Islamic Finance | A
Arabic (أهلية) for legal capacity. A term that describes a person's fitness or capacity to undertake or perform something (an act with legal repercussions). In the realm of transactions, the contract shall be deemed void if one party or both parties don't process legal capacity to transact. In other words, legal incapacity of either party to some contractual agreement shall render it null and void. Ahliyyah is typically divided into two types: (1) ahliyyat al-wujoob (in Arabic script: أهلية الوجوب-i.e., receptive capacity or capacity of obligation) and (2) ahliyyat al-adā' (in Arabic script: أهلية الأداء- i.e., active capacity or capacity of execution).