Incoterms: Reconstructing International Sales Contracts in Harmony with Sharia Economic Law

Junaidi Arif; Indah Parmitasari; Nandang  Sutrisno

Authors

Junaidi Arif Universitas Islam Indonesia, Yogyakarta, Indonesia https://orcid.org/0009-0002-2355-9889
Indah Parmitasari Universitas Islam Indonesia, Yogyakarta, Indonesia
Nandang Sutrisno Universitas Islam Indonesia, Yogyakarta, Indonesia

Keywords:

Gharar, Incoterms, Sales and Purchase, Sharia Economic Law

Abstract

In global trade, Incoterms play an important role as a standardised framework that defines the allocation of responsibilities and risks between sellers and buyers. However, from the perspective of Islamic economic law, the application of Incoterms in some cases has the potential to cause gharar (uncertainty) which can affect the validity of the agreement. This study aims to analyse the gap between the provisions of Incoterms 2020 and the principles of fiqh muamalah, particularly in terms of responsibility sharing and risk transfer in international sales contracts. This study conducted searches in various academic databases, and after applying pre-determined criteria, obtained relevant studies for review, which were reinforced by normative juridical analysis based on fiqh literature and Islamic legal doctrine. There are discrepancies between the Incoterms 2020 standard and the principles of fiqh muamalah, especially in the risk transfer clauses (such as FOB and CIF) which have the potential to cause gharar. Vagueness in the division of responsibilities can lead to uncertainty which is contrary to the principles of justice and transparency in Islamic law. Therefore, there is a need for an updated contract system that accommodates Sharia principles without ignoring the practical needs of international trade. The findings of this research serve as a way to formulate a more transparent and fair contractual framework.

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