The merging of contracts into one contract occurs when Al-Qard contracts are combined with AlUjrah (deposit wages). The combination of loan and sale contracts is also prohibited based on ijma' fuqaha. Al-Qarafi stated that the contract of sale and purchase and other receivables are two separate contracts, one of them is mandatory but the combination between both contracts is forbidden since it would result in usury. While on the other hand, al-Zarkasyi in chapter sadd alzariah in his book also elaborated that ijarah is a part of sale contract, because the essence of ijarah is basically sales and purchase of nahdha and services. Therefore, just as the law prohibits combining sale and purchase contracts with qards totally then likewise it prohibits combining ijarah contracts and qards based on this very same principle.
Ar-Rahnu started to gain traction in Malaysia in the 1990s along with Islamic financial and cooperative institutions. The merger of contracts does not involve circumstances that are expressly prohibited by Sharī'ah. For example, when combining the concept of a sales contract (Al-bay') and loan contract (Al-Qard) in one contract. These two contracts are different in terms of their purpose and manner of practice. Therefore, contradictions are very easy to occur when merging these different contracts. The responsibilities of the parties involved are affected and unclear. When this situation occurs, it can interfere with the observance of Sharī'ah in the practice. The incorporation of contracts should not be used as a hilah (or trick) to perform ribā. It is because it can be burdensome and affect the parties involved. The merger of contracts such as the merger that led to the existence of bay' al-'Inah, or Hilah to perform ribā al-fadl is forbidden. The merger could lead to its banning on the side of Sharī'ah.
This is primarily because such combinations may lead to conflicts in actualizing the intent of the common Shariah as each one has its own rules and conditions. These combinations are permissible only when Shariah-compliant, and they do not create any haram component, as mixing these contracts can sometimes impose additional obligations or problems on the parties involved.
Despite the various facets of Islamic finance, one of its most fundamental rules is the prohibition of riba. Combining contracts to mask interest is impermissible, and riba itself remains prohibited. Some contracts, like bay' al-'inah or riba al-fadl, are prohibited because they are a means of incorporating interest. Allah gave precise reprimands towards riba in the Qur’an, which are depicted very well inside Surah Al-Imran (3:130) and Surah Ar-Rum (30:39). Hence, Ar-Rahnu is one of the vital financial products for Muslims to borrow money as it complies with Shariah law and free from riba disfavor and adverse effect.
( يَـٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ لَا تَأْكُلُوا۟ ٱلرِّبَوٰٓا۟ أَضْعَـٰفًۭا مُّضَـٰعَفَةًۭ ۖ وَٱتَّقُوا۟ ٱللَّهَ لَعَلَّكُمْ تُفْلِحُون {١٣٠} )
(Al-Imran (3:130))
It means: "O you who have believed, do not consume usury, doubled and multiplied, and fear Allah, that you may be successful."
It is a great representation of this conclusion, based on the history and context of Ar-Rahnu and proves that each contract must be executed with its original purpose. If the payment is not a fee that is actual or supposedly, then the payment will be deemed to be as if it were a way to get paid more than Qardhu Hasan was given. This balance legitimizes the contract, makes the transaction shariah-compliant and will address any unfair nature that is limited towards the essential purpose of Ar-Rahnu.
Therefore, it is highly inappropriate when the merger of contracts takes place. The following is evidence of the prohibition of combining contracts according to a famous hadith stating, "Do not combine two sales in one sale," which scholars have interpreted to mean that combining contracts of different natures can lead to confusion and potential injustice. This hadith became the basic reference for many scholars who argued against combining contracts such as ujrah (service fee) with qard (loan) in the framework of ar-Rahnu, because it might create a scenario similar to bayʿ wa salaf (selling and lending), which is prohibited in Islam.
As noted by scholars such as Ibn Qudamah and Al-Zuhayli, the principle of rahn (collateral) emphasizes that any collateral must be valuable and free from defects to ensure compliance with Shariah principles. Furthermore, hadiths illustrate that even during the time of the Prophet Muhammad SAW, collateral was accepted in transactions as long as it adhered to Islamic guidelines. For instance, it was narrated that "Rasulullah bought food on credit from a Jew and gave his steel armor as collateral towards the seller" (Sahih al-Bukhari). This historical precedent reinforces that while contracts may be combined under certain conditions, they must remain faithful to their original intentions without introducing elements such as riba or gharar.
In addition, according to different schools of Islamic jurisprudence, there are different interpretations regarding the nature of the ar-Rahnu contract. For example, while the Hanafi and Syafi'i schools see ar-Rahnu primarily as a charitable contract (tabarruʿ), others such as the Maliki school see it as a mutual exchange (muʿāwaḍāt). These differences illustrate the complexities surrounding the incorporation of contracts in Islamic finance, emphasizing the need for clarity and adherence to Shariah principles in financial products.
In light of these views, it is evident that addressing the issue of contract merger in ar-Rahnu requires careful consideration of both prophetic traditions and scholarly interpretations. The consensus leans towards avoiding combinations that could lead to non-compliance with Shariah, advocating instead for structures like tawarruq that respect Islamic financial principles while meeting contemporary financial needs.