The Lessee's Obligation in a Finance Lease Contract to Guarantee the Perishing of Leased Vehicles in Palestine: A Comparative Study with the Provisions of Islamic Jurisprudence According to AAOIFI Standards

Abstract

This study aims to clarify the nature of the lessee's obligation in a finance lease contract and compare it with the lessee's obligation in a lease-to-own contract according to AAOIFI Sharia standards regarding the maintenance and guarantee against the perishing of the leased asset. The study reveals that the lessee's required obligation in both contracts is to exercise due diligence in using the leased asset and to maintain it in the same condition as received, without being responsible for any changes resulting from ordinary use. However, the study shows that in a finance lease contract, the lessee bears the risk of loss or damage to the leased asset from the moment of actual or constructive delivery, whether the loss is due to a foreign cause or otherwise. In contrast, in a lease-to-own contract, the lessee does not bear the responsibility for the loss or damage to the leased asset after actual or constructive delivery unless it is due to the lessee's negligence or misconduct. The lessor alone bears the responsibility for loss due to a foreign cause as the owner of the leased asset.

Keywords: Finance Leasing, UNIDROIT Leasing Law, Lease-to-Own, Foreign Cause, Lessee's Responsibility, Perishing of the Leased Asset, AAOIFI Standards.