Non essential interest clause in a contract : interest condition if a contract is broken

Fatawa Question

Assalamu Alaikum, Dear Scholars, I signed a contract with a government body that funds me for my on-the-job training in another country. The contract says that in return of the fund they spend on me, I am required to work for two years in the country that is funding me, and I do not need to return any cents from that fund. However, in any case and in anytime, if I break the contract, I have to return the fund that they have spent on me and plus an interest of 10 % . In Sha Allah, I have no intention of breaking the contract when I signed it and that is the reason why I signed it as I see it is Halal. However, I need to hear from you on this case. If I were considered doing something Haram, how can I purify myself from it since the funding last until August 2003 and the bond that I will serve last until year 2005 ? and if I break the contract now, it means that I have to pay additional 10 %, which I consider it as Riba and thus it is Haram. Jazaka Allah Khairan Wassalam Alaikum

Fatwa

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Publication Date

2003-01-23

Main Subjects

Financial and Accounting Sciences
Religion
Islamic Studies

Topics

• Islamic jurisprudence
• Contracts
• Usury

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-726722

• APA
• MLA
• AMA