Mohatra Contract

The Mohatra contract is a commercial contract, used to lend money with interest without breaking the ban on usury . It consists for the lender to sell an item on credit, which he immediately resells the borrower for a lesser amount; the borrower still has to pay his credit, but he has the money obtained from the sale of the object.

First used in the Muslim world, the Mohatra contract is from the end of the Middle Ages also used in the Catholic world. Tolerated by some casuists, it is denounced by Blaise Pascal in the Provincials and banned by the Holy See in 1679.

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