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Consumption Of Murabaha Asset While Acting As Agent
How does the consumption of the Murabaha asset by the client while he serves as an agent affect the transaction?
If the client takes possession of the asset and consumes it, a Murabaha cannot be executed for it any more. For instance, consider raw material as the subject matter of a Murabaha. The client processes it into a finished product, for instance, sugar cane into sugar. In such a situation if the client acting as agent consumes the asset before the Murabaha’s execution, the financial institution must cancel the contract, recover the principal amount and enforce the charity clause established at the time of the contract’s execution.

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