Ijarah is a term which has originated from Islamic Fiqh. It is a derivative of the Arabic words Ajr and Ujrat which means consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of service of an asset. Generally,
it means 'to give someting on rent'.
It is a mechanism of leasing of property.
Ijarah is defined as a contract between two parties, the Lessor and Lessee, where the Lessee enjoys a specific service or benefit against a specified consideration or rent from the asset owned by the Lessor.
It is an agreement for hire under which a certain asset is hired out by the Lessor to a Lessee against fixed rent for a specified period.
Major Terms and elements of Ijarah:
i. The Agreement
ii. Contracting Parties
iii. Object of the contract
iv. The Lessor(Muajjir): The party hires or rents.
v. The Lessee (Mustajir): The party takes the hire of the asset or service.
vi. The service/asset(Maajur)