Unilateral & Bilateral Promise | Shari'ah Fundamentals

Definitions

Unilateral Promise — Wa'ad (وعد): A party informs another of its resolute intention to act in the future in the interest of the other, with the other having the option to avail itself of the promise.

Bilateral Promise — Muwa'adah (مواعدة): The exchange of two back-to-back promises between two parties, each promising to perform an act in the future relating to the same subject matter.

Prohibited Promises

Impermissible-act promise — Promising to perform an impermissible act is prohibited; fulfilling it is also prohibited.
Lender-benefit promise — A promise in a loan that gives the lender a benefit beyond repayment is prohibited, even if recorded in a separate document.
Bay' al-'Inah promise — A promise resulting in a Bay' al-'Inah (repurchase) is prohibited, whether part of the sale contract, prior to it, or subsequent to it, including collusion through a third-party intermediary.

The Core Binding Rule for Unilateral Promises

A promise is a RELIGIOUS obligation to fulfil (sin to break without excuse), but is NOT LEGALLY binding EXCEPT when: (1) there is a real need for enforcement, and (2) the promisor causes the promisee to incur a liability as a result of the promise.

Key Refinements

One-sided enforcement — A binding promise is enforceable ONLY against the promisor, not the promisee. The promisee may choose to demand performance or waive it.
Benevolent promises — A benevolent promise (gift, loan of item) is a religious obligation but NOT legally binding, UNLESS it is conditioned on the promisee performing an action that incurs liability.
No automatic contract — A promise to contract in the future does NOT automatically create the contract; offer and acceptance must still be exchanged at the proper time.
Actual loss only — If the merchant cannot sell the item for cost, the promisor pays the difference. Actual loss does NOT include opportunity cost.

Rules for Bilateral Promises

A bilateral promise is a religious obligation but NOT legally binding EXCEPT when:

an actual commercial transaction is NOT possible without a binding bilateral promise
this is due to legal requirements OR general commercial custom
the objective is NOT merely to provide financing

Application	Promise Type	Why It Binds
Client's purchase promise in Murabahah	Unilateral (client → bank)	Bank acquires goods in reliance on promise → client incurs liability to bank
Bank's gift promise in IMB	Unilateral (bank → client)	Conditioned on client paying all installments → conditional benevolent promise becomes binding
Bank's lease promise in Diminishing Musharakah	Unilateral (bank → co-owner)	Client relies on being able to lease bank's share
Client's unit purchase promise in Diminishing Musharakah	Unilateral (client → bank)	Bank relies on gradual exit through unit sales
Buyer's and seller's exchange of binding promises in documentary credit	Bilateral (importer → exporter and vice versa)	International trade custom and regulation make spot performance impossible — both legs of the exchange must commit before goods move
Both parties' commitments in long-term supply agreements	Bilateral (buyer → seller and vice versa)	Industrial-scale production planning requires forward commitment from both sides; the binding bilateral promise is the only commercially viable structure

Master Agreements vs. Binding Bilateral Promises

A general framework agreement (Master Agreement) is itself a non-binding bilateral promise — it sets the terms that will apply if the parties later transact, but it does not commit either party to enter any specific deal. A Master Murabahah Framework, for instance, governs price-disclosure mechanics, default consequences, and documentation conventions for any future Murabahah the parties choose to execute; neither side is obliged to execute one. The terms only crystallise when the parties exchange offer and acceptance for an individual transaction; the Master Agreement is then incorporated into that transaction. The doctrinal point is that a binding bilateral promise (such as in documentary credit) commits both parties to enter the underlying contract, while a Master Agreement merely pre-agrees the terms if and when they decide to enter one.

Impermissible Applications

Back-to-back bilateral promises designed to circumvent Shari'ah prohibitions are impermissible — particularly derivatives-like structures where two parties exchange promises to buy and sell the same subject matter at different prices on a future date. This mimics conventional forward/futures contracts.