The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.Question:: In this chap. it states that leasing is haram. Because the contract is kept suspensefor a certain amount of years. I've always thought that islamic banks do conduct their businessthis way. For example, say that you are leasing a car from a financial institution. Doesnt theislamic bank buy ther car and then they lease it to you for a set amount of years, and when theduration of years have concluded you can buy the car. Wouldnt that be haram. Please explain moreabout the leasing factor. Answer: Leasing is certainly not haram. The manuals of Islamic law are filled with text on thesubject of leasing, and almost all of our modern Islamic banks engage in leasing of one sortor another. Please turn to the Lesson once again and look at the section entitled: Principles ofthe Islamic Law of Contract. If you scroll down you'll come to some blue text which is a hyperlink to an explanation of the different sorts of contracts. Here you'll find that under theheading: Binding (or obligatory) and facultative (or permissible) Some contracts are binding, Lazim, once concluded they cannot be revoked except by mutualconsent of the two parties. Some are facultative, Jaiez, which can be revoked by either party, and in some cases bya given party. Examples of the binding contracts are the contracts of sale, hire and lease, etc.