Landmark legal cases on Bai' Bithaman Ajil (BBA) house financing in Malaysia

The Central Bank of Malaysia has approved the application of BBA in all financial institutions. Nevertheless, despite it being deemed to be a Shari'ah compliant instrument, the validity of the contract in its essence or even in its execution has been repeatedly challenged in a number of cases in Malaysia. This paper discusses on the importance of understanding the significance of the BBA in the eyes of Maqasid Shari'ah. It also attempts to highlight the legal issues in landmark cases involving BBA instruments. Finally, this paper provides recommendations and suggests several modifications in BBA practice so that the public would have more confidence towards this Islamic financing facility.