharikah), leasing (ijārah), and sale (bayʿ) within a single financing arrangement. Given the historical juristic debates surrounding the permissibility of combining multiple contracts in a singular transaction (ʿuqūd mujtamiʿah, also termed ʿuqūd murakkabah or "hybrid contracts"), the jurisprudential legitimacy of such products remains an enduring subject of debate in Islamic commercial law. This article undertakes a comparative fiqhī appraisal of multi-contract transactions across the four Sunni schools of law, grounded directly in their primary foundational texts (umahāt al-kutub). It subsequently applies the extracted jurisprudential principles to the structural execution of Diminishing Mushārakah within contemporary Islamic housing finance. Acknowledging that empirical commercial practice frequently contravenes classical strictures via binding cross-default clauses and interest-rate benchmarking, this paper advances the existing discourse by proposing an original contribution: the Dynamic Risk-Aligned Diminishing Mushārakah (DRADM) framework. Utilizing an asset-backed mathematical formulation indexed to localized House Price Indices (HPI), this proposed model resolves the inherent tension between formal legal compliance (championed by Ḥanafī and Ḥanbalī doctrines) and substantive economic justice (mandated by the Mālikī tradition).