Shari'ah Non-compliance Risk Management and Legal Documentations in Islamic Finance

Chapter 9

Drafting Legal Documents

9.0. INTRODUCTION

Drafting a legal document is a skill of encapsulating rights, obligations, and liabilities of parties pertaining to a transaction. The drafting is a common word used by legal professionals such as lawyers. The legal draft presented is very precise wording that describes what the contracting parties want, their needs, desired, and objectives. Consent is expressed in legal terms to be made as reference in case of dispute.

9.1. STRUCTURE OF THE LEGAL AGREEMENT/CONTRACT

The following aspects are the most important terms found in the legal documents. Some of them might not be necessarily found in every legal document, such as the preamble:

• Title
• Date
• Preamble
• Recitals
• Parties
• Definition
• Interpretation
• Body of the agreement/contract
• Boilerplate clauses
• Miscellaneous
• Signature
• Schedule

These terms are explained briefly in the following sections.

9.1.1. Title

The legal document has a title that describes the scope and the area of the agreement such as interbank wakalah placement agreement, corporate wakalah placement agreement, or master agency agreement, and so forth. The title is mentioned on the first page.

9.1.2. Date

The date of the agreement. The date is mentioned on the first page.

9.1.3. Preamble

The preamble is an introduction to a book or a written document; an introduction to something you say. Normally the preamble is found at the beginning of the agreement. The preamble is an introduction to the legal agreement contents ...