Bismillāh, wa l-ḥamdu lillāh, wa ṣ-ṣalātu wa s-salāmu ‘alā Rasūli llāh, wa ‘alā ālihī wa ṣaḥbihī wa man wālāh. Ammā ba‘d:
Our scholars mention that it is unlawful for one to undertake an action unless one knows what Allah has permitted and prohibited with respect to it and the conditions for its legal validity. Trade is an activity many people are involved in on a daily basis, yet most are ignorant of its basic rules, integrals and conditions. As such, this article will, in shā’ Allāh, serve as a brief guide, in accordance to the Shāfi‘ī school (although practiceable for those following other schools), to the basic fiqh of trade that every Muslim who wishes to buy and sell must know. And Allah is the granter of divine facilitation.
Integrals of a Transaction
Every transaction must consist of six matters:
(a) a seller;
(b) a buyer;
(c) an article to be transacted;
(d) a price;
(e) an offer from the seller; and
(f) an acceptance from the buyer.
As for the seller and buyer, they must:
(a) be sane;
(b) be pubescent (bāligh) (Note: Imām Aḥmad permits the buying and selling of minor items by children. Imām Abū Ḥanīfah permits for children to buy and sell provided they have their guardian's prior permission.);
(c) be of sound judgement in one's religious and worldly matters; and
(d) not be forced without right.
If it is book containing Qur’ānic verses (even if a slight amount) or a book of Sacred Knowledge, it is additionally stipulated that the buyer be a Muslim.
As for the article being transacted, it must:
(a) be pure in and of itself, or affected with filth but capable of being purified by washing;
(b) be of benefit;
(c) be deliverable;
(d) be in the ownership of the seller or the person who has authorised the seller to transact on his behalf; and
(e) be determinately known to the seller and buyer as to its quantity, its description, and which particular item it actually is.
These conditions likewise apply to the price being paid.
The following are examples of transactions that are excluded by the abovementioned conditions:
(1) (non-(a) above) the trade of dogs, pigs, non-halal meat (such as that usually found in pet food), food or drink with ḥarām additives, etc. as they are filthy in and of themselves; likewise the trade of juice affected with filth, as it cannot be purified by washing.
(2) (non-(b)) the trade of insects, which are of no tangible benefit, and forbidden musical instruments, which are of no benefit insofar as the Sacred Law is concerned.
(3) (non-(c)) the sale of a bird in the sky, or the sale of an item that has been seized from its owner by force and is now irretrievable, as in such cases the buyer is unable to take possession of the item.
(4) (non-(d)) selling something that is owned by another without the owner's prior authorisation, even if the owner later comes along and approves of the sale. 1
(5) (non-(e)) the sale of “however much this box can hold”, “whatever you can carry”, and the like, as the quantity of the item is unknown.
(6) (non-(e)) the trade of what the buyer or the seller have not seen, such as the sale of “the white phone in my room”, as the item's description is unknown. 2
(7) (non-(e)) the trade of “one of these two shirts”, as no particular item has been determinately identified.
As for the offer and acceptance, the mu‘tamad (relied-upon) view of the Shāfi‘ī school is that the seller must make a spoken offer (e.g. “I sell it to your for such-and-such price”) and the buyer must make a spoken acceptance (e.g. “I buy it for such-and-such”, “I accept”). To leave out doing so renders the transaction invalid and is unlawful. This is due to the ḥadīth narrated by Ibn Mājah that the Prophet ﷺ said, “إنما البيع عن تراض” – “Trade is only through mutual consent” – mutual consent being a hidden matter that can only be known by its expression verbally, therefore necessitating a spoken offer and acceptance for the validity of a transaction.
The offer and acceptance can be either be made explicitly – by saying, “I sell it to you”, “I buy it from you,” and the like – or figuratively, i.e. by using phrases which could be used for trade or other than it, provided that such figurative phrases are uttered with the intention of trade. Examples are a seller saying, “Take it,” “It's yours,” or, “May Allah bless it for you,” or a buyer saying, “I take it,” or “Thanks for the item.”
It is permissible for the buyer to make his spoken acceptance before the seller makes his spoken offer. However, the first of the two to initiate must mention the price.
As for mu‘āṭāh, which is trade without a spoken offer or acceptance, it is invalid according to the mu‘tamad (relied-upon) view of the Shāfi‘ī school and thus ḥarām, as previously mentioned. However, other authorities from within the school held alternative views:
• Imāms al-Rāfi‘ī, Ibn Surayj and al-Rūyānī held that mu‘āṭāh is valid for the trade of minor items. This is also the position of the school of Imām Abū Ḥanīfah.
• Imām al-Nawawī held that mu‘āṭāh is valid for all transactions that people consider sales, as long as a price is settled and agreed upon. This is also the view of group of scholars such as Imams al-Mutawallī and al-Baghawī, and is also the position of the Mālikī school.
As such, there is no problem in following these alternative opinions, although it is best to take the path of scrupulousness and caution by initiating the spoken offer or acceptance whenever transacting.
Unlawful Gain (al-Bay‘ al-Ribawī)
“O you who believe, fear Allah and give up what still remains of ribā, if you are true believers. If you do not, then be warned of war from Allah and His Messenger.” (Qur’an 2:278-279)
There are two broad categories of ribā: that pertaining to sales and that pertaining to loans.
Ribā on Sales
Option to Cancel (Khiyār)
There are three categories of khiyār:
1. Khiyār al-Majlis (Option to Cancel at Time of Agreement)
When a sale is effected, both buyer and seller have the option to cancel it so long as they have not yet physically parted company, unless they both waive the right to cancel. This applies to all sales.
2. Khiyār al-Sharṭ (Stipulation of Option to Cancel Period)
The buyer and seller may stipulate a period during which either party may cancel the agreement, provided that:
(a) a determinate period be specified;
(b) the period not exceed three consecutive days from the time of the agreement; and
(c) the item not be something that would change over such a period, such as cooked meat over three days.
This category of khiyār applies to all sales except those mentioned in the “Unlawful Gain” section above.
3. Khiyār al-‘Ayb (Cancelling Sale Due to Defect)
A buyer is entitled to cancel his purchase and return the item to the seller upon finding it to be defective, even if after a long period of time. An item is considered defective when it has a flaw which diminishes the item or its value to a degree that the flaw hinders a valid purpose, the item being typically free of such a flaw; for example, a book missing a page or more. An example of what is not considered a defect is scratches on a car.
The buyer may return the defective item to the seller provided that:
(a) the defect had been present before the buyer took possession of the item;
(b) the buyer immediately cease using it after noticing the defect; and
(c) the buyer return the item without inexcusable delay (“inexcusable” excluding defects noticed while praying, eating, using the bathroom, or at night if returning the item at night is problematic, in which cases one may delay returning it until the excuse is lifted).
If the buyer and seller argue over whether the defect occurred before or after the sale and no evidence is present, then:
• if its occurrence both before and after the sale are possible, the seller's word is taken after swearing an oath.
• if its occurrence before the sale is impossible, the seller's word is taken without oath.
• if its occurrence after the sale is impossible, the buyer's word is taken.
This category of khiyār applies to all sales.
Miscellaneous Issues Relating to Trade
One may not sell an item before taking possession of it. For example, if one were to have ordered a book and had paid the price, one may not sell the book to someone else while the book is still being delivered to him.
Our scholars mention that it is unlawful for one to undertake an action unless one knows what Allah has permitted and prohibited with respect to it and the conditions for its legal validity. Trade is an activity many people are involved in on a daily basis, yet most are ignorant of its basic rules, integrals and conditions. As such, this article will, in shā’ Allāh, serve as a brief guide, in accordance to the Shāfi‘ī school (although practiceable for those following other schools), to the basic fiqh of trade that every Muslim who wishes to buy and sell must know. And Allah is the granter of divine facilitation.
Integrals of a Transaction
Every transaction must consist of six matters:
(a) a seller;
(b) a buyer;
(c) an article to be transacted;
(d) a price;
(e) an offer from the seller; and
(f) an acceptance from the buyer.
As for the seller and buyer, they must:
(a) be sane;
(b) be pubescent (bāligh) (Note: Imām Aḥmad permits the buying and selling of minor items by children. Imām Abū Ḥanīfah permits for children to buy and sell provided they have their guardian's prior permission.);
(c) be of sound judgement in one's religious and worldly matters; and
(d) not be forced without right.
If it is book containing Qur’ānic verses (even if a slight amount) or a book of Sacred Knowledge, it is additionally stipulated that the buyer be a Muslim.
As for the article being transacted, it must:
(a) be pure in and of itself, or affected with filth but capable of being purified by washing;
(b) be of benefit;
(c) be deliverable;
(d) be in the ownership of the seller or the person who has authorised the seller to transact on his behalf; and
(e) be determinately known to the seller and buyer as to its quantity, its description, and which particular item it actually is.
These conditions likewise apply to the price being paid.
The following are examples of transactions that are excluded by the abovementioned conditions:
(1) (non-(a) above) the trade of dogs, pigs, non-halal meat (such as that usually found in pet food), food or drink with ḥarām additives, etc. as they are filthy in and of themselves; likewise the trade of juice affected with filth, as it cannot be purified by washing.
(2) (non-(b)) the trade of insects, which are of no tangible benefit, and forbidden musical instruments, which are of no benefit insofar as the Sacred Law is concerned.
(3) (non-(c)) the sale of a bird in the sky, or the sale of an item that has been seized from its owner by force and is now irretrievable, as in such cases the buyer is unable to take possession of the item.
(4) (non-(d)) selling something that is owned by another without the owner's prior authorisation, even if the owner later comes along and approves of the sale. 1
(5) (non-(e)) the sale of “however much this box can hold”, “whatever you can carry”, and the like, as the quantity of the item is unknown.
(6) (non-(e)) the trade of what the buyer or the seller have not seen, such as the sale of “the white phone in my room”, as the item's description is unknown. 2
(7) (non-(e)) the trade of “one of these two shirts”, as no particular item has been determinately identified.
As for the offer and acceptance, the mu‘tamad (relied-upon) view of the Shāfi‘ī school is that the seller must make a spoken offer (e.g. “I sell it to your for such-and-such price”) and the buyer must make a spoken acceptance (e.g. “I buy it for such-and-such”, “I accept”). To leave out doing so renders the transaction invalid and is unlawful. This is due to the ḥadīth narrated by Ibn Mājah that the Prophet ﷺ said, “إنما البيع عن تراض” – “Trade is only through mutual consent” – mutual consent being a hidden matter that can only be known by its expression verbally, therefore necessitating a spoken offer and acceptance for the validity of a transaction.
The offer and acceptance can be either be made explicitly – by saying, “I sell it to you”, “I buy it from you,” and the like – or figuratively, i.e. by using phrases which could be used for trade or other than it, provided that such figurative phrases are uttered with the intention of trade. Examples are a seller saying, “Take it,” “It's yours,” or, “May Allah bless it for you,” or a buyer saying, “I take it,” or “Thanks for the item.”
It is permissible for the buyer to make his spoken acceptance before the seller makes his spoken offer. However, the first of the two to initiate must mention the price.
As for mu‘āṭāh, which is trade without a spoken offer or acceptance, it is invalid according to the mu‘tamad (relied-upon) view of the Shāfi‘ī school and thus ḥarām, as previously mentioned. However, other authorities from within the school held alternative views:
• Imāms al-Rāfi‘ī, Ibn Surayj and al-Rūyānī held that mu‘āṭāh is valid for the trade of minor items. This is also the position of the school of Imām Abū Ḥanīfah.
• Imām al-Nawawī held that mu‘āṭāh is valid for all transactions that people consider sales, as long as a price is settled and agreed upon. This is also the view of group of scholars such as Imams al-Mutawallī and al-Baghawī, and is also the position of the Mālikī school.
As such, there is no problem in following these alternative opinions, although it is best to take the path of scrupulousness and caution by initiating the spoken offer or acceptance whenever transacting.
Unlawful Gain (al-Bay‘ al-Ribawī)
Ribā is one the of two only sins for which Allah declares upon the one involved in it (the other one being enmity with a walī of Allah). Allah says:
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ ٱتَّقُوا۟ ٱللَّهَ وَذَرُوا۟ مَا بَقِىَ مِنَ ٱلرِّبَوٰٓا۟ إِن كُنتُم مُّؤْمِنِينَ فَإِن لَّمْ تَفْعَلُوا۟ فَأْذَنُوا۟ بِحَرْبٍ مِّنَ ٱللَّهِ وَرَسُولِهِۦ
There are two broad categories of ribā: that pertaining to sales and that pertaining to loans.
Ribā on Sales
Ribā (unlawful gain) on sales is specific to certain exchanges involving human foodstuffs and money (“money” here referring to gold, silver, and cash).
When trading foodstuffs for foodstuffs of the same kind (such as wheat for wheat or dates for dates), silver for silver, gold for gold, or cash of the same currency (such as US dollars for US dollars), then:
(a) the items must be exchanged before the buyer and seller part company;
(b) the sale must be immediate, i.e. one may not stipulate for the sale to take effect at a later time or date, such as a seller saying, “I sell this amount of rice to you with payment delayed until next week;” and
(c) the items exchanged must be in exact equivalence in amount. As such, one may not sell 10g of gold for 12g of gold, even if the two amounts of gold were to be of the same monetary value3. Nor may one sell 2kg of apples for 3kg of apples, nor 1L of rice for 750mL of rice, even if they differ in quality or type (e.g. basmati rice for jasmine rice). Nor may one trade US$10 for US$20.
When trading foodstuffs for foodstuffs of a different kind (such as wheat for dates), silver for gold (or vice versa), gold or silver for cash, or cash of one currency for another (such as US dollars for euros), the above conditions likewise apply except for condition (c).
Any such transaction in which one of the above conditions are missing is considered a transaction of ribā. There are three types of ribā on sales:
(1) Ribā al-Yad– ribā in transactions of the aforementioned nature where condition (a) above is missing.
(2) Ribā al-Nasā – ribā in transactions of the aforementioned nature where condition (b) above is missing
(3) Ribā al-Faḍl – ribā in the first of the two aforementioned types of transactions where condition (c) above is missing, i.e. ribā involving an increase in one of the two items exchanged.
Ribā on Loans
Ribā al-Qarḍ (interest on loans) is defined as “every loan that brings a benefit to the lender,” such as when X lends $10 to Y and stipulates that Y repay him $15, or that Y repay the loan with a book that costs $30. This is the category of ribā that people are most familiar with. Ribā on loans is ḥarām for all types of property.
When trading foodstuffs for foodstuffs of the same kind (such as wheat for wheat or dates for dates), silver for silver, gold for gold, or cash of the same currency (such as US dollars for US dollars), then:
(a) the items must be exchanged before the buyer and seller part company;
(b) the sale must be immediate, i.e. one may not stipulate for the sale to take effect at a later time or date, such as a seller saying, “I sell this amount of rice to you with payment delayed until next week;” and
(c) the items exchanged must be in exact equivalence in amount. As such, one may not sell 10g of gold for 12g of gold, even if the two amounts of gold were to be of the same monetary value3. Nor may one sell 2kg of apples for 3kg of apples, nor 1L of rice for 750mL of rice, even if they differ in quality or type (e.g. basmati rice for jasmine rice). Nor may one trade US$10 for US$20.
When trading foodstuffs for foodstuffs of a different kind (such as wheat for dates), silver for gold (or vice versa), gold or silver for cash, or cash of one currency for another (such as US dollars for euros), the above conditions likewise apply except for condition (c).
Any such transaction in which one of the above conditions are missing is considered a transaction of ribā. There are three types of ribā on sales:
(1) Ribā al-Yad– ribā in transactions of the aforementioned nature where condition (a) above is missing.
(2) Ribā al-Nasā – ribā in transactions of the aforementioned nature where condition (b) above is missing
(3) Ribā al-Faḍl – ribā in the first of the two aforementioned types of transactions where condition (c) above is missing, i.e. ribā involving an increase in one of the two items exchanged.
Ribā on Loans
Ribā al-Qarḍ (interest on loans) is defined as “every loan that brings a benefit to the lender,” such as when X lends $10 to Y and stipulates that Y repay him $15, or that Y repay the loan with a book that costs $30. This is the category of ribā that people are most familiar with. Ribā on loans is ḥarām for all types of property.
Option to Cancel (Khiyār)
There are three categories of khiyār:
1. Khiyār al-Majlis (Option to Cancel at Time of Agreement)
When a sale is effected, both buyer and seller have the option to cancel it so long as they have not yet physically parted company, unless they both waive the right to cancel. This applies to all sales.
2. Khiyār al-Sharṭ (Stipulation of Option to Cancel Period)
The buyer and seller may stipulate a period during which either party may cancel the agreement, provided that:
(a) a determinate period be specified;
(b) the period not exceed three consecutive days from the time of the agreement; and
(c) the item not be something that would change over such a period, such as cooked meat over three days.
This category of khiyār applies to all sales except those mentioned in the “Unlawful Gain” section above.
3. Khiyār al-‘Ayb (Cancelling Sale Due to Defect)
A buyer is entitled to cancel his purchase and return the item to the seller upon finding it to be defective, even if after a long period of time. An item is considered defective when it has a flaw which diminishes the item or its value to a degree that the flaw hinders a valid purpose, the item being typically free of such a flaw; for example, a book missing a page or more. An example of what is not considered a defect is scratches on a car.
The buyer may return the defective item to the seller provided that:
(a) the defect had been present before the buyer took possession of the item;
(b) the buyer immediately cease using it after noticing the defect; and
(c) the buyer return the item without inexcusable delay (“inexcusable” excluding defects noticed while praying, eating, using the bathroom, or at night if returning the item at night is problematic, in which cases one may delay returning it until the excuse is lifted).
If the buyer and seller argue over whether the defect occurred before or after the sale and no evidence is present, then:
• if its occurrence both before and after the sale are possible, the seller's word is taken after swearing an oath.
• if its occurrence before the sale is impossible, the seller's word is taken without oath.
• if its occurrence after the sale is impossible, the buyer's word is taken.
This category of khiyār applies to all sales.
Miscellaneous Issues Relating to Trade
One may not sell an item before taking possession of it. For example, if one were to have ordered a book and had paid the price, one may not sell the book to someone else while the book is still being delivered to him.
Non-refundable deposits (in Arabic, bay‘ al-‘arabūn) are invalid. For example, X sells a car to Y for $10,000 on the basis that Y pays $1,000 of the price upfront while the rest may be paid later on, though if Y decides to cancel the sale, the $1,000 upfront deposit remains with X and doesn't return to Y.
It is ḥarām to undercut another person's deal (sawm) that he had made with a customer after they have settled on a price, by saying for example, “Don't buy it from him, buy it from me, I'll sell it to you for a cheaper price, or I'll sell you a better item for the same price, or I'll sell you more of the item for the same price.”
Najash is ḥarām, najash being the bidding up of the price of an item that one has no real interest in, only to fool another bidder.
It is ḥarām to lend someone a loan and then sell an item to him at a higher price than usual due to the loan, for such a loan is one from which the lender derives benefit, which is precisely what ribā is. For example, X lends Y $50. X, who runs a small business, then happens to have Y come down to his shop. Y decides to by a packet of chips, usually worth $2, though X demands that Y buy it for $5 due to the debt he owes X.
It is ḥarām to sell an item to someone whom one knows will use it to disobey Allah, such as selling a lighter to someone whom one knows will use it to smoke harmful substances. It is ḥarām to sell a defective item without pointing out the defect. It is ḥarām to purchase food during times of inflation or widespread need with the intent of storing it and selling it later on for a higher price when the situation becomes worse. It is ḥarām to deceive, to lie, to defraud others, and to cheat on the scales.
The above is what is required knowledge for every Muslim seeking to buy and sell, give or take a few matters. We ask Allah to grant us divine facilitation in carrying out his commands and avoiding his prohibitions, and to overlook and pardon our shortcomings. Upon Him do we rely, to Him do we turn to, and to Him is our return.
And Allah the Exalted knows best.
References
- Reliance of the Traveller, Sh. Nuh Ha Mim Keller (translation of ‘Umdat al-Sālik by Imām Aḥmad ibn Naqīb al-Miṣrī)
- The Ultimate Conspectus, Sh. Musa Furber (translation of Matn al-Ghāyah wa al-Taqrīb by Abū Shujā‘ al-Aṣfahānī)
- التقريرات السديدة في المسائل المفيدة، للسيد حسن بن أحمد بن محمد الكاف
- الياقوت النفيس في مذهب ابن إدريس، للسيد العلامة أحمد بن عمر الشاطري
- سلّم التوفيق إلى محبة الله على التحقيق للحبيب العلامة عبد الله بن حسين بن طاهر، مع شرحه المسمّى بكأس الرحيق للأستاذ صالح بن مطران بكيران بامعبد
- الفوائد المرضيةفي شرح المقدمة الحضرمية [الصغير] للإمام شمس الدين محمد بن أحمد الرملي
Footnotes
1 E.g. when a store owner leaves his shop and his friend sits at the counter to deal with customers, without having had the store owner's prior explicit authorisation. Though according to the other three schools as well as the old Shāfi‘ī school, such a transaction would be deemed valid if the owner later comes along and approves of the sale.↩
2 However, it is permissible to order goods (salam) that one has not seen if the item is described to the buyer and the buyer, upon receiving the item, finds it exactly as described.↩
3 Such as when the 10g and the 12g of gold happen to both be worth $500 each due to the former being purer than the latter – it would still be ḥarām to exchange the gold in such cases, for the determining factor is the mass and not the monetary value of the gold.↩
It is ḥarām to undercut another person's deal (sawm) that he had made with a customer after they have settled on a price, by saying for example, “Don't buy it from him, buy it from me, I'll sell it to you for a cheaper price, or I'll sell you a better item for the same price, or I'll sell you more of the item for the same price.”
Najash is ḥarām, najash being the bidding up of the price of an item that one has no real interest in, only to fool another bidder.
It is ḥarām to lend someone a loan and then sell an item to him at a higher price than usual due to the loan, for such a loan is one from which the lender derives benefit, which is precisely what ribā is. For example, X lends Y $50. X, who runs a small business, then happens to have Y come down to his shop. Y decides to by a packet of chips, usually worth $2, though X demands that Y buy it for $5 due to the debt he owes X.
It is ḥarām to sell an item to someone whom one knows will use it to disobey Allah, such as selling a lighter to someone whom one knows will use it to smoke harmful substances. It is ḥarām to sell a defective item without pointing out the defect. It is ḥarām to purchase food during times of inflation or widespread need with the intent of storing it and selling it later on for a higher price when the situation becomes worse. It is ḥarām to deceive, to lie, to defraud others, and to cheat on the scales.
The above is what is required knowledge for every Muslim seeking to buy and sell, give or take a few matters. We ask Allah to grant us divine facilitation in carrying out his commands and avoiding his prohibitions, and to overlook and pardon our shortcomings. Upon Him do we rely, to Him do we turn to, and to Him is our return.
And Allah the Exalted knows best.
References
- Reliance of the Traveller, Sh. Nuh Ha Mim Keller (translation of ‘Umdat al-Sālik by Imām Aḥmad ibn Naqīb al-Miṣrī)
- The Ultimate Conspectus, Sh. Musa Furber (translation of Matn al-Ghāyah wa al-Taqrīb by Abū Shujā‘ al-Aṣfahānī)
- التقريرات السديدة في المسائل المفيدة، للسيد حسن بن أحمد بن محمد الكاف
- الياقوت النفيس في مذهب ابن إدريس، للسيد العلامة أحمد بن عمر الشاطري
- سلّم التوفيق إلى محبة الله على التحقيق للحبيب العلامة عبد الله بن حسين بن طاهر، مع شرحه المسمّى بكأس الرحيق للأستاذ صالح بن مطران بكيران بامعبد
- الفوائد المرضيةفي شرح المقدمة الحضرمية [الصغير] للإمام شمس الدين محمد بن أحمد الرملي
Footnotes
1 E.g. when a store owner leaves his shop and his friend sits at the counter to deal with customers, without having had the store owner's prior explicit authorisation. Though according to the other three schools as well as the old Shāfi‘ī school, such a transaction would be deemed valid if the owner later comes along and approves of the sale.↩
2 However, it is permissible to order goods (salam) that one has not seen if the item is described to the buyer and the buyer, upon receiving the item, finds it exactly as described.↩
3 Such as when the 10g and the 12g of gold happen to both be worth $500 each due to the former being purer than the latter – it would still be ḥarām to exchange the gold in such cases, for the determining factor is the mass and not the monetary value of the gold.↩
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