Some forms of riba al-fadl in trade and commerce

The term riba can be applied to practices fitting in two general categories--first, riba al-nasi'a; and second, riba al fadl. Riba al-nasi'a applies to interest charged on capital and on commodities loaned over set periods of time. Riba al-fadl applies to interest taken in direct, person-to-person exchanges of capital or of goods. Riba al-fadl is a less understood topic than riba al-nasi'a, and it is a sort of interest born out of deception, misrepresentation, and speculation. The most common type of riba al-fadl involved futures deals. The author's discussion of riba al-fadl addresses with some depth the sale of risk and chance and the institution of interest in a system of bartering. The author draws heavily on ahadith in explaining certain terms. Also copiously referred to are early jurists in Islam, including Malik, Shaf'i, and Abu Hanifa.