Ju'alah
A reward contract: a fee is promised for achieving a specified result and is paid only when the result is delivered.
Ju'alah is a contract in which one party promises a specified reward to whoever achieves a stated result, such as recovering a lost item or completing a task. The reward is earned only on completion, and the party doing the work need not be identified in advance. In modern finance it is used for services paid on outcome, such as collection or brokerage, where the effort needed is uncertain but the result is clear.
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
Ujrah (fee)A fee, wage or rent paid for a service, an agency or the use of an asset; the price side of ijarah and paid wakalah.WakalahAgency: one party appoints another to act on its behalf, with or without a fee.IjarahA lease: the lessor owns the asset and sells its use for an agreed rent over an agreed period.