As financial instruments, waraqas involved a range of different contractual forms for circulating credit between lenders and borrowers. These forms constituted the legal core of the transaction, defining the rights and obligations of the lender and borrower to one another and - in the case of property transactions - to the property involved.
Below are some of the most common contractual forms that one sees in waraqas from Oman and East Africa.
Iqrār (Acknowledgment) إقرار : This was the most basic vehicle for accessing credit; every waraqa involved some form of iqrār, usually stated within the first few words. Simply put, the iqrār was a basic acknowledgment of debt; the borrowers would acknowledge that they owed the creditor a certain sum of money or a commodity, and thus bound themselves into a relationship of obligation with their creditors. When mobilized on its own (i.e. without a pledge of property) the form would be analogous to a basic IOU, though with different legal ramifications. Iqrār transactions are marked as debt in the Ocean of Paper database.
Bay' Qaṭ‘'(Qaṭ' Sale) بيع قط : This referred to a simple property sale; the term qaṭ' suggested that the original owner was cut off (inqaṭa'a' from ownership of the property in return for a sum of money. For property owners looking to access credit or cash, this was the simplest route. Though these were sometimes coupled with the stipulation that the original owner buy back the property after a certain period of time, or rent the property back from the buyer for a certain period (see Qu'd), that constituted a separate agreement; the qaṭ' itself referred only to the simple property sale.
Bay' Khiyār (Khiyār Sale) بيع خيار :
This was a common property transaction in Oman and East Africa, though one doesn’t see it elsewhere under the same name (in Hadhramawt, for example, it was called the 'uhda sale). In the khiyār sale, a property owner looking to access credit would sell the property to the buyer (i.e. the lender/creditor) for a specified period of time, after which he could exercise the option (khiyār) to purchase it back. In the time between the original sale and re-purchase, the buyer/lender was the formal property owner; though the lender/buyer rarely took physical possession of the property. However, they had the right to collect rent or harvest until the original owner (i.e. the borrower) re-purchased it, effectively paying back the principal amount borrowed. The contract effectively amounted to what people today might think of as a property mortgage, and the rent/harvest collected in the interim period would have amounted to interest on the principal amount borrowed.
Rahn (Pledge) رهن : This referred to a basic pledge of property as security against the loan. A borrower looking to take on a loan would offer some sort of property as security; in case of a default, the lender would be able to keep the property pledged. The difference between a rahn and khiyār sale was that in a rahn contract, it was not clear that the lender/buyer had the right to collect harvest or rent.
Qu'd (Rental) قعد : This was a basic rental agreement, in which a tenant agreed to rent a property for a certain period of time. It was often coupled with one of the other property transactions in order to create a situation wherein a person hands over property to a creditor in return for a loan and agrees to rent it back; the rent paid would constitute a form of interest on the loan itself.
Ḍamān (Guarantee) ضمان : In this contract, one party agrees to stand as surety for another in the context of a credit transaction, acting akin to a cosigner. The person who stands as surety (the ḍāmin) effectively guarantees the loan for the creditor; if the borrower defaults, the creditor would have recourse to the ḍāmin for the amount of the loan.
Ḥawāla (Transfer) حوالة : Through this sort of contract, a creditor could transfer a debt owed to him to another person to collect. To illustrate: if debtor B owed creditor A money, and creditor A himself owed another person, C, money, A could transfer B’s debt to C to collect. Hawala documents are noted as transfer in the Ocean of Paper database.