Financial Transactions in Islamic Jurisprudence Volume 1

Dr. Wahbah Al-Zuh.
ayls
Al-Fiqh Al-Islam wa Adillatuh
(Islamic Jurisprudence and Its Proofs)
Financial Transactions in
Islamic Jurisprudence
Volume 1
Translated by: Mahmoud A. El-Gamal, Ph.D

Revised by: Muhammad S. Eissa, Ph.D
ii
In The Name of All

ah, The Most Gracious, The Merciful
Typeset in LATEX 2 TM with ArabTEXTM macros by Mahmoud A. El-Gamal
c 2001 Dar Al-Fikr, Damascus

All rights reserved
Translator s Preface
This volume is an English translation of Volume 5 of Dr. Wahbah Al-Zuh.ayls
Al-Fiqh Al-Isl
am wa Adillatuh, Damascus: Dar Al-Fikr, Fourth edition, 1997
(ISBN: 1-57547-370-4). My goal in providing this translation was to give nonArabic readers access to the rich Islamic juristic literature on financial transactions. A Translation of Volume 6 is forthcoming shortly, Allah willing.
I should caution the uninitiated reader that this English translation is no
more accessible than the Arabic original. Islamic jurisprudence is a highly technical field, and jurists have somewhat unorthodox writing styles. In this sense,
juristic writings are no more accessible to new readers than any other set of
technical writings (in law, science, etc.). Moreover, Islamic jurists, especially in
the area of comparative jurisprudence, tend to write in a highly non-linear
style. By non-linear, I mean that the reader is required to take multiple
passes through any particular passage before the logic of the text becomes apparent. For example, the author may first mention the opinion of one jurist,
then mention an opposing opinion by other jurists, then mention the proof of
the latter group followed by a proof of the former. The text may then continue to go back-and-forth with discussions of the juristic principles upon which
the varying opinions are based. This zigzagging may continue for a number of
passages, requiring the reader to try to keep-up with the author. Whenever
possible, I tried to linearize the authors line of thought. However, in most
cases, I maintained the order of the text to avoid departing significantly from
its structure.
In some instances, the author gave numerous examples of a ruling, where a
few of them would illustrate the point. For instance, when he mentions homogeneous goods measured by number, he may enumerate five or six different fruits
as examples. In such instances, I only translated a few of the most relevant
examples to save the reader some time and space.
I must also warn the reader that the references given in the Arabic text, as
well as this translation, are far from perfect. In some cases, the author did not
give full citations for his references, in which case I simply translated his partial
citation. In other instances, the author gave the fullest possible citation, but the
format and information provided therein was insufficient to identify the edition,
publisher, etc. Many of the references are out of print, and lack proper citation
of place of publication, pubisher, and year. This makes it very difficult for a
reader who wishes to consult the original text that is cited by the author, and
iii
iv
TRANSLATOR S PREFACE
the volume and page numbers provided here are therefore of very little use. In a
partial attempt to standardize citations of those references for which the author
provided partial information, I included a standard author and year citation in
the text, with a bibliography at the end of the volume. For the benefit of the
reader, I also included in the citations an indication of the juristic school within
which that text is classified.
Mahmoud A. El-Gamal
Houston, TX
August 2001
Acknowledgments
I wish to thank Sheikh Mohamed Binzagr and Sheikh Khalid Abdul Hadi Taher
for their generous financial support that made this translation project possible.
I also wish to thank Sheikh Hussein Al-Banawi for his support of the study of
Islamic Economics, Finance, and Management at Rice University.
Last, but not least, I wish to thank Dr. Muhammad Eissa for carefully
reviewing my translation. It is impossible to have any publication, let alone a
translation, without mistakes. His efforts to minimize the number of remaining
errors are greatly appreciated.
May Allah reward all our efforts and good intentions.
vi
ACKNOWLEDGMENTS
Abbreviations and
Transliteration
0.1
List of abbreviations
Abbreviation
Full phrase
pbuh
peace be upon him

s.alla Allahu alayhi
wa sallam

rad.iya Allahu anhu
( anh
a)

Corresponding Arabic
c
mAbpwh
may Allah be please with him(her)
mAbpwt
may Allah be please with them
rad.iya Allahu c anhum (c anhuma)
vii
viii
0.2
ABBREVIATIONS AND TRANSLITERATION
Transliteration table
Transliteration
Arabic letter
letter name
Short vowels illustrated with consonant b
ba, bi, bu
fath.at, kasrat, ..dammat

Long vowels illustrated with consonant b

ba, b, b
u
alef, ya, waw
Consonants

a, i, u
hamza
b
ba

t
ta, ta marb
ut.a
th
tha
j
jm
h.
h.a
kh
kha
d
dal
dh
dhal
r
ra
z
zay
s
sn
sh
shn
s.
s.ad
d.
d.ad
t.
t.a
z.
z.a
ayn
gh
ghayn
f
fa
q
qaf
k
kaf
l
lam
m
mm
n
n
un
h
ha
w
waw
y
ya
c
0.3. GLOSSARY OF TRANSLITERATED TECHNICAL TERMS
0.3
ix
Glossary of transliterated technical terms

Transliteration
Sharc ; Sharc a
Quran
Translation
Islamic Law
The Revealed Scripture
H
. adth
Prophetic Tradition
Sunnah
Prophetic Actions and Traditions
faqh, fuqah
a
jurist, jurists
madhhab (pl. madhahib)
fatwa (pl. fatawa)
school(s) of jurisprudence
Islamic legal opinion(s)
ijma
consensus
ijitihad
juristic inference
qiyas
juristic analogy
istih.san
tarjh.
juristic approbation
jumh
ur
majority (of jurists)
h.alal
h.aram
permissible
makr
uh
disliked; reprehensible
mand
ub; mustah.abb
recommended; encouraged
fard.
aqd
obligation
.safqah
contract/deal
s.ghah
rukn (pl. arkan)
language
juristic preference
prohibited
contract
cornerstone(s)
shart. (pl. shur

ut.)
rushd
jab
condition(s)
discernment
qab
ul
acceptance
offer
Arabic

rq s
t r

r r

r
r s
r

q r r

r

Transliteration
h.ukm al-c aqd
Translation
legal status of the contract
h.aqq (pl. h.uq

uq)
khiyar
mawq
uf
legal right(s)
s.ah.h.
nafidh
lazim
valid
executable
bat.il
invalid
fasid
defective
bayc
sale
mal (mutaqawwam)
(valued) property
qabd.; tasallum
receipt
mithl; dayn
qm; c ayn
fungible
non-fungible
dayn
debt or liability
thaman
qmah
price
option
suspended
binding
value
s.arf
murabah.a
currency exchange
tawliya
sale at cost
cost-plus sale
wad. a
juzaf
sale at a loss
h.iwalah
Bill of exchange
h.iwalah
transfer of liability
kaf
alah
guarantee
kafl
guarantor
iqalah
revocation
khul
gross-sale
divorce at the instance of the wife
Arabic


Transliteration
muc at.ah; mur
awad.ah
Translation
hand-to-hand sale
salam
Islamic forward contract
istis.nac
mud.arabah
commission to manufacture
sharikah; musharakah
jar; ijarah
partnership or corporation
qard.
ic arah
loan
simple loan
jic alah
promise of reward
hibah
c
silent partnership
lease; hiring
gift
c
d
a ; wad ah
deposit
wakl; wakalah
agent; agency
simsar; samsarah
broker; brokerage
fud.u
l
rahn
uncommissioned agent
d.aman
guaranty
amanah
trust
rib
a
usury
jah
alah
ignorance
gharar
ghubn (f
ah.ish)
tadls; ghishsh

risk and uncertainty
pawning
(excessive) inequity
cheating
Arabic

xi
xii
Translator s Preface
This volume is an English translation of Volume 5 of Dr. Wahbah Al-Zuh.ayls
Al-Fiqh Al-Isl
am wa Adillatuh, Damascus: Dar Al-Fikr, Fourth edition, 1997
(ISBN: 1-57547-370-4). My goal in providing this translation was to give nonArabic readers access to the rich Islamic juristic literature on financial transactions. A Translation of Volume 6 is forthcoming shortly, Allah willing.
I should caution the uninitiated reader that this English translation is no
more accessible than the Arabic original. Islamic jurisprudence is a highly technical field, and jurists have somewhat unorthodox writing styles. In this sense,
juristic writings are no more accessible to new readers than any other set of
technical writings (in law, science, etc.). Moreover, Islamic jurists, especially in
the area of comparative jurisprudence, tend to write in a highly non-linear
style. By non-linear, I mean that the reader is required to take multiple
passes through any particular passage before the logic of the text becomes apparent. For example, the author may first mention the opinion of one jurist,
then mention an opposing opinion by other jurists, then mention the proof of
the latter group followed by a proof of the former. The text may then continue to go back-and-forth with discussions of the juristic principles upon which
the varying opinions are based. This zigzagging may continue for a number of
passages, requiring the reader to try to keep-up with the author. Whenever
possible, I tried to linearize the authors line of thought. However, in most
cases, I maintained the order of the text to avoid departing significantly from
its structure.
In some instances, the author gave numerous examples of a ruling, where a
few of them would illustrate the point. For instance, when he mentions homogeneous goods measured by number, he may enumerate five or six different fruits
as examples. In such instances, I only translated a few of the most relevant
examples to save the reader some time and space.
I must also warn the reader that the references given in the Arabic text, as
well as this translation, are far from perfect. In some cases, the author did not
give full citations for his references, in which case I simply translated his partial
citation. In other instances, the author gave the fullest possible citation, but the
format and information provided therein was insufficient to identify the edition,
publisher, etc. Many of the references are out of print, and lack proper citation
of place of publication, pubisher, and year. This makes it very difficult for a
reader who wishes to consult the original text that is cited by the author, and
iii
iv
TRANSLATOR S PREFACE
the volume and page numbers provided here are therefore of very little use. In a
partial attempt to standardize citations of those references for which the author
provided partial information, I included a standard author and year citation in
the text, with a bibliography at the end of the volume. For the benefit of the
reader, I also included in the citations an indication of the juristic school within
which that text is classified.
Mahmoud A. El-Gamal
Houston, TX
August 2001
Acknowledgments
I wish to thank Sheikh Mohamed Binzagr and Sheikh Khalid Abdul Hadi Taher
for their generous financial support that made this translation project possible.
I also wish to thank Sheikh Hussein Al-Banawi for his support of the study of
Islamic Economics, Finance, and Management at Rice University.
Last, but not least, I wish to thank Dr. Muhammad Eissa for carefully
reviewing my translation. It is impossible to have any publication, let alone a
translation, without mistakes. His efforts to minimize the number of remaining
errors are greatly appreciated.
May Allah reward all our efforts and good intentions.
vi
ACKNOWLEDGMENTS
Abbreviations and
Transliteration
0.1
List of abbreviations
Abbreviation
Full phrase
pbuh
peace be upon him

s.alla Allahu alayhi
wa sallam

rad.iya Allahu anhu
( anh
a)

Corresponding Arabic
c
mAbpwh
may Allah be please with him(her)
mAbpwt
may Allah be please with them
rad.iya Allahu c anhum (c anhuma)
vii
viii
0.2
Transliteration table
Transliteration
Arabic letter
letter name
Short vowels illustrated with consonant b
ba, bi, bu
fath.at, kasrat, ..dammat

Long vowels illustrated with consonant b

ba, b, b
u
alef, ya, waw
Consonants

a, i, u
hamza
b
ba

t
ta, ta marb
ut.a
th
tha
j
jm
h.
h.a
kh
kha
d
dal
dh
dhal
r
ra
z
zay
s
sn
sh
shn
s.
s.ad
d.
d.ad
t.
t.a
z.
z.a
ayn
gh
ghayn
f
fa
q
qaf
k
kaf
l
lam
m
mm
n
n
un
h
ha
w
waw
y
ya
c
0.3
ix
Glossary of transliterated technical terms

Transliteration
Sharc ; Sharc a
Quran
Translation
Islamic Law
The Revealed Scripture
H
. adth
Prophetic Tradition
Sunnah
Prophetic Actions and Traditions
faqh, fuqah
a
jurist, jurists
madhhab (pl. madhahib)
fatwa (pl. fatawa)
school(s) of jurisprudence
Islamic legal opinion(s)
ijma
consensus
ijitihad
juristic inference
qiyas
juristic analogy
istih.san
tarjh.
juristic approbation
jumh
ur
majority (of jurists)
h.alal
h.aram
permissible
makr
uh
disliked; reprehensible
mand
ub; mustah.abb
recommended; encouraged
fard.
aqd
obligation
.safqah
contract/deal
s.ghah
rukn (pl. arkan)
language
juristic preference
prohibited
contract
cornerstone(s)
shart. (pl. shur

ut.)
rushd
jab
condition(s)
discernment
qab
ul
acceptance
offer
Arabic

rq s
t r

r r

r
r s
r

q r r

r

Transliteration
h.ukm al-c aqd
Translation
legal status of the contract
h.aqq (pl. h.uq

uq)
khiyar
mawq
uf
legal right(s)
s.ah.h.
nafidh
lazim
valid
executable
bat.il
invalid
fasid
defective
bayc
sale
mal (mutaqawwam)
(valued) property
qabd.; tasallum
receipt
mithl; dayn
qm; c ayn
fungible
non-fungible
dayn
debt or liability
thaman
qmah
price
option
suspended
binding
value
s.arf
murabah.a
currency exchange
tawliya
sale at cost
cost-plus sale
wad. a
juzaf
sale at a loss
h.iwalah
Bill of exchange
h.iwalah
transfer of liability
kaf
alah
guarantee
kafl
guarantor
iqalah
revocation
khul
gross-sale
divorce at the instance of the wife
Arabic


Transliteration
muc at.ah; mur
awad.ah
Translation
hand-to-hand sale
salam
Islamic forward contract
istis.nac
mud.arabah
commission to manufacture
sharikah; musharakah
jar; ijarah
partnership or corporation
qard.
ic arah
loan
simple loan
jic alah
promise of reward
hibah
c
silent partnership
lease; hiring
gift
c
d
a ; wad ah
deposit
wakl; wakalah
agent; agency
simsar; samsarah
broker; brokerage
fud.u
l
rahn
uncommissioned agent
d.aman
guaranty
amanah
trust
rib
a
usury
jah
alah
ignorance
gharar
ghubn (f
ah.ish)
tadls; ghishsh

risk and uncertainty
pawning
(excessive) inequity
cheating
Arabic

xi
xii
Contents
Translators Preface
iii
Acknowledgments
Abbreviations and Transliteration

vii
0.1 List of abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . vii
0.2 Transliteration table . . . . . . . . . . . . . . . . . . . . . . . . . viii
0.3 Glossary of transliterated technical terms . . . . . . . . . . . . . ix
The Sales Contract (c Aqd Al-Bayc )
Authors plan: . . . . . . . . . . . . . . . . . . . . . . . .
1 Constituents of Sale
1.1 Definition, legitimacy, and ethics . . . . .
Definition of sale . . . . . . . . . .
Legitimacy of sale . . . . . . . . .
Ethics of sales . . . . . . . . . . .
1.2 Cornerstones of sale contracts . . . . . . .
1.2.1 Language of offer and acceptance .
Some differences between sales and
The physical exchange sale . . . .
1.2.2 Nature of offer and acceptance: . .
A discussion of khiy
ar al-majlis . .
2 Conditions of Sale
2.1 Conditions of conclusion . . . . . . .
2.1.1 Eligibility of the parties . . .
Sale by a discerning child . .
Sales under coercion . . . . .
Compelled sale . . . . . . . .
Sale to pre-empt danger . . .
Brokerage sale: . . . . . . . .
2.1.2 Correspondence of acceptance
xiii
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marriage
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to the
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offer
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xiv
CONTENTS
2.1.3
2.2
2.3
2.4
2.5
Unity of the contract session . . . . . . . . . . . . .

Contracting while walking or riding . . . . . . . . .
Contracting on a ship or airplane . . . . . . . . . . .
Contracting with an absent party . . . . . . . . . . .
Contracting via a messenger . . . . . . . . . . . . . .
Contracting by written correspondence . . . . . . . .
Divorce and khulc . . . . . . . . . . . . . . . . . . . .
Marriage . . . . . . . . . . . . . . . . . . . . . . . .
The principles of unity of a .safqa, and its parting . .
Conditions for the executability of a sale . . . . . . . . . . .
Executable and suspended sales . . . . . . . . . . . .
Jurists views on uncommissioned agent . . . . . . .
Validity of the dealings of an uncommissioned agent
Nullification of uncommissioned agent contracts . . .
One uncommissioned agent for two parties . . . . . .
Suspension of transactions by a discerning child . . .
Conditions for the validity of a sale . . . . . . . . . . . . . .
General conditions . . . . . . . . . . . . . . . . . . .
Specific conditions . . . . . . . . . . . . . . . . . . .
Conditions for bindingness (luz
um) . . . . . . . . . . . . . .
Summary of sale conditions . . . . . . . . . . . . . . . . . .
2.5.1 Conditions of sale for the H
. anafs . . . . . . . . . . .
(i) Conditions of conclusion . . . . . . . . . . . . . .
(ii) Conditions of validity . . . . . . . . . . . . . . .
(iii) Conditions of executability . . . . . . . . . . . .
(iv) Conditions of bindingness . . . . . . . . . . . . .
2.5.2 Conditions of sale for the Maliks . . . . . . . . . . .
2.5.3 Conditions of sale for the Shafics . . . . . . . . . . .
2.5.4 Conditions of sale for the H

. anbals . . . . . . . . . .
2.5.5 Agreements and differences in sale conditions . . . .
3 Status, Object, and Price

3.1 Status of the contract . . . . . . . . . . . . . . . . . . . .
Rights attached to merchandise . . . . . . . . . . .
3.2 Price and object of sale . . . . . . . . . . . . . . . . . . .
3.2.1 Specification of the price and object . . . . . . . .
Specification of the object of sale . . . . . . . . . .
Differences between price, value, and debt . . . . .
Differentiation between the price and object of sale
3.2.2 Rulings pertaining to object of sale and price . . .
Diminution in the object or price . . . . . . . . . .
H
. anaf views on price perishing . . . . . . . . . . .
H
. anaf views on diminution of the prices value . .
Reselling unreceived merchandise . . . . . . . . . .
Reselling an un-received price . . . . . . . . . . . .
Object and price delivery . . . . . . . . . . . . . .
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19
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61
62
CONTENTS
xv
The right to withhold the object . . . . . . . . . . . . . .
Forfeiting the right to withhold . . . . . . . . . . . . . . .
Delivery and receipt: meaning and means . . . . . . . . .
63
64
66
4 Invalid and Defective Sales

4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defective and invalid contracts . . . . . . . . . . . . . . .
4.2 Types of invalid sales . . . . . . . . . . . . . . . . . . . . . . . . .
4.2.1 Sale of a non-existent object . . . . . . . . . . . . . . . .
H
. anbal opinions regarding the sale of non-existent objects
4.2.2 Sale of undeliverable goods . . . . . . . . . . . . . . . . .
4.2.3 Sales of liabilities (including debts) . . . . . . . . . . . . .
Sale of liabilities with a deferred price . . . . . . . . . . .
Sale of debt . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Selling debt to the debtor . . . . . . . . . . . . . . . .
2. Selling debt to a third party . . . . . . . . . . . . . . .
4.2.4 Gharar sales: . . . . . . . . . . . . . . . . . . . . . . . . .
Legal status of insurance . . . . . . . . . . . . . . . . . .

Status of cooperative insurance . . . . . . . . . . . . . . .
The fatwa of Ibn c Abid

n: . . . . . . . . . . . . . . . . . .
Insurance and re-insurance . . . . . . . . . . . . . . . . .
Types of insurance . . . . . . . . . . . . . . . . . . . . . .
Islamic rulings on insurance . . . . . . . . . . . . . . . . .
Re-insurance and compound insurance . . . . . . . . . . .
4.2.5 The sale of impure objects . . . . . . . . . . . . . . . . . .
4.2.6 Downpayment sale . . . . . . . . . . . . . . . . . . . . . .
4.2.7 The sale of water . . . . . . . . . . . . . . . . . . . . . . .
The status of water sales . . . . . . . . . . . . . . . . . .
4.3 Types of defective sales . . . . . . . . . . . . . . . . . . . . . . .
4.3.1 Sale of unknowns . . . . . . . . . . . . . . . . . . . . . . .
Gharar and ignorance (jah
ala) . . . . . . . . . . . . . . .
4.3.2 Suspended conditional sales and future sales . . . . . . . .

4.3.3 Sales of absent and uninspected non-fungibles . . . . . . .
Sale of difficult to inspect items . . . . . . . . . . . . . . .
4.3.4 Trading by a blind person . . . . . . . . . . . . . . . . . .
4.3.5 Sale with a forbidden price . . . . . . . . . . . . . . . . .
4.3.6 Time sales (buy
uc al-
aj
al) . . . . . . . . . . . . . . . . . .
Same-item sales (bayc al-cna) . . . . . . . . . . . . . . . .
Tawarruq sales . . . . . . . . . . . . . . . . . . . . . . . .
4.3.7 The sale of grapes to a wine-maker . . . . . . . . . . . . .
4.3.8 Two sales in one & conditions in sales . . . . . . . . . . .
4.3.9 Deferred price and installment sales . . . . . . . . . . . .
4.3.10 Purposeful sale of appertainings . . . . . . . . . . . . . .
4.3.11 Sale of property before receiving it . . . . . . . . . . . . .
4.3.12 Conditionality of deferment . . . . . . . . . . . . . . . . .
4.3.13 Sales with defective conditions . . . . . . . . . . . . . . .
71
71
73
74
74
76
76
78
79
79
80
80
82
87
87
88
90
91
92
95
97
99
100
102
104
104
109
109
110
112
112
113
113
114
117
117
117
119
120
121
123
123
xvi
CONTENTS
4.4
4.5
Valid conditions (al-shart. al-s.ah.h.) . . . . . . . . . . . . . 123

Defective condition (al-shart. al- f
asid) . . . . . . . . . . . 127
3. Invalid and nugatory conditions (al-shart. Al-laghw or
al-b
a.til) . . . . . . . . . . . . . . . . . . . . . . . 128
Status of a sale with an attached condition for non-H
. anafs129
4.3.14 Sale of fruits and vegetables . . . . . . . . . . . . . . . . . 131
Status of leaving fruits after the goodness of their quality
is manifested when they are sold unconditionally 134
Status of newly-grown fruits during a waiting period not
made a condition of sale . . . . . . . . . . . . . . 134
Sale of fruits, cucumbers, and watermelon . . . . . . . . . 137
Sale of wheat in its spikes . . . . . . . . . . . . . . . . . . 138
Status of defective sales . . . . . . . . . . . . . . . . . . . . . . . 139
4.4.1 Dispossession of an object purchased through a defective
sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
4.4.2 Invalidating the right to void . . . . . . . . . . . . . . . . 141
1. Dispossession of an item purchased in a defective sale: 141
2. Increase in the object of a defective sale . . . . . . . . 142
Summary of forbidden sales in Islam . . . . . . . . . . . . . . . . 144
4.5.1 Ineligibility of a contracting party . . . . . . . . . . . . . 145
4.5.2 Sales forbidden based on the contract language . . . . . . 146
4.5.3 Sales forbidden based on the objects of sale . . . . . . . . 148
4.5.4 Sales forbidden based on a description, condition, or legal
prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Defective or invalid sales for the Maliks . . . . . . . . . . 158
Invalid sales for the Shafics . . . . . . . . . . . . . . . . . 159
Invalid sales for the H

. anbals . . . . . . . . . . . . . . . . 162
Forbidden but valid sales for the Shafics . . . . . . . . . . 163
5 Options
5.1
5.2
5.3
5.4
5.5
Types of options . . . . . . . . . . . . . . . . . .
Characteristics option khiy
ar al-was.f . . . . . . . . . . .
5.1.1 Option conditions . . . . . . . . . . . . . . . . .

5.1.2 Status . . . . . . . . . . . . . . . . . . . . . . . .
Price payment option (khiy
ar al-naqd) . . . . . . . . . .
5.2.1 When is this option dropped ? . . . . . . . . . .

Specification option (khiy
ar al-tac yn) . . . . . . . . . .
5.3.1 Option conditions . . . . . . . . . . . . . . . . .

5.3.2 Status . . . . . . . . . . . . . . . . . . . . . . . .
Fraud option (khiy
ar al-ghubn) . . . . . . . . . . . . . .
5.4.1 Status . . . . . . . . . . . . . . . . . . . . . . . .
c
5.4.2 Three H
. anbal categories: ghubn, tadls, and ayb
1. Types of deception (ghubn) . . . . . . . . . . .

(al-tadls) . . . . . . . .
2. Concealment of defect
3. Defect option (khiy
ar al-c ayb) . . . . . . . . .
Revelation option (khiy

ar kashf al-h.a
l) . . . . . . . . . .
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165
165
168
169
169
169
170
171
171
172
172
173
173
173
174
174
175
CONTENTS
5.6
5.7
5.8
5.9
5.10
5.11
5.12
Betrayal option (khiy

ar al-khiy
anah) . . . . . . . . . .
Sale partition option (khiy

ar tafarruq al-s.afqa) . . . .
Uncommissioned agent (fud.u

l) sale option . . . . . . .
Option based on rights of others . . . . . . . . . . . .
Quantity option (khiy
ar al-kimmiyya) . . . . . . . . .
Entitlement option (khiy

ar al-istih.q
aq) . . . . . . . . .
Condition option (khiy

ar al-shart.) . . . . . . . . . . .
5.12.1 Defect-inducing options (al-khiy

ar al-mufsid) vs.
tions (al-khiy
ar al-mashr
uc ) . . . . . . . . . . .
Defect-inducing options (al-khiy

ar al-mufsid) .
Legal options (al-khiy

ar al-mashr
uc ) . . . . . .
5.12.2 Jurist opinions regarding option period . . . .

Determination of the option period limit . . . .
5.12.3 Methods of dropping an option . . . . . . . . .
1. Manifest dropping of an option . . . . . . .
2. Inferred dropping of an option . . . . . . . .
Options dropped by necessity . . . . . . . . . .
1. Passage of the option period . . . . . . . . .
2. Death of the option holder . . . . . . . . . .
3. States equivalent to death . . . . . . . . . .
4. Object of sale perishing . . . . . . . . . . . .
5. New object of sale defects . . . . . . . . . .
5.12.4 Status of a contract during its option period .
5.12.5 Means of voiding or permission . . . . . . . . .
5.13 Defect option (khiy
ar al-c ayb) . . . . . . . . . . . . . .
5.13.1 Option legality and contract status . . . . . . .

Legality of the defect option . . . . . . . . . . .
Legal status of the sale . . . . . . . . . . . . .
5.13.2 Defects that result in an option . . . . . . . . .
5.13.3 Finding a defect, and establishing an option . .
Conditions for establishing a defect option: . .
Means of establishing the existence of a defect
Soliciting the sellers oath . . . . . . . . . . . .
5.13.4 Option consequences, and voiding the contract
Consequences of the defect option . . . . . . .
Voiding the contract . . . . . . . . . . . . . . .
Timing of contract voiding . . . . . . . . . . .
5.13.5 Return impediments and option dropping . . .
Changes that occur prior to receipt . . . . . . .
Changes that occur after receipt . . . . . . . .
5.13.6 Seller liability for defects . . . . . . . . . . . .
5.14 Inspection option (khiy
ar al-ruyah) . . . . . . . . . .
5.14.1 Legality of the inspection option . . . . . . . .

5.14.2 Time of establishment of the inspection option
5.14.3 Means of establishing the inspection option . .
5.14.4 Sales with inspection options . . . . . . . . . .
xvii
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legal op. . . . . .
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175
175
178
178
179
179
180
180
180
181
182
183
184
184
184
185
186
186
187
188
191
192
196
198
198
198
199
199
200
200
201
205
205
205
205
206
207
208
209
212
214
215
218
218
219
xviii
CONTENTS
Characteristics of such sales . . . . . . . . . . . . . . . . .
Legal status of the sale . . . . . . . . . . . . . . . . . . .
5.14.5 Establishing the inspection option . . . . . . . . . . . . .
Means of effecting inspection . . . . . . . . . . . . . . . .
Opinions of non-H
. anaf jurists . . . . . . . . . . . . . . .
Sale based on a sample (bayc al-num
udhaj) . . . . . . . .
Commissioning an agent for inspection or receipt . . . . .

Effective inspection of the merchandise . . . . . . . . . . .
Disagreement regarding inspection . . . . . . . . . . . . .
Inspection in the distant past . . . . . . . . . . . . . . . .
5.14.6 Dropping the inspection option . . . . . . . . . . . . . . .
5.14.7 Conditions of voiding . . . . . . . . . . . . . . . . . . . .
What voids a contract in this context . . . . . . . . . . .
Conditions of voiding the contract based on the inspection
option . . . . . . . . . . . . . . . . . . . . . . . .
II
Types of Sale (anwac u al-buy

uc )
6 The Forward Contract (salam)

6.1 Legality of forward contracts . . . . . . . . . . . . . . . . . . . .
6.2 Defining salam and its cornerstones . . . . . . . . . . . . . . . . .
6.2.1 Defining salam . . . . . . . . . . . . . . . . . . . . . . . .
6.2.2 Cornerstone of salam . . . . . . . . . . . . . . . . . . . . .
6.3 Conditions of forward sale . . . . . . . . . . . . . . . . . . . . . .
6.3.1 Conditions for the price of a forward sale . . . . . . . . .
6.3.2 Conditions for the object of a forward sale . . . . . . . . .
6.3.3 Forward sales of animals and their parts . . . . . . . . . .
6.3.4 Forward sales of meat attached to bones . . . . . . . . . .
6.3.5 Forward sales of fish . . . . . . . . . . . . . . . . . . . . .
6.3.6 Forward sales of clothes . . . . . . . . . . . . . . . . . . .
6.3.7 Forward sales of hay . . . . . . . . . . . . . . . . . . . . .
6.3.8 Forward sales of bread . . . . . . . . . . . . . . . . . . . .
6.3.9 Lending bread . . . . . . . . . . . . . . . . . . . . . . . .
6.3.10 Shafic conditions for forward sales . . . . . . . . . . . . .
6.4 Legal status of forward sales . . . . . . . . . . . . . . . . . . . . .

6.5 Differences between forward and regular sales . . . . . . . . . . .
6.5.1 Exchange during the contract session . . . . . . . . . . . .
6.5.2 Revocation of part of a forward sale . . . . . . . . . . . .
6.5.3 Exonerating the buyer of the price . . . . . . . . . . . . .
6.5.4 Bill of exchange (h.aw
alah), assumption of responsibility
for a liability (kaf
alah), and pawning of the price and object of a forward sale . . . . . . . . . . . . . . . . . . . . .
6.5.5 Receipt of a defective price . . . . . . . . . . . . . . . . .
219
219
220
221
224
225
226
227
227
228
228
230
230
230
233
237
237
238
238
238
239
240
242
251
252
252
252
253
253
254
254
255
256
256
258
259
260
262
CONTENTS
xix
7 Commission to Manufacture (istis.n

ac )
Prologue . . . . . . . . . . . . . . . . . . . .
Plan of this chapter . . . . . . . . . . . . .
7.1 Commission to manufacture (istis.n
ac ) . . . . . . .
7.1.1 Definition . . . . . . . . . . . . . . . . . . .
7.1.2 A promise or a sale? . . . . . . . . . . . . .
7.1.3 Proof of legality . . . . . . . . . . . . . . .
7.1.4 Appended conditions and legal status . . .
Appended conditions . . . . . . . . . . . . .
Legal status and characteristics . . . . . . .
7.2 Commissioning to manufacture vs. forward sales .
7.2.1 Similarities and differences . . . . . . . . .
7.2.2 Conditions of both contracts . . . . . . . .
7.3 The positive role of commissioning to manufacture
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267
267
268
268
268
269
271
272
274
274
276
276
277
278
8 Currency Exchange (s.arf)

Definition . . . . . . . . . . . . . . . .
Conditions . . . . . . . . . . . . . . .
8.1 Consequences of the mutual receipt condition
8.2 Debt-Clearance in .sarf and salam . . . . . . .
8.3 Transfers based on loans . . . . . . . . . . . .
8.4 Debt repayment in a different currency . . . .
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281
281
281
283
287
290
291
9 Gross-Sales (bayc al-jiz

af)
9.1 Nature of the contract . . . . . . . . . .
9.2 Proof of its legality . . . . . . . . . . . .
9.3 Status of gross-sales . . . . . . . . . . .
9.3.1 H
. anaf opinions . . . . . . . . . .
Containers of unknown measure
Known volumes of food . . . . .
9.3.2 Malik opinions . . . . . . . . . .
9.3.3 Shafic opinions . . . . . . . . . .
9.3.4 H
. anbal opinions . . . . . . . . .
9.4 Gross-Sales of money and jewelry . . . .
9.5 Conditions of gross-sale . . . . . . . . .
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293
293
293
294
294
296
296
297
297
298
299
304
10 Rib
a
10.1 Definition and Proof of Prohibition . . . . . . . . . .
10.2 Types of Rib
a . . . . . . . . . . . . . . . . . . . . . .
10.2.1 Suspicions of rib
a. . . . . . . . . . . . . . . .
10.3 Causes of rib
a. . . . . . . . . . . . . . . . . . . . . .
10.3.1 H
. anaf rulings . . . . . . . . . . . . . . . . . .
1. Reasons for the prohibition of surplus rib
a
2. Minimum amount to effect surplus rib
a . .
3. Types of causes . . . . . . . . . . . . . . .
4. Measuring goods eligible for rib
a. . . . . .
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309
309
311
315
315
316
317
318
318
318
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xx
CONTENTS
10.4
10.5
10.6
10.7
10.8
5. Irrelevance of the goods quality . . . . . . . . . . . .

6. The cause of rib
a al-nasah . . . . . . . . . . . . . .
7. Reasons for forbidding rib
a al-nasah . . . . . . . . .
Commercial banking rib
a . . . . . . . . . . . . . . . . .
8. Unity and Diversity of Genera . . . . . . . . . . . . .
H
. anaf proofs . . . . . . . . . . . . . . . . . . . . . . . .
10.3.2 Malik rulings . . . . . . . . . . . . . . . . . . . . . . . .
10.3.3 Shafic rulings . . . . . . . . . . . . . . . . . . . . . . . .
Unity and difference in genus . . . . . . . . . . . . . . .

10.3.4 H
. anbal rulings . . . . . . . . . . . . . . . . . . . . . . .
Unity and difference in genus . . . . . . . . . . . . . . .
10.3.5 Z.ahiri rulings . . . . . . . . . . . . . . . . . . . . . . . .
10.3.6 Juristic Preference (tarjh.) . . . . . . . . . . . . . . . . .
Basic types of rib
a . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.1 Defer and increase . . . . . . . . . . . . . . . . . . . . .
10.4.2 Reduction due to pre-payment . . . . . . . . . . . . . .
Conditions for trading goods eligible for rib
a . . . . . . . . . .
Consequences of differences in rib
a criteria . . . . . . . . . . . .
10.6.1 Consequences relating to rib
a al-fad.l . . . . . . . . . . .
1. Trading flour for flour or grains . . . . . . . . . . . .
2. Trading an animal for meat . . . . . . . . . . . . . .
10.6.2 Consequences relating to rib
a al-nasah . . . . . . . . .
1. Consequences of eligibility for rib
a. . . . . . . . . . .
2. Consequences of genus classification . . . . . . . . . .
Reasons for prohibiting rib
a . . . . . . . . . . . . . . . . . . . .
10.7.1 Rib
a in loans . . . . . . . . . . . . . . . . . . . . . . . .
Commercial bank interest is forbidden . . . . . . . . . . . . . .
10.8.1 Gradual prohibition . . . . . . . . . . . . . . . . . . . .
10.8.2 The forbidden rib
a . . . . . . . . . . . . . . . . . . . . .
10.8.3 Commercial bank rib
a . . . . . . . . . . . . . . . . . . .
10.8.4 Legal treatments of banking interest in Arab Countries
10.8.5 Arguments of those who permit banking interest . . . .
10.8.6 Rules for dealing with Islamic financial institutions . . .
10.8.7 What distinguishes Islamic financial institutions? . . . .
10.8.8 Is dealing with Islamic financial institutions permitted?
11 Trust Sales (mur

abah.a, tawliya, wad.c a)
11.1 Cost-plus sales (mur
abah.a) . . . . . . . . . . . . . .
11.1.1 Conditions of mur
abah.a . . . . . . . . . . . .
11.1.2 Initial price, and what may be appended to it
11.1.3 Disclosure in mur
abah.a . . . . . . . . . . . .
11.1.4 Betrayal of trust . . . . . . . . . . . . . . . .
Mur
abah.a to-order . . . . . . . . . . . . . . .
11.2 Revocation of Sale (iq
alah) . . . . . . . . . . . . . .
11.2.1 Legality, definition, and the cornerstone . . .
11.2.2 Revocation and its legal status . . . . . . . .
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319
320
321
321
322
322
323
324
325
326
327
327
328
329
329
329
330
331
331
332
333
334
334
335
337
338
339
340
342
342
344
345
349
349
352
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353
354
355
356
357
359
360
362
362
363
CONTENTS
xxi
11.2.3 Conditions of validity . . . . . . . . . . . . . . . . . . . . 365
III
The loan contract (c aqd al-qard.)
12 The loan contract (c aqd al-qard.)

12.1 Defining loans . . . . . . . . . . . . . . . .
12.2 Legality of loans . . . . . . . . . . . . . .
12.3 Contract parties and language . . . . . . .
12.4 Options or deferment in loans . . . . . . .
12.5 Objects eligible for lending . . . . . . . .
12.6 Legal status of loans . . . . . . . . . . . .
12.7 Summary of validity conditions . . . . . .
12.8 Valid and corrupting conditions . . . . . .
12.9 Repayment timing and methods . . . . . .
12.10Loans beneficial to the lender . . . . . . .
12.11Letters of credit (al-suftajah) . . . . . . .
12.12Different types of Investment Certificates
IV
367
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The Lease Contract (c aqd al-jar)
369
370
370
371
371
372
373
374
375
375
376
378
379
381
13 Legality, Cornerstones, and Essence

385
13.1 Cornerstone and essence of leasing . . . . . . . . . . . . . . . . . 386
Ibn Al-Qayyims opinion on leasing . . . . . . . . . . . . 388
14 Lease Conditions
14.1 Conditions of Conclusion . . . . . . . . . . . . . . . . . .
14.2 Conditions of executability . . . . . . . . . . . . . . . . .
14.3 Conditions of validity . . . . . . . . . . . . . . . . . . . .
14.3.1 Consent of the contracting parties . . . . . . . . .
14.3.2 Knowledge of lease object . . . . . . . . . . . . . .
1. Knowledge of the usufruct . . . . . . . . . . . .
2. Knowledge of the lease period . . . . . . . . . .
Month-to-month leases . . . . . . . . . . . . . . . .
Knowledge of the work for which a worker is hired
Joint specification of time period and work . . . .
14.3.3 Legal and physical availability of lease object . . .
14.3.4 Permissibility of the usufruct . . . . . . . . . . . .
14.3.5 Hiring for religious obligations . . . . . . . . . . .
14.3.6 Hired individuals benefiting from their work . . . .
14.3.7 Customary use of lease contracts . . . . . . . . . .
14.3.8 Location conditions for the leased object . . . . . .
14.3.9 Conditions that pertain to wages . . . . . . . . . .
1. Wages must be known valued property . . . . .
Hiring a wet-nurse . . . . . . . . . . . . . . . . . .
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389
389
390
391
391
391
391
392
393
393
393
395
397
398
399
400
400
401
401
401
xxii
CONTENTS
Wages that are part of the contract object . . . . . . . . .

Paying a lessor or lessee to vacate the premises . . . . . .
Islamic Fiqh Council ruling #6, 1408 A.H./1988 C.E. . .
2. Rent cannot be a usufruct of the same genus . . . . . .
14.3.10 A condition pertaining to the cornerstone of the contract
14.4 Conditions of bindingness . . . . . . . . . . . . . . . . . . . . . .
14.4.1 Leased item must remain free of defects . . . . . . . . . .
14.4.2 Valid excuses to void the contract . . . . . . . . . . . . .
H
. anafs opinions . . . . . . . . . . . . . . . . . . . . . . .
Shafic opinions . . . . . . . . . . . . . . . . . . . . . . . .
1. Contracting parties eligibility . . . . . . . . . . . . . .

2. Contract language . . . . . . . . . . . . . . . . . . . . .
3. Usufruct . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Rental or wage payment . . . . . . . . . . . . . . . . .
402
402
403
404
404
405
405
406
407
408
408
408
408
409
15 Characteristics and Legal Status

15.1 Characteristics of leases . . . . . . . . . . . . . . . . . . . . . . .
15.1.1 Options in lease contracts . . . . . . . . . . . . . . . . . .
15.2 Legal status of leases . . . . . . . . . . . . . . . . . . . . . . . . .
411
411
412
412
16 Two Types of Leasing

16.1 Leases for usufruct . . . . . . . . . . . . . . . . .
16.1.1 Establishment of ownership of the rent . .
16.1.2 Delivery of the leased object . . . . . . .
16.1.3 Deferred leasing . . . . . . . . . . . . . .
16.1.4 Miscellaneous other issues . . . . . . . . .
Means of extracting usufruct . . . . . . .
Leasing of land . . . . . . . . . . . . . . .
Leasing of riding animals . . . . . . . . .
Repairs of the leased item . . . . . . . . .
Lessee responsibilities at the conclusion of
16.2 Legal status of hiring workers . . . . . . . . . . .
16.3 The Shafic classification of leases . . . . . . . . .
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lease
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17 Guarantees In Leasing
17.1 Guarantee of leased items . . . . . . . . . . . . . . . .
17.2 Hired workers guarantee of work materials . . . . . .
17.2.1 Exclusively hired worker . . . . . . . . . . . . .
17.2.2 Non-exclusively hired workers . . . . . . . . . .
17.2.3 Converting possession from trust to guarantee .
Apprentice mistakes . . . . . . . . . . . . . . .
Blood-letting and circumcision . . . . . . . . .
17.3 Violation of lease conditions . . . . . . . . . . . . . . .
17.3.1 Leased riding animals . . . . . . . . . . . . . .
17.3.2 Non-exclusively hired workers . . . . . . . . . .
17.3.3 If the product perishes . . . . . . . . . . . . . .
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413
413
413
415
415
416
416
416
416
417
417
418
419
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421
421
421
421
421
423
423
424
424
424
425
425
CONTENTS
xxiii
18 Resolving Disagreements
429
18.1 Disagreements over the product . . . . . . . . . . . . . . . . . . . 430
18.2 Disagreement over wage entitlement . . . . . . . . . . . . . . . . 430
19 Lease Termination
19.1 Death of one party . . . . . .
19.2 Revocation . . . . . . . . . .
19.3 Perishing of the leased object
19.4 Expiration of the lease period
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Promise of reward (jic alah)

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Partnerships (al-sharik
at)
21 Introduction to Partnerships
21.1 Legality of Partnership . . . . . . .
21.2 Types of partnerships . . . . . . .
21.2.1 General partnership . . . .
21.2.2 Contract-based partnership
433
433
433
434
434
435
20 Promise of Reward (jic a

lah)
20.1 Definition . . . . . . . . . . . . . . . . . .
20.2 Legality of the contract . . . . . . . . . .
20.3 Contract language . . . . . . . . . . . . .
20.4 Differences between jic a
lah and ij
arah . .
20.5 Conditions of jic a
lah . . . . . . . . . . . .
20.6 Legal status and accrual of compensation
20.7 Increase or diminution of the reward . . .
20.8 Disagreement between the parties . . . . .
20.9 Promise of reward vs. hires . . . . . . . .
VI
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437
437
438
438
439
440
441
442
442
443
445
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447
448
448
449
449
22 Origination of Partnerships
22.1 Definition of Capital partnerships . . . . . . . . . . . .
22.1.1 Limited partnership (sharikat al-c in
an) . . . .
22.1.2 Unlimited partnership (sharikat al-muf

awad.ah)
22.2 Credit partnerships (sharikat al-wuj

uh) . . . . . . . . .
22.3 Physical labor partnership (sharikat al-ac m

al) . . . .
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451
451
451
452
454
455
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457
457
458
458
458
459
460
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23 Partnership Conditions
23.1 General conditions . . . . . . . . . . . . . . .
23.2 Conditions for capital partnerships . . . . . .
23.2.1 Specification of the capital . . . . . .
Is it necessary to mix the properties? .
23.2.2 Partnership capital must be monetary
Partnerships with fungible capital . .
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xxiv
CONTENTS
23.3 Conditions for unlimited partnerships . . . . . . . . . . . . . . . 461

23.4 Conditions for labor partnerships . . . . . . . . . . . . . . . . . . 462
23.5 Conditions for credit partnerships . . . . . . . . . . . . . . . . . . 462
24 Partnership Status
24.1 Limited capital partnerships . . . . . . . . . .
24.1.1 Work condition . . . . . . . . . . . . .
24.1.2 Profit distribution . . . . . . . . . . .
24.1.3 Perishing capital . . . . . . . . . . . .
24.1.4 Dealing in the partnerships property .
24.2 Unlimited capital partnerships . . . . . . . .
24.3 Credit partnerships . . . . . . . . . . . . . . .
24.4 Legal status of labor partnerships . . . . . . .
24.4.1 Unlimited labor partnerships . . . . .
24.4.2 Limited labor partnerships . . . . . .
24.4.3 Profit sharing . . . . . . . . . . . . . .
24.4.4 Loss sharing . . . . . . . . . . . . . . .
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465
465
465
465
466
467
469
470
470
470
470
471
471
25 Contract Characteristics
473
25.1 Bindingness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473
25.2 Nature of partner possession . . . . . . . . . . . . . . . . . . . . . 474
26 Invalid Partnerships
475
26.1 General invalidating conditions . . . . . . . . . . . . . . . . . . . 475
26.2 Specific invalidating conditions . . . . . . . . . . . . . . . . . . . 476
27 Defective Partnerships
27.1 Utilization of public property . . .
27.2 Partnership in leasing . . . . . . .
27.3 Lease sharing . . . . . . . . . . . .
27.4 Partnership in unreceived property
VII
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Silent Partnership (mud.arabah)
28 Definition and Legality

28.1 Definition . . . . . . . . . . . . . . . . . . . . . .
28.2 Legality of silent partnership . . . . . . . . . . .
28.3 Cornerstones and types of mud.a
raba . . . . . . .
28.3.1 Unrestricted silent partnership . . . . . .
28.3.2 Restricted silent partnership . . . . . . .
28.4 Characteristics of silent partnerships . . . . . . .
Multiple capitalists, multiple workers, and
corporations . . . . . . . . . . .
479
479
480
480
480
483
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contemporary
. . . . . . . . .
487
487
488
489
490
490
491
491
CONTENTS
xxv
29 Silent Partnership Conditions

29.1 Conditions pertaining to partners . . . . . . . . . . .
29.2 Conditions pertaining to capital . . . . . . . . . . . .
29.2.1 Must capital be monetary? . . . . . . . . . .
29.2.2 Must the capital be present? . . . . . . . . .
29.2.3 Capital must be delivered to the entrepreneur
29.3 Conditions pertaining to profits . . . . . . . . . . . .
29.3.1 Profit ratios must be known . . . . . . . . . .
Defective conditions . . . . . . . . . . . . . .
Extreme profit shares . . . . . . . . . . . . .
29.3.2 Partner profits must be common shares . . .
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493
493
493
493
494
495
496
496
497
497
498
30 Legal Status
30.1 Defective silent partnerships . . . . . . . . . . . . . .
Malik rulings . . . . . . . . . . . . . . . . . .
30.2 Valid silent partnerships . . . . . . . . . . . . . . . .
30.2.1 Entrepreneur possession of the capital . . . .
30.2.2 Entrepreneur actions . . . . . . . . . . . . . .
1. Actions in unrestricted partnerships . . . .
Restrictions on the entrepreneur . . . . . . .
Obligations of the entrepreneur . . . . . . . .
Recursive silent partnership . . . . . . . . . .
Summary . . . . . . . . . . . . . . . . . . . .
2. Actions in restricted partnerships . . . . .
A. Location restrictions . . . . . . . . . . . .
B. Restricted set of individuals . . . . . . . .
C. Temporal restrictions . . . . . . . . . . . .
Ex post restrictions . . . . . . . . . . . . . .
General rulings on restrictions . . . . . . . .
30.2.3 Rights of the entrepreneur . . . . . . . . . . .
1. Expenses chargeable to the partnership . .
Amount of charged expenses . . . . . . . . .
How expenses are deducted . . . . . . . . . .
2. Entrepreneurs right to stated profit share
30.2.4 Rights of the capitalist . . . . . . . . . . . . .
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499
499
500
501
501
503
503
504
505
505
507
508
508
509
509
510
510
510
511
512
513
513
514
31 Capitalist-Entrepreneur Disagreements
31.1 Disagreements over entrepreneur actions
31.2 Disagreement over capital destruction .
31.3 Disagreement over capital repayment . .
31.4 Disagreement over capital amount . . .
31.5 Disagreement over profit ratios . . . . .
31.6 Disagreements over the capital . . . . .
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515
515
516
516
516
517
518
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xxvi
CONTENTS
32 Invalid Silent Partnerships

32.1 Terminating authorization to work
32.2 Death of one of the parties . . . .
32.3 Insanity . . . . . . . . . . . . . . .
32.4 Apostasy . . . . . . . . . . . . . .
32.5 Destruction of the capital . . . . .
32.6 Capital as credit . . . . . . . . . .
VIII
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Contemporary Partnerships
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The Gift Contract (al-hibah)
525
527
527
528
528
529
530
530
531
531
531
535

35 Cornerstones
35.1 Unrestricted gift offers . . . .
35.2 Temporal gift offers (c Umr
a)
35.3 Provisional gift offers . . . . .
35.4 Usufruct gift offers . . . . . .
519
519
520
520
520
521
521
523
33 Juristic Analysis
33.1 Legal status of contemporary partnership forms . . . . . . . . .
33.1.1 Joint liability companies (sharik
at al-tad.a
mun) . . . . .
33.2 Simple partnerships (sharik

at al-taws.iyah al-bast.ah) . . . . . .
33.3 Particular partnerships (sharik

at muh.a
.s.sah) . . . . . . . . . . .
33.4 Joint stock companies (sharik

at mus
ahamah) . . . . . . . . . .
33.5 Hybrid limited partnerships or sharik

at al-taws.iyah bi-l-ashum)
33.6 Limited liability companies . . . . . . . . . . . . . . . . . . . .

33.7 Summary of common modern partnerships . . . . . . . . . . . .
33.8 Transportation vehicle partnerships . . . . . . . . . . . . . . . .
33.9 Partnerships in livestock . . . . . . . . . . . . . . . . . . . . . .
IX
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539
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541
542
542
543
544
36 Contract Conditions
36.1 Conditions for donors . . . . . . . . .
36.2 Conditions for the gift object . . . . .
36.2.1 Existence at gift time . . . . .
36.2.2 Gift must be valued property .
36.2.3 Gift must be a private property
36.2.4 Donor must be the owner . . .
36.2.5 Gift object must be separate .
Multiple donors or donees . . .
1. Multiple donees . . . . . . .
2. Multiple donors . . . . . . .
36.2.6 Object of gift must be separate
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545
545
546
546
547
547
547
547
548
549
549
550
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CONTENTS
xxvii
Unborn animals . . . . . . . . . . .
36.2.7 Gift receipt . . . . . . . . . . . . .
36.2.8 Donors permission . . . . . . . . .
Third-party debts as gifts . . . . .
36.3 Two types of receipt . . . . . . . . . . . .
36.3.1 Receipt on behalf of oneself . . . .
36.3.2 Receipt on behalf of another . . .
Representation of the recipient . .
Representation of the act of receipt
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37 Legal Status of Gifts

38 Prevention of Gift Rescinding
38.1 Material compensation . . . . .
Compensating a donor .
38.2 Non-material compensation . .
38.3 Growth in the gift . . . . . . .
38.4 Transfer of property . . . . . .
38.5 Death of either party . . . . . .
38.6 If the gift perishes . . . . . . .
38.7 Characterization of gift returns
550
551
553
554
555
555
556
556
556
559
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563
563
565
565
566
566
567
567
567
39 Gifts to Immediate Family

569
39.1 Gifts to offspring . . . . . . . . . . . . . . . . . . . . . . . . . . . 569
39.2 Gifts to ones parents . . . . . . . . . . . . . . . . . . . . . . . . . 571
39.3 Gifts to siblings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571
The deposit contract (c aqd al-d

ac )
573
577
41 Deposit Cornerstones and Conditions
579
42 Status, and Methods of Safekeeping

581
42.1 Joint depositors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581
42.2 Joint depositaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 582
42.3 Methods of safekeeping . . . . . . . . . . . . . . . . . . . . . . . . 582
43 Status of Deposit Possession
585
43.1 Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 586
44 Deposit Guarantee
44.1 Abandon of safekeeping . . . . .
44.2 Re-deposit with ineligible parties
44.3 Utilization of the deposit . . . .
44.4 Traveling with the deposit . . . .
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589
589
589
591
592
xxviii
CONTENTS
44.5
44.6
44.7
44.8
44.9
Denial of delivery . . . . . . . . . . . .
Mixing deposits with other properties
Violating depositor conditions . . . . .
Summary of Non-H
. anaf conditions . .
Some subsidiary rulings . . . . . . . .
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593
593
595
596
597
45 Termination of a deposit
599
XI
601
Simple Loans (c aqd al-ic arah)
605
47 Cornerstones and Conditions
607
48 Legal Status
48.1 The actual legal status
48.1.1 Usufruct rights
48.2 Characterization of the
48.3 Recall of lent land . .
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.
609
609
610
612
613
49 Guarantees of Simple Loans

49.1 Can the lender require guaranty? . . . . . . . . . . . . . . . . . .
49.2 Changes from trust to guaranty . . . . . . . . . . . . . . . . . . .
49.3 Cost of re-delivery . . . . . . . . . . . . . . . . . . . . . . . . . .
617
619
619
620
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legal
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status
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50 Lender-Borrower Disagreements
623
50.1 Disagreements over the contract nature . . . . . . . . . . . . . . 623
50.2 Disagreement over causes of defect . . . . . . . . . . . . . . . . . 623
50.3 Disagreement over return . . . . . . . . . . . . . . . . . . . . . . 624
51 Termination of the contract
625
XII
627
The Agency Contract (c aqd al-wak

alah)
52 Definition, Cornerstones, and Legality

52.1 Definition . . . . . . . . . . . . . . . .
52.2 Cornerstones . . . . . . . . . . . . . .
52.2.1 Restricted agency . . . . . . . .
52.2.2 Temporary agency . . . . . . .
52.2.3 Compensated agency . . . . . .
52.2.4 Comprehensive agency . . . . .
52.3 Legality . . . . . . . . . . . . . . . . .
52.3.1 Legal status . . . . . . . . . . .
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631
631
632
632
633
633
634
634
636
CONTENTS
xxix
53 Contract Conditions
53.1 Conditions for contract language . . . . . .
53.2 Conditions for the principal . . . . . . . . .
53.3 Conditions for the agent . . . . . . . . . . .
53.4 Conditions for contract objects . . . . . . .
53.4.1 Agency in Rights of Allah . . . . . .
1. Prosecution Agency . . . . . . . .
2. Exacting punishments . . . . . .
53.4.2 Agency in human legal affairs . . . .
Agency in testimony . . . . . . . . .
Agency in admission/confession . . .
Agency in debt-collection . . . . . .
Agency in debt-payment . . . . . . .
Agency in common contracts . . . .
Explicit mention of agency . . . . .
Agency in utilizing public properties
Legal agency of an attorney . . . . .
Agency in trading . . . . . . . . . .
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637
637
638
639
640
641
641
642
645
647
647
647
648
648
648
649
649
649
54 Legal Status
54.1 Agents actions . . . . . . . . . . . . . . . .
54.1.1 Attorneys . . . . . . . . . . . . . . .
Admission of legal rights . . . . . . .
Collecting compensation . . . . . . .
Friendly settlements and exoneration
Agents commissioning agents . . . .
54.1.2 Debt demanding agents . . . . . . .
54.1.3 Debt collecting agents . . . . . . . .
Commissioning an agent . . . . . . .
Receiving compensation for debts . .
Multiple debt collectors . . . . . . .
Collecting defective goods . . . . . .
Unauthorized agency . . . . . . . . .
54.1.4 Selling agent . . . . . . . . . . . . .
Partial sale . . . . . . . . . . . . . .
Exonerating a buyer of the price . .
Commissioning a second agent . . .
Dubious dealings . . . . . . . . . . .
54.1.5 Buying agent . . . . . . . . . . . . .
Restricted buying agency . . . . . .
Unrestricted buying agency . . . . .
The agent-principal relationship . .
54.2 Contract rights, and status . . . . . . . . .
54.2.1 Unidentified principal . . . . . . . .
54.2.2 Identified principals . . . . . . . . .
54.2.3 Property receipt agents . . . . . . .
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653
653
653
653
655
655
656
656
656
658
659
659
659
659
661
663
664
664
664
666
666
667
670
670
671
671
672
xxx
CONTENTS
54.2.4 Rights and duties of trading principal and

Principal responsibilities and rights . . . .
Agent responsibilities and rights . . . . .
54.2.5 The contracts legal status . . . . . . . . .
1. Sales contracts . . . . . . . . . . . . . .
2. Contracts concluded by receipt . . . .
3. Marriage . . . . . . . . . . . . . . . . .
4. Divorce . . . . . . . . . . . . . . . . . .
54.3 The agents possession . . . . . . . . . . . . . . .
agent
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673
673
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674
674
675
675
675
675
55 Multiple agents
679
55.1 Consultation agencies . . . . . . . . . . . . . . . . . . . . . . . . 680
55.2 No-Consultation agencies . . . . . . . . . . . . . . . . . . . . . . 680
56 Agency termination
56.1 De-commissioning of the agent . .
56.2 The principal performing the task
56.3 Expiration of the reason for agency
56.4 Loss of eligibility . . . . . . . . . .
56.5 Apostasy of the principal or agent
56.6 Agent self-de-commissioning . . . .
56.7 Perishing of the agency object . . .
56.8 Transfer of property . . . . . . . .
56.9 Bankruptcy . . . . . . . . . . . . .
56.10Denial . . . . . . . . . . . . . . . .
56.11Transgression . . . . . . . . . . . .
56.12Lasciviousness . . . . . . . . . . . .
56.13Divorce . . . . . . . . . . . . . . .
56.14Expiration . . . . . . . . . . . . . .
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Part I
The Sales Contract (cAqd

Al-Bayc)
3
Authors plan:
This part consists of six chapters:
1. Constituents of sale.
2. Conditions of sale.
3. Status of sale, its object, and price.
4. Invalid (b
a.til) and defective (f
asid) sales.
5. Options (khiy
ar
at).
6. Types of sale:
(a) Forward sale (salam).
(b) Commission to manufacture (istis.n
ac ).
(c) Currency exchange (s.arf).
(d) Gross-Sale (jiz
af).
(e) Usury (rib
a).
(f) Trust sales: cost-plus sale, sale at cost, and sale at a loss (mur
abah.a,
tawliya, wad.c a).
(g) Revocation (iq
ala).
Chapter 1
Constituents of Sale
This chapter will consist of two sections:
1. The definition of a sale contract, its conditions, and ethical considerations.
2. The cornerstones of a sale, and how it proceeds.
1.1
Definition, legitimacy, and ethics
Definition of sale
A sale (bayc ) is an exchange of one item for another. The Arabic term bayc refers
both to the activities of buying and selling (c.f. Quran [12:20] and [2:102]).
The Arabic term bayc is derived from the term b
ac (for arm) because one
extends ones arm to give or take. Another explanation for this derivation is
the likely possibility of extending ones arm to the other to shake hands at the
completion of a sale; hence the other Arabic term for a sale agreement .safqa
(literally, a hand-shake).
For the H
al) for
. anafs, it means the exchange of an owned commodity (m
another in a specified manner; or the exchange of an owned commodity
for another in a beneficial and special manner. This excludes unbeneficial
exchanges (e.g. the exchange of one coin for an identical one), or the
exchange of bads (i.e. items of no worth, e.g. dead animals, or dust).1
Al-Nawaw defined sale as the exchange of an owned commodity for another with the exchange of ownership.2 Ibn Qud
amah defined it similarly, emphasizing both the exchange of ownership, and taking possession
by the new owner.3
1 Al-K
as
an
((H
am ((H
. anaf), vol. 5, p. 133),Ibn Al-Hum
. anaf), vol. 5, p. 73), Ibn
((H
. anaf), vol.5, p.3 onwards).
2 Al-Khat
b Al-Shirbn ((Sh
afic), vol. 2, p. 2).
.
c
3 Al-Kh
at.b Al-Shirbn ((Sh
afi ), vol. 3, p. 559).
c Abid
CHAPTER 1. CONSTITUENTS OF SALE
For the H
al) must be desirable
. anafs, a commodity defined as property (m
and possible to save for later use. The commodification and ownership of an
object for them can be established by its satisfying those requirements for some
or all of the people. Professor Al-Zarqa criticized this definition and replaced
it with the following: An owned commodity is any identifiable object with a
material value for the people.4 Therefore, services and mere rights are not considered commodities for the H
a)
. anafs. However, the majority of jurists (fuqah
consider them potentially owned commodities, because what is desirable in a
physical object is its usufruct. In all of the above, a sale always means a contract
consisting of an offer (j
ab) and an acceptance (qab
ul).
Legitimacy of sale
Sales are permissible, with supporting evidence from the Quran, the Sunnah
(tradition and sayings of the Prophet pbuh), and ijm
ac (consensus of the jurists).
In the Qur
an: But Allah has permitted trade [2:275], But take witnesses
whenever you make a commercial contract [2:282], But let there be
among you traffic and trade by mutual good will [4:29], and It is no
crime for you to seek the bounty of your Lord [2:198].
In the Sunnah: The Prophet (pbuh) was asked: Which are the best forms of
income generation?. He replied: A mans labor, and every legitimate
sale,5 i.e. devoid of cheating or treason. Another saying of the Prophet
(pbuh) is: A sale must be by mutual consent.6 Moreover, the Messenger
(pbuh) was sent to mankind while people traded among themselves, and he
accepted that practice. He said: The truthful and honest trader is among
the prophets, the righteous, and the martyrs (Al-Tirmidh classified it as
aH
hasan).
. adth
.
Ijm
ac : Muslims have agreed that sales are permissible, and this only stands
to good sense as it allows each individual to meet his needs in cooperation
4 See the introduction of his Nazariyya Al-Iltiz
f Al-Fiqh Al-Isl
am
am Al-c Ammah
.
(pp.114-118).
5 Related by Al-Bazz
ar and verified by Al-H
akim on the authority of Rif
ac a ibn R
afic ,
.
and mentioned by Ibn H
s. Al-H
abr on the authority of R
afic ibn Khudayj,
. ajar in Al-Talkh
.
who attributed it to Ah.mad, and mentioned by Al-S.uy

ut. in his Al-J
amic Al-S
. aghr, on the
authority of R
afic Al-S.anc
an (2nd printing, vo. 3, p. 4).
6 This is a long Had
, related by Al-Bayhaq and Ibn M
ajah, and verified by Ibn H
an
. th
. ibb
on the authority of Ab
u Sacd Al-Khudriy that the Messenger of All
ah (pbuh) said: I
shall meet All

ah before I give anyone something owned by another without his consent, for a
sale requires mutual consent, and related by c Abd Al-Razz
aq in Al-J
amic on the authority
of c Abd All
ah ibn Ab Awf
a as follows: A sale is by mutual consent, and options are
implemented after mutual agreement Al-Suy
ut. (a, vol.1, p. 102), Kanz Al-Daq
aiq (vol. 2,
p. 212), Al-Im
am Al-Nawaw/Al-Subk ((Sh
afic), vol. 9, p. 158). Also, Al-Tirmidh and
Ab
u D
aw
ud related on the authority of Ab
u Hurayra a H
meaning: No two [should]
. adth
depart (after a sale) except with mutual agreement, Ibn Al-Athr Al-Jazar (, vol. 2, p. 9)
and Al-Haytham (, vol.4, p. 100).
1.1. DEFINITION, LEGITIMACY, AND ETHICS
with others trying to meet their own. Therefore, the general rule in sales
(al-buy
uc ) is permissibility.
Al-Imam Al-Shafic ruled: The general rule for all sales is permissibil
ity as long as they are concluded by consenting capable decision makers,
except for what the Messenger of Allah (pbuh) has forbidden, or what
is sufficiently similar to that which the Messenger of Allah (pbuh) has
forbidden; and anything different from those is permissible following the
permissibility of sales stated in the book of Allah Almighty (meaning the
verses [2:275], [2:282], [4:29], and [2:198] cited above).
Ethics of sales
There are many ethical considerations in sales, including:
1. The avoidance of excessive profits: All religions prohibit excessive
taking of advantage of buyers as forms of cheating. However, a moderate
degree of such taking of advantage is admissible because otherwise, all
trade would cease. However, if one side takes too much advantage of the
other, the sale may be deemed void. The Malik scholars defined excessive
disadvantage as a profit of one third or more, since that corresponds to
the rules of limited will.7 Therefore, a profit rate of one third or less is
considered acceptable.
2. Truthful and complete disclosure of information: The seller must
give full and truthful information about the product, including its type,
origin, and cost. Al-Tirmidh reported the following H
on the author. adth
ity of Rifac a : All merchants are resurrected on the day of judgments as

sinners, except for those who feared All
ah, treated their customers well,
and were truthful.
3. Ease of conduct: the seller and the buyer should not be too harsh in
their conditions or insist on prices too high or too low. Al-Bukhar related
on the authority of Jabir the following H

: Allah is merciful to the
. adth
man who is easy when he sells, when he buys, and when he collects his
loans.
4. Avoidance of swearing, even if truthful: It is recommended not
to swear in the name of Allah in any sale, since it is disrespectful and
unworthy of the name of Allah, and All
ah has forbidden in the Quran
using his name to swear that you will be good to people and fearful of
Him. Al-Bukhar and Muslim narrated on the authority of Ab
u Hurayra
the following H
: Swearing destroys the goods, and wipes out their
. adth
blessings. Swearing by the name of Allah is criticized thus in the Quran:

And make not Allahs name an excuse in your oaths against doing good
or acting rightly or making peace between persons [2:224].
7 Ibn c Arab
,
Ah.k
am Al-Qur
an (vol. 4, p. 1804).

5. Frequent paying of charity: It is recommended that a merchant pays
charity often to atone for whatever swearing, cheating, hiding of information, poor conduct, or excessive profits he may have committed. AlTirmidh, Ab
u D
aw
ud, and Ibn M
ajah reported on the authority of Qays
ibn Ab Ghurza the following H

ad
: O merchants, the devil and sins
. th
are present at each sale, so purify your sales with charity.

6. Documentation and witnessing of all debts: It is desirable that all
contracts and loans be written, and that witnesses sign for all delayed
sales and debts, as Allah has prescribed in the Quran [2:282].
1.2
Cornerstones of sale contracts
The primary cornerstone (rukn) of a sale for the H

. anafs is the offer and acceptance or other mechanisms that signify an exchange.8 In other words, the
cornerstone for completion of a sale is the action or statement signifying the
acceptance of the exchange of owned properties. This is how they define a sale
contract.9
For the majority of fuqah
a, there are four cornerstones (ark
an) for a sale:
the seller, the buyer, the language of the contract, and its object. Those are
also prallel to the cornerstones of all contracts. For the majority of jurists other
10
than the H
. anafs, the cornerstones of sale are either three or four: parties to
the contract (buyer and seller), object of contract (price and what is priced),
and language of the contract (offer and acceptance).
The H
. anafs view an offer as an action of one of the two parties indicating
willingness to engage in a transaction. The offer thus may originate from the
buyer or the seller, and acceptance is indicated by the second party. Thus, the
offer is defined as the primary action, and the acceptance as the secondary one,
regardless of whether they originate with the buyer or the seller.
However, the majority (jumh
ur) of jurists ruled that an offer originates with
the seller, and acceptance originates with the buyer, regardless of who initiates
the transaction.11
The discussion of offer and acceptance will cover two issues:
1. The language (s.gha) of offer and acceptance.
2. The nature (s.ifa) of offer and acceptance.

8 A cornerstone (rukn) for the Hanaf
s is a necessary part upon which the existence of
.
something depends. For the majority (jumh
ur), it is a necessary condition for the existence
or mental conception of something (not necessarily a part of it, but associated with it). A
condition, on the other hand, is necessary for the existence of something without being part
of it.
9 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol. 5, p. 74), Al-K
. anaf), vol.5 p. 133), and Ibn
c Abid
n ((H
. anaf), vol.4, p.5 and what follows).
10 Sharh Al-Minh
aj for Shaykh Zakariyy
a Al-Ans.
ar (vol.2, p.180 onwards), and Al-Buh
ut
.
(3rd printing (H
. anbal), vol.2, p.3).
11 Al-Buh
ut (3rd printing (H
. anbal), vol. 2, o. 3).
1.2. CORNERSTONES OF SALE CONTRACTS
1.2.1
Language of offer and acceptance
The form of a contract is the language used for the offer and acceptance if the
contract is binding upon two parties, or offer only if it is binding on one alone.
All religions have agreed that the precondition for the existence of a contract
and its conclusion is the expression of consent by both parties to have a binding
agreement. This is what jurists call the language of the contract (s.ghat alc
aqd), and lawyers call expression of intent or will. It is necessary in the
language of the contract that it be standardized and approved by the legislator.
The H
. anafs agree that the language of request such as sell to me or buy
from me does not constitute an offer or an acceptance; while language in the
present or past tense such as I sold you or I sell you, etc. would constitute
an offer or an acceptance.
Some differences between sales and marriage
In this regard, a sale contract is different from a marriage contract, since the
latter is valid with request statements such as marry me, which gives the
other party the right to conclude the contract by accepting this proposal. In
this way, one party is concluding the marriage contract by representing both
sides following that request. In contrast, a sale may not be concluded by one
party except in special cases (e.g. a father selling or buying property to or
from his son, or a legal guardian transferring properties between himself and
the person under his guardianship). A second difference between the marriage
and sale contracts is the lack of bargaining in the former. However, in the sale
contract, since bargaining is possible, a precise language is needed to specify
what is being offered, at what price, etc. before the nature of the contract
becomes clear.
In summary, the language of the contract for the H
. anafs can be by two
expressions without specifying intent (i.e. in the past tense, as in I sold ...
or I bought ...). This usage of the verb in its past tense is conventionally
accepted to signify an offer in the present, and convention supersedes the rules
of grammar. Alternatively, the offer and acceptance can be by two verbs in
the present tense, indicating intention (since the present tense allows either
immediate or future implementation in the Arabic language). In this sense, the
offer in the present tense is binding for future actions. A third possibility is
using three expressions, via an inquiry by one party (e.g. would you buy this
from me) or a request/command (e.g. buy this from me). In those cases,
a third expression is necessary, with the second and third using the present or
past tenses to complete the language of the contract. In this respect, the trade
may not take place with the expression of a request or order (e.g. buy this
from me for so much), regardless of intent. Similarly, the use of future tense
(e.g. I shall sell you, etc.) cannot conclude the contract, since the use of
shall contradicts a present intention.12
12 Al-K
as
an ((H
am ((H
. anaf), vol.5, p. 133 onwards), Ibn Al-Hum
. anaf), vol.5, p.75 on
n ((H
wards), Ibn c Abid
10
In contrast, the Maliks, the majority of the Shafics, and the H

. anbals have
all agreed that the language of the contract be it a sale or a marriage contract
may be in the form of a request from one party (e.g. sell to me) and an
acceptance from the other (e.g. I have sold to you).13
The physical exchange sale
This form of sale (bayc al-muc a
.ta
h) or (mur
awad.a) is concluded when a buyer
and a seller agree on the object of the sale and its price, and exchange the object
for the price without explicit verbal offer and acceptance. An example is when
a buyer simply takes the object and gives the seller its price without any words
or signals. Jurists disagreed on this contract.
Most of the H
. anafs, Maliks and H
. anbals have agreed that this form of sale
is admissible as long as it is customary and interpreted by the parties to imply
mutual agreement. The logic of this admissibility is that the essence of a sale
is mutual agreement, which may be obtained in a variety of ways considered
customary in any markets.14
The most accepted opinion of the Shafics is that it is necessary for the
conclusion of a contract that explicit or implicit words be used to imply offer

and acceptance, thus nullifying this form of sale. The logic used by those jurists
is based on the Messenger (pbuh)s H
: A sale is but concluded by mutual
. adth
agreement.15 Since agreement or acceptance is a hidden matter, the use of

words is necessary to make it possible for witnesses to testify that agreement
indeed took place. However, some of the Shafics, including Al-Nawaw, Al
Baghw and Al-Mutawall have deemed this type of sale acceptable, since an
acceptance does not necessarily have to be verbal in their opinion. Al-Nawaw

found this the best fatw
a, while some of the other Shafics, including Ibn Surayj
and Al-R
uyan allowed physical sale only for less expensive items (e.g. a pound
of bread, etc.) to the exclusion of more expensive ones.
It is important to note, however, that there is a consensus among all the
jurists that a marriage contract cannot be implemented simply through the
actions of its parties, but that the verbal communication of offer and acceptance (to those capable of speaking) is necessary due to the importance of this
contract.
1.2.2
Nature of offer and acceptance:
A discussion of khiy
ar al-majlis
Neither the offer nor the acceptance is binding until both have been expressed.
Therefore, each party to the contract has the option to withdraw their part
as long as the other has not been extended. The question remains, however,
13 Ibn Rushd Al-Haf
alik), vo.2, p. 168), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.4),
. d ((M
Al-Buh
ut (3rd printing (H
. anbal), vol.3, p. 136).
14 Al-K
as
an ((H
am ((H
d
. anaf), vol. 5, p. 134), Ibn Al-Hum
. anaf), vol. 5, p. 77), Ibn Rush
Al-H
alik), vol. 2, p. 161), Ibn Qud
amah (, vol. 3, p. 561).
. afd ((M
15 Verified by Ibn Hibb
an.
.
1.2. CORNERSTONES OF SALE CONTRACTS
11
whether a party may rescind their offer or acceptance after the other party
has extended their part. Jurists differed in opinion on this possibility called
khiy
ar al-majlis, or the option of withdrawal before parting, whereby an offer
or acceptance may be withdrawn as long as both parties are still present.

The H
aliks, and the seven jurists of the Madnah16 have con. anafs, the M
cluded that a contract is binding once the offer and acceptance have been extended, since a sale is an exchange contract that is binding with the conclusion
of the expression of offer and acceptance. Therefore, to them, a sale does not
allow for the option of withdrawal before parting, as c Umar (mAbph) said:
A sale is either a contract, or an option.
Those jurists understand the H
: The two parties to a sale still have
. adth
the option as long as they have not parted by interpreting the two parties as
those who are still in the process of bargaining, and parted as a reference to
parting before both offer and acceptance have been expressed. They find this
interpretation more satisfactory, especially in light of the fact that the apparent
meaning disagrees with the verse: But let there be among you traffic and
trade by mutual good will [4:29], and the verse O you who believe, fulfill (all)
obligations [5:1]. Some of them even ruled that the H
is thus abrogated.
. adth
Therefore, they equate the option (khiy

ar) that is admissible here to the
option of acceptance (khiy

ar al-qab
ul or khiy
ar al-ruj
uc ) that is valid prior to
17
the conclusion of the contract.
On the other hand, the Shafics, the H
an Al-Thawr and Ish.aq
. anbals, Sufy
ruled: If the sale is finalized by the satisfaction of offer and acceptance, the
contract becomes possible but not binding as long as the two parties to the
contract have not parted. Therefore, each of the two parties would have the
option to break the contract as long as they have not parted, and parting
is defined by convention: that they leave the place where they concluded the
sale.18
Therefore, parting refers to the physical separation of the parties to the
contract. This is what makes the mention of parting meaningful in the H
,
. adth
since it is obvious that each of the parties has the option if they have not
expressed an offer or an acceptance.
This is the khiy
ar al-majlis that is known in various trades, according to
the strong H
ad
th
narrated
by the two Shaykhs19 that the Prophet (pbuh) said:
.
16 The seven fuqah

a of the Madnah are: Sacd ibn Al-Mosb (d.94H), c Urwa ibn Al-Zubayr
(d.94H), Al-Q
asim ibn Muh.ammad (d.106H), Ab
u Bakr ibn c Abd Al-Rah.man ibn Al-H
arith
.
ibn HiSh
am (d.94H), c Ubayd All
ah ibn c Utbah ibn Masc u
d (d.98H), Sulaym
an ibn Yas
ar
(d.107H), and Kh
arija ibn Zayd ibn Th
abit (d.99H).
17 Al-K
as
an ((H
am ((H
d
. anaf), vol. 5, p. 134), Ibn Al-Hum
. anaf), vol.5, p.78), Ibn Rush
Al-H
alik), vol.2, p.169 and thereafter), lbn-Rushd Al-Qurt.ub ((M
alik), vol.5, p.55),
. afd ((M
Ibn Juzayy ((M

alik), p.274), Al-Buh
ut (3rd printing (H
. anbal), vol.3, p.187).
18 Al-Khat
c
b
Al-Sh
irb
n
((Sh
a
fi
),
vol.2,
p.43,45),
Ibn
Qud
amah (, vol.3, p.563). Some
.
H
. anbals ruled that the conventional definition of parting differs for different forms of sale
(e.g. in a large market, parting is established by walking away until one does not hear the
others common talk; and on a ship by going to different levels, and in a house by one leaving,
etc. However, if they sleep in the same place or walk together, they have not parted), Marc
ibn Y
usuf (1st printing (H
. anbal), vol.2, p.30).
19 Al-Shaykh
an in this context are Ab
uH
u Y
usuf, [tr.]
. anfa and Ab
12
The two parties to a sale have the option as long as they have not parted, or that
one of them has given the other that option.20 This H
has been strongly
. adth
confirmed. Ibn Rushd said that this is among the best supported ah.a
dth, and
its many narrations have been documented by Ibn H

a.
. azm in Al-Muh.all
Thus, they have replied to the M
aliks and H
. anafs that the language of
this H
ad
th
does
not
allow
the
interpretation
they
gave (which is parting in
.
language) since the thing to be settled between the buyer and seller is not
the language, but the price and object of sale. Moreover, their interpretation
makes the H
vacuous since it is well known that they have the option prior
. adth
to reaching an agreement. This is the meaning of the saying of c Umar quoted

above that A contract is either concluded or it involves an option; i.e. that
sale contracts may be divided into those with options and those without.
However, this opinion was criticized because it weakens the power of contracts by diluting their binding nature. This can have grave consequences for a
variety of legal principles.21
20 Al-Sanc
an
21 See
(2nd printing, vol.3, p. 33).

.
Mas.a
dir Al-H
ur (vol. 2, p. 37 onwards).
. aqq of Al-Sanh
Chapter 2
Conditions of Sale
A sale contract must satisfy four sets of conditions: (i) conditions of conclusion, (ii) conditions of validity, (iii) conditions of execution, and (iv) bindingness conditions.1 The reasoning behind all those conditions is the avoidance of
disagreement and protection of the rights of parties to the contract. Those conditions also help ameliorate or remove all uncertainty that can lead to excessive
risk. If the conditions of conclusion are not satisfied, then the contract is null.
If the conditions of validity are not satisfied, then the contract is invalid. If
the conditions of executablitity are not satisfied, then the contract is suspended
and ownership is transferred only if the appropriate permission is given. If the
bindingness conditions are not satisfied, then the parties to the contract have
the option to conclude or nullify it.
2.1
Conditions of conclusion
The H
. anafs have imposed four sets of conditions for the conclusion of a contract.
They are conditions regarding: (1) the contractor, (2) the contract itself, (3)
the place of the contract, and (4) the object of the contract.2
1. The contractor must satisfy the following two conditions:
(a) The contractors must be sane and able to run his own affairs, so no
contract may be concluded by an insane person or a child who cannot
run his affairs. The H
. anafs, however, do not make it a condition that
the contractors reach legal age, for even a seven year old child who
can understand and manage his affairs may conclude a contract. A
childs ability to conclude a contract is studied by jurists through the
following exhaustive partition:
n ((H
more details, see Ibn c Abid
. anaf), vol.4, p.5 and thereafter).
c
n
also Al-K
as
an ((H
. anaf), vol.5, p.135 and thereafter; vol.2 p.332) and Ibn Abid
((H
. anaf), vol.2 p.448).
1 For
2 See
13
14
CHAPTER 2. CONDITIONS OF SALE

i. Purely beneficial dealings (e.g. accepting a gift or charity, or
payment of debts by proxy). This type of dealing is valid for any
sane child without requiring a permission from his guardian.
ii. Sheerly harmful dealings (e.g. divorce, the giving of gifts, the
giving of charity, extending loans, or risking the childs money
or life by making him a guarantor for other peoples debts or
life). Such dealings may not be concluded by a sane child under
the legal age, even if his guardian approves them, because the
guardian himself is not allowed to conclude such purely harmful
dealings.
iii. Dealings that may result in benefit or harm (e.g. trading, renting
properties, marriage, investment, etc.). Those dealings may only
be concluded by a discerning child if he can understand them,
and either: (a) his guardian approves them while he is still young,
or (b) he approves them after reaching legal age.
(b) The multiplicity of contractors: A sale may not be concluded by one
legal proxy for both parties; except for a father, a legal guardian, a
judge, or a messenger from both parties; or for a marriage contract.
The difference between a sales contract and a marriage contract in
this regard is that a sale induces opposing rights, as related to the
delivery and receipt of goods, the request to deliver the goods and
receive the price, returning the goods in case of discovery of defect, or
the request to exercise a valid option. In this regard, it is impossible
for one individual at one point in time to be both a deliverer and
a recipient, or to make a request and respond to it. Consequently,
since the rights allocated by a contract are valid only for the parties
to the contract, one individual party to the contract may not assume
both sides. The agent (wakl) for two sides in a marriage contract is a
special case, since the rights allocated by the contract are not for him,
but rather for the principal, and thus he is viewed as a messenger for
both sides.
In sales, the father is an exception since it is assumed that he shares
the best interest of his child, and therefore will not go beyond reasonable profit in exchanging his property for his childs. For Ab
u
H
u Y
usuf, a plenipotentiary commissioned by the father
. anfa and Ab
is in the same position as the father, and thus may conduct similar
trades. However, Muh.ammad determined that analogy (qiy
as) invalidates such transactions for both the father and the plenipotentiary,
but that the fathers care for his child is grounds for an exception
that does not apply to the plenipotentiary.
The judge is considered a messenger for both sides, and therefore
may conclude a sale between the two parties as a single contractor.
This is possible since the judge does not himself get any of the benefits or obligations stipulated by the contract, and thus may like a
messenger conclude the contract by himself.
2.1. CONDITIONS OF CONCLUSION
15
The majority of H
afics and Zufar,
. anaf scholars, in contrast to the Sh
find it legitimate for one person to conduct both sides of a marriage

contract, with an offer that legally constitutes an acceptance. This
may be accomplished in five ways: (i) if he is a guardian or legal
agent for both sides as in saying: I married my son to my niece,
or I marry this man whom I represent legally to this woman whom
I represent legally; (ii) the person may represent himself on one
side and be a legal agent on the other (e.g. if a woman commissions
her potential husband as her legal agent in the marriage contract);
(iii) the person may represent himself on one side, and be a legal
guardian to the other (e.g. in marrying a young cousin); (iv) the
person may be a legal guardian on one side, and a legal agent for the
other, as in saying: I married my daughter to this person whom I
legally represent. However, (v) representing oneself on both sides is
logically impossible in this context.3
2. Conditions for the contract itself: The only condition in the contract itself
is that the offer and acceptance correspond to one another, as detailed
below.4
3. Conditions for the place of the contract: There is only one condition here
as well, which is that the offer and acceptance are both made during the
same session, as detailed below.
4. Conditions for the object of the contract: There are four such conditions:5
(a) The object of the sale must exist. Therefore, it is not permitted to sell
a non-existent object, or an object that may cease to exist. Examples
of the former include selling the offspring of the offspring of an animal,
or selling the fruits of a tree before they appear. Examples of the
latter include the sale of an unborn animal in its mothers womb, or
sale of the milk in a cows udder, since both of those may cease to
exist.
The proof of all those conditions is that the Prophet (pbuh) forbade
the sale of fruit before it is known to be of acceptable quality.6 It
follows from this that the sale of what is believed to be a jewel but
proves to be glass includes a faulty descripton of the nature of the
object of the sale, and thus the sale would be void.
The exceptions to this general rule are bayc al-salam (forward sales,
with the price collected instantly), istis.n
ac (the sale of a manufactured object, with partial payments at different stages of production),
3 Al-K
c
as
an ((H
at (p.410), Al-Far
aid Al-Bahiyya
. anaf), vol.5, p.136), Mujma Al-D
. aman
f Al-Qaw
ac id Al-Fiqhiyya by Shaykh Mah.m
ud H
amza (p.139).
.
4 Al-K
as
an ((H
. anaf), vol.5, p. 137).
5 Al-K
as
an ((H
. anaf), pp.138-148).
6 Narrated by the two Shaykhs on the authority of c Umar (mAbph) who said: The Mes
senger of All
ah (pbuh) forbade the sale of fruit before it is known to be of acceptable quality;
he forbade both the seller and the buyer (Ibn Al-Athr Al-Jazar (, vol.1, p.389)).
16

and to some H
. anafs the sale of fruits on a tree after some of the
fruits are seen.
(b) The object of sale must be a currently owned and temporarily nonperishable good that may be saved for future use.7 Therefore, no
contract may be concluded for the sale of what may not be owned
such as a free man, or forbidden foods such as wine, pork, blood, etc.
Ab
uH
. anfa allowed the sale of machines whose primary purpose may
be illegitimate, but whose parts may be used in legitimate enterprise,
whereas Ab
u Y
usuf, Muh.ammad and the rest of the Imams do not
allow such sales since they encourage corruption.
(c) The object must be privately owned by, and in the possession of, the
seller. This excludes the sale of non-owned entities such as grazing
grass (even in owned land), uncontained waters, wildlife, the sands
of the desert and its minerals, sun light, air, etc.8
Note that the ownership of the object of the sale by the seller is not
a condition for the conclusion of the contract, but a condition for its
implementation, as will be seen below.
(d) The object of the sale must be deliverable at the conclusion of the
sale. Therefore, a sale may not be concluded if the object is impossible to deliver, even if owned by the seller. Examples of the latter are
escaped animals, birds, or fish after having been in the possession of
the seller.
2.1.1
Eligibility of the parties
It already has been shown that the H

. anafs require that both parties to the
contract be discerning sane people.9 This is in fact a condition for the contract,
not for its form. The H
. anafs consider children seven years of age and older to
be discerning, while the other schools consider children over six years of age to
be discerning.
Sale by a discerning child
The H
. anafs, Maliks, and H
. anbals agreed that a discerning child may buy and
sell subject to the consent of his guardian; since the will causing the sale is
indeed the guardians and not the childs, thus the sale is valid. Also, such a
permission makes it possible to test the childs judgment in matters of trade
before his money is given to him when he reaches legal age.10
7 Ibn c Abid
((H
. anaf), vol.4, pp.3,150).
majority of jurists do not allow the sale of uncontained waters such as the waters of
seas and rivers, since they are available to all people to the exclusion of no one. However,
contained water such as in a well or a spring that are owned by a particular person may be
sold. The Z.
ahir jurists ruled that the sale of water is forbidden except if it is from a well or
a spring that is owned.
9 Al-K
as
an ((H
. anaf), vol.5, p.135).
10 Al-K
as
an ((H
d Al-H
alik), vol.2, p.287), Ibn
. afd ((M
Qud
amah (, vol.4, p.246).
8 The
17
The Shafics ruled that the sale of a child is not valid if he is non-discerning,
and made it a condition for both buyers and sellers to be of legal age, good
religion and character, and have a good source of income.11 Their proof for
this opinion is the verse: To those weak of understanding, make not over your
property, which Allah has made a means of support for you[4:5]. The common
factor between giving such incompetent people the monies and allowing them
to trade is the potential for wasting the money illegally.12
Sales under coercion
The majority of H
. anafs ruled that the contracts of trade, rent, etc. that take
place under threat or coercion are defective contracts, since they eliminate mutual agreement that is a condition of contract validity. The proof is in the
Quran [4:29]. In this case, the coerced person has the right later to break the
contract or to implement it. However, as in all defective contracts, the buyer
does obtain ownership at the time of receipt of the price by the seller. The contract is therefore binding once the coerced seller receives the price or delivers
the good of his own will. However, unlike other defective trades, the coerced
sale becomes valid once the parties accept its terms either verbally or by action,
thus eliminating its defectiveness. This is different from other defective sales
in which defectiveness is not removed, since in the other cases the defectiveness is due to opposing the Law, whereas in coercion it is defectiveness only for
personal reasons. Thus, they concluded that the coerced sale is a suspended defective sale (i.e. it is no longer defective if accepted). Consequently, Zufar ruled
that coercion makes the contract suspended. Then, if the coercion is removed
and the coerced party accepts the trade, it becomes valid. The author (Prof.
Zuh.ayl) finds this to be the better supported argument.13
The Shafics and the H
. anbals ruled that the contractor must be free and
willing when selling his own property, so the sale of a coerced person may not
be concluded, based on the verse [4:29], and based on the saying of the Prophet
(pbuh): My people have been forgiven [their actions committed under] errors,
forgetfulness, or coercion.14
However, coercion to enforce rights does not prevent the completion of a
contract because the consent of religious Law (Sharc ) supersedes and replaces
the traders consent. Examples are selling a house to enlarge a mosque, road,
or cemetery when needed; or selling a good to pay back a debt or for alimony
and support payments for a spouse, children or parents; or to pay taxes.
11 Al-Khat
b
Al-Shirbn ((Sh
afic), vol.2, p.7).
ruled (see Toh.fat Al-Muh.t

aj wa Ghayrih
a min Shor
uh. Al-Minh
aj): the trades
of four may not be concluded: a child, discerning or not, an insane person, a slave even if
given an order, or a blind person; such sales is null.
13 Ibn c Abid
n ((H
. anaf), vol.4, p.4; vol.5, p.89-91).
14 Al-Tabar
an related this H
on the authority of Thawb
an using the phrase All
ah has
.
. adth
forgiven. Al-Nawaw said it is a good H

. It was criticized by Al-Haytham due to one
. adth
of the links of its narration being Yazd ibn Rabc a Al-H

. alab, and determined that it was
weak. It was related by Ibn M
ajah, Ibn H
an, Al-D
araqut.n, Al-T
an, Al-Bayhaq,
. ibb
. abar
and Al-H
akim in Al-Mustadrak on the authority of Al-Awz
ac. There are differences among
.
tha narrations. See Ibn H
am (, vol.6, p.250).
. ajar (, vol.1, p. 109), and Al-Hayth
12 The Sh
afics
18
The Maliks determined that the sale by a coerced person is not binding,
and the coerced party then has the option to break or fulfill the contract, as
found in the Mukhtas.ar of Khall, and its interpreters. Ibn Juzayy ruled that
both the buyer and seller must be contracting of their free will, since the selling
and buying of a coerced person is void.15
Compelled sale
A compelled sale (bayc u al-mud..tarr) is a sale in which a person is forced to sell
part of his property, and the buyer pays an excessively low price. Examples
include a judge forcing a person to sell his property to pay his debts, or forcing
a Christian or Jew to sell a copy of the Quran or a Muslim slave, etc. The
H
. anafs have determined that the buying and selling of the coerced is defective
(f
asid).16 However, other jurists have permitted it if it is dictated by necessity.
Sale to pre-empt danger
A sale to pre-empt danger (bayc al-taljia or bayc al-am
ana) is a sale in which
a person pretends to sell his property to a third party to avoid being transgressed
upon by an unjust person, and the sale is concluded according to all the usual
rules and conditions. Jurists disagreed on this form of sale:
The H
. anbals determined that it is a null contract, since the parties did not
intend a real sale, and therefore its status is similar to that of parties
joking about a contract.17
The H
afics determined that it is a valid sale, since all the cor. anafs and Sh
nerstones and conditions of the sale contract have been satisfied, and the
parties have uttered the offer and acceptance with free intent. This is similar to a case in which two parties agree on a contract-spoiling condition,
but then conclude the contract without such a condition. The belief of the
person making the contract that he may suffer otherwise does not affect
the contract, as all other beliefs do not.18
Brokerage sale:
Brokerage (al-samsara) is the intermediation between a buyer and a seller to
conclude a sale, and it is admissible. The compensation that the broker collects is admissible, since it is compensation for work and effort. However, the
Shafics ruled that it is not proper to pay an intermediary for simply advertis
ing the product, if the advertising was costless, since there is no value added
by that advertisement, even if it increases the chances of selling it at a high
15 Al-Shac ar
an ((Sh
afic), vol.2, p.62), H
shiyat Al-Dus
uq (vol. 3, p.6), Al-Khat.b Al.a
Shirbn ((Sh
afic), vol.2, p.7 and thereafter), Ibn Juzayy ((M
alik), p.246), and Marc ibn
Y
. anbal), vol.2, p.5).
16 Ibn c Abid
n ((H
amah (, vol.4, p.214).
. anaf), vol.4, pp. 111,255), Ibn Qud
17 Ibn Qud
amah (, vol.4, p.214).
18 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.16).
.
19
price.19 There is no harm in one person saying to another: sell this item for
so much, and any extra you may keep or divide between us. This is based on
the H
narrated by Ah.mad, Ab
u Daw
ud, and Al-H
. adth
. akim on the authority
of Ab
u Hurayra: Muslims are bound [in contracts and agreements] by their
conditions.
2.1.2
Correspondence of acceptance to the offer
A condition of the sale contract is that the seller accepts all that the buyer
had offered to buy, and for the terms he specified.20 So, if one individual says
to another: I have sold you those two items for such a price, and the buyer
replies I accept in that item only, pointing to one, the sale is not concluded.
Similarly, if one party says: I sold you this house with all its contents for such
a price, and the buyer replies: I accept buying the house alone without its
contents for such a (lower) price, the contract is not concluded. In both cases,
the buyer would be dividing what the seller is offering to sell, and it is not up
to him to do so; especially since sellers often combine the higher quality with
the lower quality goods in bundles they attempt to sell, thus enabling the sale
of the lower quality goods.
Of course, if the buyer accepts the higher price, the sale is concluded since
the one who agrees to pay more for the same item must agree to pay less. In
this case, the buyer is only obliged to pay what the seller requested. If the buyer
accepts but at a lower price, then the contract is not concluded. Similarly, if
the buyer disagrees with the seller on the nature of the price and not necessarily
on its quantity, the sale is not concluded. For example, if the seller offers to
sell at an immediate (cash and carry) price, but the buyer accepts to buy now
and pay in the future; or if the offer and acceptance differ on the timing of
future payments, then the acceptance does not correspond to the offer, and the
contract is not concluded.
2.1.3
Unity of the contract session
It is required that the offer and acceptance be uttered in the same session, where
both parties are present, or in a session where the absent party knows of the
offer.21
19 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p. 335), and in the Ih.y
a of Al-Ghaz
al: It is not
.
permissible to receive compensation for an endorsement by a physician of a medication that

only he knows, since such an endorsement is effortless; unlike the skilled sword-maker who has
to exert effort to straighten a sword with one hit, and he is entitled to a reward [even if it is
too large]. This is the case since acquiring the necessary skill to perform the job without effort
itself requires much effort. Al-Qaff
al declared an opinion (fatw
a) that he may not be hired,
which is the majority opinion, even though Al-Adhrac agrees with the view of Al-Ghaz
al.
20 Al-K
as
an ((H
at.b Al-Shirbn ((Sh
afic), vol.2, p.5 and
. anaf), vol.5, pp.136-7), Al-Kh
thereafter), Al-Buh
ut (3rd printing (H
usuf M
us
as Al-Amw
al wa
. anbal), vol.3, p.136), and Y
Naz.ariyyat Al-c Aqd (p.256).
21 Al-K
as
an ((H
as
an ((H
. anaf), vol.5, p.137 onwards), Al-K
. anaf), vol.5, p.80), and Dr.
Y
usuf M
us
as Al-Amw
al (p.257).
20
According to this condition, if one party made an offer, and the other party
left the session before accepting, or was occupied with another business that
disengaged him from the first party, then he later accepted, the sale is not
concluded. This does not mean that acceptance has to be instantaneous, for
the acceptor may need to ponder the offer.
The Maliks ruled that separation between the offer and acceptance does not
harm the sale contract, unless (as determined by convention) one of the
parties was disengaged from the transaction.22
The Shafics and H
. anbals ruled that cceptance must follow the offer, but not
by a long period. A long period is defined as one that may indicate that
the second party does not wish to accept. The contract would be harmed
if a discussion outside the scope of the contract ensues between the offer
and the acceptance.
Contracting while walking or riding
If the parties conduct a sale while walking or riding the same or adjacent vehicles,
then if the offer and acceptance were uttered in sequence without interruption
(even while moving), the contract is concluded. However, if there was a period
of silence between the offer and acceptance, even a short one, then the contract
is not concluded, since movement in this case changed the session (majlis).
In analogy, the jurists extended this ruling to the recitation of a prostration
(sajda) verse, or an offer to a mans wife to divorce herself if she wishes. In
the former case, the person does not have to perform the prostration if he is
walking or riding, and in the latter case, the option to the wife becomes void
by her walking or riding since that option is restricted to the session (khiy
ar
al-majlis).23
If the parties conduct the sale while standing up, it is concluded. However, if
one makes an offer while they are standing, then one or both start walking, the
contract is not concluded since the session has been changed before acceptance.
In this case, walking is considered a rejection of the offer.
In a special case, if a husband stands up and gives his wife the option, then
he walks away while she is still standing, then she still has the divorce option.
But if she walks and he stays standing, her option is void. In this case, it is
her adherence to the session that matters and not her husbands, since she has
not given any indication of rejecting the offer. As for the husband, his walking
away or rejection cannot nullify the option since it is binding once it is offered.
This is unlike a sale, where either of them may cancel the sale by walking away.
Contracting on a ship or airplane
If the two parties make a contract on a ship, airplane, or train, the contract is
concluded, whether the vehicle is moving or stationary. This is different from
22 See
H
w c al
a Al-Sharh. Al-S
. ashiyat Al-S
.a
. aghr (vol.3, p.17).
c
H
a id Al-fiqhiyya.
.
. amzas Al-qaw
23 Sheikh
Mahm
ud
21
walking or riding on the ground, since stopping those means of transportation

is under the control of the parties. Thus the entire ride on a ship, airplane or
train is considered a single session, no matter how long.
Contracting with an absent party
If one party extends a selling or buying offer to an absent party, and the absent
party receives that offer and accepts it, the sale is not concluded. The fundamental rule on which this is based is that one of the two halves of the contract is
only valid for that session and not beyond, unless the absent party commissions
a proxy they contract by messenger, or they conduct the contract by written
correspondence.24
Contracting via a messenger
An example of this transaction is to tell a messenger: I have bought suchand-such an object from the absent person so-and-so for such an amount of
money, so go to him and say: so-and-so has bought this object from you for
so much. Then, the messenger arrives and delivers his message. If the second
party accepts the offer in the same session during which the message is delivered,
then the sale is concluded. This is valid since the messenger represents the first
party, as if he were present and making the offer, so when it is accepted in the
same session, the sale is concluded.
Contracting by written correspondence
An example of this case is when one party writes a letter stating: I have
purchased such-and-such an item for such an amount of money. The second
party receives the letter, and announces acceptance of the written offer during
the same session in which he received it. The sale is thus concluded. In this case,
the written letter becomes a proxy for the absent party, as if he were present
at the session where the offer and acceptance were communicated to the two
parties. However, if the recipient of the message delays acceptance until a later
time (after the end of the session majlis), then the sale is not concluded.
The person sending an offer letter may rescind that offer in the presence
of witnesses provided that this takes place before the other partys acceptance,
and the arrival of the message. However, the majority of Malik jurists find that
the originator of the offer may not rescind it before he gives the other party
an opportunity to respond. The length of the period that constitutes such an
opportunity is to be determined by convention.
Note that unity of the session (majlis) is also a condition for the conclusion
of a lease contract or a gift.
24 Al-K
as
an
((H
am ((H
. anaf), vol.5, p.137 onwards), and Ibn Al-Hum
. anaf), vol.5, p.79).
22
Divorce and khulc
As for divorce, the part of the contract originating from the husband continues
to be valid, and may be accepted by the other party after the session is over.
For instance, if a man says: I have divorced my absent wife, on the following
terms, and she receives the news and accepts the terms, then the divorce is
concluded.
Marriage
For Ab
u H
. anfa and Muh.ammad, marriage is treated the same way in this
context as sales, so one side of the contract may not be suspended beyond the
session, unless the absent party is represented by a consenting proxy who accepts
the offer. For example, if a man or woman says in the presence of witnesses:
witness that I have married so-and-so for such-and-such terms, and the other
party receives the news and accepts, the contract is not concluded for Ab
u
H
. anfa and Muh.ammad unless the absent party is represented by a proxy who
accepts on behalf of the absentee in the session of the offer.
For Ab
u Y
usuf, however, half of the marriage contract is suspended beyond the session and may be validly accepted by the second party, even if not
represented by a proxy who accepts in the session of the offer.
The principles of unity of a .safqa, and its parting
The term .safqa in Arabic (literally: the impact of a strong handshake) is used
to signify the contract itself.25 Al-Nawaw said that .safqa is a name for sales
contract since it was customary for each of the contractors to slap his hand
loudly with his counterparts hand at the conclusion of the contract.26
As discussed above, the sale contract is composed of an object of sale, a
price, a seller, and a buyer, together with a sale and a purchase. With the
combination of some of those items or their parting, the contract may be unified
or dissolved.27
jurists agreed on the necessity of combining all the elements of a contract as
a matter of principle, since one condition for the conclusion of sale is the one
we mentioned above: that the acceptance corresponds to the offer. However,
there are some partial disagreements about the satisfaction of this principle or
lack thereof; the latter corresponding to the dissolution of the contract.
28
In this regard, the H
. anafs argued that it is necessary to understand the
unification of the contract, or its partition; both with respect to the parties of
the contract, and the object of sale.
1. With respect to the parties of the contract: If the side making the offer
is unitary whether a seller or a buyer and the recipients of the offer
25 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.80).
Al-Nawaw/Al-Subk ((Sh
afic), vol.9, p.524).
c
Al- In
aya, and Al-Im
afic), vol.9, p.432 onwards).
28 Ibn Al-Hum
am ((H
anaf
),
vol.5,
p.80),
Al-K
a
s
a
n
((H
anaf
), vol.5, p.136 onwards), Ibn
.
.
c Abid
n ((H
. anaf), vol.4, p.20).
26 Al-Im
am
27 See
23
were more than one, then the recipients may not partition the contract
by some of them accepting and some rejecting the offer. Similarly, if the
offer is made by a group, the recipient of the offer may not accept the part
of the offer pertaining to one of the offerers. In those cases, the contract
is not concluded unless all the recipients accept the entire offer. If, for
example, a buyer makes an offer to a number of sellers, and some accept
while others do not, then the contract is partitioned, and the sale can only
be concluded with a new acceptance.
2. With respect to the object of sale: Even if the parties making the offer
and accepting it are unitary, the acceptor of the offer may not accept part
of the contract pertaining to a portion of the merchandise.
If the parties are both unitary, but the objects of the sale are fungible
(mithl), or some fungible and some non-fungible (qm),29 then the buyer
may not accept to purchase some of the merchandise but not all. In this
case as well, the contract would have been partitioned, and the sale can
only be concluded with a new acceptance from the primary party. In this
case, the new acceptance may conclude the sale contract by making the
partial acceptance an offer, and the secondary acceptance an acceptance
(while the initial offer is no longer valid since it is implicitly rejected).
Note that there is a difference between those two cases with respect to the
manner in which the price would be distributed, as well as the unity of
the contract or its partition. For, if the objects of the sale were fungible
(e.g. two bags of rice, or two pounds of iron), and the buyer accepts one
of them, then the price is divided in proportion; since the price of fungible
items is divided in proportion to its parts. In this case, the contract is
unified.
However, if the merchandise were non-fungible, e.g. two unique pieces
of cloth or two particular animals, then the price may not be divided in
proportion to the number of parts, since the parts are not identical. In this
case, the partial acceptance leaves the parts of the offer with undetermined
prices, and indetermination of the prices nullifies the sale. To correct this
situation, one of two procedures may be followed:
(a) Either the offer is repeated; e.g. by saying: I sell you those two
items, this one for so-much, and that one for so-much (or similarly
for the buyer if he originates the offer), then the contract is valid,
and it in fact becomes two contracts.
(b) Alternatively, the offer may partition the sale at the inception of the
offer (e.g. I will sell you those two items, this one for so-much, and
that one for so-much). In this case, the acceptor is not partitioning
the contract, but it is indeed already partitioned, and he may accept
29 fungible: being of such nature that one part of quantity may be replaced by another
equal part or quantity of an obligation (oil, wheat and lumber are fungible commodities),
Merriam-Webster Collegiate Dictionary, 10th edition, 1993, p. 473. [tr.]
24

whichever part(s) he wishes, and reject the others. Had the seller
intended to sell the two items only in one transaction, there would
be no use in specifying the price of each separately.
If the offer and acceptance correspond to one another (i.e. agree on the
object, the price, etc.), then the sale is binding, and neither party has an option,
unless a defect is found in the merchandise, or if it were not inspected before.
In item #351 of Al-Majalla, the following was stated: If some merchandise
was sold in a single contract, and then some of it was found defective then: if
the price has not been received, the buyer has the option to return the entire
merchandise, or to keep it all for the full price. However, the buyer does not
have the option to return the defective parts only and keep the rest. If the price
has already been collected, and if separating the merchandise does not lead
to loss or harm, he may return the defective parts in exchange for its portion
of the price were it not defective. In this case, he may not return the entire
merchandise unless the seller agrees. And if the separation of the merchandise
may lead to loss or harm, then either the entire merchandise is returned, or it
is all accepted at the full price ...
30
Ab
uH
. anfa and the Maliks ruled that if the sold merchandise contains
a mixture of admissible and prohibited goods (such as wine, pork, etc.), then
the entire sale is void. Ab
u Y
usuf and Muh.ammad ruled that the contract
is valid for the good merchandise, and defective for the defective. The origin
of disagreement between Ab
u H
u
. anfa and his two colleagues is that for Ab
H
. anfa, the defectiveness of part of the sale agreement renders the entire agreement defective, whereas his two colleagues consider the good part of the sale
still valid.
If a person sells items he owns together with items owned by another in one
sale agreement, the sale is valid, and binding only for the part that the seller
owns. The sale is not binding for the part owned by another unless the other
person allows it. The H
. anafs and Maliks agree on this since they allow for the
suspended (mawq
uf) or uncommissioned agent (fud.u
l) sale, as discussed below.
31
anbal
s
studied
the partition of a conThe majority of the Shafics and H
.
tract in the case of sales of legitimate and prohibited goods in one contract for
one price in three cases:
1. The sale of a known and an unknown item for one price (e.g. I sell you
this book and another that I own for such a price). In this case, the sale
is void, since the unknown may not be sold, and the price of the known is
unknowable.
2. The sale of divisible goods that are jointly owned by one of the owners
without the permission of the others. In this case, the sale is valid for the
30 Ibn
Juzayy ((M
alik), p.260), and Al-K
as
an ((H
. anaf), vol.5, p.217).
afic), vol.9, pp.425-437), Ab
u-Ish.
aq Al-Shr
az
c
((Sh
afic), vol.1, p. 269), Ibn Qud
amah (, vol.4, p.236 onwards), Ibn Rajabs Al-Qaw
a id
(p.421), Al-Suy
ut. ((Sh
afic), p.98), Marc ibn Y
. anbal), vol.2, p.16).
31 Al-Im
am
25
portion owned by the seller at its portion of the price. The sale is void for
that which is not owned by the seller.
3. The sale of goods that are non-fungible, or whose price is not divisible
in proportion due to the uniqueness of the components (i.e. qmiyy
at),
while some of the goods are permissible and others are forbidden (e.g. a
lamb and a pig, or a bottle of wine and a bottle of vinegar for one stated
price). In this case, the better of two opinions for Al-Shafic, and in a
related opinion of Ibn H

. anbal, renders the sale valid in the permissible
32
goods and void for the forbidden. As for the division of the price, items
are priced the same as their closest counterpart (e.g. commissioning the
pig the same price as the lamb, or the wine the same price as the vinegar).
This is what was stated by those who related this first opinion of Ah.mad.
However, the H
ama found the second related opinion
. anbal jurist Ibn Qud
of Ah.mad that the entire sale is void.
If the sale consisted of the property of the seller and the property of others,
the price may not be divided in proportion. The favored opinion among
the Shafics is that the sale of that which is owned by the seller becomes
valid, while the sale of the other items becomes void; but the price is
divided based on the value of the items. As for the H
. anbals, the entire
sale is void in this case.
As for the option of partitioning the sale, the H
afics ruled
. anbals and Sh
that if part of the sale is valid, then if the buyer knows the situation (e.g. that
the merchandise and its price are divisible), he has no option, since he bought
while knowing the conditions of the merchandise. On the other hand, if the
buyer did not know, e.g. by thinking that all the merchandise was owned by
the seller only to discover that he owns only half, then he has the option to
break the contract or uphold it. The seller in this case if the buyer decides to
keep the valid part of the sale does not have the option in the more favored
opinion, since he willingly accepted exchanging his part of the merchandise for
the appropriate portion of the price.
If part of the merchandise sold in one contract is spoiled before the buyer
receives it and before the seller receives the price, then the contract is unanimously seen as void for the spoiled part. As for the rest of the merchandise, the
buyer has the option to keep the unspoiled merchandise at the agreed price, or
to void the entire contract.
The Z.ahirs ruled that every sale agreement that combines a legitimate portion and a prohibited one is void in its entirety.
a) deem the mixed sale
In summary: the majority of jurists (jumh
ur al-c ulam
that contains permissible and prohibited components, or owned and unowned
merchandise, to be void. The Shafics, on the other hand, lexically Al-Nawaw
32 This explains the common statement of the Sh

afics about the two statements on the
partition of a sale agreement. The first and stronger statement for the Sh
afics is that the
agreement is partitioned, permitting the sale of the permissible, and voiding the other, and
their second opinion is that the sale may not be partitioned, and thus it all becomes void.
26
who favored this opinion ruled that the contract is valid for the permissible part,
and void for the impermissible part.
2.2
Conditions for the executability of a sale
There are two conditions for the executability of a sale:

1. Ownership or guardianship (wil
aya): Ownership is the possession of
an item where the possessor is alone capable of freely using it in the
absence of legal constraints. In this regard, the guardian of an underage
child or an insane person, is not considered an owner of that persons
property. However, the underage child or the insane person are considered
the owners, even though they may not freely use the objects due to the
legal constraint of being under another persons guardianship.33
Guardianship: There are two types of guardianship.
(a) Original: A person is fundamentally a guardian for himself.
(b) Agent/vicarious: For those who may not legally represent themselves
(e.g. due to being underage), a guardian may be commissioned.
The legal order of legal agents is as follows: the father, then his plenipotentiary, then the grandfather, then his plenipotentiary, then the judge,
then his plenipotentiary.34
The result of this condition is that the merchandise must be owned by
the seller, so the uncommissioned agent (fud.u
l) sale is not executable
due to lack of ownership or legal agency. However, the H
. anafs ruled
that the fud.u
l sale is suspended pending the agreement of the owner.
Al-Shafic, on the other hand, considered ownership or legal agency a con
dition of conclusion, thus voiding the transactions of an uncommissioned
agent (fud.u
l).35
2. No third party should have rights over the object of sale: If anyone
other than the owner has a legal right to ownership of the merchandise
or its usufruct, then the contract is suspended. Hence, the seller cannot
sell what he has pawned or rented. The sale is thus considered suspended
and dependent for executability on the consent of the other parties. This
is the best accepted opinion among the H
. anafs, since the cornerstone of
the sale was satisfied, and since there is no coercion to any party of the
contract.36 The buyer in this case has the option to conclude the sale or
to void it. As for the other party who has a vested interest in the sale
object (e.g. a tenant or pawn-broker), if they allow it, the contract will
be executable. If the renter of a property does not allow the sale, then it
33 Al-Amw
al
wa Naz.ariyyat Al-c Aqd (p.165).
n ((H
as
an ((H
(p.148), Ibn c Abid
. anaf), vol.4, p.6), Al-K
. anaf), vol.5, pp.146,155).
35 Al-K
as
an ((H
. anaf), vol.5, p.148).
36 Al-K
c
n ((H
as
an ((H
. anaf), vol.4, pp.6,145-148).
. anaf), vol.5, p.155), Ibn Abid
34 ibid.
2.2. CONDITIONS FOR THE EXECUTABILITY OF A SALE
27
may only be executable after the end of the rent contract. Similarly, the
pawner may have to repay the pawn-broker before the sale is executable.
n is the correct opinion.

This according to Ibn c Abid
Based on this opinion, the sale of a middle man becomes admissible but
suspended dependent on the consent of the owner. In this case the contract
may be broken by the buyer, but the dependence on the consent of the
owner is not viewed as a breaking of the contract. Also, the middle-man
may break the contract, except in the case of marriage.
Professor Mus.t.afa Al-Zarqa said: The best juristic opinion is that a sale
may not be suspended pending the consent of a pawn-broker or a renter,
even though they do have some legal rights regarding the object of sale,
since such suspension is only valid legally for an owner or a legal agent.
On the contrary, he says, the sale is executable, but the delivery of the
good requires the consent of the pawn-broker or the renter to guarantee
their rights. In this case, the buyer is given the option of voiding the
contract, or waiting for the pawned good to be freed, or the rent contract
to expire, before receiving the purchased items.37
Executable and suspended sales
38
Given the H
. anaf conditions for executability of a sale listed above, it can be
seen that there are two types of sales: executable and suspended.
Executable sale: This is the type of sale in which the cornerstones of the
contract, its conditions of conclusion, and its conditions of executability
are all satisfied.
Suspended sale: This is the type of sale in which the cornerstones and
conditions of conclusion of the contract are satisfied, but the conditions of
executability (ownership and guardianship) were not.
As seen above, the conditions of executability may be violated in the object
of sale (as in the sale by an uncommissioned agent) or in the behavior of
parties to the contract (as in the sale or purchase by a young discerning
child, or an incompetent person).
Jurists views on uncommissioned agent
An uncommissioned agent (fud.u
l) is someone who makes a transaction or signs a
contract without having the legal authority or representation to do so. Examples
are when someone sells or buys for another, or rents on behalf of another,
without being a legal proxy, agent, guardian, or plenipotentiary with the right
to make such a contract, and without taking permission.39 One person selling
Al-Bayc (p.31), Ibn c Abid

n ((H
. anaf), vol.5, p.371).
we use conclusion for inc iq
ad (the contract is concluded= tamma al-c aqd or
c
in aqad), and executability for naf
adh. [tr.]
39 Ibn Rushd Al-Haf

d ((M
alik), vol.2, p.171), Al-Amw
al wa Naz.ariyyat Al-c Aqd (p.380),
.
c
Us.u
l Al-Buy
u Al-Mamn
uc a by Prof. c Abd Al-Samc (p.134).
37c Aqd
38 Here
28
the property of another has become very common in everyday dealings; e.g.
men selling the property of their wives, or individuals selling the property of
the state, or the property of person missing for a long time.
Notice that the uncommissioned agent is dealing in property that is clearly
owned by another, otherwise (if the other party thinks that the property is his),
it would be considered selling what he does not own, which is prohibited. What
is being considered here is the uncommissioned agents sale of the property of
another, with the condition that the owner has the option to make the sale
executable, or to void it. Similarly, the uncommissioned agent may buy an item
for a third party without their permission, with the condition that the ultimate
buyer has the option to accept or void the purchase.40 Jurists differ in opinion
regarding the dealings of uncommissioned agents:
The H
. anafs distinguished between the cases of sale and purchase. In the case
of a sale, the dealings of the uncommissioned agent are deemed valid but
suspended, whether the uncommissioned agent or the owner is listed as
the seller in the contract. It is suspended since if he signs as the seller, he
cannot execute the contract.
In the case of purchase, if the uncommissioned agent lists himself in the
contract as a buyer, with the intention of buying for another person, he is
considered the buyer if his own trading is executable. In this case, the rule
appeals to the principle that a persons dealings are normally for himself
and not for another.
If the buyer listed in the contract is other than the uncommissioned agent,
or if his purchase is not executable (due to being a child, or one with legal restrictions on his dealings) then the purchase is valid but suspended
conditional on the approval of another person or the person for whom
the purchase was intended. If the intended buyer approves the transaction, it is executable, and the uncommissioned agent is considered ex post
authorized.
In summary: the dealings of an uncommissioned agent is deemed by the
H
. anafs to be admissible but suspended pending the approval of the relevant party.41 In this context, the trades of the uncommissioned agent,
together with the sale of surrendered property, the sale of coerced person,
and the sale of a legal proxy, are among the special cases of the sale of
what one does not own.
The Maliks consider the dealings of the uncommissioned agent and his trade
contracts in general to be concluded and suspended pending the permission of the affected party. If the affected party approves of the contract,
it becomes valid and executable, otherwise it is void. This is based on
40 Ibn
Rushd Al-H
alik), vol.2, p.171).
. afd ((M
vol.5, pp.148-150), Ibn Al-Hum
am ((H
.
. anaf), vol.5, p.309 onwards),
n ((H
Ibn c Abid
. anaf), vol.4, pp.5-6).
41 Al-K
as
an ((Hanaf),
29
the view that ex post permission is similar to ex ante permission or legal

representation.42
The H
. anafs and Maliks have cited as proof of their opinion the verses
of trade that are general, and did not offer any special treatment of the
case of uncommissioned agents. In this regard, they cite the verses: But
Allah has permitted trade [2:275], But let there be among you traffic and
trade by mutual good will [4:29], and And when the prayer is finished,
then you may disperse through the land, and seek of the bounty of All
ah
[62:10], all of which mention trade positively in general terms.
Also, the uncommissioned agent is (generally assumed to be) of legal age
and of good mental status, thus allowing his transactions is more appropriate than nullifying them. Moreover, the contracts may indeed bring
benefit to the party he represented, and there is no harm since the person
he represented without authorization has the option to void the contract
if it is not beneficial. It is narrated in Al-Bukhar and elsewhere that the
ar with which to buy one

Messenger (pbuh) gave c Urwa Al-Bariq one dn
lamb, but he bought him two lambs for the one dn
ar. He then proceeded
to sell one of the lambs for one dn
ar, and returned to the Messenger
(pbuh) with one lamb and one dn
ar. The Messenger (pbuh) said: May
Allah bless your trades. It was narrated by Al-Tirmidh and Ab
u D
aw
ud
on the authority of H
ak
m
ibn
H
iz
a
m
that
the
Prophet
(pbuh)
gave
him
.
.
one dn
ar to buy him a lamb for sacrifice. He then proceeded to buy two
lambs for the one dn
ar, and sold one of them for one dn
ar, and returned to
the Messenger (pbuh) with one lamb and one dn
ar. The Prophet (pbuh)
commended him and prayed for him to be blessed by saying: May Allah
bless your trade.43 Note that the Prophet (pbuh) in both versions of the
story did not order the second lamb to be either bought or sold.
44
The H
. anbals ruled that the dealings of the uncommissioned agent are never
valid in trade or otherwise, even if his dealings are approved ex post. The
exception is when the uncommissioned agent purchases for himself with
the intention of purchasing for another person who is not mentioned in the
contract, in which case the contract is valid. Similarly, if he bought some
goods on a cash-and-carry basis and had the intention that he was buying
for another person who was not mentioned, then the sale is valid. In these
cases, if the unmentioned party intended for the purchase approves it, the
merchandise becomes his from the moment of purchase; but if he does not
approve it, then the middle person becomes the buyer. Ibn Rajab ruled
that dealings of the uncommissioned agent are permissible and suspended
pending permission if necessity dictates dealing in the property and rights
42 Ibn Rushd Al-Haf
alik)), H
shiyat Al-Dus
uq (vol.3, p.12), Ibn Juzayy ((M
alik),
. d ((M
.a
p.245).
43 Al-Sanc
an (2nd printing, vol.3, p.31).
.
44 Al-Buh
ut (3rd printing (H
. anbal), vol.2, p.11 onwards), Ibn Rajab (1st edition (H
. anbal),
p.417),Marc ibn Y
lib Uwl Al-Nuh
a f Sharh.
. anbal), vol.2, p.8), Mat.a
Gha
yat Al-Muntah
a (vol.3, p.18).
30

of another person, and obtaining permission was impossible due to not
knowing his identity, his absence, or the difficulty of waiting for him.
Item (13) of the project to legalize the Sharc a following the school of
Imam Ah.mad states: The dealings of an uncommissioned agent are

invalid, even if approved ex post, unless he buys for himself with the
intention of buying for a person whom he does not name, then it is valid.
The Shafics and the Z.ahirs ruled that it is necessary for the item being sold
to be owned by the one engaged in the contract. Hence, the sale by

an uncommissioned agent is invalid at its origin since it cannot even be
concluded, thus making the permission of the affected party irrelevant.
Their proof for this opinion the H
hasan narrated by Ab
u D
aw
ud
. adth
.
and Al-Tirmidh that the Prophet (pbuh) said: There is no sale except
in what you own. The prohibition of selling what one does not own has
also been correctly reported.45 This is due to the uncertainty induced
by the possible inability to deliver to the sold items at the end of the
contract, and the conflicts that may ensue. They said with regards to the
H
of c Urwa Al-Bariq or H
. akm ibn H
. izam that it is valid due to his
. adth
being an unrestricted legal agent of the Prophet (pbuh), since he bought

the lamb and delivered it.46 Thus, it is a legal representation where the
agent diverged to improve the lot of the person whom he represented, and
therefore his dealings are executable. Thus, the Shafics and Z.ahirs view
the purchase of an uncommissioned agent as a purchase for himself, and

ruled that ownership does not transfer to a third party except via a new
contract. This is also the opinion of the H
. anafs.
Validity of the dealings of an uncommissioned agent
The H
. anafs stipulated the following three conditions for the validity of a contract by an uncommissioned agent:47
1. A person who can validate the deal must exist at the time of the contract,
since it is then possible for this person to give permission to conclude the
contract following the actions of the middle person in the same session.
However, if the person who can give such a permission is not known to
exist, then permission may not be given during that session, and a future
permission may or may not be forthcoming. Thus, if an uncommissioned
agent divorces the wife of a man of legal age, or gave his property as a gift
or charity, his actions conclude the contract but it is suspended pending
45 The text of the Had
was narrated by Ah.mad and As.h.
ab Al-Sunan Al-Arbac a on the
. th
authority of H
ak
m
ibn
H
iz
a
m,
that
the
Prophet
(pbuh)
said
to him: Do not sell what you
.
.
do not have, which was deemed H
h.asan by Al-Tirmidh, c.f. Al-H
afiz. Al-Zaylac (1st
. adth
.
edition, (H
), vol.4, p.45), Al-Shawk
an (, vol.5, p.155).
. adth
46 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.15), Al-Im
afic),
.
vol.9, pp.281,284 thereon).

47 Al-K
as
an ((H
am ((H
. anaf), vol.5, pp.149-151), Ibn Al-Hum
. anaf), vol.5, p.311), Ibn
c Abid
n ((H
. anaf), vol.4, p.142).
31
permission. In this case, the concerned party could have initiated these
contracts by himself, thus he may approve them after they occur. In this
sense, a person who can validate the deal does exist at the time of the
contract. However, if the uncommissioned agent attempts to do the same
on behalf of a child, then the contract is not concluded, since the child
does not have the ability to conclude such contracts on his own, and the
childs guardian does not have the ability to conclude them on his behalf.
In this case, a person who can validate the contract does not exist at the
time of the contract.
2. Validation (giving of permission) must take place while the buyer, seller,
owner, and merchandise all exist. Thus, if a contract is approved after
one of those had perished, the contract is void and approval of it does not
matter. This is the case since such approval is with respect to a contract,
whose cornerstones (the parties to the contract, and its object) must exist
at the time.
3. That the uncommissioned agent does not have the ability to execute the
contract if the concerned party refuses.
Nullification of uncommissioned agent contracts
The contract (e.g. a sale) by an uncommissioned agent may be nullified by:
(i) the owner of the property, (ii) the middle person himself before the sale
is approved by the owner to avoid the obligations he would have if the owner
approves it, or (iii) the buyer who may decide to avoid possible harm in buying
from a party other than the owner.
As for the marriage contract, the uncommissioned agent may not nullify
it since it is a contract whose rights and obligations are all allocated to the
concerned parties.48
Validation of the contract of an uncommissioned agent may only come from
the owner or others who have rights associated with the item of sale. Moreover,
validation may only take place if the buyer, seller, and object of sale are all
unchanged (since validation of this contract is legally equivalent to concluding
a direct sale). Also, if the object of the sale is unique, its price must remain
unchanged. The object of the sale must remain unchanged. This follows since it
is in the interim owned by the middle person, and thus if it perishes, it perishes
in his property.49
One uncommissioned agent for two parties
If an uncommissioned agent sells someones house to another person and accepts
for the buyer, while both are absent, or if he marries a man to a woman and
accepts for both sides, the contract is not concluded. This ruling follows from the
condition of multiplicity of the parties to the contract, as explained above. Thus,
48 Al-K
as
an
((H
am ((H
. anaf), vol.5, p.151), Ibn Al-Hum
. anaf), pp.309-312).
((H
. anaf), vol.4, p.146 thereon).
49 Ibn c Abid
32
the offer in contracts of sale, marriage, etc. may not be suspended conditional
on the acceptance of an absent party. On the contrary, the offer becomes void,
and later permission may not conclude the agreement.
Therefore, if one person is an uncommissioned agent for both sides of a
marriage contract, or if he is an uncommissioned agent for one side while representing the other party (that party being himself, someone he legally represents,
or for whom he is a guardian), then his offer is not suspended. Such an offer
is considered by Ab
u H
. anfa and Muh.ammad to be void, whether he spoke
only for one side (by only making the offer), or for both sides (by making an
offer and an acceptance). Ab
u Y
usuf ruled that the offer of an uncommissioned
agent is suspended pending acceptance by the absent party, and it is suspended
pending acceptance by both parties if it is accepted by another uncommissioned
agent. For example, if two uncommissioned agents marry a man to a woman
without their knowledge, it would be valid but suspended conditional on their
acceptance. Then, if they accept, the contract is executable, otherwise it is not.
The two parties argued thus: The acceptance by an uncommissioned agent
is legally unacceptable, since the offer extended by the uncommissioned agent
without a potential acceptor in the session (not even another uncommissioned
agent) was invalid from its inception. Thus, it is not suspended pending acceptance of an absent party, and later acceptance does not change its invalidity.
In other words, all that exists at the time of the offer is half of a contract,
and the other half may not be realized without legal representation through
guardianship.
The argument of Ab
uY
usuf, on the other hand, is that the expression of
the uncommissioned agent contains both halves of the contract, and hence it is
valid as it would be in the presence of a legal agent or guardian.50
Suspension of transactions by a discerning child

If the child is mindful and discerning, then the H
. anafs and H
. anbals ruled that
his transactions are valid, but suspended pending approval of his guardian as
long as he is a child, or his own approval when he reaches legal age.
2.3
Conditions for the validity of a sale
Conditions for the validity of a sale may be divided into general and specific
sets of conditions.51
50 Ibn c Abid
n ((H
al Al-Shakhs.iyya by the late Dr. Mus.t.af
a
. anaf), vol.2, p.448), Al-Ah.w

Al-Sib
ac (vol.1, p.95).
51 See the details in Ibn c Abid
c
c
n ((H
. anaf), vol.4, p.6), Aqd Al-Bay for Professor AlZarq
a (p.25 thereon), Al-Amw
al wa Naz.ariyyat Al-c Aqd by Dr. Muh.ammad Y
usuf M
us
a
(p.394 onwards).
2.3. CONDITIONS FOR THE VALIDITY OF A SALE
33
General conditions
Those are the conditions that must be satisfied for all types of sale contracts to
make them legally valid. Those general conditions specify that the sale must
not include any of the following six shortcomings: uncertainty or ignorance
(al-jah
ala), coercion, time-restriction, uncertain specification (gharar al-was.f),
harm (al-d.arar), and corrupting conditions (al-shur

u.t al-mufsida).
1. Ignorance: This shortcoming signifies excessive uncertainty or ignorance

that may lead to disputes that are impossible to resolve, since both parties
would have equally valid arguments based on ignorance. An example of
such a shortcoming is when a person sells one sheep out of a herd. This
kind of ignorance may be divided into four types:
(a) Ignorance by the buyer of the object of the sale: its genus, type, or
quantity.
(b) Ignorance of the price. Thus, it is not valid to sell something at a
price specified to be the price of a similar object, or whatever future
price may be determined in the market.
(c) Ignorance of the time-period terms, as in deferred price or conditional
options (khiy
ar al-shart.), where the time-periods must be known, oth
erwise the contract is deemed defective. If the price and object are
both fungible, the price may be deferred to a known date. However,
if either the price or the object of the sale are non-fungible and identified, the scholars have agreed that the price may not be deferred.
Thus, if a person sells a specific item to deliver it after one month,
or if a person buys an item using a unique object as its price with
the understanding that he will deliver the price in one month, then
the sale is not valid, even if the term till delivery is known. This
follows from the fact that deferment was legalized to enable the parties to the contract to obtain the property required to compensate
the other party. This applies to fungibles since they are not specific
items identified in the sale. However, specified non-fungibles are by
their nature defined and present, and thus deferment would lead to
damages without a corresponding benefit.52
(d) Ignorance of the means of documentation: This type of ignorance
would ensue if the buyer makes it a condition to have a third party
guarantor of the transaction, or pawning an object of the same value
as the deferred price. In this case, the guarantor of the object to be
pawned must be specified, otherwise the sale is not valid.
2. Coercion: We consider two types of coercion in sale:
52 Ibn Al-Hum
am ((H
afic), vol.9,
. anaf), vol.5, p.219), Al-Im
p.373), Ibn Rushd Al-H

afd ((M
alik), vol.2, p.155).
.
34

(a) Total coercion: this is the situation where the coerced person finds
himself forced to take an action; e.g. if he is threatened by death or
permanent physical disability.
(b) Partial coercion: this would result if the person is threatened with
incarceration, beating, or injustice such as prevention from promotion
or immediate demotion.
Both types of coercion affect the sale, rendering it invalid for most
H
. anafs, and suspended for Zufar. In this case, the buyer owns the
object of sale after delivery of the price if the sale is invalid. However,
the buyer does not unconditionally own the object of sale when th
eprice is delivered if the sale is considered suspended. The better
opinion is considering the coerced sale suspended, since the H
. anaf
scholars have agreed that if the coerced person approves the sale after
the coercion is removed, it becomes valid and executable. This is the
ruling for the suspended and not the invalid sale.53
3. Timing: A sale is defective if it has an expiration period, as in saying: I
sold you this dress for one month. In this case, the sale is invalid, since
ownership of a specific object does not have an expiration date.
4. Deception and gharar: If a person sells a cow with the understanding
that it produces a certain amount of milk per day. This description of the
object of sale is only assumed to materialize, and the actual amount of
milk the cow produces may be less. However, if the cow is sold with the
understanding that it produces milk but without quantifying its production, the specification is deemed valid.
Uncertainty regarding the existence of the object of sale (gharar al-wuj
ud)
of selling what
invalidates the sale due to the Prophets (pbuh) prohibition
may and may not exist (bayc al-gharar);54 e.g. selling the offspring of the
offspring.
5. Harmful sales: This type of characteristic ensues if the object of sale
cannot be delivered without causing the seller losses that exceed what he
is selling. For example, if he sells a specific beam in the roof of a building,
or a sleave of a dress, then the delivery of the object of sale would require
destroying the house or the dress.
Since the corrupting factor in this type of sale negatively affects only
the personal rights of the seller (and not the legal rights), scholars have
determined that if the seller completes the delivery that harms himself
(e.g. by extracting the beam or cutting the sleave), the sale becomes
valid.
53 Al-K
as
an ((H
al Al-Fiqh by Professor Al-Zarq
a (vol.1,
. anaf), vol.7, p.188), Al-Madkh
n ((H
p.364), and Ibn c Abid
. anaf)).
54 Narrated by Muslim, Ahmad, and Ash
c
u
.
. . ab Al-Sunan Al-Arba a on the authority of Ab
Hurayra (mAbph) (see Ibn Al-Athr Al-Jazar (, vol.1, p.441), Al-Haytham (, vol.4, p.80).
2.3. CONDITIONS FOR THE VALIDITY OF A SALE
35
6. Corrupting condition: Any condition that causes benefit to a party of

the contract is corrupting unless it has been specified in the law, accepted
in custom and convention, required by the contract, or suitable for the
transaction. Examples of corrupting conditions are: if a person sells a car
with the condition that he can use it a month after the sale, or a house
on the condition that he can reside in it for some period; or if the buyer
stipulates in the contract itself that the seller must lend him some amount
of money.
ud alIf a corrupting condition is made part of a commutative contract (c uq
muc a
wad.a
t, such as sale, lease, etc.), it invalidates the contract. In other
types of contracts (e.g. donations, marriage, etc.), such conditions are
deemed nugatory, and these contracts themselves are considered valid.55
Professor Mus.t.afa Al-Zarqa has commented on this topic saying: Since
conventions among people validate conditions in the opinion of some scholars, every condition that is originally defective becomes valid and binding
if people make it a convention and use it often. Thus, we can say that the
corrupting condition has been juristically eliminated in peoples dealings
with the passage of time, and this ages conditions have all become valid
by the very fundamentals of H
ad).56
. anaf inference (ijtih
Specific conditions
Those are the conditions relating to some sales and not to others, as detailed
below:
1. Receipt of movable (manq
ul) goods:57 It is a condition for the validity
of selling a movable good purchased from another that the seller receives
it from the first seller prior to concluding the second sale. This ruling
follows from the high rate of depreciation of movable goods, and thus
the second sale before receiving the goods would incorporate prohibited
uncertainty (gharar). However, Ab
uH
u Y
usuf allowed the
. anfa and Ab
ar) prior to receipt, as discussed below.

sale of immovable
properties (c aq
2. Knowing the initial price in trust sales (buy
uc al-am
ana): This
type of sales includes cost-plus (mur
abah.a), investiture (tawliya), resale
with loss (wad.c a), and joint purchase (ishr
ak), as detailed below.
3. Exchanging object and price prior to parting in money exchange

transactions (s.arf).
4. Satisfaction of forward sale (salam) conditions as detailed below, if
that is the nature of the sale.
5. Equality of compensations if the object of sale lends itself to usurious
uses (ribawiyya), and avoiding the semblance of rib
a.
55 Al-Amw
al
wa Naz.ariyyat Al-c Aqd by Professor Muh.ammad Y

usuf M
us
a (p.423).
Al-Bayc (p.28).
57 Here we use movable for manq
ul and immovable property for c aq
ar.
56c Aqd
36

6. Receipt of debts on the parties, such as the object or price of forward
sale, or selling an object in exchange for a debt on someone other than the
seller. All of those debts may not be sold by anyone other than the debtor
before receiving them. For example: the buyer in a forward sale may not
sell the object of sale before receiving it from the seller. Also, the creditor
may not buy an item from a party other than the debtor, with the price
being the unpaid debt.
2.4
Conditions for bindingness (luz

um)
The conditions for a sale to be binding come into consideration after the conditions of conclusion and executability. Thus, for a sale to be binding, the contract
must be devoid of all options that allow one of its parties to void the contract
(e.g. options by condition (khiy
ar Al-shart.), description (was.f), price payment
(naqd), identification (tac yn), inspection (ruya), defect (c ayb), or deception

(ghubn mac a al-taghrr). If any of those options are present in the sale contract,
the party who has the option right. This party may void
it is not binding on
the sale or accept it, unless the considerations discussed in the chapters dealing
with options (al-khiy
ar
at) apply.58
Note that the opposite of conclusion of a contract is its voiding; the opposite
of its validity is its invalidity (but.l
an) or its defectiveness (fas
ad); the opposite
of its executability is its suspension; and the opposite of its bindingn is nonbinding, implying the existence of an option.
2.5
Summary of sale conditions
This section summarizes the different types of conditions of sale in different juristic schools (madha
hib), and highlights the points of agreement and disagreement
among the various schools. Jurists enumerated different types of conditions of

sales: the H
. anafs enumerated twenty-three conditions, the Maliks enumerated eleven conditions, the Shafics enumerated twenty two conditions, and the
H
. anbals enumerated eleven conditions.
2.5.1
Conditions of sale for the H

. anafs
The H
. anafs classified the conditions of sale into four groups: (i) conditions of
conclusion, (ii) conditions of validity, (iii) conditions of executability, and (iv)
conditions of bindingness, with a total of twenty three conditions.59
(i) Conditions of conclusion
Conditions of conclusion fall in four categories:
58 Ibn c Abid
n
59 Al-K
as
an
c
c
((H
a (p.32).
. anaf), vol.5, p.6), Aqd Al-Bay by Professor Al-Zarq
((H
. anaf), vol.5, pp.135148,155).
2.5. SUMMARY OF SALE CONDITIONS
37
1. Conditions pertaining to the parties of the contract. The buyer

and the seller must both satisfy two conditions:
(a) Sanity and discernment: The sales and purchases of an insane
person, and those of a young non-discerning child, are not concluded.
(b) Multiplicity: A sale may not be concluded by one person, but the
offer must come from one party, and the acceptance from another.
The exceptions to this rule are the father and his plenipotentiary, the
judge, and a messenger of both sides; in which cases one party may
be both buyer and seller.
2. Conditions pertaining to the language of the contract, consisting
of the offer and acceptance. There are three such conditions:
(a) Audibility: The sale is not concluded unless both parties heard the
utterances of the other.
(b) Correspondence of the offer and acceptance: The buyer must
accept all the merchandise specified, and at the price indicated, in the
offer. If the offer and acceptance do not correspond to one another,
the sale is not concluded, unless the non-correspondence benefits the
other party, e.g. if the buyer accepts to buy at a price higher than
that indicated in the offer to sell.
(c) Unity of the contract session: The offer and acceptance must
be uttered in one session without break. If the session is altered,
one of the parties departs, or one of the parties gets occupied by
another matter before acceptance, then the sale is not concluded. The
definition of a unified session is to be determined based on convention
and the nature of the contract. However, immediate acceptance is
not necessary, since the accepting party may need time to consider
the offer.
In case the contract is conducted by any kind of mail, the session in
which the message of the first party arrives to the second party is
considered the session of the contract.
3. Conditions pertaining to the object of the contract: There are five
such conditions:
(a) That the object of sale is a good: This limits the object of sale
to things that can commonly be used to benefit people, so the sale
of a dead animal (mayta), or an insignificant amount of a good such
as one grain of wheat, is not concluded.
(b) That it is admissible: In other words only objects from which it
is legal to derive benefit may be sold. Thus, the sale of wine and
pork may not be concluded since their use is prohibited. This and
the above condition were combined before into one.
38

(c) That it is private property: Thus, the sale of what is not owned
by any person, such as grass for public grazing is not permissible,
even if it is on privately owned land.
(d) That it exists at the time of the contract: Thus, the sale of
non-existent objects such as the produce of the produce may not be
concluded. Also, the sale of items that may exist and may vanish (e.g.
a lamb in the womb or milk in an udder) may not be concluded.
(e) That it be possible to deliver the object of sale at the time
of the contract: Thus, the sale of fish in the water and birds in the
sky may not be concluded.
4. The condition of compensation or price: The price must be an existing legitimate privately owned item. Thus, the price of a sale may not
be wine or pork.
(ii) Conditions of validity

Those are subdivided into general and specific conditions.
The general conditions pertain to all types of sale and subsume all the
conditions of conclusion mentioned above, since a contract that may not be
concluded may not be valid either. In addition, there are four other conditions
of validity:
1. That the object of sale and the price are known beyond dispute:
Thus, it is not valid to sell an unknown such as one sheep in a herd, or
to sell with an unknown or unidentified price such as selling an item for
its value, or for what is described only as what is in ones hand or pocket
without it being known to the seller.
2. That the sale is not timed: The essence of sale is the eternal exchange
of property rights to the object of sale and the price.
3. That the sale is beneficial: Thus the sale of one unit of currency for
another equal in value is not valid.
4. That it does not contain a corrupting condition: Corrupting conditions are those that lead to an extra benefit to one of the parties of the
contract. They are forbidden since such benefit is not legally proscribed,
not accepted conventionally, and not appropriate to the nature contracts.
Thus, it is not valid to stipulate a condition that the sold animal be pregnant, that the object sold be used by the seller for a period after the sale,
or that the buyer lends the seller an amount of money.
As for the particular conditions that apply to some sales and not others,
there are five:
1. Receipt of movable or immovable but perishable goods before
sale: Thus, if a person buys an item, it is not valid for him to sell it
39
to another before receiving it, since that would violate the prohibition of
selling what he has not yet received. However, for an immovable object
that is not perishable, selling it before having it in the sellers possession
is valid for Ab
uH
u Y
usuf.
. anfa and Ab
2. That the initial price be known in trust sales: Those types of sales
include cost-plus, investiture, and resale with loss.
3. Equality of the exchanged items if they are of the same genus
and were measured by weight or volume. This is a condition for all commodities that can give rise to rib
a.
4. The satisfaction of the conditions of forward sale when conducting
this type of sale. For example, the entire price of the sale must be paid
during the sale session.
5. That neither of the exchanged items is a debt when the debt is
being sold to a party other than the debtor.
(iii) Conditions of executability
There are two conditions of executability:
1. That the object of sale is owned or under the authority of the
seller: Thus, the sale of an item not owned by the seller (either sale of
what is owned by another, or sale of an uncommissioned agent) is not
executable, except in the forward sale, since it is valid to sell what he will
own after the contract is concluded.
2. That none other than the seller have a right in the object of sale:
Thus, the sale of a pawned or rented item is not executable, since others
have a right in the item that is owned by the seller.
(iv) Conditions of bindingness
There is only one condition for the contract to be binding on its parties, and
that is not having any options. Thus, a sale contract that allows for options is
not binding, and may be voided.
2.5.2
Conditions of sale for the M

aliks
The Malik conditions are divided into three groups pertaining to the parties to
the contract, the language of the contract, and the object of the contract, for a
total of eleven conditions.60
The conditions pertaining to the buyer and seller are three, with a
fourth for the seller alone:
60 Ibn Juzayy ((M
alik), p.245 onwards), Ibn Rushd Al-H
alik), vol.2, pp.125. afd ((M
127,168-171).
40

1. That the buyer and seller are both discerning: Thus, the sale of
a non-discerning child, an insane person, an unconscious person, and an
intoxicated person, all may not be concluded. However, the sale of a
discerning person is not necessarily binding regardless of validity; unless
the discerning child is a legal agent of a legally responsible person, in which
case it is binding.
2. That the buyer and seller are both owners, legal agents of owners, or guardians of owners: Thus, the sale of an uncommissioned
agent is concluded, and suspended conditional on the approval of the
owner.
3. That they are free to choose: Thus, the sale and purchase of a coerced
person are void. The authoritative opinion among the Maliks is that the
sale of coerced person is not binding.
4. That the seller is discerning and of legal age: Thus, the sale of an
incompetent person, or a person under the supervision of a guardian, are
not executable, and they are suspended conditional on the approval of the
guardian.
It is not necessary for the parties to the contract to be Muslims, except for
the buyer of a Muslim slave, or the buyer of a copy of the Quran (i.e. a Mus.h.af).
In those cases, the sale is valid and executable. However, the non-Muslim buyer
is forced to give up his ownership of that item, since that is demeaning for Islam.
Also, the sale and purchase by a blind person is allowed, thus eye-sight is not a
condition for sale.
As for the conditions pertaining to the language of the contract, they
are:
1. Unity of the contract session: Thus, the offer and acceptance must
take place in the same session; i.e. if a seller tells a [potential] buyer: I
sold you this book for so much, and the buyer did not answer him before
they parted from the session, the sale is not concluded.
2. The offer and acceptance must not be separated by anything
that conventionally indicates rejection of the sale. If something
occurs between the offer and acceptance that is conventionally associated
with rejection, the contract is not concluded.
As for the conditions pertaining to the price and object of sale, they
are:
1. That they are not legally prohibited: Thus, the sale of a dead animal,
blood, or an item that is not yet in the possession of the seller, are not
concluded.
2. That they are pure: Thus, the sale of impure items such as wine or
pork is invalid. Also, it is conventionally agreed that the sale of ivory,
41
garbage, and impure oil are generally prohibited. However, Ibn Wahb
allowed such sales. Thus, the scholars who consider the ivory obtained
from an elephant to be a tooth, consider it a part of the dead animal,
and thus forbidden; while those who consider it an inverted horn find it
admissible.
3. That it can be used in a legally beneficial manner: Thus, it is
not allowed to sell dogs, insects, and gambling machines. However, the
Maliks have different opinions over the sale of dogs for use in hunting and
the protection of sheep.
4. That it be known to the parties of the contract: Thus, the sale of
an unknown is not allowed.
5. That it be possible to deliver: Thus, the sale of what is not possible
to deliver, such as fish in a sea, ocean, or river, is not concluded.
2.5.3
Conditions of sale for the Sh

afics
The Shafics have stipulated twenty two conditions pertaining to the parties of
the contract, its language, or its object.61

There are four conditions pertaining to the buyer and seller:
1. Eligibility (al-rushd), which constitutes being discerning, of legal age,
and actively protective of their religious and financial well-being. Thus,

the sale of a young boy is not concluded (even if intended to test his judgment), and neither is the sale of an insane person, or one under supervision
due to his incompetence concluded. However, if a boy conducts a sale and
destroys an item that he bought or borrowed from an eligible person, then
the apparent ruling is that he is not responsible for the destroyed item,
since the one who gave him control over that item is considered the one
who wasted his owned property. However, the more sophisticated and less
apparent ruling is that the underage child is responsible for compensating
the other party to that contract after he reaches legal age, as stated by
ar). In case the
Al-Shafic in Al-Umm, chapter of confirmation (Al-Iqr
boy receives items sold to him by another boy, without the permission
of their guardians, then each of them is responsible for what he received
from the other. However, if the exchange took place with the permission
of the guardians, then the guardians are the ones who are responsible for
the items.
The person who sells to a boy is responsible to return the price to his
guardian. Thus, if he returns it to the child (even with the permission of
the guardian), then he is still responsible for what may happen to the item.
However, if he returns it to the guardian, then he has relieved himself of
all responsibility. Exceptions to this rule exist in case the sold item was
61 Al-Khat
b
Al-Shirbn ((Sh
afic), vol.2, pp.5-16), Al-Sharq
aw ((Sh
afic), pp.141-145).
42

for the physical benefit of the child, such as food and drink, in which case
he is relieved of responsibility.
2. No wrongful coercion: Thus, the contract by one who is wrongfully coerced is not valid, according to the verse [4:29]. Whatever an unrightfully
coerced person says has no legal effect, except in prayers, where it violates
and voids it. Also, the actions of such a person have no legal effect except
in breastfeeding, the voiding of ablutions, turning away from the qibla, not
performing a religious obligation while able to do so, and murder.
As for rightful coercion, approval of the law supersedes and replaces
approval of the party to the contract. For example, if a person is indebted
and refuses to pay his debts or sell some items to do so, then the judge
may sell some of his property without his permission to repay his debts.
Alternatively, the judge may rebuke or imprison him to force him to sell
such an item and repay his debts.
3. That the person purchasing a Mus.h.af or other Islamic texts be a
Muslim: This includes books of H
, of Islamic traditions and sayings,
. adth
or of Islamic Jurisprudence that contain elements of the Quran, H

,
. adth
or tradition, since this is demeaning for Islam. The sales of such items to
an infidel is not valid. Similarly, the best opinion is that the purchase of a
Muslim slave by an infidel is not valid, since it humiliates a Muslim, and
is in defiance of the verse And never will Allah grant to the unbelievers
a way (to triumph) over the believers [4:141].
4. That the buyer does not belong to an army purchasing weapons
that may be used against Muslims. However, items other than
weapons, even if made of steal, may be sold to armies since they can
be used for other purposes. A Christian or Jew in the land of war is
considered equivalent to a member of an army.
As for the thirteen conditions pertaining to the language, they are:
1. Direct communication: In other words one of the parties to the contract
must address the other, as in saying I sold you such and such. Thus, if
he says I sold to so-and-so, it is not valid.
2. Addressing the entire person: Thus, the seller may say: I sold to
you, however, if he says I sold to your hand, or I sold to your head, it
is not valid.
3. That the acceptor is the one who was addressed: Thus if an offer
is made to one person, and a different person who is not his legal agent
accepts on his behalf, the sale is not valid. If the person who was addressed
died before accepting, and his heir accepted, the sale is not concluded. The
same applies to his legal agent accepting after his death.
43
4. That the first speaker specifies the price and object of sale: for
example, he may say: I sold you this for so-much, or I bought this
from you for so-much.
5. That the buyer and seller mean what they say: Thus, if someone
utters the language of offer or acceptance without meaning to exchange
ownership with the addressed person (e.g. as a joke), the sale is not valid.
6. That the speaker making the offer does not withdraw it before
acceptance, and that the eligibility of the two parties is maintained until
acceptance. Hence, if he says: I sold you... then he becomes insane or
faints before the other accepts, the contract is voided. If the offer is made
with an implicit deferment or option to choose, then the deferment or the
option were dropped, the contract is not valid, since the offer by itself is
weaker in both cases.
7. That the period between offer and acceptance is not too long:
A long period between the offer and acceptance is defined as one that
indicates disinterest in the offer.
8. That no discussion outside the contract intervenes between the
offer and acceptance, even if the buyer and seller do not part from
the session, since such a foreign discussion is indicative of disinterest in
the offer. Exceptions are a short period of silence, and a minimal foreign
discussion during a khulc contract (divorce at the instance of the wife with
monetary compensation), since it allows the husband to comment, and the

wife to assert her opinion, unlike the case of a sales contract.
9. That the person making the offer does not alter it before the
acceptance. For instance, if the seller says: I sold you for five, then
says: for ten before the other accepts, the contract is not concluded.
10. That the language of the contract be audible: Thus, both parties
to the contract, and every person in their proximity, must hear what they
are saying. If those present in the proximity of the parties do not hear the
language, the contract is not concluded.
11. That the offer and acceptance agree completely, otherwise, the
contract is not valid.
12. That language of the offer does not imply conditionality outside
of the contract: For example, if the seller says: if so-and-so comes, I
have sold you such-and-such, or I have sold you this house if so-and-so
wishes, or if Allah wishes, since a sale requires assertiveness. However, if
the offer is conditional on something related to the contract, such as saying:
I have sold you this for so-much if you wish, then if the buyer says: I
have bought, then the contract is valid, since this conditionality does
not negate the contract, but is rather an explicit statement of something
essential for the contract.
44
13. That the contract does not have an expiration period: for instance,
if the seller says: I sold you this house for a month for one thousand,
the contract is not valid, since a sale must be unlimited in time.
As for the five conditions pertaining to the object of the contract, they
are:
1. That the object of the contract is pure: Thus, the sale of dogs, wine,
and an adulterated items that cannot be purified such as vinegar, milk,
and animal fat, is not valid.
2. That it is legally beneficial: Thus, the sale of insects that have no use
is not valid. The same applies to the sale of animals and birds that have
no legal uses such as lions, wolves, and vultures. Also, it is not valid to
sell instruments of entertainment, or statues or pictures. Moreover, the
sale of two grains of wheat (or any very small quantity) is not valid since
it is insignificant. However, it is valid to sell water entrapped at the shore,
rocks by a mountain, and dust in the desert by their owner, since they are
beneficial.
3. That the object be possible to deliver: Thus, it is not valid to sell
birds in the sky, fish in a sea, ocean, or river, a run-away slave, or a lost or
stolen animal. However, if the stolen animal is sold to one who is capable
of extracting it from the thief, or a lost animal is sold to one who is capable
of finding it, then it is valid, unless this buyer needs additional supplies
to do so in which case it is not valid.
4. That the party to the contract be the objects owner, or a
guardian for the owner: Thus, the sale of the uncommissioned agent
is invalid, due to the saying of the Prophet (pbuh): There is no sale but
for what you own.62
5. That the object be known to the parties to the contract, in
genus, amount, and description: Thus, the sale of one of two dresses
for instance is invalid due to corrupting uncertainty. However, the sale
of one measure out of a heap of foodstuffs is valid since its parts are
homogeneous, and ignorance of the exact items being sold is immaterial
in this case. On the other hand, the sale of one item from a heterogeneous
group (e.g. a herd of sheep) is not valid.
2.5.4
Conditions of sale for the H

. anbals
The H
. anbals have stipulated eleven conditions for the sale contract pertaining
to the parties of the contract, its language, or its object.63
The two conditions pertaining to the parties to the contract are:
62 Narrated
by Ab
u D
aw
ud and Al-Tirmidh who said that it is a H
hasan.
. adth
.
ibn Y
ut (3rd printing
. anbal), vol.2, pp.5-14), Al-Buh
(H
. anbal), vol.3, pp.139-166).
63 Marc
45
1. A sufficient degree of discernment: Thus, sale by a young boy, an

insane person, an intoxicated person, or an incompetent person is invalid;
with the exception of cases where the guardian of a discerning child or
incompetent person permits a beneficial sale, in which case the contract is
valid. However, if the sale is not beneficial, it is forbidden for the guardian
to give a permission to conclude the sale, since it would be wasteful.
It is invalid for a discerning child or an incompetent person to give a gift,
write a will, sell property, etc. unless their guardian approves the contract.
In minor matters, the dealings of a young child (even if below the age of
discernment) would be valid, as narrated that Ab
u Al-Darda bought a
sparrow from a small child and set it free.64 Similarly, minor dealings of
an incompetent person, such as a small container of foodstuffs or matches,
etc. are permitted, since the justification of limiting their dealings is fear
of wasting property, which is not applicable to minor dealings.
It is valid to commission a discerning child as a legal agent in sending a
gift or entering a house, in accordance with convention.
2. Mutual agreement of the buyer and seller of their own free will,
or under rightful coercion. This is due to the verse [4:29], and the
H
Trade is based on mutual agreement.65 Thus, the sale to pre. adth
empt danger (bayc al-taljia, or bayc al-am

ana), where the parties to the
contract pretend to conduct a sale that they do not intend, is not valid.
Also, the sale of someone who is joking about the sale is not valid, since
his true intention is not to conduct a sale.
The sale is valid in the case of rightful coercion, such as the case of a
ruler coercing a person to sell some property in order to repay his debts,
or to buy what would satisfy his debts. Examples of a rightfully coerced
person include someone who has pawned some property, a monopolist,
and a debtor.
It is detestable to buy the property of a compelled person who sells his
property for less than its market value.
There are three conditions pertaining to the language of the contract:
1. Unity of the trading session: Thus, acceptance must be in the same
session as the offer. So, if a seller says I sold you, and they parted before
an acceptance in that session, the sale is not completed.
2. That there is no separator between the offer and acceptance that
conventionally indicates aversion to acceptance.
3. That the contract does not have an expiration date or a suspension clause other than All
ahs will: An example where this condition
is violated would be saying: I sold you for a year, or I sold [or bought]
if so and so agrees.
64 Narrated
65 Narrated
by Ibn ab M
us
a.
by Ibn H
an, with full reference provided above.
. ibb
46
As for the six conditions pertaining to the price and object of the
contract, they are:
1. That the object of sale is an owned commodity, i.e. something
that is legitimate for use in all cases, not necessarily under necessity. A
sale is an exchange of one property for another, thus the sale of what may
not be used (such as insects) is not valid, and neither is the sale of items
whose use and benefits is prohibited such as wine, the sale of what may
be used only as needed such as a dog, and what may only be used in cases
of extreme necessity such as the meat of dead animals [at times of famine]
or wine when choking with food in the throat.
It is valid to sell the skin of a dead animal after staining it, and possessing
it is valid even if not a necessity. Also, it is valid to sell a mule, a donkey,
silk worms, or bees individually if it is possible, or with the entire beehive
if seen entering it, since it is beneficial for people. It is also valid to sell
birds used for hunting, worms for catching fish, animals and birds of prey
used for hunting only, and it is permitted to sell leeches to sucking blood
(for medical purposes).
It is also valid to sell birds to hear their voices (e.g. robins and nightingales) since that is a permissible benefit. Also, it is permitted to sell
parrots and similar birds. It is also permissible to give an ownerless dog
as a gift.
It is not valid to sell deadly poisons (e.g. from snakes), since they have no
beneficial use. The same applies to poisons extracted from various plants,
unless they can be used in small quantities for medicinal benefit.
It is forbidden to sell a written Quran (i.e. a Mus.h.af) to a Muslim or
infidel, since honoring it is obligatory, and selling it is a denigration of its
value. Moreover, since an infidel may not own a Mus.h.af in the long term,
such a possession is invalid from its very beginning.
It is not valid to sell instruments of entertainment such as horns, drums,
dice, and chess-sets. It is not valid to sell insects such as beetles, mice,
snakes, scorpions, cockroaches, etc. It is not valid to sell a dead animal
even for one who needs the money, nor is it valid to sell blood, pork, or
idols.
It is not valid to sell impure manure, or fats from impure sources (e.g.
from a dead animal, etc.), due to the H
reported in Al-Bukhar and
. adth
Muslim: When Allah forbids an item, He forbids its price. It is forbidden to use such impure fats in any way (e.g. lighting, etc.) since it was
forbidden by the Prophet (pbuh) in an agreed-upon H
narrated by
. adth
Jabir. It is not permitted to sell polluted fats (e.g. oils that were contaminated with impure substances) even to a non-believer, due to the above
mentioned H
that forbids its price. However, it is valid to use impure
. adth
fats for lighting in places other than mosques, since that leads to benefit
without any harm.
47
It is not permitted to sell a free human being, due to the H

reported
. adth
by Al-Bukhar and Muslim: I am the adversary of three on the day
of judgment; and among them is: any man who sold a free person and
consumed the price. It is not permitted to sell public properties such as
pasture, water or minerals prior to being possessed and owned by anyone,
due to its violation of the following condition:
2. That the object of sale is completely owned by its seller since the
Prophet (pbuh) said to H
. akm ibn H
. izam: Do not sell what you do not
possess.66 Thus, the trading of an uncommissioned agent is not valid,
even if permission is obtained afterwards.
It is not valid to sell what is not owned such as a free person or a public
property before obtaining possession, or the sale of lands held in trust and
not distributed. However, a religious leader may sell such trust land for
benefit. Those who considered such a sale valid also allowed individuals
other than religious leaders to perform such sales. It is not valid to sell
or lease the Holy Mosque in Makkah or the homes surrounding it. The
same applies to the areas where h.ajj rituals are performed, since those,
like mosques, are for the benefit of all Muslims. It is not valid to sell what
is no completely owned such as an item the ownership of which is still
suspended by an option.
3. That the item is deliverable at the time of the contract, since that
which is not deliverable is comparable to that which does not exist, and
the sale of the latter is not valid.
Thus, it is not valid to sell half of a specific object such as a pot, a sword,
or an animal. Also, it is not valid to sell a debt to anyone other than the
debtor. It is not valid to sell a run-away slave or lost animal to someone
capable of bringing them back, due to the H
: The Prophet (pbuh)
. adth
has forbidden the purchase of a run-away slave.67 It is not valid to sell

fish in water, unless it is encased in an area that facilitates catching it. It
is not valid to sell birds that are difficult to catch, or if it is flying and
accustomed to return, unless it is in a closed area, since otherwise it is not
known to be deliverable.
The sale of an object obtained by coercion is only valid to the one who
obtained it thus, or to a person who can obtain it from him. In the latter
case, the person has the option to void the contract if he fails to obtain
the object.
4. That the object of sale be known to the buyer and seller via
inspection at the time of the contract or at an earlier time such that the
object certainly would not change.
It is valid for a blind person to buy and sell what he may inspect without
eyesight (i.e. by using his other senses such as touch, smell and taste).
66 Narrated
67 Narrated
by Ibn M
ajah and Al-Tirmidh, who considered it a H
sahh.
. adth
. . .
by Ah.mad on the authority of Ab
u Sacd.
48

It is valid to sell an unidentified measure out of a large quantity of a
homogeneous good.
It is not valid to sell based on a sample (such as showing the buyer one
measure of a good, and selling a much larger uninspected quantity claiming
to be of the same material), since the object of sale is not inspected at the
time of the sale.
It is not valid to sell an unborn animal in the womb, milk in an udder,
seeds in fruits, or wool on an animal, except as part of a sale of the whole,
such as: I sold you this animal and what it carries, or I sold you this
land and the seeds in it.
It is not valid to sell the offspring of the offspring of an animal, what a
tree or animal carries, perfume in its container, onions or turnips before
extracting them, a folded cloth, or a cloth the weaving of which has not
been completed. All of those items, as described, are not inspected prior
to the sale.
It is not valid to sell based on touch as: I have sold you this dress when
you touch it, if you touch it, or I have sold you whichever dress you
touch, for such-and-such a price. Similarly, the sale of discarded items
is not valid. For example, if a seller says: whenever (or if) I discard
this item, then its yours for so-much, or whichever dress I discard is
t), where the
sold to you for so much. Sale of the pebble (bayc al-h.as.a
person throws a pebble, and whichever item it falls on is sold to them at
a pre-specified price, is not valid.
ul) without identifying the
Also, the sale of an unknown (bayc al-majh
specific item out of a group (e.g. selling one sheep out of a herd, or one
tree out of a garden) even if all the members of the group are of equal
value.
5. That the price be known to both parties at the time of the
contract or before: Thus, it is not valid to sell at an unknown numerical
price, or at the same price for which so-and-so sold, unless the latter is
known to both parties. It is not valid to sell at the same price at which
people trade, or at the price on which we agree later (in disagreement
with the view of later H
. anbals).
6. That the price, object of sale, and parties to the contract do
not have any invalidating aspects such as usury (rib
a), invalidating
conditions, etc. Thus, it is not valid to sell an animal designated for
an obligatory religious sacrifice (at h.ajj or elsewhere) except for better
animals. Also, it is not valid to sell mortmain property without compelling
reason, sell a pawned item without permission of the pawn-broker, sell
water or appropriate clothing to a person embarking on prayer and lacking
those items, sell a Mus.h.af, or selling after the call for the Friday noon
(jumc a) prayer has been made.
2.5.5
49
Agreements and differences in sale conditions
In the discussions above, we notice the following:

1. For the parties to the contract: Discernment is an agreed-upon condition. However, there are disagreements regarding the condition of reaching
legal age: it is a condition of executability for the Maliks and H
. anafs,
anbals.
and a condition of conclusion for the Shafics and H
.
As for acting of their own free will, it is a condition of conclusion for

the majority of scholars, and a condition of executability for the H
. anafs.
Thus, coerced sale is void for the majority of scholars, while it is suspended
and not executable for the H
. anafs, and non-binding for the mainstream
Malik position.
2. For the language of the contract: The following are all agreed-upon
conditions for all the madha
hib, even if some of the fuqah
a omit mention
ing some of them: unity of the session without a separation between the
offer and acceptance, the full correspondence of acceptance to offer, that
the language be audible and that the contract is not suspended, and that
the sale does not have an expiration period.
3. For the object of the contract: The following are agreed upon by the
scholars: that the object of sale be an owned property that can be used
legitimately, that it is pure, existent, possible to deliver, and fully known
(i.e. without ignorance). Ignorance voids the contract for the majority of
the scholars, but only renders it defective for the H
. anafs. The condition
that the object be owned by the seller is a condition of executability for
the H
afics
. anafs and Maliks, and a condition of conclusion for the Sh
and H
. anbals. Thus, the sale and purchase of an uncommissioned agent
is suspended for the H
afics and
. anafs and Maliks, and void for the Sh
H
. anbals.
As for the condition that no person other than the seller have any right
to the object of sale (as in the sale of a pawned or rented item), it is a
condition of executability for the H
. anafs and Maliks, and a condition of
anbals. Thus, the sale of a pawned or
conclusion for the Shafics and H
.
rented item is suspended for the first two schools, and void for the second
two.
Chapter 3
Status, Object, and Price

This chapter consists of two sections:
1. Status of the contract.
2. A discussion of the object of sale and the price.
3.1
Status of the contract
The status of a contract is its purpose. Thus, the purpose of a sales contract is
to transfer ownership of the object of the sale to the buyer and ownership of the
price to the seller. In a lease contract, the purpose is the transfer of ownership
of the usufruct of the leased item to the lessee, and the transfer of ownership of
the rent to the lessor.1
The Arabic word h.ukm2 may refer to one of three things:
1. The legal status of the action, which is either: (i) obligatory, (ii) recommended, (iii) permitted, (iv) reprehensible, or (v) forbidden. Thus, we say
that the status of fasting is obligatory, the status of theft is forbidden,
etc.
2. The juristic characterization of the actions, such as their validity, bindingness, etc. Thus, it would be said of a contract that satisfies all its
cornerstones and conditions that it is valid and binding.
3. The legal consequences resulting from a legal action; e.g. the consequences
of a will that satisfies all of its cornerstones and conditions as they pertain
to the heir and objects mentioned in the will.3
1 Al-Amw
al
wa Naz.ariyyat Al-c Aqd by Professor Muh.ammad Y

usuf Mus
a (p.372).
here as status. [tr.]
3 Al-Talw
h. Sharh. Al-Tawd.h. by Al-Taft
az
an (vol.2, p. 122), and Al-Ah.w
al Al-Shakhs.iyya

by Professor Mus.t.af
a Al-Sib
ac (vol.2, p. 114).
2 translated
51
52
CHAPTER 3. STATUS, OBJECT, AND PRICE
In this text, we use the term to refer to the third meaning of the term: the
established legal status of the sales contract, and its consequences. Thus, the
status of the sale is establishment of the buyers ownership of the object, and
the establishment of the sellers ownership of the price, if the sale is binding (i.e.
void of options).4
What we mean by the rights of a contract (h.uq
uq al-c aqd) are the actions
necessary to reach its status; e.g. the delivery of the object of sale and receipt
of the price, returning the object of the sale if a defect is found, options of
inspection or other conditions, and the obligation to return the price if the
object is rightfully returned.5
Rights attached to merchandise
Those include all the rights pertaining to the object of sale without which the
object of sale would not have been desired; e.g. infrastructures such as roads,
wells, or land. The general rule is thus: everything connected to a house is
part of its sale, even if not mentioned explicitly. However, items that are not
connected to the house are not part of the contract unless they are mentioned
explicitly in the contract or conventionally understood to be part of selling a
house. Thus, keys to the house would be conventionally considered part of the
sale; as contrasted with a pad lock and its key, or detached ladder, that do not.
However, stairs in multi-level buildings are conventionally and automatically
part of the sale, as detailed below:6
1. If a person buys a house with another house on top of it, the other house
is not part of the sale, since the like of an object does not belong to it.
2. The sale of a house includes its private rights and infrastructure such as
roads, kitchens, bathrooms, etc., since they belong to the house. Thus,
selling a house includes selling all internal corridors or roads leading to
public roads, its out house, its water wells, the trees within its boundaries,
and its connected gardens and yards, even if not explicitly mentioned in
the contract. The main door of the house is included in the sale, as well as
the main gate (or greater door) leading to the street, since those are both
part of the houses infrastructure. However, a disconnected garden or yard
that is equal or larger in size than the house itself, are not automatically
included in the sale of a house.
However, a hut in front of the house, if built on the road, shares the status
of the road. The road itself, and any areas for water and drainage access
that are not privately designated to the house are not considered part of
the house when sold, unless they are explicitly mentioned in the contract.
This is contrasted with the case of a lease, pawn, or endowment contract,
in which case all the infrastructures of the house are clearly part of its
4 Al-K
as
an
((H
. anaf), vol.5, p.233).
wa Naz.ariyyat Al-c Aqd, op.cit.
6 Khusr
u (1304H (H
. anaf), vol.4, pp.197-199).
5 Al-Amw
al
3.2. PRICE AND OBJECT OF SALE
53
usufruct and are part of the contract whether or not they are explicitly
mentioned. This is the old opinion of the H
. anaf school, and its strongest
support is the convention in various places and periods.
The following are treated the same way as the sale contract: the concession
of a house, reconciliation over one, listing one in a will, giving one as a
gift, and marriage and divorce with financial compensation.
3.2
Price and object of sale
The discussion of the price and object of sale will proceed in two steps:
1. Specification of the price and object of sale.
2. Rulings related to the price and object of sale.
3.2.1
Specification of the price and object
For the majority of H

. anaf scholars, the object of sale and price are antonymous expressions that denote many meanings. In the most common usage, the
object of the sale becomes uniquely identified by specification, while the price
is most often not uniquely identified by specification in a contract.7 The same
applies to animals and foods whose characteristics and descriptions are related
to their valid usage. Such objects become identifiably unique because they have
different usage for different people.8
This is the general rule for those two items, but it can change under specific circumstances. For example, items that cannot be uniquely identified may
become objects of sale, such as those in a forward sale, and items that can
be uniquely identified can become a price such as the price in such a forward
contract, if it is an uniquely identifiable object. Consequently, the most common practice is to consider the price to be a debt or liability (dayn), typically
specified generically as a quantity of fungible goods such as money, wheat, oil,
and other items that can be weighed or measured in volume, length, or number.
The price may also be non-fungible, such as an animal, or specific clothes, etc.
For instance, if a quantity of sugar is forward-sold for a non-fungible price, the
object of sale is fungible, and the price is not.
Ibn Al-Humam and others ruled that clothes can be non-fungible objects
of sale in forward contracts, and can also be considered a deferred liability if
specified as a price. In the latter case, deferment is a condition, not due to
its being a price, but rather to make it eligible for being a deferred debt of
non-fungibles. Thus, it is valid to sell a book for a price of a described dress to
be delivered in the future; thus the book is sold but the dress does not have to
be delivered in the session. This is in contrast to delivering a monetary price
7 Al-Qar
af said: There is a consensus among the people that the commodities (i.e. traded
goods) become identifiably unique (tatac ayyan), once they are specified.
8 Al-Qar
af ((M
alik), vol.4, p.7).
54
for the purchase of a dress, in which case the dress becomes the object of the
forward sale, since it cannot be sold before its delivery.9
Al-Shafic and Zufar said that object of sale and price are synonyms,
which may describe the same object, and the distinction between the two depends on which is designated by the preposition for in I sold you ... for
....
Both parties have their own foundation for their opinion, and this is merely
an issue of semantics.10
Specification of the object of sale
Specification (al-tac yn) is the identification of a specific object to the exclusion
of all others. The object of sale is specific if it is specified in the contract,
whether it is present in the sale session or absent. If the object of sale is not
specified in the contract, then it becomes specified only by its delivery.11
Differences between price, value, and debt
A price may only exist in the context of a contract. It is determined by
the mutual agreement of the buyer and seller, whether it is more, less, or
equal to the objects value.
The value of an object is its market value (market price).
A debt is an obligation on a person, and must be of the genus of the (fungible) properties in which debts can be specified. A debt may come into
being through agreement, coercion, bail or security deposit, borrowing,
sales, etc.12
Differentiation between the price and object of sale
The general rule is that whatever can be an object of sale can be a price and
vice versa. As discussed above, the price may be a non-fungible as well as a
fungible, just like the object of sale.
Thus, we need to differentiate between the price and object of sale in a
manner that facilitates analyzing their different rulings. Such distinction will
apply to commodities used in exchange, which are money, as well as fungible
and non-fungible commodities:
1. Money measured in gold, silver, or commonly accepted currencies,13 if it
is compensation for the object of sale, is considered a price. The other
component of a sales contract is the object of sale, whether it comes before
9 Ibn c Abid
((H
. anaf), vol.4, p.26).
((H
. anaf), vol.5, p.233).
Al-Bayc by Professor Al-Zarq
a (p.34).
12c Aqd Al-Bayc (p.56 onwards), Ibn c Abid
n ((H
. anaf), vol.4, pp.53,173).
13 Including both coins and paper currency.
10 Al-K
as
an
11 See c Aqd
55
or after the preposition for, as in I sold you this item for one coin, or
I sold you this coin for this item.
The majority of H
. anaf scholars have decided that minted coins in gold,
silver, or other metals, are not made non-fungible by specification in exchange contracts. Thus, if a seller says: I sold you this dress for those
specific coins, the buyer has the right to replace those coins with others
of equal value, and the seller has no right to insist on getting the specific
coins to which he pointed. This is inferred from monetary prices being
specified as a liability, which cannot be identified by its specific external features. Instead, liabilities are specified in terms of non-fungibles
that are described only in terms of their genus, type, characteristic, and
quantity. Thus, if the description was 1000 coins of a specific currency in
good condition, he only needs to use 1000 coins satisfying that description. Consequently, if the specific monies to which the seller pointed were
destroyed, the contract is not voided.
On the other hand, the Shafics and Zufar ruled that monies can be made
non-fungible by being specifically identified in a contract, in which case

the seller has the right to get the specific monies to which he pointed,
as any non-fungible would have been treated. They made this judgment
since the person may have a specific purpose for those specific monies, and
a specified price is treated no differently from a specified object of sale, in
that the rights of the parties to the contract pertain to the specific items
that they identify in the contract. Consequently, if the price to which the
seller pointed is destroyed before delivery, the contract is void in the same
manner it would have been voided if the object of sale were destroyed.
All agree that if the price is not a minted coin, then its specification in
the contract makes it non-fungible.
2. If non-fungible commodities are traded in exchange for specific fungibles,
they automatically become the object of sale, and the fungibles are automatically and generally the price regardless of how the two are mentioned
in the language of the contract. This is the case since fungibles are more
appropriate to be a price due to the possibility of rendering them a liability, in analogy to money.
Examples of non-fungibles are clothes, houses, buildings, and heterogenous
countable items such as sheep, animals, and watermelon if it is sold by
number not weight.
However, if non-fungibles are traded in exchange for non-specified fungibles, then the one considered to be a price is the one following the preposition for. For example, if a seller says: I sold you this item for one
pound of sugar, then the sugar is the price; but if he says: I sold you
a pound of sugar for this item, then the sugar is the object of sale, and
the item is the price, and in this case the contract is a forward sale.
56

3. Fungibles, if traded in exchange for money, are the object of sale as discussed above. If fungibles are traded in exchange for other fungibles, such
as exchanging wheat for oil, then the one that is specified is the object of
sale, and what is described as a liability is the price.
If both fungibles are described as liabilities, then the one following the
preposition for is the price, and the other is the object of sale.
Fungibles are those measured by: (i) volume such as wheat and barley, or
liquids such as petroleum oil that are measured by the liter; (ii) weight
such as ghee, oil, or sugar, (iii) length or size such as cloth or land, or (iv)
countables of approximately equal size and quality, such as eggs, nuts,
glasses, plates, etc.14
4. If non-fungibles are exchanged for other non-fungibles, then each is considered a price on the one side and an object of sale on the other.
3.2.2
Rulings pertaining to object of sale and price
Following the distinctions between price and object of sale drawn above, a number of rulings ensue, of which I discuss six in summary and three in detail:
1. A condition for the conclusion of sale is that the object of sale be a valued
good with legitimate uses. This condition does not apply to the price.
2. A condition for the executability of a sale is that the object of sale be in
the possession of the seller. The same condition does not apply to the
price.
3. It is not valid to defer the delivery of the price in forward sales, while the
deferment of the object of sale is necessary.
4. The cost of delivery of the price is borne by the buyer, and the cost of
delivery of the object of sale is borne by the seller.
5. A sale without naming the price is defective and invalid (f
asid); whereas
not naming the object of sale, as in saying: I sold you for ten coins,
voids the contract that is thus not concluded.
6. If the object of sale perishes after the exchange of object and price, the
sale may not be reversed. However, the perishing of the price after the
exchange does not prevent the sale from being reversed.
7. If the object of sale perishes prior to delivery, the sale is void. However,
if the price perishes prior to delivery, the sale is not void.
8. The buyer may not re-sell movable merchandise before receiving it, whereas
the seller may use or sell the price before he receives it.
14 See c aqd Al-bayc of Professor Al-Zarq
n ((H
a (p.50), Ibn c Abid
. anaf), vol.4, [.173), AlKhat.b Al-Shirbn ((Sh
afic), vol.2, p.281).
57
9. The buyer must deliver the price before he has a right to receive the object
of sale, unless the seller accepts otherwise.15
I now discuss the last three items in more detail:
Diminution in the object or price
The object of sale may perish totally or in part before or after the delivery.16
1. If the entire object of sale perishes prior to delivery:
(a) If it perishes due to a natural disaster, due to actions of the object
of sale itself, or due to actions of the seller, then the sale contract is
voided.
(b) If it perishes due to an action of the buyer, then the sale is not voided,
and the buyer must pay the price.
(c) If it perishes due to the actions of a third party, the sale is not voided,
and the buyer has an option either to void the sale, or to conclude it,
pay the price, and demand compensation from the third party who
destroyed the good.
2. If the entire object of sale perishes after delivery:
(a) If it perishes due to natural disaster, the actions of the object of sale
itself, the actions of the buyer, or the actions of a third party, then
the sale is not voided. The responsibility for compensation falls on
the buyer, unless it was destroyed by the actions of a third party,
in which case that responsibility falls on that third party. In either
case, the sellers responsibility for the object of sale is transferred to
the buyer once the goods are received by the latter.
(b) If it perishes due to actions of the seller, we consider two cases:
i. If the buyer received the object of sale with or without the sellers
permission, but has paid the monetary price, or if the price is
deferred, then the seller (like a third party) would be responsible
to compensate the buyer for the perished goods.
ii. If the buyer received the goods without the permission of the
seller, and the price was due but had not yet been delivered to
the seller, then the contract should be voided. In this case, the
sellers transgression leads to the object of sale being returned
to him, and he is responsible for compensation.
The Maliks ruled17 that the responsibility for compensation is
transferred to the buyer in every sale except in five cases:
15 See c Aqd

a (p.61).
Al-K
as
an ((H
s (1st edition (H
. anaf), vol.5, p.238 thereon), Al-Sarakh
. anaf), vol.13,
c
c
n ((H
p.9), Ibn c Abid
. anaf), vol.4, p.44), Aqd Al-Bay (ibid., p.92).
17 Ibn Juzayy ((M
alik), p.247), Al-Dardr ((M
alik)B, vol.3, p.45).
16 See
58

A. The sale of an absent object by description only, if the object
of sale is not an immovable property (c aq
ar). If the object is
an immovable property, then the responsibility is transferred
to the buyer.
B. Whenever the sale contains options.
C. Fruits sold before ripening fully.
D. Objects that have to be fully measured by volume, weight,
or number.
E. Invalid sales.
In those five cases, responsibility stays with the seller until the
buyer receives the goods.
The Shafics ruled18 that every object of sale is under the respon
sibility of the seller until the buyer receives them.
19
The H
. anbals ruled that if the object of sale is measured by
volume, weight, or number, and if it is spoiled prior to delivery,
then it is the property of the seller. For other objects of sale,
receipt by the buyer is not necessary, and if it is spoiled, it is still
the property of the buyer.
3. H
. anaf views on part of the object of sale perishing prior to
delivery:
(a) If it perishes due to a natural disaster, then there are multiple possibilities:
i. If the decrease in the object of sale is a decrease in quantity;
i.e. part of an object of sale measured by volume, weight, or
number perishes, then the contract is voided for the perished
portion, and its portion of the price is deducted. In this case,
the buyer has an option for the remainder of the contract due to
its partition. He then has the right to execute the valid portion
of the contract, or to void it.
ii. If the decline in value is in terms of characteristics (including all
items that are part of a sale without mention; such as trees and
buildings on a land, and quality of objects measured by volume
or weight), then the sale is not voided, and no part of the price
is deducted. This follows since characteristics have no explicit
portion of the price. In this case, the buyer has the option to
accept the goods for the full price, or to void the contract due to
a defect in the object of sale.
(b) If the destruction is caused by the object of sale itself (e.g. an animal
that wounds itself), then the sale is not voided, and no part of the
price is deducted. In this case, the buyer has the option of accepting
18 Al-Khat
b
Al-Shirbn ((Sh
vol.4, p.110).
19 Ibn Qud
amah (,
59
the remainder of the object of sale for the full price, or voiding the
entire contract.
(c) If the destruction is caused by actions of the seller, then the contract
is voided in proportion to the destruction, and the corresponding
portion of the price is deducted, regardless of whether the decrease
in the object is quantitative or qualitative. In this case, the characteristics of the object of sale do have a share in the price when there
is a transgression against them. The buyer then has the option to
take the remainder for its share of the price.
(d) If the destruction is caused by the actions of the buyer, then the sale
is not voided, and no part of the price is deducted, since he has in
effect received the object of sale by spoiling part of it.
4. If part of the object of sale is destroyed after receipt:
(a) If the destruction is caused by a natural disaster, or the actions of
the buyer, the object of sale, or a third party, then the buyer is
responsible for the destroyed part.
(b) If the destruction is caused by actions of the seller, then:
i. If the receipt of the goods was with the sellers permission, and
if the price is monetarily paid, or deferred, then he (like a third
party) is responsible for compensation.
ii. If the receipt was without his permission, and if its price is due
but not yet paid, then the sale is voided for the spoiled portion,
and the price to be paid by the buyer is deducted accordingly.
H
. anaf views on price perishing
If the price perishes during the contract session prior to receipt:
1. If it is fungible: the contract is not voided, since an equivalent price can be
delivered. This is in contrast to the object of sale that is a non-fungible,
and the buyer may have a specific use for a specific non-fungible.
2. If it perishes, and no substitute is immediately available, the H
. anafs ruled
that the contract is void, while Ab
u Y
usuf and Muh.ammad ruled that it
is not void.20 The proofs of the various positions will be discussed below
in our discussion of the loss of value of the price.
H
. anaf views on diminution of the prices value
If an individual buys an item in exchange for money denominated in a currency,
and then the currency loses its value (e.g. stops being legal tender due to the
issuing of a new currency) before receipt, the contract is void in the opinion of
Ab
uH
. anfa. In this case, the buyer is responsible to return the object of sale
20 Al-Samarqand
((H
. anaf), vol.2, p.54, old edition).
60
if it is still intact, or its value or replacement object if it perished. This opinion

is based on the fact that the defunct currency is no longer a price, and no sale
is complete without a price. In this case, the loss of value of the price is treated
like its perishing, and the sale must be voided.
Ab
u Y
usuf and Muh.ammad ruled that the sale is not voided, but that the
seller is given the option to void it or to take the value of the monies originally
agreed upon. This follows, since the monies are considered a liability on the
buyer, and liabilities never perish. Thus, loss of value of the monies is not
considered perishing, but rather a defect, thus giving the seller the option. This
is similar to the case where the price is denominated in dates, which may be
spoiled prior to receipt. Thus, they have ruled that loss of value is treated like
a defect.
However, they all agreed that if the monies do not lose all their value, but are
changed in value by appreciating or depreciating, then the sale is not voided,
since change in price does not necessitate the invalidity of its price-hood
(thamaniyya).
Then, Ab
u Y
usuf and Muh.ammad disagreed among themselves on the timing of considering the value of the monies. Ab
u Y
usuf ruled that its value is
considered at the time of the contract, since the price is due at the time of the
contract, and that should be when its value is due. Muh.ammad, however, ruled
that its value is considered at the time it loses value, which is the last day people
used that currency, since that is the time delivery became impossible.21
Reselling unreceived merchandise
The H
. anafs ruled unanimously that it is not valid to resell a movable object of
sale before receipt, since the Prophet (pbuh) has forbidden the sale of what one
has not received.22 Prohibition results in the invalidity of the forbidden transaction. Moreover, this sale incorporates excessive risk and uncertainty (gharar)
the
since it may be voided if the object of sale perishes, which would invalidate
first sale and void the second. The Messenger (pbuh) has forbidden such sales
with excessive risk and uncertainty (gharar).
As for immovable property, it is discretionally valid to resell it before receiving it in the opinion of Ab
uH
u Y
usuf, based on the general
. anfa and Ab
permissibility of sales in the Quran, which cannot be made specific based on a
H
with very few chains of narration. Moreover, there is no excessive risk
. adth
and uncertainty when selling an immovable property since its perishing is very
c
n ((H
Al-K
as
an ((H
. anaf), vol.4, p.25).
are a number of H
s among which some are agreed upon by Al-Bukh
ari and
. adth
Muslim , as well as Al-Tirmidh, based on the H

on the authority of Ibn c Abb
as forbid. adth
ding the sale of that which has not been received. Among those H
s is the one narrated
. adth
by Al-Nas
a on the authority of H
am, who said: I said, O Messenger of All
ah,
. akm ibn H
. iz
I am a man who buys goods and resells them; which of those sales are permitted, and which
are forbidden? He (pbuh) said: Do not sell anything until you receive it. This H
was
. adth
also narrated in Musnad Ah.mad and Ibn H

an in Al-s.ah.h., as: If you buy goods, do not
. ibb
sell them until you receive them (Al-H
afiz. Al-Zaylac (1st edition, (H
), vol.4, p.32), Ibn
.
. adth
Al-Athr Al-Jazar (, vol.1, p.380), Takhrj Ah.a

dth Al-Ih.y
a (vol2, p.61)).
21 See
22 There
61
unlikely.
Muh.ammad, Zufar and Al-Shafic ruled that it is not valid to sell an im
movable property prior to receiving it due to: (i) the generality of the H
s
. adth
prohibition of selling what has not been received, (ii) the inability to deliver the
object of sale, and (iii) the existence of excessive risk and uncertainty (gharar).23
context
The opinions of various jurists will be discussed in detail below in the
of invalid sales.
Reselling an un-received price
It is valid to resell prices prior to receipt,24 since they are liabilities. Similarly,
it is valid to resell various liabilities such as dowry, wages, compensations for
spoiled goods, etc. prior to receiving them. The proof of this opinion is in the
narration on the authority of c Umar (mAbpwh) that he said: O Messenger of
Allah: we sell camels in Al-Baqc , and take silver coins in place of gold coins,
and gold coins in place of silver coins. The Messenger (pbuh) said: There
is no harm if the exchange is based on the prices that day, and you departed
without any unfinished business.25 This proves the permissibility of receiving
an alternative price for the object of sale. The point of the H
forbidding
. adth
the resale of that which has not yet been received relates to non-fungibles, not
to liabilities that may be received in the form of replacement of equal value.
They have made an exception to the rule of validity of reselling price prior to
receipt in the two contracts of currency exchange and forward sale. In the case
of currency exchange, the exception is based on both exchanged items being an
object of sale on the one hand, and a price on the other. When considered the
object of sale, it is not valid to resell it. Due to this obscurity, I have found
the prohibition to be a safer choice. As for the forward contract, the object of
contract may not be resold since it is an object of sale, and the price inherits
from the object of sale the property of forbidding resale according to Islamic
Law.26
Notice that reselling prices and fungibles is valid in sale, gift, leasing, and will
(i.e. with or without compensation) whether they are not subject to specification
(such as money), or can be specified (such as fungibles measured by volume or
weight). This is the case for the person with the liability to deliver the fungibles;
e.g. the seller may buy from the buyer an item in exchange for the price that
he owes, to rent a house owned by the buyer in exchange for such a price, or to
give him the price as a gift.
23 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol.5, p.264), Al-K
. anaf), vol.5, p.180 thereon, p.234),
n ((H
Ibn c Abid
24 The price consists of items that can constitute a liability in compensation for goods, such
as monies, or fungibles measured in volume or weight if identified and exchanged for nonfungibles, or non-identified but stated in the contract following for in I sold you ... for ...
(Ibn c Abid
n ((H
. anaf), vol.4, p.173)).
25 Narrated by Ahmad and Ash
c
c
.
. . ab Al-Sunan Al-Arba a on the authority of Ibn Umar;
see Ibn Al-Athr Al-Jazar (, vol.1, p.469), and Al-H

adth),
.
.
vol.4, p.33).
26 Al-K
as
an ((H
anaf
),
vol.5,
p.234),
Ibn
Al-Hum
a
m
((H
anaf
),
vol.5,
p.269
thereon),
Ibn
.
.
c Abid
n ((H
62
It is not valid to resell a debt or liability to anyone other than the debtor
(e.g. as in buying a horse from A in exchange for $100 owed by B), except in
three forms:27
1. If he commissions him to collect the debt, thus making him a legal agent
to collect on behalf of the represented, then a collector for himself.
2. Transfer.
3. Will.
Object and price delivery
Delivery28 of the object of sale to the buyer is one of the obligations on the seller
ensuing from the sales contract. Similarly, delivery of the price to the seller is
one of the obligations on the buyer ensuing from the sale contract. Mutual
delivery of the two parts of the transaction is an obligation on the parties of the
contract, since ownership of the two parts is exchanged.
One may ask: who should deliver his obligation first? In particular, does
the seller have the right to retain possession of the object of sale until the entire
price is delivered? Moreover, what modes of delivery and receipt of the two
items may be used?
The item that must be delivered first is determined by the nature of the two
elements of the transaction:
If the sale involves the exchange of non-fungibles for other non-fungibles,
then delivery of the two elements must be mutual. This mutual delivery
is necessary to ensure equal compensation to the two parties, neither of
whom deserves to receive their part of the exchange first.
The same applies if the sale involves the exchange of fungibles for fungibles;
e.g. in currency exchange transactions, as described above.
If the sale involves an exchange of a non-fungible for a fungible29 then the
H
. anafs ruled that the order should be respected. The buyer in this case
must deliver the price (i.e. the fungibles) first, if the seller asks him for
it, and until it becomes identified. This follows the saying of the Prophet
(pbuh): Debts (or liabilities) must be fulfilled immediately.30 Thus,
27 Ibn c Abid
((H
atb Al-Shirbn ((Sh
. anaf), vol.4, p.173), Al-Kh
.
(al-taslm) denotes detaching the sellers claims to the object of sale, thus enabling the buyer to take it and use it.
29 Recall, fungibles are items in which a liability may be denominated, be it money or
otherwise. In contrast, non-fungibles may not be used to denominate a liability (Ibn c Abid
n
((H
. anaf), vol.4, p.26).).
30 Narrated by Ibn c Udayy in Al-K
c
amil on the authority of Ibn Abb
as. The full text
is that the Prophet (pbuh) said: Al-zacmu gh
arim wa al-dayno maqd.iyy, wa al-c
ariyato
muadd
ah, wa al-minh.ato mard
udah, and he narrated
it based on the narration of Ism
acl
ibn Ziy
ad Al-Suk
un, and he denied the correction of this H
(see Al-H

. adth
.
edition, (H
), vol.4, p.58)). It was reported by Ah.mad and As.h.
ab Al-Sunan with the
. adth
exception of Al-Nas
a. The chain of narration includes Ism
acl Ibn c Ayy
ash (see Al-H
afiz.
.
Al-Zaylac (1st edition, (H

), p.250)).
. adth
28 Delivery
63
if the delivery of the price is after the delivery of the object of sale, the
financial liability would not have been fulfilled. Following the delivery
of the price, the seller should deliver the object of sale when the buyer
requests it, to equalize the conclusion of the transaction. Two exceptions
to this rule are: (i) the object of a forward sale, since it is a deferred
fungible, and (ii) deferred price, in which case, the seller should deliver
the object immediately, since the seller would have forfeited his own right
of withholding by accepting deferment of the price delivery.31
The Maliks32 agreed with the H
. anafs that the buyer is obliged to deliver the price, and the seller is obliged to deliver the object of sale. If
one of them insists not to deliver what he possesses until he receives its
compensation, the buyer is forced to deliver the price first, and then he
receives the object of sale from the seller. Malik ruled that the seller has
the right to withhold the object of sale until he receives the price. The
proof of the M
aliks and H
. anafs is that the seller is in the same position
as a pawn-broker, who withholds the object and does not have to deliver
it until after he receives the price.
33
The Shafics and H
. anbals ruled that if there is a dispute over delivery
and price was due as a liability on the buyer, and if the seller says: I
shall not deliver the object of sale until I receive its price, and the buyer
says: I shall not deliver the price until I receive the object of sale, then
the seller is forced to deliver the object of sale first, and later the buyer
is forced to deliver the price. This follows since the buyer has a right to
the specific non-fungible object of sale, whereas the right of the seller is
a liability on the buyer. In this case, priority is given to the delivery of
non-fungibles. In addition, whoever delivers his side of the contract first
forces the other to deliver the other, since both sides have a right and a
liability. However, the Shafics restricted this ruling to the cases where
the seller does not fear being exposed to risk due to the lapse of time, in
which case he has the right to withhold the object until he receives the
price. Similarly, the buyer has the right to withhold the price if he fears
the risk of delaying the delivery of the object of sale.
The right to withhold the object

Given the discussion above of the obligation on the buyer to deliver the price
first, it follows that the seller has the right to withhold the object of sale from
the buyer until he receives the part that must be delivered first, be it the entire
price or a part thereof.34
31 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p. 192), Al-K
c
n ((H
Al-Hum
am ((H
32 Al-Khat
b Al-Shirbn ((Sh
afic), p.247).
.
c
33 Al-Kh
at.b Al-Shirbn ((Sh
afi ), vol.2, p.74), Ibn Qud
amah (, vol.4, p.198).
34 See Al-Sarakhs
(1st edition (H
anaf), ibid.), Al-K
as
an ((H
.
c
c
c Abid
n ((H
a (p.77).
64
The two conditions that justify the right to withhold the object of sale from
the buyer are:
1. That one of the items of the exchange is non-fungible, and the other is fungible (e.g. a commodity in exchange for an amount of money denominated
in some currency). If the two items are both fungible or both non-fungible,
then the exchange must be contemporaneous.
2. That the price is due immediately. If the price is deferred, then the seller
does not have the right to withhold the object of sale, since that right is
voided by deferring the price.
Thus, if the price is deferred except for one unit of currency, the seller has
the right to withhold the entire object of sale, since that right is not partitioned.
Similarly, if the seller receives the entire price save for one unit of currency, or
if he drops all of the price except for one unit of currency, he still has the right
to withhold the object of sale.
Imam Malik ruled that35 the seller has the right to withhold the object of
sale until he receives the price.
36
The H
. anbals ruled that the seller does not have the right to withhold
the object of sale contingent on receiving the price, since delivery is one of the
requirements of the contract. If the two parties disagree about the order of
delivery, the seller is forced to deliver the object of sale, then the buyer is forced
to deliver the price.
The Shafics ruled37 that the seller has the right to withhold the object of
sale until he receives the price, for fear of excessive risk. Similarly, the buyer
has the right to withhold the price until he receives the object of sale for fear of
excessive risk.
Forfeiting the right to withhold
If the buyer provides a pawned object or a guarantor to guarantee the price, the
right to withhold the object is not voided. This follows since the pawning or
guaranteeing does not void the buyers liability for the price, or forfeit the sellers
right to demand it. In this case, the pawned object or guarantor only confirm
that the price can be delivered, but the seller retains the right to withhold the
object until the price is delivered to him.
As for transferred money equivalent in value to the price, it does void the
right to withhold the object of sale in the opinion of Ab
u Y
usuf, whether the
seller transferred the collection of the price to a third party who accepted it, or
whether the buyer transferred the sellers right to collect to a third party. In
this case, the buyer has fulfilled his obligation towards the seller, and the right
to withhold the object of sale is based upon the liability of the buyer to pay the
seller. Since the liability is transferred to a third party, the right to withhold
35 Ibn
Juzayy ((M
alik), p.247).
Qud
amah (, vol.4, p.198).
37 Al-Khat
b Al-Shirbn ((Sh
.
36 Ibn
65
the object of sale is voided. The seller no longer has the right to demand the
price from the buyer, and may only demand it from the third party to whom
the liability was transferred.
Muh.ammad ruled that if the transfer is from the buyer, it does not void the
sellers right to withhold the object of sale, and he may withhold the object until
he receives the price from the third party to whom the liability was transferred.
If the transfer originates from the seller, then: (i) if the transfer is unrestricted
(mut.laq), it does not void the right to withhold the object of sale; (ii) if it is
restricted (muqayyad) by sending a debtor/creditor (gharm) to collect the debt
from the buyer, then the transfer of liability voids the right to withhold the
object of sale. The proof of this opinion is that the sellers right to demand
delivery of the price is not forfeited by a transfer originated by the buyer, or an
unconditional one originated by the seller. However, a conditional transfer by
the seller voids the right to demand delivery of the price, and hence forfeits the
right to withhold the object of sale.38
Al-Kasan said: The correct opinion is that of Muh.ammad, since the right
to withhold the object of sale is legally predicated on the right to demand
delivery of the price, and not on the actual delivery of the price itself.39
In summary, it is unanimously agreed that the right to withhold the object
of sale is forfeited if the seller issues a transfer of the right to collect the price.
For Ab
uY
usuf, the same applies if the buyer issues a transfer of the obligation
to pay the price to a third person who accepts it. There are two narrations
regarding the position of Muh.ammad on this issue, the more credible of which
was narrated above.
If the seller lends the object of sale to the buyer, or gives it to him for
safekeeping, the right to withhold the object is forfeited. Thus, the seller
may not re-claim the object of sale. This follows from lending or giving
to safe-keep being a liability on the buyer, who cannot act as a legal
agent of the seller for that object of sale since he has a primary ownership
claim. Thus, the possession of the goods is primary for the buyer, and
once he gets the object of sale into his possession, it becomes a possession
of ownership that cannot be reversed by a re-claim of the seller.40
If the buyer lends the object of sale to the seller, or leases it to him, or gives
it to him for safekeeping, the right to withhold the object from the buyer
is not forfeited. This follows since those actions would not be valid when
originating from the buyer, since the authority to withhold the object of
sale is originally given to the seller, and thus he (the seller) cannot be
withholding it as a legal agent of another.41
If a third party transgresses against the object of sale, and the buyer
chooses to make the transgressor liable for the object of sale, then the
38 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.195), Al-K
((H
. anaf), vol.4, p.44).
((H
. anaf), ibid., p.251).
40 Al-K
c
n ((H
as
an ((H
. anaf), vol.4, p.44).
41 Al-K
as
an ((H
. anaf), vol.5, p.246).
c Abid
39 Al-K
as
an
66

right of the seller to withhold the object is forfeited in the opinion of Ab
u
Y
usuf. This will be further discussed in what follows.
If the buyer receives the object of sale with the permission of the seller,
the right to withhold the object is forfeited. Thus, the seller has forfeited
the right to reclaim the object of sale by giving the permission for delivery.
If the buyer takes possession of the object of sale without the permission
of the seller, but after the price has been paid, then the right to withhold
the object is forfeited. Thus, the seller has forfeited the right to reclaim
the object by receiving the price, which makes the receipt of the goods a
satisfaction of the buyers right.
If the buyer takes possession of the object of sale without the permission
of the seller and prior to delivering the price, then the right to withhold
the object is not forfeited, and the seller may reclaim the object of sale.
Thus, the seller retains the right to withhold the object until he receives
the price, and this right cannot be voided without his consent.
If the buyer has already resold or used the object of sale in the latest case,
then:42
If the dealing of the buyer can be voided (e.g. sale, gift, leasing,
pawning, etc.), then the seller can void that transaction and reclaim
the object of sale, since he retains the right to that object.
If the dealing of the buyer cannot be voided (e.g. the freeing of a
slave, automatic freeing of a slave following the death of his master,
or impregnating of a slave woman with automatic freeing following
the death of her master), then the seller may not reclaim the object.
Thus, there is no gain in retaining the right to withhold the object
of sale since the withholding of a free person, or a person who will
become free, is not valid.
Delivery and receipt: meaning and means

Delivery and receipt are defined thus by the H
. anafs: it is the removal of all
obstacles by the seller between the buyer and the object of sale, allowing the
buyer to use the object. Thus, the seller would have delivered the object of sale,
and the buyer would have received it.43 The same applies to the delivery of the
price by the buyer to the seller.
Receipt may occur through a number of different mechanisms:
1. Giving full access and permission (al-takhliya): Thus, the buyer
would have full access to the object of sale with the full permission of
the seller. Thus, if a person purchases wheat in a house, and the seller
gives him the key to the house saying: I have given you full access and
42 Al-K
as
an
43 Al-K
as
an
((H
. anaf), vol.5, p.246).
((H
. anaf), vol.5, p.244).
67
permission to take the object of sale, then the buyer would have received
the object of sale.44 However, if he gives him the key without saying anything, then it is not a receipt by the buyer. For a house or land, delivery is
concluded when the buyer stands in it or near its edge or door (to the point
where he can close it at that moment). If the distance is larger than that,
then it is not a receipt.45 Thus, receipt for the H
. anafs is concluded with
full access and permission, whether the object of sale is immovable property or movable goods, with the exception of goods measured by volume
or weight in which case receipt is concluded after its measure is verified.
The Maliks and Shafics ruled that the receipt of an immovable prop
erty such as land or buildings, etc. is concluded by giving access and
permission to the buyer, by delivering keys if they exist. Receipt of movables such as furniture and animals is determined based on convention
prevailing among the people trading.46 Convention dictates that delivery
is determined either by exchanging hands (e.g. for clothing and books)
or by transportation from one place to another (e.g. for an animal or a
locomotive).
The H
. anbals ruled that taking possession of any item is determined by
the items nature. Thus, if it is measured by volume or weight, then its
transfer of possession is actualized by verification of its measure. In other
words, receipt is defined by convention.47
2. Spoiling: If the buyer spoils the purchased goods while they are in the
possession of the seller, then he is considered a recipient of the goods, and
he is liable for the price. This follows since giving access and permission
implies giving the ability to affect the objects, and spoiling the goods
certainly affects them. Causing a defect in the goods (quantitative or
qualitative) has the same status as spoiling them. Moreover, if the buyer
orders the seller to spoil the goods, and he does so, (e.g. if he asks him
to mill wheat into flour), he would have acted on behalf of the buyer and
the ruling is the same.48
3. Giving the object to the buyer for safekeeping or lending it to
him: In this case, the buyer is considered a recipient of the object of sale,
since it is not valid for him to be a borrower or safe-keeper as discussed
above. Similarly, if the buyer gives the object to a third party for safekeeping, or lends it to such a third party, and asks the seller to deliver
44 One of the general juristic rules for the Hanaf
s is that giving full access and permission
.
to the buyer is a receipt by the buyer. Thus, it is considered a receipt, even though the buyer
did not literally receive the goods. Thus, if the object of sale perishes, it would be the loss of
the buyer. See Al-Far
aid Al-Bahiyya f Al-Qaw
ud H
. amza
(p.63).
45 Al-K
c
c
c
as
an ((H
n ((H
. anaf), ibid.), Ibn Abid
a (p.68).
46 Al-Dard
r ((M
alik)A, vol.3, p.145), Al-Im
afic), vol.9,
pp.301-309), and Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.263).
47 Ibn Qud
amah (, vol.4, p.111 onwards).
48 Al-K
c Abid
n
((H
as
an ((H
anaf
),
ibid.),
Ibn
. anaf), ibid.).
.
68

it to him, then he is considered a recipient of the goods. This follows
since lending or giving for safekeeping to a third party is valid, and by
establishing another as a legal agent, receipt by that party is tantamount
to his own receipt.
However, if the buyer gives the object to the seller for safekeeping, or as a
loan or lease, then it is not a receipt, since such actions by the buyer are
invalid. This follows from the sellers primary right of withholding of the
object, hence he cannot hold it as an agent of another.49
4. Prosecution of a transgressor on the object of sale by the buyer:
In this case, Ab
u Y
usuf has ruled that the buyer, who chooses to prosecute
the transgressor to collect compensation, is considered in receipt of the
object of sale. Thus, if the object of sale perishes, the loss would be the
buyers, and the price would still be due as a liability on him, and the sale
is not voided.
Muh.ammad ruled that he is not considered in receipt and the seller remains responsible for the goods, and any compensation must go to him.
In this case, if the object of sale perishes, it is a loss for the seller, the sale
is voided, and the buyer is no longer responsible for the price.
The proof of Ab
u Y
usuf is that the transgression by a third party occurred
implicitly under permission by the buyer, and thus he is in receipt as if
he himself transgressed against the object of sale. The explanation of this
proof is that the buyers choice to prosecute the transgressor demanding compensation is tantamount to assuming ownership of the object
upon which the transgression occurred. This follows by a ruling that once
a person is responsible for compensation of any item, it is retroactively
considered owned by that party at the time of destruction requiring compensation. In this way, the transgression can be seen to have happened
by order from the buyer.
The proof of Muh.ammad is that the compensation is related to the specific
existing object of sale. Now, if that existing object were to perish prior
to receipt by the buyer, it is the responsibility of the seller. The same
argument then applies to a destruction in the value of the existing item.50
5. Prior receipt: All of the above relates to the case where the object of
sale is in the possession of the seller. If, on the other hand, it is in the
possession of the buyer through an earlier receipt, and then it was sold
to him by the items owner, one may ask: would the buyer be considered
in receipt immediately following the purchase, or would a new receipt be
necessary to establish delivery? Jurists made a distinction here based on
the effect of receipt:
Receipt/possession of guaranty (qabd. al-d.am
an): This is the
case where the recipient is considered responsible to another party
49 Al-K
as
an
50 Al-K
as
an
((H
. anaf), vol.5, p.246).
((H
. anaf), ibid.).
69
for the items that he received. Thus, if the item perishes (even if
by natural disaster) while in his possession, he is responsible to compensate that other party. Examples include usurped objects in the
possession of the usurper, and an object of sale in the possession of
the buyer.
Receipt of trust (qabd. al-am
ana): This is the case where the
recipient is not responsible for the item unless he destroys it or is
negligent in safekeeping it. Examples include deposits, loans, rentals,
or the property of a company in the possession of the depositor,
borrower, renter, or partner.
Jurists ruled that the first type of receipt is stronger due to the resulting
responsibility for compensation. The general rule is this: a receipt in
the past can play the role of the receipt necessary for the sale if the two
types of receipt have the same properties in terms of responsibility for
compensation, or if the earlier receipt was of a stronger kind. Thus, a
receipt of guaranty can replace a receipt of trust or a receipt of guaranty,
whereas a receipt of trust may only replace another receipt of trust.51
Thus, we can identify two cases where the buyer has possession of the
object of sale before the sale is concluded, according to whether the possession is one of guaranty or one of trust:
(a) If the buyers possession is a one of guaranty, there are two cases:
i. Either it is in the possession of the buyer himself (as in the case of
a usurper, or a buyer who received prior to purchase), in which
case the contract itself makes the buyer a recipient, and it is
not necessary to renew the receipt. Thus, the seller has fulfilled
his obligation to deliver, whether the object of sale is present or
absent at the contract session. This follows since the usurped
object would be compensated by itself, and so is the object of
sale after receipt. As the two receipts were of the same kind, one
may replace the other.
ii. Or, it is in another persons possession of guaranty (e.g. if the
pawner buys the pawned object from the pawn-broker) then he
is not a recipient, unless the pawned object (rahn) is present in
the contract session, or if he goes to its location and can receive
it. This follows since the pawned object is not compensated with
itself, but rather with another (which is the debt on the pawner),
whereas the object of sale is compensated with itself. Thus,
the two compensations were different. Moreover, the pawned
object is in a receipt of trust, which is not compensated by itself.
Thus, if the pawned object were to perish, the debt would perish
51 Al-K
c
as
an ((H
am ((H
n
c
((H
an
at by Al-Baghd
ad (p.217), and c Aqd Al-Bayc by
. anaf), vol.4, p.535), Majma Al-D
. am
Professor Al-Zarq
a (p.87 onwards).
70

accordingly, not as a compensation, but due to the legal link
between the debt and the pawned object. Thus, any loss in
the pawned object is a loss to the pawn-broker, and the debt is
reduced in proportion to the loss in the pawned object. Also,
the receipt of trust (which is the case for a pawned object), may
not substitute for a receipt of guaranty.
(b) If the possession of the buyer is a possession of trust: For
example, if it is possession by a borrower or a recipient of deposits for
safekeeping, then he is not considered a recipient, unless the object
is present in the contract session, or if he goes to it and can receive
it. This follows since the possession of trust is different from the
possession of guaranty, and thus may not replace it.52
52 Al-K
as
an
((H
am ((H
. anaf), vol.5, p.200).
Chapter 4
Invalid and Defective Sales

4.1
Introduction
Contracts are divided into valid and invalid from the point of view of their
legal status and description, and based on the degree of satisfaction of their
cornerstones and conditions.
A valid contract: is one that satisfies all of its conditions and cornerstones.
An invalid contract: is one where one or more of its conditions and
cornerstones are violated, and without any consequence.
In this regard, a sale is invalid (b
a.til) if and only if it is defective (f
asid). The
H
. anafs, however, divide contracts into three categories: (i) valid, (ii) defective,
and (iii) invalid. Thus they distinguish among the contracts that are not valid
between those that are invalid and those that are defective.
The source of disagreement is each partys interpretation of the legal prohibition of certain contracts. In this respect, jurists ask the question whether a
contracts prohibition entails defectiveness (i.e. lack of validity and committing
a sin), or whether it may in some cases entail the committing of sin while the
contract remains valid. Another question jurists ask is whether the prohibition
of one of the main components of a contract is equivalent to a prohibition of a
general characteristic that is satisfied in the contract.
The majority of jurists ruled that the prohibition of any contract means
that it is invalid, and that whoever engages in such a contract commits a sin.
Moreover, they ruled that the prohibition of a main component (rukn) of a
contract is equivalent to a prohibition of a general characteristic (was.f) that is
satisfied in that particular contract. This is based on the H
of the Prophet
. adth
(pbuh): Whoever commits an action that is alien to our affair (religion), then
he is an apostate; and whoever introduces into our religion something alien to
71
72
CHAPTER 4. INVALID AND DEFECTIVE SALES
it, then he is an apostate.1

Whenever the actions of an individual disagree with the orders and commands of the Legislator (Allah almighty), this action is characterized by defectiveness and invalidity. This applies regardless of whether the transgression is
a fundamental component of the action or a general characteristic thereof, and
regardless whether they pertain to acts of worship or to everyday interactions
with others.
The H
. anafs, however, ruled that the Legislator may forbid a contract with
the consequence of making those who commit it sinners, without invalidating
the contract. They also distinguish between the prohibition of the fundamental
components (ark
an) of a contract, which invalidates it, and the prohibition
of a general characteristic (was.f) of the contract that only leads to viewing it
as defective.2 This is due to the general assessment of transactions based on
the benefits to mankind. Thus, if the transgression of an action pertains to its
nature (e.g. selling a non-existent object), there is no potential benefit, and the
contract is invalid. However, if there is a potential benefit resulting from the
action, and if the reduction in benefit can be ameliorated by the removal of its
cause, then the transaction is called defective. This would be the case when
the transgression of the action pertains to one of its incidental characteristics
while its main components (i.e. cornerstones, parties to the transaction, and
object) are valid. Thus, the H
. anafs classify sales into three types based on the
Legislators evaluation of their components: (i) valid, (ii) defective, and (iii)
invalid.
As for acts of worship, the H
. anafs ruled that defectiveness and invalidity are
equivalent in this regard. This follows from the ruling that any deviation from
the orders of the Legislator in matters of worship, whether in a fundamental or
ancillary component, is both defective and invalid. The reason for this is that
acts of worship require complete obedience and following of orders, thus any
transgression thereof would violate its validity.
A valid sale is one that is legal both in its fundamental and ancillary
components,3 with respect to which no third party has a right, and that contains
no options. Its legal status is that its consequences become applicable instantly.
The consequences of a valid sale is the exchange of ownership of the object of
1 Narrated by Muslim on the authority of c Aish
at, and in a narration of Al-Bukh

ar,
Muslim and Ab
u D
aw
ud: Whoever introduces in this affair of ours something alien to it is
an apostate, Ibn Al-Athr Al-Jazar (, vol.1, p.197).
2 See Al-Amw
al wa Naz.ariyyat Al-Nuq
ud by Dr. Muh.ammad Y
usuf M
us
a (p. 436 onwards). The better opinion is that the consequences of a prohibition of a general characteristic
of a contract are legally equivalent to those of a prohibition of a fundamental part thereof. In
this respect, defective and invalid sales are one and the same. See Us.u
l al-Buy
uc al-Mamn
uc a
by Professor c Abd Al-Samc Im
am, Ph.D dissertation at Al-Azhar (p.147).
3 The fundamental components of the contract are its cornerstones and its object. The
cornerstones are the offer and acceptance, and it is legal if it has no defects (e.g. that the
offer or acceptance was issued by an insane person or a non-discerning child). The object of
sale is legal if it is a property with potential permitted benefits. The ancillary components
of a contract are its other characteristics in addition to its cornerstones and object (e.g. a
condition that violates the nature of the contract, if the object of sale was not deliverable, or
the definition of a price that is a characteristic ancillary to the contract.
4.1. INTRODUCTION
73
sale and price. Thus, if the sale contains no options, the buyers ownership of the
object of sale, and the sellers ownership of the price, are actualized immediately
following the offer and acceptance.
An invalid sale is one: (i) whose cornerstones and conditions on the object
are not satisfied; or (ii) that is illegal in its fundamental and ancillary characteristics (e.g. one of the parties of the contract is not eligible, or if the object
of sale may not be used in this type of contract). Its religious status is that
the contract is in effect not concluded, even though its outer appearance may
resemble a concluded contract, and the exchange of ownership does not result
(e.g. contracts concluded by a child, or an insane person, if the object of sale is
not a good such as a dead animal, or if the object of sale is forbidden such as
wine and pork).
If a sale is invalid, the owner does not benefit by receiving the object, thus
if the object of sale perishes in the possession of the buyer, it is treated as
a possession of trust. This follows from the contract not being considered in
effect concluded, and thus receipt is considered to be with the permission of the
owner (who remains to be the seller). This is the opinion of Ab
uH
. anfa. For
other jurists, the object in this case would be in a possession of guaranty, since
it is of no lower status than that which is received while negotiations over the
contract are in progress. This is the opinion of Ab
u Y
usuf and Muh.ammad.
The price received following an invalid sale, as well as the price received following
a defective sale, are considered in a possession of guaranty by the seller.
A defective sale is one that is fundamentally legally sound, but that has
a violating forbidden characteristic. For example, the sale of an item with uncertainty that may lead to dispute, such as a house or car owned by a person
without specifying the person, the car or the house. Another example is including two sales in one contract, such as selling someone a house on condition that
the other person sells the first a car. More examples will be studied in detail
below. The legal status of a defective sale is that ownership is actualized by
receipt with the explicit or implicit permission of the owner (e.g. implicitly if
the receipt takes place during the contract session, without any objection from
the other party). This is the H
. anaf position, which is to be contrasted with
the position of the majority of jurists, who view that ownership may not ensue
from defective sales, just as in the case of an invalid sale.4
Defective and invalid contracts
If defectiveness pertains to the object of sale, then the sale is invalid (e.g. the
sale of wine, pork, a dead animal, blood, or an animal hunted in sanctuary of
Mecca during ritual consecration (ih.r
am)). In this case, the sale does not lead
to ownership of the object by the buyer, even if he receives it, since a Muslim
may not gain ownership of such objects through a sale. In particular, dead
animals and blood are not legally beneficial properties, and the Legislator has
4 Ibn
Al-Hum
am ((H
as
an ((H
c
((H
an
at (p.215 onwards), and Naz.ariyyat Al. anaf), vol.4, p.104), Majma Al-D
. am
c Aqd by Dr. Y
usuf M
us
a (p.440 onwards).
c Abid
74
forbidden the ownership of hunted animals while the person is in a state of ritual
consecration (ih.r
am).
If defectiveness pertains to the price, and if the price qualifies as property in
other religions or is desirable for some people (e.g. wine, pork, hunted animal
during ih.r
am), then the sale is defective but concluded for the value of the
object of sale. In this case, ownership of the object of sale is actualized by
receipt, since specification of the desired price is proof of the intention of the
two parties to conduct a sale; thus the sale is concluded for the value of the
object of sale.5
If the price is a dead animal or blood, the H
. anafs disagree on the status of
the sale. The majority ruled that the sale is thus invalid, while some ruled that
it is defective. The correct opinion in this case is that the sale is invalid since
the price is not a good with potential benefit.6
Following this introduction, we mention examples of sales that at least some
jurists classified as invalid, followed by examples of defective sales. Later, the
status of defective sales and their consequences will be discussed in detail.
I have distinguished between examples of invalid and defective sales to avoid
confusion, in contrast to what most books of H
. anf jurisprudence discuss under
the heading of defective sales. The majority of such books use the term defective sales to mean the more general category of defective and invalid sales,
i.e. all the ones that are legally prohibited. It is also common for the authors of
such books to use the term defective (f
asid), when they really mean invalid
(b
a.til). The reader is then forced to infer their meaning from the surrounding
text or by telling statements such as their saying: thus the contract does not
become valid in the case of invalid sales, and thus the contract returns to
being valid in the case of defective ones.
4.2
Types of invalid sales
The most important types of invalid sales are the following:
4.2.1
Sale of a non-existent object
The top scholars of all schools of jurisprudence have agreed that the sale of nonexistent objects, and objects that may cease to exist, is not concluded. This
includes the sale of offspring of the offspring, the sale of an unborn animal in
the womb, and the sale of fruits and plants before they appear. This is based
on the Prophet (pbuh) prohibiting the sale of the unborn animal in the womb
of its mother.7 He also prohibited the sale of the male camels sperm and the
5 The difference between the price and value of an object: the price is what the two parties
agree on, whether in excess or diminution of its value. The value is what the object is assessed
for, which is equivalent to a measure with no excess or diminution.
6 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.5,
pp.186.227), Ibn Al-Hum

am ((H
. anaf), vol.5, pp.299,305).
7 Narrated by Al-Bukh
ar, Muslim, Ah.mad, M
alik in Al-Muwat..ta, Ab
u D
aw
ud, Al-Nas
a,
and Al-Tirmidh on the authority of Ibn c Umar that the Messenger of All
ah (pbuh) has
4.2. TYPES OF INVALID SALES
75
female camels eggs.8 He also prohibited the sale of fruits before they are shown
to be good, as discussed below.
In the same category as the sale of a non-existent object are: the sale of
pearls in shells, milk in an udder, wool on the backs of sheep, and a book before
it is printed. The sale of all of those is invalid for the Shafics and H
. anbals, since
the object of sale does not exist with certainty. This is based on the H
on
. adth
the authority of Ibn c Abb

as that The Messenger of Allah (pbuh) prohibited
the sale of a fruit before its quality is known, the sale of wool on the back of
sheep, and the sale of milk in a udder.9 The latter prohibition is due to the
ignorance regarding the quality and volume of the milk in an udder. The volume
is not known since an udder may seem full due to fat rather than milk. The
quality of the milk in an udder is also unknown with regards to clarity or lack
thereof. Thus, the milk in an udder is similar to an unborn animal in a womb,
since its sale would be the sale of a specific item that has not yet been realized.
Another reason for this prohibition is that such an item is not deliverable at
the time of sale, since milk does not collect in the udder all at once, but rather
gradually. Thus, the object of sale gets mixed with other milk in a manner that
makes distinguishing between them impossible.
However, the milk of a wet-nurse may be sold to be consumed as needed by
the infant.
The H
u Y
usuf, ruled that the sale of milk
. anafs, with the exception of Ab
in an udder, pearls in shells, or wool on the backs of sheep, are all defective due
to ignorance and the prohibiting H
. In the case of wool, it is continuously
. adth
growing, and thus the object of sale (the wool on the back at the time of sale)
may get mixed with that which grows afterwards, which makes a demarcation
difficult. Thus, the sale becomes defective.10
Ab
u Y
usuf ruled that the sale of wool on the backs of sheep is valid, and
that it may be agreed upon since it can be cut prior to slaughtering the sheep.
Thus, it may be sold in the same manner that plants may be sold while they
are in the ground.
Those who ruled that the sale of wool on the backs of sheep is invalid base
their opinion on the existence of uncertainty and excessive risk (gharar), since
wool grows continually. Thus the wool that is present at the time of the contract
gets mixed with that which grows later, and it is impossible to separate the two.
prohibited the sale of the unborn animal in the womb of its mother, Ibn Al-Athr Al-Jazar
(, vol.1, p.441), Al-Shawk

an (, vol.5, p.147).
8 There are a number

of narrations in this regard. Among them is the narration of c Abd
Al-Razz
aq in his Mus.annaf on the authority of Ibn c Umar that the Prophet (pbuh) prohibited
the sale of the sperm and eggs of camels, and the unborn animal in its mothers womb. What
is meant by the sale of sperm of the camel is to let a male camel copulate with a female camel,
and to sell whatever it delivers to the buyer, and what is meant by the sale of a female camels
egg is the sale includes those before or after fertilization by a male camel. Those types of sales
were common before the advent of Islam (i.e. in j
ahiliyya).
9 This is a Had
marf
uc musnad narrated by Al-T
an in his Muc jam on the authority
. th
. abar
of Ibn c Abbas. It was also narrated by Al-D

araqut.n and Al-Bayhaq in their Sunan. See
Al-H
an (, vol.5, p.149).
.
. adth
10 Ibn c Abid
n ((H
am ((H
as
an
. anaf), vol.5, p.148). Al-K
apparently concluded that the sale is not concluded, and what he meant is that it is defective.
76
Imam Malik had a different opinion in both cases. Thus, he ruled for the
validity of the sale of milk for a specified number of days in the udder of a herd
of sheep whose milk is homogeneous and whose productivity is known, but not
that which is in the udder of one sheep. The ruling is that such a sale is similar
to the sale of the milk in the breast of a wet-nurse to feed an infant for a known
period. Moreover, it is common practice for people to give others the rights to
the milk of a cow for a month or more by making it publicly available or giving
it as a gift. He also ruled that it is valid to sell wool on the backs of sheep since
it is observable and deliverable.
There is an opinion among the H
. anbals that agrees with this ruling, stating
that it is valid to sell wool on the backs of sheep provided that it is sheered
immediately, since its delivery can be verified. The Z.ahirs agreed with the
validity of selling wool on the backs of sheep.11
H
. anbal opinions regarding the sale of non-existent objects
Ibn Al-Qayyim and his teacher Ibn Taymiya permitted the sale of items that
do not exist at the time of the contract if their future existence is known according to custom. They base their opinion on the lack of any prohibition of
the sale of that which is not mentioned in the Quran, the Sunnah, or the talk
of the companions of the Prophet (pbuh). What was narrated in the Sunnah
is the prohibition of sales with excessive risk and uncertainty (gharar), where
the object may be undeliverable, whether it exists or not (e.g. a runaway horse
or camel). Thus, the wisdom in the prohibition is neither existence nor lack
thereof.
On the contrary, Islamic law has explicitly permitted the sale of non-existent
items in some cases. Examples of such permissions apply for fruits when their
quality is beginning to appear, and seeds after they start to sprout. It is clear
that contracts in this case apply to existing objects as well as to those that are
non-existent before their realization. Thus, the sale of a non-existent object is
forbidden if there is ignorance about its future existence. This prohibition is
based on excessive risk and uncertainty (gharar), and not based on the lack of
existence.
4.2.2
Sale of undeliverable goods
The majority of H
. anaf scholars apparently agree that the sale of an item that is
undeliverable at the time of contract is not concluded. This applies even if the
item is owned by the seller, e.g. a bird that flew away from its owner, a run-away
slave, or gleanings. In this case, the sale is invalid. Even if the object were to
11 Al-Sarakhs
(1st edition (H
am
. anaf), vol.12, p.194 onwards, vol.13, p.23), Ibn Al-Hum
c
n ((H
((H
as
an ((H
. anaf), vol.4,
. anaf), vol.5, pp.139,148), Al-K
pp.106,112,113), Ibn Rushd Al-H
alik), vol.2, pp.147,157), Al-mz
an (vol.2, p.67), Al. afd ((M
Khat.b Al-Shirbn ((Sh

afic), vol.2, p.30), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.262), Ibn
Qud
amah (, vol.4, p.208 onwards), Al-S.anc
an (2nd printing, vol.3, p.32 onwards), Ibn Juzayy
((M
alik), p.256), Ibn H
. azm (, vol.8, p.458).
77
appear after the contract, the offer and acceptance would have to be renewed,
unless they agree on the spot, in which case it becomes a change-of-hands sale.
If the object of sale becomes deliverable during the sales session, the sale
that occurred while the object was undeliverable does not become valid. This
is based on the fact that the sale when it was originally conducted was deemed
invalid. However, Al-Karkh and Al-T
. ah.aw ruled that it becomes valid in this
case.
If the object of sale is a bird that flew away but is accustomed to return
(e.g. domesticated pigeons), then the apparent ruling is that it is not valid to
sell since it is not deliverable immediately. Some of the H
. anafs ruled that if
the bird is accustomed to returning to its home, and can be captured without
excessive effort, then it is valid to sell, otherwise it is not.
Similarly, the contract is invalid if the undeliverable item is designated as a
price; since the price if identified as a non-fungible becomes an object of sale
from its owners point of view.12
The Maliks ruled that the purchases of run-away camels, wild cows, and
usurped objects by other than the usurper, are not concluded.
The Shafics and H
. anbals ruled that it is not valid (i.e. not concluded) to
sell undeliverable objects such as birds in the sky, fish in a sea, ocean, or river,
run-away camels, lost horses, usurped property, or runaway slaves whether or
not their whereabouts are known. The same applies to the sale of a house
12 Al-Karkh
, may All
ahs mercy be on him, ruled that it the sale of a run-away slave is
concluded. Then, if he appears and is delivered, the sale becomes valid and does not require
renewal of the sale. His proof is that running away does not void the property rights of the
owner. Thus, the sale is not executed immediately due to the impossibility of delivery, but
once delivery is possible, the sale is executed. This is similar to the sale of a usurped item in
the possession of the usurper, which the owner may sell to a third party. In this case, the sale
is concluded but suspended pending delivery.
The apparent story is that the deliverability of the object of sale is a condition of contract
conclusion, which may not be concluded without a benefit to its parties, and such a benefit
is not present. At the time of the sale, the object of sale is undeliverable, and there is doubt
whether or not the object will become deliverable in the future. In this case, the rule is
that the contract that would not be concluded with certainty would not be concluded with a
probable benefit. This is different than selling the usurped object to a third party, which is
concluded and suspended pending delivery. Thus, if delivery takes place, the sale is executed.
In this case, the owner has the ability to deliver the object by resorting to the powers of the
government, the judicial system, and Muslim society. The lack of immediate executability of
the contract is caused by the usurper. This obstacle to execution is removed by deliver. In the
case of a run-away slave, delivery is impossible for an indefinite period, like the sale of flying
birds or fish in a sea, ocean or river. See Al-K
as
an ((H
. anaf), vol.5, p.147 onwards), Ibn Alc
Hum
am ((H
n ((H
aw ((H
. anaf), vol.4, p.112), Al-T
. ah.
. anaf),
p.82), Al-Amw
al wa Naz.ariyyat Al-c Uq
ud by Professor Muh.ammad Y
usuf M
us
a (p.314).
The M
aliks ruled that the sale of a runaway slave is not valid as long as his whereabouts are
not known, or if it is known that he is with someone from whom it is difficult to obtain him.
However, if his whereabouts are known to the buyer and seller, and he can be returned, then
the sale is valid. Ibn Rushd said: I suspect that he (i.e. Im
am M
alik) made it a condition
that his whereabouts are known, and that the price is not taken by the seller until the buyer
takes possession of the object of sale (Ibn Rushd Al-H
alik), vol.2, p.156), Al-Dardr
. afd ((M
((M
alik)A, vol.3, p.11). I have discussed the rulings regarding run-away slaves to study this
historical situation.
78
or land under the control of an enemy.13 This is based on the prohibition by

the Prophet (pbuh) of the pebble sale and the sale including excessive risk
and uncertainty (gharar),14 and the sale thus discussed fits the definition of
gharar. It is narrated
on the authority of Abu Sacd Al-Khudriy (mAbpwh)
that
the Messenger of Allah (pbuh) has forbidden the purchase of a run-away
slave, the purchase of unborn animals in their mothers wombs, the purchase
of the milk in an animals udder, and the purchase of spoils of war prior to
d, it is narrated that the
their distribution.15 On the authority of Ibn Masc u
Messenger of Allah (pbuh) said: Do not purchase fish in the water, for it is
gharar. Thus, he (pbuh) based the prohibition of buying fish in the sea, ocean,
river, on the basis of its being gharar (i.e. containing excessive risk and
or
gharar includes the sale of items that
uncertainty). Thus, it is inferred that
in this Hadth refers to uncontained
are not deliverable. The water mentioned
.
water, e.g. waters of a sea or river. However, if the water is contained (say in a
c
pond), then the H
afi s, and H
. anbals ruled that fish in such water may
. anafs, Sh
be sold if it is accessible without fishing or special tricks. The H

. anafs added
that the buyer has the option to void the sale if visual inspection is unfavorable.
The Maliks, on the other hand, prohibited the sale of fish in a pond or creek.16
In summary: the four schools of jurisprudence agree on the invalidity of sales
of undeliverable items, with few disagreements on conditions, and opinions that
are deemed weak in the various schools.
The Z.ahir scholars ruled that deliverability of the object of sale is not a
condition of validity of the sale. The condition as they see it is that the seller
does not present an obstacle between the buyer and what he buys.17
4.2.3
Sales of liabilities (including debts)
Liabilities18 include: the price of a purchased object, the compensation for a

loan, dowry before or after the consummation of a marriage, wages compensat13 Al-muhadhdhab (vol.1, p.263), Ibn Qud
amah (, vol.4, p.200 onwards), Marc ibn Y
usuf

(1st printing (H
. anbal), vol.2, p.10).
14 Narrated by Muslim, Ahmad, Abu-D
aw
ud, Al-Tirmidh, Al-Nas
a, and Ibn M
ajah on
.
the authority of Abu Hurayra that the Prophet (pbuh) prohibited the sale of the pebble and
the sale of gharar, authenticated above. The pebble sale is in saying I sold you whichever
dress this pebble

falls upon and tossing the pebble. See Ibn Al-Athr Al-Jazar (, vol.1,
p.441), Al-Shawk
an (, vol.5, p.147).
15 Narrated by Ahmad and Ibn M

a
jah
as
the
narration
of
Sh
ahr
ibn H
ab on the
.
. awsh
authority of Abu-Sacd Al-Khudriy with the text: The Prophet (pbuh) has forbidden the
purchase of the unborn animal in its mothers womb, the sale of the milk in its udder without
measurement, the purchase of spoils of war prior to their distribution, the purchase of charities
prior to their receipt, and the purchase of the catch of a diver. Al-Shawk
an (, vol.5, p.149).
16 Al-K
as
an ((H
d Al-H
afd ((M
alik), vol.2, p.156), Ab
u. anaf), vol.5, p.295), Ibn Rush
.
Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.263), Ibn Qud
amah (, vol.4, p.202).
17 Ibn H
l Al-Buy
uc Al-Mamn
uc a (p.130).
. azm (, vol.8, p.449 onwards), Us.u
18 Note that liabilities in modern secular laws are: obligations on individuals. This includes
liabilities discussed by Islamic jurists, as well as non-fungible items that are identified and
must be delivered.
79
ing for a benefit, indemnity (arsh)19 , fines for destruction of property, financial
compensation for divorce at the instance of the wife, and the object of a deferred
sale. The sale of a liability may be: (i) to the liable person, or (ii) to a third
party. In both cases, the sale may be: (i) with deferred price, or (ii) in return
for immediate monetary compensation.
Sale of liabilities with a deferred price

This is the sale of debt for debt, which is prohibited, since the Prophet (pbuh)
alii bi-lk
ali .20 It has been rehas forbidden it Nah
a (sAc ws) c an bayc i l-k
ported that the jurists unanimously agree on the invalidity of a sale of one debt
for another, whether the debt is being sold to the debtor or to a third party.
An example of a sale of debt to the debtor is for one person to buy a measure
of wheat for a unit of currency, with the provision that both the object of sale
and the price would be delivered in a month (i.e. modern forward and futures
contracts). Another example is a forward sale, where the seller is unable to
deliver his obligation at the specified term and asks the buyer to sell him the
object for another term with an increase. In this case, if the buyer agrees to
sell him as proposed, without an exchange of object of sale and price, then this
becomes a form of the forbidden usury (rib
a). This is the form of rib
a falling
under the general category of give me more time, and I compensate you with
more value. However, if he sells the debt in a different manner, as in selling him
the amount for which he is liable for furniture or a rug for example, or for an
amount of money paid by the debtor, then the sale is valid since it constitutes
a consensual resolution of conflict.
An example of selling a debt to a party other than the debtor is when a
man sells a measure of wheat owed to him by a third party for an amount of
money due from the buyer after a specified period of time,21 or for a present
non-fungible commodity. In this case, the sale is not valid, since the object of
sale is not deliverable.
Sale of debt
Jurists disagreed with regards to this type of sale as detailed below.
19 Indemnity (arsh) refers to a financial compensations for physical injuries inflicted on
another
20 Narrated by Al-D
araqut.n on the authority of Ibn c Umar, and authenticated by Alh.
akim using the method of Muslim, and narrated by Al-T
an on the authority of R
afic
. abar
ibn Khadj, however, its chains of narration relied on one narration by M
us
a Ibn c Ubayda
Al-Rabdh, and there it is discussed elsewhere (Al-Shawk

an (, vol.5, p.156)).
21 Al-Sanc
an (2nd printing, vol.3, p.45), Al-Shawk
an (, vol.5, p.156), Al-Sharh. Al-Kabr
.
c
(vol.3, p.61 onwards), Al-Gharar wa Atharuhu f Al- Uq
ud by Dr. Al-S.iddq (p.311 onwards),
Marc ibn Y
anbal
),
vol.2,
p.58),
Ab
u
-Ish
a
q
Al-Sh
r
a
z
((Sh
afic), vol.1,
.
.
p.262).
80
1. Selling debt to the debtor

The majority of jurists from the four schools have ruled as valid the sale of
debt to the debtor, or forgiving it as a gift. This follows since what invalidates
the sale of debt for debt is the inability to deliver, which is not needed in this
context since the liability of the debtor is given to him.22 An example of this
transaction would be where a creditor sells to the debtor his debt in return
for another debt denominated in a different numeraire. In this case, the sold
debt is dropped, and its compensation becomes a liability. This is considered a
consensual resolution of a dispute, which is allowed based on what was narrated
by the five (Ah.mad and As.h.ab Al-Sunan) on the authority of c Abd Allah ibn
c
Umar (mAbpwt) who said: I came to the Prophet (pbuh) and said: I sell
camels in Al-Baqc , with the price denominated in gold coins, and collected in
silver coins; and sell them denominated in silver coins collecting in gold coins.
He (pbuh) said: There is no harm if you take it at its spot price, as long as
you do not depart without fully concluding the transaction. This exchange of
silver coins for gold coins, and vice versa, is a sale of a liability in exchange
for an identified object paid by the debtor. This follows from his saying I sell
at a price denominated in gold coins that makes it a liability, since he did
not receive the gold coins. Then, he exchanged those uncollected gold coins for
received silver coins.
The Z.ahirs ruled that it is invalid to sell a debt to the debtor due to the
incidence of gharar. Ibn H
. azm ruled that this is the sale of an unknown,
whose specific characteristics are not observed, which is an unlawful devouring
of others wealth.23
2. Selling debt to a third party
The H
. anafs and Z.ahirs ruled that since it is not valid to sell an undeliverable
item, the sale of a debt by a person other than the debtor is not concluded. This
follows since the debt is not deliverable by any potential seller other than the
debtor himself. The debt is a legal claim of the creditor and a liability on the
debtor, or - in other words - it is the act of changing possession of the money and
its delivery; and such rights and acts are not deliverable. Even if a condition
of delivery by the debtor is included in the sale, it is still not valid, since the
seller in this case puts a condition of delivery by a person other than himself,
which makes this a defective condition, thus rendering the sale defective due to
the undeliverability of the object of sale.24
Some of the Shafics ruled25 that it is valid to sell a confirmed debt at ma
turity (al-dayn al-mustaqirr)26 to the debtor or a third party before receipt. In
22 Al-K
c
n ((H
as
an ((H
. anaf), vol.2, p.326), Indian Authors
((H
l Al-Buy
uc Al-Mamn
uc a (p.111), Ibn Qud
amah (, vol.4, p.120).
. anaf), vol.4, p.365), Us.u
23 Ibn Hazm (, vol.9, p.7 onwards), Us
ul Al-Buy
uc (ibid.).
.
24 Al-K
as
an ((H
. anaf), ibid.).
25 Ab
u-Ish.
aq Al-Shr
az ((Sh
26 Such is a loan whose

repayment is certain, with no possibility for default.
81
this case, deliverability is apparently satisfied without any impediments. Examples of such confirmed and matured debts are: compensation for destroyed
property, and monies in the possession of the borrower.
If the liability is not confirmed or not currently due (ghayr mustaqirr), then
(i) if it is the object of a forward sale (salam), then it is not valid to resell
it prior to receipt. This follows from the general prohibition of selling what
one has not received, and since the object of a deferred sale is not certain to
be delivered. (ii) If the liability is a price in a sale contract, then one Shafic
opinion is that it may be resold prior to receipt. This is based on a narration

by Ibn c Umar that the Messenger (pbuh) said: There is no harm as long as
you do not depart with unfinished business between you.27 Also, in this case
there is no danger of voiding the contract based on the perishing of the object
of sale, thus simulating reselling the object of sale after receipt. On the other
hand, there is a consensus that the sale of a debt in exchange for a deferred
debt is not valid in monies, foods, and other properties that can result in rib
a.
The discussion above may not be used as a basis for any argument that would
contradict clear and unequivocal legislation. Al-Nawaw in Al-Minh
aj ruled that
the most apparent ruling is that the sale of a debt to any party other than the
debtor is invalid.
The H
. anbals ruled that it is valid in their school to sell a confirmed and
matured debt to the debtor, e.g. repayment of a loan or payment of dowry after
consummation of the marriage. It is not valid in their school to sell a debt to
any party other than the debtor. Moreover, it is not valid to give it as a gift
to any party other than the debtor, since a gift necessitates the existence of an
identified object (the gift), which is not available in this case. It is not valid
to sell a debt prior to its due date such as the rental of a property prior to
the time the rent is due, the dowry of a woman prior to consummation of the
marriage, or the object of a forward sale (salam) prior to receipt. However, Ibn
Al-Qayyim allowed the sale of a debt to both the debtor and a third party.28
The Maliks ruled that it is valid to sell a debt to a party other than the
debtor under eight conditions that distance the sale from gharar, rib
a, and other
prohibited sales such as selling food prior to its receipt. Those conditions can
be summarized under two headings:
1. The sale must not violate a legal prohibition such as rib
a, gharar, etc.
Thus: (i) the debt must be an item that may be resold prior to receipt
(e.g. in the case of loans) and the object of the debt must not be food;
(ii) the price of the sale must be paid currently to avoid selling a debt for
another debt; (iii) the price must either be of a different genus than the
27 Narrated by Al-Tirmidh
and others, and authenticated by Al-H
. akm following the con
ditions of Muslim, and the story is well known: Ibn c Umar said: I used to sell camels in
Al-Baqc denominated in gold coins and collected in silver coins, and denominated in silver
coins and collected in gold coins, the Messenger of All
ah (pbuh) said: There is no harm in
this, as long as you not depart with any unfinished business between you.
28 Ibn Qud
c
amah (, vol.4, pp.120,301), Mar ibn Y
. anbal), vol.2, p.80
onwards), Ibn Qayyim Al-Jawziyyah ((H
ut (3rd print. anbal), vol.1, p.388 onwards), Al-Buh
ing (H
. anbal), vol.4, p.337).
82

debt, or - if it is of the same genus - equal to it to avoid rib
a; (iv) the price
must not be gold if the debt is silver to avoid selling money for deferred
money (rib
a). Those are four conditions under one heading.
2. (i) The repayment of the debt must be most likely, e.g. the debtor should
be present in the city where the contract is conducted so that his financial
condition would be known. (ii) The debtor must acknowledge the debt so
that he may not deny it later. Thus, it is not valid to sell a right under
dispute. (iii) The debtor must be eligible to take responsibility for the
debt (e.g. he may not be underage or under legal supervision), thus the
debt may be deliverable. (iv) There should be no enmity between the
debtor and the buyer of the debt so that the buyer would not be exposed
to an additional risk, and so that the debtor will not be subjugated to an
adversary.29 Those are four other conditions under one heading.
We find that the M
alik school is the best in this regard. In general, it is
not valid to sell a debt for a debt, as in selling a debt to a third person
with a deferred price. Also, it is not valid for a debtor to settle a debt
with another debt; e.g. a debtor may not repay the creditor with fruits
to be reaped, or a house in which he may dwell, since the receipt of such
items would be deferred.30
Discounted IOUs: The H

. anafs ruled that the sale of an IOU to a party
other than the debtor (or a person who owes the government money) at a
discounted price is not valid.31
4.2.4
Gharar sales:
The term gharar literally means danger, and the source term al-taghrr refers
to items
to exposure to danger. The linguistic origin of the term gharar refers
with a likeable appearance and disliked reality. Thus, our life on earth has been
ur (utilities of ghur
ur), i.e. deceptive.
called in the Quran mat
ac u al-ghur
Thus, gharar is exposing oneself orones property unwittingly

to the possibility
of perishing.
gharar sales literally refers to the existence of gharar either in the
may qualify as a
nature of the sale itself, or in the object of sale.32 Thus, a sale
gharar sale if the object of the sale is what qualifies as gharar (e.g. selling birds
the air or an [unspecified] sheep from a herd), or if the gharar is intrinsic
in
to the language of the sale (e.g. two sales in one, two conditions
in a sale,
down-payment sales, pebble sales, etc.).
Al-gharar lexically refers to deception, where a necessary condition for ac may and may not exist. Thus benefiting from such contract qualifies
ceptability
29 Al-Dard
r ((M
alik)A, vol.3, p.63), Ibn Rushd Al-H
. afd ((M
Juzayy ((M
alik), pp.210,289), Us.u
l Al-Buy
uc Al-Mamn
uc a (p.109), Al-Gharar wa Atharuh
u
f Al-c Uq
ud (p.315).
30 Ibn Juzayy ((M
alik), p.289).
31 Usu
uc Al-Mamn
uc a f Al-Sharc a Al-Isl
amiyya wa Mawqif Al-Qaw
ann Minh
a
. l Al-Buy
by Professor c Abd Al-Samc Im

am (p.120).
32 See Al-Gharar wa Atharuhu f
Al-c Uq
ud by Dr. Al-S.iddq Al-Amn (p.62).
83
as invalid acquiring of property.33 In jurisprudence, the term gharar refers to
purposive cheating and deception as well as ignorance of the object

of sale and
c
undeliverability of the object. Al-S.ana an said that a gharar sale may occur
in a number of forms: through undeliverability of the object of sale (e.g. a
run-away horse or camel), non-existence or ignorance of the object of sale, lack
of full ownership of the object by the seller (e.g. fish in large volumes of water
[i.e. in a sea, ocean, river, etc.]), or any of a number of other forms.34
Gharar in the language of jurists:
Jurists of various schools have given somewhat similar definitions of gharar
among which are the following:

Al-Sarakhs said for the H
. anaf school: gharar is that whose consequences
are hidden.35
Al-Qar
af said for the M
alik school: gharar is what is not known to exist
in the future, e.g. birds in the air and fish in the water.36
Al-Shr
az said for the Shafics: gharar is that whose nature and conse
quences are hidden.37

Al-Isnaw said for the Shafics: gharar is that which admits two possibil
ities, with the worse consequence being the more likely.38
Ibn Taymiya (of the H
. anbal school) said: gharar is that whose conse
quences are unknown. His student Ibn Al-Qayyim
said: It is that which
is undeliverable, whether it exists or not (e.g. the sale of a run-away slave
or a run-away camel, even if they exist).39
Ibn H
. azm (of the Z.ahir school) said: gharar is where the buyer does not
not know what he sold.40
know what he bought, or the seller does
In summary: the gharar sale is any sale that incorporates a risk that af parties to the contract and may result in loss of his
fects one or more of the
41
property. Professor Al-Zarqa defined it thus: It is the sale of probable items
whose existence or characteristics are not certain, due to the risky nature that
makes it similar to gambling. The type of gharar that invalidates a sale is that
of sale (gharar al-wuj
which pertains to the existence of the object
ud), which
may and may not exist. As for gharar pertaining to theattributes of the object
of sale (gharar al-was.f), it corrupts

the sale, as we have seen in the conditions
33 Al-Sanc
an
(2nd printing, vol.3, p.15).

Ibn Juzayy ((M
alik), p.256).
(1st edition (H
. anaf), vol.12, p.194).
36 Al-Qar
af ((M
alik), vol.3, p.265).
37 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.262).
38 Nih
ayat Al-S
ul Sharh. Minh
aj Al-Us.u
l (vol.2, p.89).
39 Ibn Qayyim Al-Jawziyyah

((H
. anbal), vol.2, p.9), Ibn Taymiyah ((H
. anbal), vol.3, p.275).
40 Ibn Hazm (, vol.8, p.396).
.
41 Usu
uc Al-Mamn
uc a (p.130).
. l Al-Buy
.
34 ibid.,
35 Al-Sarakhs
84
of validity.42 Therefore, gharar is risk in the sense of lack of certainty regarding

The gharar sale is consequently: the sale of (i) that
the existence of an object.
(ii) whose measure is not known to be large
which is not known to exist or not,
or small, or (iii) that is undeliverable.
A note on definitions: The Z.ahirs restricted gharar to that which is
unknown, and some of the H

. anafs restricted it to that the existence of which is
not known but excluded the unknown from the definition. The best definition in
the view of most jurists is that gharar incorporates that whose existence is not
43
Thus, the definition of Al-Sarakhs is
known, and that that is itself unknown.
the best one: that whose consequences are hidden.

The status of gharar sales:
said: the prohibition of gharar sales is a fundamental part
Imam Al-Nawaw
issues may be included. Two
of Islamic Law, under the topic of which many
items are to be excluded from the topic of gharar sales:
1. Items that are included as part of a sale, and that may not be sold separately (e.g. the foundation of a house, or milk in the udder belonging to
an animal).
2. Items that are customarily tolerated, either due to its insignificance, or
the difficulty of identifying (e.g. the fees for using a bathroom where the
amount of water used in the bath may vary, drinking from private waters,
and the amount of cotton used in the lining of a garment).44
Jurists agreed that gharar sales are not valid: e.g. the sale of milk in an
udder, wool on the back of sheep, pearls in their shells, unborn animals in the
womb, fish in the water (sea, river, etc.) prior to catching them, birds in the
air prior to hunting them, and the sale of another persons property on the
understanding that he will buy it and then deliver it (i.e. selling what the seller
will own prior to owning it, since the seller would have sold what he does not
own at that time). This applies whether the gharar pertains to the object of
sale or to the price.

Among the sales that are deemed not valid due to gharar are the following:
the sale of the sperm and eggs of camels, the touch sale (al-mul
amasa), the
h).45
sale of discarded items (al-mun
abadha), and the pebble sale (bayc al-h.as.a
(vol.1, p.97), c Aqd Al-Bayc (p.20).

Al-Fiqh Al-c Am
wa Atharuhu f Al-c Uq
ud (p.33 onwards).
44 Al-Im
afic), vol.9, p.280 onwards), Al-Shawk
an (, vol.5,
p.148), Qaw
ac id Al-Ah.k
am by Al-c Izz ibn c Abd Al-Sal
am (vol.2, p.76).
45 The sales of camel eggs and sperm has been discussed above. The touch sale is: I sold
you this dress as soon as you touch it, or if you touch it, or whichever dress you touch,
then it is yours. The discarded item sale is: I sell you this item if (or when, or whichever
dress) I discard it for such and such. The sale of the pebble is similar to lotteries nowadays:
throw this pebble, then whichever dress it falls upon is yours, or I sold you this land to
the farthest point to which you throw the pebble. gharar incorporates all of those sales since
they were explicitly forbidden in H
due to their common usage prior to Islam. Al-S.anc
an
. adth
(2nd printing, vol.3, p.15), Marc ibn Y

. anbal), vol.2, p.11). The H
. anafs
understood those three sales by interpreting the touch as a proof of the sale being binding,
whether the buyer knows the object of sale or not. Later interpreters indicate that the touch
42 Al-Madkhal
43 Al-Gharar
85
Not valid also are the sale of the catch of a future fishing or hunting attempt
(e.g. I sell you whatever fish my net will catch in one throw for so-much),
or a dive (e.g. I sell you however many pearls I get in my next dive for somuch).46 Thus, the object of sale in all five cases is unknown either in nature
or in measure, and the prohibition of those sales is well documented in H
,
. adth
and they are among the pre-Islamic (j

ahil) sales.
Among the non-valid sales also is bayc al-muz
abana, which is the sale of dates
or grapes on a palm tree or vine in exchange for cut dates or raisins assumed (or
guessed) to be of equal volume. Also, bayc al-muh.a
qala is not valid: that is the
sale of wheat in its spikes in exchange for wheat kernels assumed to be of equal
volume. The Prophet (pbuh) forbade al-muz
abana and al-muh.a
qala.47 Those
sales are deemed not valid due to the inclusion of rib
a induced by ignorance of
the volume of the sold object. This follows from the well known requirement
that trading of commodities amenable to rib
a must be of known equal quantities.
anbals, Z.ahirs, and the majority of Maliks
Accounting for needs, the Shafics, H
.
have allowed an exception in the case of bayc al-c ar

ay
a.48 For the Shafics, this
type of sale covers the sale of dates on a palm tree of estimated volume, in
exchange for a measured quantity of dates on the ground. It also includes the
sale of grapes of an estimated quantity on the vine in exchange for a measured
alik jurists added a
quantity of raisins of 653 kilograms or less.49 The non-M
condition that the exchange is completed in the sale session. This decision is
based on the Prophets (pbuh) prohibition of selling fresh dates in exchange for
ay
a.50 The H
dried dates, but his allowance of a special case for al-c ar
. anafs, on
c
c
the other hand, have allowed bay al- ar
ay
a only if executed out of necessity.
c
c
Al-Shawkan reported that Abu-H
aya, and
. anfa forbade all forms of bay al- ar
restricted it to the case of an intended gift: (Where the owner of an orchard gives
in a touch sale refers to inspection by touch (rather than sight) in cases where that can be
useful, as in purchasing clothes. Al-Mirghn
an defined it as the case wherein two men bargain
or the seller discards it to him, or the buyer puts a
over a good, then if the buyer touches it,
pebble on the item, then the sale becomes binding. Thus, the first is a touch sale, the second
is sale of a discarded item, and the third is a pebble sale (Ibn Al-Hum
am ((H
. anaf), vol.5,
p.196)).
46 The hunter/fisher is anyone who uses a tool to catch animals or fish on land or in the
sea (al-q
anis.). The diver (al-gha
is.) is one who dives into the sea to extract pearls or other
materials. The prohibition of selling the catch from one future dive was narrated in a H
. adth
on the authority of Abu-Sacd Al-Khudriy (Al-Shawk

an (, vol.5, p.148)).
c
ar amd Muslim based on the H
of J
abir ibn Abd All
ah and
. adth
Abu-Sacd Al-Khudriy, also narrated by Al-Bukh

ari based on the H
of Ibn c Abb
as and
. adth
Anas. Muslim also narrated it based on the H

of Anas. See Al-H
. adth
.
edition, (H
), vol.4, p.12 onwards), Al-Shawk
an (, vol.5, p.198 onwards).
. adth
48 Al-c ar
ay
a is the plural of the Arabic word c urya, which refers to a palm tree the dates of
which are given to another for a fixed period of time.
49 The Hanbal
s and Z.
ahirs have restricted bayc al-c ar
ay
a to dates, excluding grapes,
.
whereas M
alik allowed it for all agricultural products that are dried and stored, such as
walnuts and figs.
ar and Muslim based on the H
of Sahl ibn Ab H
ma, and
. adth
. ath
reported by Al-Shaykh
an based on the H
of Abu Hurayra that the Messenger of All
ah
. adth
c
(pbuh) has allowed bay al- ar
aya in quantities less than five awsaq (equivalent to approx 653
kg), meaning the sale of fresh dates in exchange for aged dried dates. See Al-H
afiz. Al-Zaylac
.
(1st edition, (H
an (, vol.5, p.200).
. adth
86
as a gift to another man the produce of a known group of date palms, then felt
uncomfortable at the thought of this individual frequenting his orchard. Then,
he may buy back from him the fresh dates on the palm in exchange for dried
dates that he pays currently in an amount estimated to be equal to the fresh
dates on the palm.)51
We notice that those sales that are deemed non-valid due to gharar subsume
of the Hanaf
some that are invalid, and some that are defective (in the sense
.
jurists). Those that are only defective are: the sale of the catch of a hunter or
diver, al-muz
abana, al-muh.a
aqala, the touch sale, al-mun
abadha, the pebble sale,
and the sale of an identified item out of many, due to the resulting ignorance.
52
The other non-valid sales are also invalid. Thus, the sale of the sperm of he
camels and eggs of she camels, and the unborn animal in its mothers womb, are
invalid due to the prohibition by the Prophet (pbuh), and due to its inclusion
of gharar as shown above in the discussion of selling non-existent objects.
The proof of the non-validity of gharar sales in general is that the Prophet
sales of gharar. Ibn Masc u
(pbuh) prohibited the pebble sale and
d narrated
that the Prophet (pbuh) said: Do not buy fish in the water, for it is gharar.53
of sale,
This prohibition is further based on: (i) the undeliverability of the object
(ii) the existence of invalidating ignorance of the object of sale and its quantity,
and (iii) the lack of ownership by the seller at the time of the contract.
Minor gharar: gharar and ignorance may be classified into three groups:54
and unanimously
(i) substantial
prohibited (e.g. birds in the sky), (ii) minor and
unanimously allowed (e.g. the foundation of a house, or the cotton lining of an
overcoat), and (iii) intermediate with differing opinions. The H
. anafs allowed
sales that include minor gharar such as the sale of nuts, beans, rice, sesame,
wheat, watermelon, and pomegranate

in their shells, conditional on giving the
buyer the option of inspection (as discussed below in the section dealing with
this option).
The Maliks and H
. anbals permitted all sales containing minor gharar, and
those that are deemed necessities, as discussed above.

The Shafics, on the other hand, allowed the sale of such items in their inner
peals. They have two opposite opinions on their sales in their outer shells. AlNawaw, Al-Baghw, and Al-Shr
az ruled that sales in the outer shells is not
aramayn and
valid. Imam Al-H
Al-Ghazal ruled that it is valid, based on the
.
story that Al-Shafic (mAbph) ordered someone to buy fresh green beans for
him, as well as the agreement on such practices in all countries.55

51 Al-Shawk
an
(, vol.5, p.201), Al-T

aw ((H
. ah.
. anaf), p.78).
writers confused the issues by including the sale of birds in the sky and fish in the
water prior to catching among defective sales in the H
. anaf schools. The correct statement
is that those sales are invalid, since they constitute sales of what is not owned at the time
c
c
of the sale, c.f. Ibn Abid

n ((H
an Al-Mayd
an
. anaf), vol.4, p.111 onwards), Abd Al-Gh
c Uq
((H
anaf
),
vol.2,
p.25),
Al-Gh
arar
wa
Ath
aruhu
f
Alu
d
(p.347).
.
53 Sources for those two H

s were provided above.
. adth
54 Al-Qar
af ((M
alik), vol.3, p.265).
55 See the jurists study of gharar: Al-Sarakhs
(1st edition (H
wards), Al-Zaylac ((H

am ((H
. anaf Jurisprudence), vol.4, p.45 onwards), Ibn Al-Hum
. anaf),
c
n
vol.5, pp.106,191 onwards), Al-K
as
an ((H
. anaf), vol.5, p.147 onwards, 294), Ibn Abid
52 Some
87
I favor the validity of all such sales as ruled by the Maliks and the H
. anbals
due to the commonality of such sales. If a defect is found, the sale may be
voided based on the option of detecting a defect.
Legal status of insurance
Insurance is a new industry that first appeared in its true form in the fourteenth
century C.E. in Italy, mainly in the form of marine insurance. There are two
main types of insurance: (1) cooperative (mutual) insurance, and (2) insurance
in exchange for fixed payments.56
Cooperative (mutual) insurance: takes place when a group of individuals agree
each to pay a given amount to compensate for losses that may occur for
any of them. This kind of insurance is rare in everyday life.
Insurance in exchange for fixed installments: is where the insured is required to
pay fixed installments to the insurer. The insurer is typically an insurance
company comprised of invested partners. The insurer is thus required
to pay a defined financial compensation to the insured in the event of
occurrence of a particular type of loss. The compensation may be paid to
a specified person, or to the insured individual or his heirs. It is thus an
commutative contract binding on both parties. This is the prevalent type
of insurance today.
The difference between the two types of insurance is that the insurer in the
former case is not an institution separated from the insured. Moreover, the
members of the insurer organization are not seeking to make profits, but only
to reduce the losses that affect some of them. On the other hand, the insurance
in exchange for fixed installments is implemented by an insurer that is a profitseeking corporation. Such profits are made at the expense of the insured. Even
though the insured may not collect any monies from the insurance companies,
it is still a commutative contract. Indeed, it is in the nature of contingency
contracts that some parties may not receive compensations in certain cases.
Status of cooperative insurance
There is no doubt that cooperative insurance is valid in Islam, since it is classified as a donation contract. It qualifies as cooperation to do good, since each
participant willingly pays his share to reduce the losses that may befall other
((H
aj Al-Andalus (1st edition (M
. anaf), vol.4, pp.111-114), Al-B
Rushd Al-H
alik), vol.2, pp.151,156,158), Al-Dardr ((M
alik)A, vol.3, pp.55-60),
. afd ((M
Ibn Juzayy ((M

alik), p.256 onwards), Al-Qar
af ((M
alik), vol.1, p.150 onwards), Al-Khat.b
Al-Shirbn ((Sh
afic), vol.2, pp.31,90,93), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.263 on
c
wards), Al-Im
afi ), vol.9, pp.281,374,335), Ibn Qud
amah (,
vol.4, pp.56,92,201), Al-Suy

ut. (b, vol.2, p.125 onwards), Al-Shawk
an (, vol.5, pp.147,200
c
onwards), Al-S.an
56 See Al-Tam
n f Al-Q
an
un Al-Mis.r wa Al-Muq
aran by Dr. c Abd Al-Munc im Al-Badr
aw
(p.36 onwards).
88
members. This applies to all domains of insurance, including life, physical injury, fire, theft, and accident insurance.57
The fatw
a of Ibn c Abid
n:
n ruled that marine insurance is prohibited.58 This type of insurance

Ibn c Abid
guarantees potentially sold goods for traders who import goods by sea. Ibn
c
Abidn ruled that the trader may not collect from the insurer any compensation
for the perished goods, for three reasons:
1. This contract makes binding that which is not legally binding, due to the
absence of any of the four justifications of guarantee, which are:
(a) Transgression via killing, destruction, burning, etc.
(b) Causing damage, for example by digging a well in a public road
without permission.
(c) Illegal possession, e.g. by usurping, stealing, withholding a sold item
from the buyer without legal cause.
(d) Surety.
The insurer does not transgress, cause damage, is not in possession of
what the insured owns, and there is no identified collateral.
2. Insurance is not equivalent to a guarantee for a depositor against the
perishing of his deposit in exchange for a wage. This follows from the
property not being in the possession of the insurer, but rather in the
possession of the owner of the ship. If the owner of the ship is himself the
insurer, then he is a common agent, and not a recipient of deposits. In
both cases, the depository and the common agent are not responsible for
compensation following an unavoidable accident, such as death, sinking,
or fire.
3. Insurance is not equivalent to a guarantee against deception, since the
deceiving party must know of the danger, while the deceived party must
be ignorant of it. In this regard, the insurance company (insurer) is not
intentionally deceiving the merchants (insured). The possibility of the ship
sinking, while known to both parties, has a future realization is unknown
to both.
However, in the case where the danger is well known by both parties, e.g.
the danger of hijacking by pirates, then a guarantee is valid. However, this
is no longer an insurance contract. Thus, if one person says to another:
take this route, then if someone attacks you, I guarantee your money, the
guarantee is valid.
Al-c Uq
ud by Dr. Al-S.iddq Muh.ammad Al-Amn Al
D
. arr (p.521 onwards). It is also valid for the purposes of obligatory insurance such as those
imposed on vehicle owners. Social insurance of this form are valid as well against disability,
old age, sickness, and retirement.
58 Ibn c Abid
n ((H
89
n also considered the case of a defective insurance contract in the

Ibn c Abid
land of war between the insurer and a non-Muslim partner with the insured, or
between an insured trader present in a land of war and the insurer. In this case,
if the insured takes a compensation for perished goods, and sends it in the former
case to the Muslim trader, or if the insured trader collects the compensation in
the Islamic country in the latter case, then the most common opinion is that it
is valid. This follows since the defective contract was concluded between nonMuslims in a land of war, and the trader has received the compensation with
their consent. Then there is no reason not to collect. However, if the contract
was concluded in Muslim lands, and the collection was in a land of war, then
collecting the compensation is not allowed, even if the non-Muslim agrees. This
follows since such compensation is based on a defective contract originating in
Muslim lands.
It is not valid to consider insurance a form of silent partnership (mud.a
raba),
with one party working and the other financing, for two reasons:
1. The installments and payments paid by the insured become a property of
the insurer (insurance company). Thus the insurance company may use
such monies anyway it wishes, and the insured loses those monies if no
accident befalls him.
2. A condition for the validity of a mud.a
raba is that the profits be shared
according to fixed proportions between the financier and the entrepreneur
(e.g. one quarter or one third to one party, and the rest to the other). In
insurance, however, the insured is often given a fixed percentage interest
payment (e.g. 3% or 4%), thus rendering this mud.a
raba invalid. Even if
this reason does not apply in a given contract, the first reason remains.
Moreover, if the insured dies, the money may not go to his heirs, but
rather to the one designated in the insurance contract. This is contrary
to the case of death of a financier in a silent partnership (mud.a
raba).
It is not valid to consider insurance a guarantee or surety, due to the absence
of the four legitimate reasons for guarantee enumerated above. Also, many
insurance contracts do not have an item that may be considered the object of
surety (makf
ul), and even when such an item exists (e.g. in the case of auto
accidents), it is unknown.
In fact, the insurance contract is among gharar contracts, i.e. its outcomes
are probabilistic depending on the existenceof the object of contract or nonexistence thereof. The Messenger of Allah (pbuh) forbade gharar sales, and an
Thus, gharar afanalogy can be made to cover financial commutative contracts.
fects such contracts in the same manner it affects sales. Consequently, legislators
have included insurance contracts under the heading gharar contracts, since
and may not occur.
insurance by necessity deals with future events that may
Thus, gharar is a necessary component of insurance. Moreover, insurance con
tracts include
a substantial (rather than moderate or low) level of gharar since
danger is one of its cornerstones, and payment depends on a probabilistic
90
event that is exogenous to the will of the parties to the contract.59

The type of necessity that may validate a contract that contains a substantial
degree of gharar (defined as: a case where if the individual does not engage in
the prohibited
activity, he will endure severe hardship, but does not perish)60
must be: (i) general, i.e. affecting all people; or (ii) special to a particular group
of people (e.g. the inhabitants of a village, or members of a guild or union); and
(iii) the necessity must be certain, by exhausting all legal venues to satisfy the
need before resorting to the ones including substantial gharar.
Even if we accept the claim that insurance is a general

necessity today, it
is not a certain necessity since the same effect can be achieved by means of
cooperative insurance that is based on voluntary contributions. This would
eliminate the profit-seeking intermediary that exploits the needs of the people.
Thus, the insurance contract is a non-necessary financial exchange contract
containing substantial gharar, which is prohibited in Islam.
religiously forbidden from collecting a compensation
Thus, the insured are
from the money of an insurance company. This follows since it is money that
is not binding on the paying agency, and since the condition of guaranty by a
depositary is invalid.
Insurance and re-insurance
Definition: Egyptian law (747) and Syrian law (713), as well as others, have
defined insurance as: A contract that obligates the insurer to pay the insured
or the beneficiary designated in the contract an amount of money, a regularly
scheduled set of payments, or another monetary compensation, in case of an
accident or the occurrence of an event stipulated in the contract. The insured
on his part makes regularly scheduled payments, or some other payment method,
to the insurer.
This definition clearly refers to the commercial insurance contract between
two parties: the insured, and an insurance company. The insured deals with the
insurance company by paying regular installments in return for the guarantee to
pay a compensation in case the event stipulated in the contract occurs. It is thus
one of the probabilistic contracts (i.e. one of the compensations is contingent
on events that may and may not occur), as well as a financial commutative
contract. Note, however, that it is not necessary in a probabilistic contract that
a financial compensation will be paid sometimes, and such a compensation,
if paid, would not be considered a voluntary contribution on the part of the
insurer.
The definition also makes it clear that insurance is among the gharar con
tracts, since the amounts being paid by the two parties are not known
at the
contract session. This is the case since an accident may occur immediately after
the insured makes the first payment, and the latter may make all the payments
without any accidents occurring.
Al-c Uq
ud by Dr. Al-S.iddq Muh.ammad Al-Amn Al-D
. arr
(pp.656,661).
60 Al-Suy
ut. ((Sh
afic), p.77, fourth rule).
91
It is also a contract by mutual consent (c aqd tar

ad.), and binding on both
parties. It is moreover, a timed contract (c aqd muddah), since time is a crucial
factor for the implementation of the commitments of both sides. Finally, it is
among the compliance contracts (c uq
ud al-idhc a
n), since the insured is subject
to conditions and restrictions that are pre-specified by the insurance company.

Types of insurance
In form, there are two types of insurance:
1. Cooperative insurance: This is the arrangement whereby a group of
individuals each pay a fixed amount of money, then compensation for
losses of members of the group are paid out of the total sum.
2. Commercial insurance, or insurance in exchange for fixed installments: This is the default form addressed when we use the term
insurance. In this contract, the insured is bound to pay fixed installments to the insurance company that is a joint-stock company. In return,
the insurance company is responsible to compensate the insured for losses
caused by events stipulated in the contract. If the stipulated events do
not occur, the insured loses his right to the payments he made, and they
become property of the insurer.
This latter type of insurance, in turn, may be divided into:
(a) Insurance against losses: This type compensates the insured for
losses incurred due to events that befall him. This includes:
Liability insurance: This would guarantee the insured for his
liability towards others who incurred a loss (e.g. traffic accidents,
and work-related injuries).
Object insurance: This would compensate the insured for
losses in property (e.g. due to theft, fire, flood, pests, etc.).
(b) Insurance of individuals: that covers:
Life insurance: In this case the insurer is bound to pay an
amount of money to the person of the insured or to his heirs in
case of death, old age, disease, or disfigurement, depending on
the extent of the injury.
Insurance against bodily injuries: In this case, the insurer
is bound to pay a specified amount of money to the insured in
case of injury during the period of the insurance, or to another
beneficiary in case of death of the insured.
Insurance can be classified in terms of its generality and specificity into:
1. Individual insurance: This would insure the insured against a specific
danger.
92

2. Social or common insurance: This would insure a group of individuals
with a common source of income against specific dangers, such as illness,
old age, unemployment, or disability. This is typically a compulsory type
of insurance that includes social, health, and retirement insurance.
Islamic rulings on insurance

There is no doubt as shown above that cooperative insurance is valid from the
viewpoint of contemporary Muslim jurists. This follows since it is a voluntary
contribution contract, which encourages the type of cooperation that Islamic
law requires Muslims to exhibit. Each participant would voluntarily pay his
contribution to ameliorate the effects of losses that other participants incur.
This would apply to all types of insurance: life, physical injury, or objects (due
to fire, theft, or the death of livestock). It also applies to liability insurance
against traffic accidents and work-related injury. Moreover, the validity of this
contract follows from the fact that it is not motivated by profit-making.
On this basis, cooperative insurance companies in Sudan and elsewhere were
established. Those companies have been successful in attaining their objectives
despite their characterization by lawyers as primitive.
Similarly, obligatory insurance (e.g. auto insurance for injuries inflicted on
others) that is legally enforced by the government is valid. This type of insurance
is tantamount to tax payments to the governments.
Also valid are forms of government-sponsoredsocial insurance against old
age, disability, sickness, unemployment, and reaching the age of retirement.
This follows since the government is responsible to take care of its constituents
under such circumstances, and since such contracts are devoid of rib
a, gharar,
and gambling.
The Second Conference (Cairo, 1965), and the Seventh Conference (1972)
of Muslim Scholars, have approved social insurance and cooperative insurance.
The Islamic Jurisprudence Council approved this decision in Mecca in 1978.
As for commercial insurance (in return for fixed installments): it is not
legally valid. This is the opinion of the majority of contemporary jurists. This
is also the opinion endorsed in The First International Conference on Islamic
Economics (Makkah, 1976). The reasons such contracts are not valid can be
limited to two: rib
a and gharar.
As for rib
a: No one can deny the existence of rib
a in this contract since
its origin is certainly suspect. This is the case since insurance companies
invest all of their monies in rib
a, and they may even give the insured (in
case of life insurance) part of the interest payments accrued to them. Rib
a
is definitely forbidden (h.ar
am) in Islam.
Those who rule that insurance contracts are valid explicitly reject the
investment of insurance companies in rib
a related instruments. They also
do not approve of insured individuals accepting any part of the interest
payments paid by insurance companies.
93
Rib
a is clearly effected by the two parties to the contract since there is
no equality between the installments paid by the insured and the compensation paid by the insurance company. What the company actually
pays may be more, less, or equal to that which is paid by the insured, and
equality is very unlikely.
Also, the payments are deferred. Thus, if the compensation was greater
than the installments paid by the insured, it would contain surplus rib
a
(rib
a al-fad.l) as well as credit rib
a (rib
a al-nasa) and if it is equal then
it contains rib
a al-nasa alone.
Someone may argue that the insurance contract is based on the foundations of cooperation to ameliorate losses and injuries, and thus contains
neither rib
a nor any resemblance thereof. To this one would answer that
the insured sometimes may be seeking rib
a. Even if he is not seeking it,
rib
a is still present in the compensation by the insurance company since
the profits of the latter are accumulated through interest rates and other
rib
a-related transactions.
As for gharar: It is clear that the insurance contract is among the gharar
since it is a probabilistic contract where the object of contract
contracts
may and may not exist. There is an authentic H
in the Prophetic
. adth
tradition, narrated by the most trusted narrators on the authority of a

number of the Prophets (pbuh) companions: The Messenger of Allah
(pbuh) has forbidden gharar sales.61 This prohibition extends by analogy
(qiy
as) from sales to all contracts of financial compensation, which are thus
affected by gharar in the same way.
The insurance contract with a company is one of financial compensation

not of voluntary contributions, and thus is affected by gharar. As discussed
of insurance comabove, gharar is a substantial and necessary component
panies since payments by both sides are not known at the time of the
contract.
It may be said that insurance companies rely on rigorous calculations
that eliminate all possibilities for probabilistic features, all gharar, and all
chances for injustice, under normal circumstances. However, this does not
make insurance permissible, since the removal of gharar on the part of the
arar from the contract.
insurance company alone does not eliminate all gh
It must also be eliminated for the insured before this invalidating reason
is removed. Islamic jurisprudence does not look at the entire portfolio
of contracts conducted by insurance companies, but rather looks at the
status of each contract (in terms of validity or defectiveness) on its own
merits.
It may be said that there is no gharar or uncertainty on the part of the
insured, since the object of sale inan insurance contract is security regardless of dependency on danger, and this object of sale is received by the
61 Narrated by Muslim, Abu-D
aw
a, and Ibn M
ajah on the au
thority of Abu Hurayra (mAbpwh).
94

insured after paying the first installment. This argument is invalid, since
security is the motivation for conducting the contract, and not the object
of contract. The object of the contract is that which is paid by the two
parties (in this case the insured and the insurer), or one of them. If we
say: security is the object of the sale, then the insurance contract would
also be invalid, since the object of sale must be possible and not subject to
becoming impossible. Of course, it is impossible to assume that providing
security can be binding and implemented with certainty.
Also, the object of a commutative contract must be existing at the time
of the contract, as evidenced by the H
s prohibiting the sale of fruits
. adth
before their quality is evident. The object must also be in a state that
allows the parties to utilize it in the manner stipulated in the contract.
If the object of insurance did not satisfy those conditions, or if it is nonexistent, even if possible to exist in the future, the sale is legally not valid.
The object of sale (which is what both parties pay, or what one party
pays, e.g. the insurer in case an event occurs) of insurance is not certain
to exist.
The type of necessity that would validate a contract that contains a substantial amount of gharar has been discussed above. To recap, the contract
must be necessary to avoid hardship for some or all of the people, and no
legitimate alternative must be available to reach the same end. In this
case, the existence of a legal form of insurance (cooperative insurance)
that can give the same result makes this need for commercial insurance
surmountable (ghayr mutac ayyin), and thus invalidates the contract.
Even if we accept the notion that commercial insurance is an insurmountc

able (muta ayyin) necessity, it would only be valid to the extent that
removes that need. This would be following the juristic rule: Necessity
is measured by its degree.
Another proof of the defectiveness of insurance is the condition that makes
gharar a corrupting component of the contract. That condition is that the
arar be a fundamental part of the contract, which is satisfied in the case
gh
of commercial insurance.
Since insurance contains an element of gharar, it also contains an element
of ignorance and uncertainty (jah

ala). Ignorance
of the two compensations
is evident in insurance, since the amount to be paid by the insured and the
insurer may increase or decrease. Moreover, the very act of payment by one of
the parties (compensation by the insurer) is predicated on an event that may
and may not occur. This renders the ignorance substantial and invalidating to
the contract.
Knowledge of the amount of money in each scheduled payment/installment
does not remove the gharar and ignorance, since it is the number of such installments to be paid that is uncertain. The consent of the insurer to pay the
compensation if the event (death or otherwise) takes place is also irrelevant,
since it is a consent that deviates from the rules of law and its texts that pro-
95
hibit gharar. In this respect, it has the same legal status as consent in gambling
or adultery,
which does not validate either one.
Since the degree of uncertainty is substantial, it invalidates the contract,
even if it does not lead to dispute. It is only minor uncertainty that may not
lead to conflict that is excusable. However, the uncertainty in insurance is
more substantial than the degree described by jurists as leading to conflict and
thus corrupting sale contracts. Such examples included the sale of turnips and
carrots in the ground, and those are existent in the ground, but the ignorance
still results from not seeing them and knowing their condition. In the case
of insurance, the very compensation for losses may and may not exist. This
weakens the foundations upon which contracts in general have been validated.
All those objections, and others, do not make it permissible for a merchant or
other insured parties to collect compensations for losses from insurance money.
This follows since this is money that is not binding on the one who accepted that
n. This also follows from the ruling by

responsibility, as stated by Ibn c Abid
H
anaf
jurists
that
a
condition
of
guarantee
imposed on the trustee (al-amn)
.
is invalid.
In summary: Commercial insurance (with fixed periodical payments) is
prohibited (h.ar
am) for five reasons:62
1. Rib
a: Since the insurance compensation includes an increase over the installments paid by the insured without any compensation for this increase,
it becomes rib
a. Also, insurance companies invest their monies in rib
arelated activities, and they charge interest on late installment payments.
2. Gharar: The compensation for insurance is predicated on an uncertain
event, which constitutes gharar. Insurance companies may thus pay large
sums of money with no compensation

due to this gharar.
3. Fraud (ghubn): The insurance contract is fraudulent due to the lack of
clarity regarding
the object of the contract. Knowing the object of the
contract is a condition for its validity.
4. Gambling (qim
ar): There is gambling in insurance since the person and
his property are exposed to unknown events, which is the definition of
gambling. Also, the insured pays small amounts of money in anticipation
of collecting large sums, which is a form of gambling.
5. Ignorance and uncertainty (al-jah
ala): What the insured person pays is
unknown to both parties, as evidenced in the case of life insurance. Both
parties thus act according to the contract not knowing what profits or
losses may be accrued to them.
Re-insurance and compound insurance
The principle of cooperation in insurance is attained through the division of
losses (to a specific person) over the largest possible number of individuals.
62 Al-Muc a
mal
at
Al-M
aliyya Al-Muc a
.sira by Dr. c Al Al-S
al
us (p. 380 onwards).
96
Thus, as the number of insured individuals increases, the division of losses

grows. This subdivision (diversification) may be attained in may ways, including so called re-insurance or compound insurance. This is the contract where an
insurance company insures its own liabilities with larger international insurance
companies.
Re-insurance has the same legal status as the initial insurance. Thus, a
cooperative insurance company may obtain insurance at other cooperative insurance companies. As for commercial re-insurance, it is subject to the same
rulings applying to standard commercial insurance, where the only difference is
that individuals are replaced with insurance companies.
The restrictions on the types of gharar that render a contract defective (that
is: (i) that it be a commutative contract,

(ii) that the gharar is substantial,
(iii) that it is fundamental to the contract, and (iv) thatit is not dictated by
necessity) leads to the prohibition of re-insurance contracts. Exceptions may be
allowed if a necessity that cannot be satisfied by other means leads to this type
of gharar, as ruled by the Juridical Monitoring Agency for the Islamic Faisal
in Sudan (fatw
Bank
a numbers 16,17). The determining factor here is whether
the insurance companies will face adversity if they do not deal with re-insurance
companies.
This Agency (and I agree with this fatw
a) ruled that re-insurance is valid
since it satisfies a need that cannot be satisfied otherwise, as determined by the
banks experts. This ruling is conditional on the following stipulations:
1. That payments to re-insurance companies be kept to the minimum possible
amount to satisfy the need, following the rule: necessities are measured
by their degree. The evaluation of the amount needed to satisfy this need
is left to the banks experts to determine.
2. That the cooperative insurance company does not collect a profit commission, or any other commission, from the re-insurance companies.
3. That the cooperative insurance company does not keep any reserves with
the re-insurance company for natural (heavenly) disasters, since keeping
such reserves would lead to interest payments to the re-insurance companies.
4. That the cooperative insurance company should not be involved in determining the investments of the reinsurance companies. It should not
demand any share in the profits they gain from such investments, nor ask
about any losses they incur.
5. That the contract with the re-insurance company be for the shortest possible period.
6. That the cooperative insurance company works towards the establishment
of a cooperative re-insurance company that would allow it to avoid dealing
with commercial re-insurance companies.
97
This is my religious testimony towards Allah. I never cease to find strange

and reprehensible all the arguments that justify the legality of commercial insurance. I do not find any need to answer their arguments, since they have been
answered in a number of journals, books, research papers, and conferences. Such
answers were offered beginning the Week of Islamic Jurisprudence in Damascus
(1961), and through the decision of the Islamic Jurisprudence Council in its
an 1398 H.) at the headquarters of The Islamic
first meeting in Mecca (Shac b
League. Those who wish to assure themselves of the prohibition of insurance,

and the nullification of the arguments of those who allow it, may refer to the
research papers of those two meetings, and may Allah lead us all to the correct
path.
Social insurance: Social insurances paid by governments or retirement
and insurance funds to public servants are all valid in my opinion. This follows
since the government is responsible to care for her citizens in cases of disability,
old age, sickness, and other events that hinder the ability to work and earn an
income. One should not thus doubt the validity of the taxes collected by the
government from the wages of public servants, those collected by employers on
behalf of social insurance agencies, or those voluntarily paid by the workers as
a percentage at the end of the year towards a retirement account. All such
payments must not be considered rib
a-related, even if the worker collects more
than he paid. This follows since the payments in reality are considered a gift or a
voluntary contribution and a general form of cooperation among the participants
in such state institutions.
4.2.5
The sale of impure objects
The H
. anafs ruled that the sale of wine, pork, dead animals, and blood are
not concluded, since such items are not goods eligible to become property. They
see no harm in the sale of manure since it is useful in increasing the fertility of
land, thus becoming a good. It is permissible to sell mixed items such as oil
that is contaminated by impure substances.
They allow the sale of carnivorous animals such as dogs, leopards, lions,
tigers, wolves, cats, etc. This follows since dogs and similar animals are goods
that are legally useful in protection and hunting. Also, the sale of insects, snakes,
and scorpions is allowed if they can be useful.
Also, it is valid to trade in contaminated objects and use them for purposes
other than food (e.g. dying, painting, lighting a place other than a mosque).
An exception is the fat of a dead animal, which is not valid to use.
The general rule in their school is this: any item that can be used legally
to derive a benefit is valid to sell.63 This follows since such items were created
for the benefit of mankind, the evidence being the verse: It is He Who hath
created for you all things that are on earth (c.f. Quran [2:29]).
The M
aliks ruled that the sale of wine, pig, and dead animals is not
concluded due to the H
narrated on the authority of J
abir: The Messenger
. adth
63 Al-K
as
an ((H
am ((H
. anaf), vol.5, p.142 onwards), Ibn Al-Hum
. anaf), vol.5, p.188, vol.8,
p.122), Al-Fiqh c al
a Al-Madha
hib Al-Arbac a (vol.2, p.231 onwards).
98
of Allah (pbuh) said: Allah and his Messenger have forbidden the sale of wine,
dead animals, pigs, and idols. It was said: O Messenger of Allah, how about
the fats of dead animals, which are used for painting ships, polishing leathers,
and lamp oil? He said: No, this is forbidden. Then, the Messenger of Allah
said: May Allah punish the Jews, when Allah Almighty forbade the fats of
dead animals for them, they melted them and sold them, thus consuming their
price unlawfully.64 He also said with regards to wine: The One who forbade
its drinking forbade its sale.65
The sale of a dog is not concluded in their school despite its purity, whether it
is a hunting or guard dog, since its sale has been forbidden. They cite the H
:
. adth
The Prophet (pbuh) forbade the price of a dog, the dowry of a prostitute, and
un said: I sell it and
the gratuity paid to a soothsayer.66 However, Sah.n
perform pilgrimage with its price.
The sale of items that are tainted with impure objects is not concluded if
the contaminated item cannot be purified. Examples are oil, honey and ghee in
which impure objects fell. However, a tainted object that may be purified, e.g.
a dress, is valid to sell.
Also not concluded is the sale of items that are intrinsically impure, e.g. the
manure of animals whose flesh is not permissible to eat, and the feces, bones,
and skin of a dead animal. However, the manure of cows, sheep, camels, and
similar animals, is permissible since it has uses in fertilizing land.67
The Sh
afics and H
. anbals ruled that it is not valid to sell pigs, dead
animals, blood, wine, and similar impure objects. Their proof is the H
. adth
of the Messenger of Allah (pbuh): Allah and His Messenger have68 forbidden
the sale of wine, dead animals, pigs, and idols. Another proof is the need to
avoid impure objects and not get near them, and sale is a means of getting near
them.69
It is not valid to sell a dog even if it is trained due to the above mentioned
H
: The Prophet (pbuh) forbade the price of a dog ....
. adth
It is not valid to sell items that do not have a valid use, such as insects,
carnivorous animals that cannot be used in hunting such as lions and wolves,
and birds that cannot be eaten and cannot help in hunting (e.g. vultures and
64 Narrated by the authors of the six books, as well as Ahmad, and M
alik in Al-Muwat..ta on
.
the authority of J
abir ibn c abd All
ah, c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.375), Al-S.anc
an

65 Narrated by Muslim and M
alik in Al-Muwat..ta, and Al-Nas
a on the authority of c Abd
Al-Rah.m
an ibn Wac la may All
ah bless his soul that Ibn c Abb
as narrated this H
to him,
. adth
c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.377).
66 Narrated by the Authors of the Six Books, and Ahmad on the authority of Abu-Masc u
d
.
Al-Ans.
ar c Uqba ibn c Amr, c.f. Al-Shawk
an (, vol.5, p.143), Al-H

.
edition, (H
), vol.4, p.52).
. adth
67 See Ha
sh
iyat
Al-Dus
u
q
(vol.3,
p.10
onwards),
Al-H
b c al
a Matni Khall (vol.4, p.258
.
. at..ta
onwards), Ibn Rushd Al-H

af
d
((M
a
lik
),
vol.2,
p.125),
Ibn
Juzayy ((M
alik), p.246).
.
68 Al-Bukh
ar and Muslim narrated it thus with a singular object, other narrations state
All
ah has forbidden, and others state All
ah and His Messenger have forbidden.
69 There is a method in the Sh
afic school for exchanging impure objects that can be used.
This method is the abandonment (literally: lifting of hands rafc al-yadd), thus the seller says:
I have lifted my hand off this object for so much.
99
crows). All of those items do not have a use and thus do not have a value. Consequently, taking a financial compensation for such items would be consuming
wealth illegally, and paying such a compensation would be stupidity.
It is not valid to sell tainted objects that cannot be purified, such as vinegar
and fats. However, it is valid to sell tainted objects that can be purified such as
dresses.
It is not valid to sell refuse and similar impure objects.70 However, the
H
. anbals allowed the sales of pure refuse such as droppings of pigeons and animals whose meat is permissible to eat.
In summary: The H
. anaf and Z.ahir jurists render valid the sale of all
impure objects that have a use, except the ones where an explicit prohibition
exists. Their proof is the general rule that the permissibility of sale is a function
of possibility of using the objects. As for the Malik and Shafic jurists, and the
most common opinion in the H

. anbal school, they do not allow the sale of impure
objects. Their ruling is based on the general rule that the validity of sale is a
function of purity.
4.2.6
Downpayment sale
The Arabic word for downpayment may be read in six different ways: the best
linguistically are al-c arab
un and al-c urb
un. It is also read as al-c urub
an and
c
al- urb
an. It is an Arabized term that lexically means advance payment.
The downpayment sale (bayc al-c urb
un) is where a person buys an item, then
pays a portion of the price to the seller, with the understanding that if the sale
is executed, the downpayment applies to the price, and if it is not executed it
is considered a gift from the buyer to the seller.71 In this sale, the buyer has
an option: if he executes the sale, it becomes a part of the price, and if he does
not he loses the downpayment. The period of this option is unspecified. This
sale is binding on the seller.
72
Some of the H
. anbals have ruled that the waiting period must be predetermined, otherwise, how do we decide how long the seller must wait?
Jurists differed in opinion regarding this type of sale. The majority have
ruled that it is a forbidden sale, defective for the H
. anafs, invalid for the rest.
Their proof is based on the Prophet (pbuh) forbidding the downpayment sale
an).73 It is also forbidden due to gharar, risk-taking, and taking of
(bayc al-c urb
money without proper compensation. It also contains

two defective conditions:
70 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.261), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2,
p.11), Ibn Qud

amah (, vol.4, pp.251,255 onwards), Marc ibn Y
. anbal),
vol.2, p.6 onwards), Us.u
l Al-Buy
uc Al-Mamn
uc a (p.41).
71 Note that this sale, even though the Hanaf
s consider it a defective sale (since the cor.
ruption is relative to the price), is mentioned here among the invalid sales. This is done since
it is most likely that the sale will remain defective, and thus becomes invalid. Also, this
classification follows from this sales containing gharar.
72 Marc
ibn Y
. anbal), vol.2, p.26).
73 This is a Had
munqat.ic (disconnected narration H
) narrated by Ah.mad, Al. th
. adth
Nas
a, Abu-D
aw
ud, and its origin is in M
aliks Al-Muwat..ta. Its narration includes an
unnamed narrator who is named in one of the narrations. Thus, the H
is deemed a weak
. adth
one. It contains a number of issues that can be debated. It is narrated on the authority of
100
one is the condition of gift, and the second is the condition that the buyer may
return the merchandise to the seller if he wishes to do so. Thus, the buyer
imposed the option without compensating the seller for it, rendering it invalid
in analogy to the case where a third party would have stipulated the option.
The analogy can be made to a similar condition that states: I have the option
to return the good whenever I wish, with an additional coin, which would make
the sale invalid.74
Ah.mad ibn H
. anbal ruled that there is no harm in this sale, and the proof
is the H
narrated by c Abd Al-Razzaq in his Mus.annaf on the authority of
. adth
Zayd ibn Aslam that The Messenger of Allah was asked about the downpayc
ment (al- urb
an), and he permitted it.75 Another proof is the narration in the
same reference on the authority of Nafic ibn c abd Al-H
: That he bought
. arith
for c Umar the jailhouse building from S.afwan ibn Umayya for four thousand
Dirhams, on the condition that if c Umar approves it, then the sale is executed,
otherwise, S.afwan may keep four hundred Dirhams. Ah.mad deemed the narrated H
on downpayment sales weak. However, downpayment sales have
. adth
become common and essential in todays commercial dealings that contain a

clause guaranteeing compensation for other parties losses due to waiting and
delays.76
It is my judgment that it is valid and permissible to use the downpayment
sale following convention, since the H
s used to argue on either side have
. adth
all been shown to be weak. This is the decision of the Islamic Jurisprudence
Council (Majmac Al-Fiqh Al-Islam) in its eighth session in Brunai on the first
of Muh.arram, 1414 A.H.
4.2.7
The sale of water
We have seen above the condition that the object of sale must be private property, i.e. be owned by a particular person. Thus, the sale of objects that are not
privately owned, such as water, air, and dirt, may not be concluded. We discuss
here what we mean by water, and the jurists opinions on its ownership and
sale.
77
The H
. anafs ruled that there are four types of water:
c Amr
ibn Shuc ayb on the authority of his father on the authority of his grandfather. Im
am
M
alik explained the downpayment sale saying: that is the case where a man buys a slave,
male or female, then he declares to the seller: I gave you a coin on the condition that if I take
the object of sale, the coin is part of the price, otherwise, it is yours, c.f. Al-S.anc
an (2nd
printing, vol.3, p.17), Al-Shawk
an (, vol.5, p.153), Al-Muwat..ta (vol.2, p.151).
74 Ibn Rushd Al-Haf

alik), vol.2, p.161), Al-Dardr ((M
alik)A, vol.3, p.63), Ibn
. d ((M
Juzayy ((M
alik), p.258), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.39), Al-Shawk
an (, vol.5,
p.153), Al-B
alik), vol.4, p.157), Al-Im
am Al-Nawaw/Alc
Subk ((Sh
afi ), vol.9, p.368).
75 This is a Had
mursal and its chain of narration involves Ibr
ahm ibn ab Yah.y
a, and
. th
it is thus weak (H
d.acf), Al-Shawk
an (, vol.5, p.135).
. adth
76 Ibn Qud
amah (, vol.4, p.232), Al-Sanh
urs Mas.a
dir Al-H
. aqq (vol.2, p.96 onwards), Professor Mus.t.af
a Al-Zarq
as Al-Madkhal Al-Fiqh (section 234). Also, the H
. anbals have deemed
leasing with a downpayment valid, c.f. Marc ibn Y

. anbal), vol.2, p.26).
77 See Ibn Al-Hum
c
n ((H
am ((H
. anaf), vol.5, p.311).
101
1. Sea water: that is public property for all people, who all have usage
rights in any manner they wish, in the same manner that they have free
rights of usage of the sun, moon, and air. Thus, an individual may use it
to meet private needs, or for irrigation of his private land. Those are what
is sometimes called drinking rights (h.aqq al-shafa) and irrigation rights
(h.aqq Al-shirb), respectively.78
2. Water in great valleys: such as the Tigris, Euphrates, Nile Barada, Alc
As., S.ayh.u
n, Jayh.u
n, and other public rivers. People have unconstrained
public drinking rights in those rivers, as well as unconstrained irrigation
rights as long as that does not lead to social harm. If unconstrained
irrigation would cause social harm, then it is not valid, since it is obligatory
to avoid such harm. It is also valid to install water mills on those rivers
as long as that does not lead to any social harm.
3. Water owned by a specific group: such as the inhabitants of a specific
village, who may own a small river or water springs and wells. This
includes water taken from public rivers that are then divided among the
inhabitants by digging ditches, etc. For this type of water, all people have
drinking rights only, since it is validated by necessity and the difficulty of
carrying water everywhere.
4. Water in containers: that are owned by the person in possession of
those containers. Only the owner of this water has the right to use it, and
others may not benefit from it without the owners permission.
It is therefore clear that water may be classified from the point of view of
possession and sale as either public or private. Everyone has a right to the public
water due to the Prophets (pbuh) saying: Muslims are partners in three:
water, pastures, and fire.79 Public water subsumes the first two categories
outlined above, and covers water not privately owned by anyone. Privately
owned water include that owned by individuals or groups, and subsume the
second two categories.
The Maliks, Shafics and H
. anbals agree with this categorization of water
into private and public.80 Private water are owned by virtue of being in owned
lands, such as wells and springs. Public water are not owned, and are not
confined to owned land, such as rivers and some springs.
78 The first, literally meaning the right of the lips refers to the right to use for drinking,
providing drinking water to his livestock, and washing. The second refers to a right of using
the water according to a specific time-table for watering his plans and allowing animals to
drink.
79 Narrated by Abu-D
aw
ud in his Sunan, Ah.mad in his Musnad, and Ibn Ab Shayba in
his Mus.annaf on the authority of one of the Prophets (pbuh) companions. Also narrated by
Ibn M
ajah on the authority of Ibn c Abb
as, and Al-T
an on the authority of Ibn c Umar,
. abar
see Al-H
), vol.4, p.294).
.
. adth
80 Ibn Juzayy ((M

alik), p.339), Ab
u-Ish.
aq Al-Shr
az ((Sh
Qud
102
The status of water sales

Jurists agreed that it is recommended to give water without seeking a price even
if it is privately owned. However, the owner of water is not to be forced to give
it freely except in cases of necessity. Thus, if a group of people are extremely
thirsty and fear death, then if the owner of water does not give it freely, they
may fight him over it.
However, the H
. anafs qualified the cases where fighting over water is permissible thus: Those in need may use weapons to fight the owner of water in a well
or river in his private land since he is harming them by denying their drinking
right. Water in such wells is public and not private [with regards to drinking
rights.] However, if the water was possessed in containers, then the person in
need may fight but without weapons, and compensation for the water he takes
becomes a liability on him, following the general rule used for taking food in
case of a famine. Thus, taking water or food to satisfy a dire need does not void
the liability to compensate the owner. However, if the water is not an excess
for the owner, i.e. if it is not enough to satisfy the thirst of both parties, then
it is an obligation to leave it to its owner.81
As for the sale of water, there are two general opinions: that of the majority
of jurists, and that of the Z.ahirs:
1. The majority of the jurists ruled82 that it is valid to sell privately
owned water (e.g. water in a well, spring, containers, etc.) to people. It
is also valid for the owner to benefit from it and to prevent others from
using it. Thus, the owner has the right to prohibit a person who possesses
drinking rights from entering his property if he has access to other water
near him. If he has no such access, the owner of the property must either
take the water out to the person who wishes to exercise his drinking rights,
or to allow him to enter his property to gain access to the water.
They based this ruling on two proofs:
(a) A valid H
that c Uthman ibn c Affan (mApbwh) bought the well
. adth
of R
uma from a Jew in Madnah, and he made it a sabl for the
exclusive use of Muslims. He did so after hearing the Prophet (pbuh)
say: Whosoever buys the well of R
uma and makes it available to
Muslims will be admitted to paradise. The Jew who previously
owned that well was selling its water. This H
illustrates not
. adth
only the permissibility of purchasing the well itself, and a spring by

analogy, but it also illustrates the permissibility of selling water, since
the Prophet (pbuh) allowed the Jew to sell it. Arguments contrary
to this opinion assert that those events took place in the early stages
of Islam, when the Jews were strong, and the Prophet (pbuh) was
81 Ibn c Abid
((H
am ((H
. anaf), vol.8, p.145).
c
n ((H
((H
. anaf), vol.5, pp. 311-312, vol.4,
p.6), Ibn Juzayy ((M
alik), p.339),Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), ibid.), Al-Im
am Al
Nawaw/Al-Subk ((Sh
amah (, vol.4, p.79), Marc ibn Y
usuf (1st
printing (H
. anbal), vol.2, pp.9,277).
82 Al-K
as
an
103
originally lenient in accepting their practices. Later, the argument

goes, the rules and laws of Islam were established, thus prohibiting
the sale of water. This counter-argument also points out that the
water was sold in this case as part of selling the well, which is not
denied.83
(b) An analogy can be made between selling public water and selling
forest woods after possession. The Prophet (pbuh) permitted the
sale of the latter when he (pbuh) said: It is better for one of you to
take his rope, go to the mountain to collect wood, sells it, and uses
the proceeds to eat and pay charity, than to ask people for charity.84
This opinion was debated on the basis that making the text specific
through analogy is debatable among the scholars of juristic methods,
or Islamic legal theory (us.u
l al-fiqh). Also, this argument may be
weakened by noticing that the analogy only justifies the sale of water
in possession, to the exclusion of water in wells, etc.
2. The Z
ahirs ruled85 that it is never permissible to sell water, be it in an
.
irrigation ditch, river, spring, well, or any container. The only exception
is the sale of an entire well or a specific part of it, in which case the sale
is valid, and the water is included along with the original object of sale.
It is narrated that Ah.mad said: I do not like the idea of the sale of water
at all.
The argument they use for prohibiting the sale of water is based on the
following:
(a) The Prophet (pbuh) said: Excess water may not be sold in a manner
that indirectly sells the grass of pastures.86 Thus, it is argued that
the sale of water above ones needs is prohibited. This argument was
questioned on the grounds that the prohibition was mentioned in a
special case, where the reason for selling the water was to protect the
surrounding grass that the shepherds need for their livestock.
(b) A valid narration states that the Prophet (pbuh) prohibited the sale
is explicit about the prohibition of
of excess water.87 This H
. adth
selling water that are in excess of the needs of the owner. This applies to water in public and privately owned lands, whether it is sold
for drinking or other uses. This argument was challenged with the
previously reported H
of the well of R
uma, due to its restriction
. adth
to the specific circumstance discussed above.

83 Al-Shawk
an
(, vol.5, p.146).
by Al-Bukh
ar, Muslim, Ah.mad, Ibn M
ajah, and Al-Nas
a on the authority of
Abu Hurayra, c.f. Al-Shawk

an (, vol.4, p.163), Al-Suy
ut. (a, vol.2, p.122).
85 Ibn Hazm (, vol.9,p.8).
.
86 Narrated by Muslim on the authority of Abu Hurayra, and narrated by Al-Bukh
ar and
Ah.mad (with slightly different wording), c.f. Al-Shawk

an (, vol.5, p.145).

ajah on the
.
. . ab Al-Sunan, with the exception of Ibn M
authority of Iy
as ibn c Abd, c.f. Al-Shawk
an (, vol.5, p.145).
84 Narrated
104

In my opinion, I find that the prohibition of selling excess water refers
to large quantities of water such as those in wells and springs, or rain
water that collect in a private land, in which cases the sale would be
meaningless.88
4.3
Types of defective sales
As discussed above, a defective sale in the language of H

. anaf scholars is one
that is valid in its origin but not in description. Such sales result in possession
following the receipt of the object of sale. For the non-H
. anafs, a sale is either
valid or invalid, and invalid sales do not result in possession.
In what follows, I shall enumerate some examples of defective sales in the
H
. anaf school, and discuss their status under other schools.
4.3.1
Sale of unknowns
The H
. anafs ruled that if the object of sale or price was subject to major ignorance (jah
ala f
ah.isha) in a manner that may result in dispute, then the sale is
defective. This follows since such ignorance (jah

ala) would make it impossible
to deliver and receive the price and object of sale, which is the purpose of sales.
If the ignorance regarding the object or price was minor, and would not lead
to dispute, then the sale is not defective. Such minor ignorance would not make
it impossible to deliver and receive the price and object of sale, thus the purpose
of the sale is satisfied.
The type of ignorance (major or minor) is determined by convention. For
instance, if the type of animal being sold, or the brand of a radio or camera,
is not identified, that would constitute major ignorance that renders the sale
invalid. Such ignorance would, no doubt, lead to a dispute among the parties
of the contract.89
An example of minor ignorance is the sale of one measure from a specific
heap of food in exchange for a specified number of coins. A similar example
is the sale of a pile of clothes (of unknown number) or a heap of food for a
specified price. The sale is valid in this case since it does not contain gharar,
and the ignorance is minor and does not lead to dispute in most cases.90 Another
example is the sale of one of two or three items where the buyer retains the option
of choosing the one he wishes. This is known as the choice or identification
(or selection) option (khiy
ar al-tac yn). In this case, the most common opinion
would be to validate the sale, whereas ruling by analogy would deem it defective.
The latter is the opinion of Zufar, as detailed below.
The analogy that is used against the permissibility of the identification option is based on the object of sale being unknown, since the seller sells one
88 See
Us.u
l Al-Buy
uc Al-Mamn
uc a (p.46 onwards).
wa Naz.ariyyat Al-c Aqd (p.312).
90 Al-K
as
an ((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
. anaf), vol.5, p.157 onwards), Ab
p.263).
89 Al-Amw
al
4.3. TYPES OF DEFECTIVE SALES
105
(unidentified) object out of the set. Thus, the object of sale being unknown
is not valid. This is how Zufar argues against the permissibility of the identification option.
The arguments in favor of permitting the identification option are:
1. An analogy based on the permissibility of conditional options (khiy
ar al
shart.). The common feature in the two options is the need to avoid being
a victim of fraud (ghubn). It is generally possible to classify objects of

and low quality. Thus, knowledge of the object
sale into high, medium,
of sale may be reduced to verifying the quality of the object of sale being
high, medium or low. Thus, if one item out of four is being sold with
an identification option, the sale would be defective (f
asid) since it is not
necessary to allow such an option.91
2. There is a need commonly being met by the inclusion of this option. Since
some individuals (e.g. the elderly, and some women) cannot go to market
to buy what they need, they often send someone to purchase some items
on their behalf. Since the messenger may not be able to choose an item
that will please the buyer, it is easier to buy one out of two items, takes
them to the one who commissioned him to purchase the item, and then
one of the objects will be bought at the specified price, while the second is
returned. Thus, such a purchase is permissible based on common usage,
as long as the number of items does not exceed three, in which case the
ruling by analogy is valid.92
We note that the better H
. anaf opinion in this case is not to specify a fixed
period for the option, in contrast to the case of conditional option (which is
three days or less for Abu-H
. anfa, and three days or more as long as the period
is known for Muh.ammad and Abu-Y
usuf). Thus, the sale is valid without
mentioning the period of the option.
However, some H
. anafs ruled that the sale is not permissible unless the period
of the option is mentioned. Their argument is that for an individual object being
sold with a conditional option, the statement of the period of the option is a
condition of validity of the sale. By analogy, they argue that the same condition
applies to the sale of a single but unidentified object. The common argument in
both cases is that not stating, and hence not knowing, the period of the option
renders the sale defective.
The earlier argument distinguishes between the conditional option and the
identification option thus: A conditional option makes the status of the sale
unsettled, since ownership is not transferred while the option is still in force.
Thus, the statement of the period of this option is necessarily restricted to the
minimum needed period for the buyer to properly inspect the object of sale and
avoid being a victim of fraud. In contrast, the identification option does not
leave the status of the sale unsettled, since one of the two items (although it
is not identified) is in fact sold. Thus, the option only leaves the identification
91 [tr:
The issue of selling one out of four objects is discussed in more detail below.]
((H
am ((H
. anaf), vol.5, pp.130,197).
92 Al-K
as
an
106
of which item was sold unsettled, which does not require the specification of a
time period.
An example of excessive ignorance is the sale of one out of four items,
or one sheep out of a herd, with an option for the buyer to take one and leave the
rest. Another example at the other extreme is the purchase of one out of two
or three items without including an identification option. Thus, it is not valid
to sell one out of two or three dresses, where the sale would be defective due
to ignorance of the object of sale. This type of ignorance may lead to dispute,
since the seller wants to deliver the lowest quality item, while the buyer wishes
to take the best item, and both may argue their cases based on the absence of
an identification option.93
Generally speaking, excessive ignorance (al-jah
ala al-f
ah.isha) may be classi
fied into four categories that were mentioned above:94
1. Ignorance of the object of sale: We have included examples of this
type of ignorance of the genus, type, or measure of the object of sale, on
the byuers part.
2. Ignorance of the price: For example, if a person sells a horse in exchange for one hundred sheep from a specific herd, the contract is defective
due to ignorance of the price.
Similarly, selling an item (say a dress) for its value is defective, since this
statement equates price to value. Since the latter varies depending
on the person evaluating the item, this renders the price unknown.
Another example is a person who buys an item at a price based on the
assessment of the seller, the buyer, or a third party. In this case, the sale
is defective since that assessment is not known at the time of sale, and
thus the price is unknown.
If a person says: I sold you this item in exchange for one measure of
wheat or two measures of barley, the sale is defective, since the price is
unknown. One opinion is that such an example qualifies as two sales in
one, which was prohibited by the Messenger of Allah (pbuh).95 If the
seller says: you can buy it with an immediate price of five, or a deferred
price of seven, then the sale is defective, since it is not determined whether
the price will be the immediate one or the deferred one. However, if the
buyer removes the ambiguity by choosing one of the two formats, the sale
is valid.
Similarly, a sale at the (unknown) cost of the object, or its code (raqm)96
(while the buyer does not know what the code means or what the cost was),
n ((H
Ibn c Abid
. anaf), vol4, p.115).
a.
95 Narrated in Al-Muwatta, Al-Tirmidh
, Al-Nas
a, and Abu-D
aw
ud on the authority of
..
Ab
u Hurayra that the Prophet (pbuh) forbade two sales in one sale, c.f. Ibn Al-Athr
Al-Jazar (, vol.1, p.446).

96 A code may be a number written on the object so that an agent would know the price,
but not the buyer (Al-c In
aya, vol. 5, p.113), and this includes ignorance of the object of sale
and its characteristics. A form of this sale is where the buyer pays a price and gets a number
93 ibid.,
94c Aqd
107
is defective. However, if the buyer learns of the objects cost, or deciphers

its code during the contract session, then the sale is permissible since the
ignorance has been removed during the contract session. However, if this
knowledge is not given to the buyer until after the contract session ended
by parting, then the defectiveness of the sale is not removed.97
Zufar ruled that if the contract was deemed defective at its initiation, it
cannot be permitted, since in his opinion the defective is impossible
to make permitted.98
The schools of jurisprudence agree on the prohibition of sale by code based
on ignorance of the price. However, if the price is known, then they agree
that it is permitted. For example, the seller may say: I sold you this
dress based on its code, which is the price written on it. Then, if that
price is known at the time of the contract, this sale has a known price,
and it is valid.99
It is not valid in the opinion of jurists to sell at the market determined
price or at the price at which people sell, or at the price that so-andso chooses, since the price is thus unknown. It is narrated that Imam
Ah.mad ruled for the validity of sale at the price to be determined by
the market at a specified future time100 without specifying that price at
the time of the contract, due to its common use in most societies. Ibn
Taymiya and Ibn Al-Qayyim have also favored permitting this type of
sale. To avoid confusion, what is referenced in this case is a market
determined price at the time of conclusion of the sale, not any future
price.101
3. Ignorance regarding the time period: This applies to sales with a
deferred price without specifying the time period, as well as sales including
a conditional option without specifying the period of the option. Such sales
are defective, based on the H
that the Prophet (pbuh) prohibited
. adth
the sale of the unborn fetus in its mothers womb, as explained by the
that corresponds to one of many different objects. Whichever object matches that number is
deemed to be what he bought in exchange for the price he paid. This eliminates the factor of
choice and free will on the part of the buyer, and resembles the pebble sales that were common
before Islam (see Us.u
l Al-Buy
uc Al-Mamn
uc a by Professor c Abd Al-Samc , pp. 72,75). In
summary, the code is a written symbol, and the meaning of selling an item based on its code
is selling it for the price that is coded on it, but that is unknown to the buyer at the time
of the contract. The four schools of jurisprudence and Z.
ahirs agreed on this type of sale not
being permissible.
97 Al-K
c
as
an ((H
am ((H
n
((H
s (1st edition (H
anaf), vol.13, p.49).
. anaf), vol.5, p.113), Al-Sarakh
.
98 Al-K
as
an ((H
. anaf), vol.6, p.124).
99 Al-Khat
c
b
Al-Sh
irb
n
((Sh
a
fi
), vol.2, p.17), Ibn Qud
amah (, vol.4, p.187).
.
100 [tr.: the first of these is what

is called a market order in todays financial markets.]
101 See Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.

alik)A, vol.3, p.15), Marc ibn Y
usuf (1st
printing (H
. anbal), vol.2, p.14), Ibn Qayyim Al-Jawziyyah ((H
. anbal), vol.4, p.5 onwards),
Ibn H
urat Al-Sharc iyya by Dr. Al-Zuh.ayl (p.178
. azm (, vol.9, p.19), Naz.ariyyat Al-D
. ar
onwards).
108

narrator Ibn c Umar. He explained this H
to refer to sales with a
. adth
deferred price until the she-camel delivers what is in her womb, and then
the born she-camel gives birth to another. Thus, the prohibition is related
to deferment for an unknown time period.
Similarly, if one sells with deferment till the return of pilgrims, crop harvesting and threshing time, collection of (ripe) grapes, or sheep shearing
time, then the sale is defective; since ignorance of the timing of such
events and the ensuing delay delay may lead to disputes. However, if a
sale is conducted with deferment to such times, and then the two parties
to the sale agree to drop the deferment prior to the occurrence of such
events, then the sale is valid. This follows since defectiveness was caused
by the possibility of disputes. Since the potential for dispute is removed,
and since ignorance is not an integral part of the contract, but rather an
ancillary component (the deferment), the defectiveness is removed.102
4. Ignorance regarding the means of recording the contract: For

example, if the buyer requires a guarantor or a pawned-object to guarantee
the deferred price, then such items must be specified, otherwise the sale
would be defective.
The preceding was the detailed ruling on sales of the unknown in the H
. anaf
anbals, and Z.ahirs ruled that it is not permisschool. The Maliks, Shafics, H
.
sible to sell an unknown object of material value (c ayn majh

ula) such as one
car out of many, or one dress out of two or many. They also ruled that it is
not permissible to sell forward with an unknown price, or a price deferred to
an unknown time period, etc. In all such cases, they deemed the sale to be
invalid based on gharar caused by ignorance relating to the object of sale, and
ah (pbuh) forbade gharar sales. Thus, they included among
the Messenger of All
object of sale be known to the parties
the conditions of validity of sale that the
of the contract. The object of sale does not have to be known in all respects,
but it has to be identified if the object is non-fungible (c ayn) and it should be
identified in measure and characteristic for fungibles (dayn or m
a f al-dhimma).
They also ruled that the price must be known in its characteristics, measure,
and time of delivery. Thus, it is not valid to suspend the sale conditional on
a future event such as the beginning of a month, or the return of the pilgrims,
since that would be a gharar sale.103 However, the Maliks have allowed sales
with deferment to crop harvesting and threshing, or the time of departure of
the pilgrims, or to the time of other specific events with a known time. They
also allowed sales with identification options, which they called choice sales
ar). However, they required that the objects of sale be of the
(bayc al-ikhtiy
same genus and type, and that the price be of the same genus and type, where
102 Ibn Al-Hum
am ((H
s (1st edition (H
. anaf), vol.5, p.322 onwards), Al-Sarakh
. anaf), vol.13,
n ((H
p.26), Ibn c Abid
. anaf), vol.4, p.125). Note that sales with such deferment is defective,
however, deferring the price alone to such a time is valid.
103 Ha
iyat Al-Dus
uq (vol.3, p.15), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, pp.263-266),
. sh
Al-Khat.b Al-Shirbn ((Sh

amah (, vol.4, pp.209,234), Marc ibn
Y
. anbal), vol.2, p.11), Ibn H
. azm (, vol.8, p.497 onwards).
109
any differences would invalidate the sale. There is no ignorance (jah

ala) without
excessive risk (gharar).104
Gharar and ignorance (jah

ala)
Gharar is more general than jah

ala. Thus, everything containing ignorance
(jah
ala) is also gharar. However, not all gharar is due to ignorance. For example,
without jah
gharar may exist

ala or ignorance
as in the case of buying a runaway
105
slave with known characteristics.
4.3.2
Suspended conditional sales and future sales
Suspended conditional sales (al-bayc al-muc allaq), or suspended contracts in

general are contracts whose existence is predicated on a possible event using
one of the verbal instruments of suspension such as: if, when, etc. For example,
a person may say to another: I have sold you this house of mine for so-much
if so-and-so sells me his house, or if my father returns from his travels.
f),106 or future contracts in general are ones
Future sales (al-bayc al-mud.a
where the offer specifies actions to take place in a future time period. For
example, a person may say to another: I have sold you this car for so-much at
the beginning of the next month.
For the H
. anafs, the difference between the two is thus: The suspended contract is considered non-existent, and is therefore not concluded at the time. It is
thus suspended pending satisfaction of a condition, and the condition may and
may not be satisfied. On the other hand, the future contract is a concluded contract, with the status and consequences of a concluded sale. The only difference
is that the consequences of such a contract take place at the time designated by
the two parties to the contract.
Jurists agreed that suspended and future sales are not valid. For the H
. anafs,
such sales are defective (f
asid), and for other schools of jurisprudence, it is invalid
(b
a.til).
Therefore, it is not valid to suspend a sale or make it a future contract, since
a sale is a contract that results in instantaneous change of ownership. Such
contracts thus may not be deferred to the future, and may not be suspended
pending a condition since this involves gambling, i.e. suspension based on a
probabilistic risk.
104 Al-Dus
uq on
Al-Sharh. Al-Kabr (vol.3, p.106), Ibn Juzayy ((M

alik), p.269), Al-Muntaq
a
Al-Muwat..ta (vol.4, p.298). The Z.

ahirs have permitted deferring the price until the time
the buyer has the means to pay (Al-Maysara, Ibn H
105 Al-Gharar wa Atharuhu f
Al-c Uq
ud (p.39), Al-Qar
af ((M
alik), vol.3, pp.265,270
onwards).
106 Tr: Since forward sale is used as a translation of the valid bayc al-salam, we use future
sale here for al-bayc al-mud.a
f. In modern financial markets, both forwards and futures
refer to forms of al-bayc al-mud.a
f, the difference being the bilateral nature of the former and
trading on an exchange of the latter. We alert the reader to the fact that we distinguish
in this book between valid Islamic forward sales (i.e. salam) and the defective or invalid
(depending on the school of jurisprudence) future or modern forwards and futures sales.
c al
a
110
Thus, both of those types of sales are defective due to containing gharar: In
a suspended sale, the parties do not know whether the condition on which the
sale is suspended will take place or not, and they do not know when it will take
place if it ever does. In future sales, the two parties of the contract do not know
the condition of the object of sale in the future, or how content they will be
with the contract and the benefits that they derive from it at the time of the
sale.107
4.3.3
Sales of absent and uninspected non-fungibles
An absent or uninspected non-fungible (al-c ayn al-gha

iba or al-c ayn ghayr
but
al-mariyya) is a non-fungible item that is owned by the seller and existent,
unseen.
The H
. anafs ruled that it is valid to sell an absent or un-inspected nonfungible without inspection or description. The buyer then has the option to
execute the sale or nullify it once he sees the object. Similarly, an object sold
based on a description must contain the inspection option (khiy
ar al-ruya),
even if the object does agree with the description given by the seller. Examples
of the latter type of sale include buying a covered horse, furniture in a box, or
a quantity of wheat in a house. The proof of the H
. anafs for the validity of the
sale in both cases is based on the buyers inspection option, which removes all
gharar. Thus, ignorance in this type of sale may never lead to a dispute as long
the buyer has the option.108 They have also found proof for this position in
as
the H
: Whoever buys an item that he has not seen, he has the option
. adth
once he sees it.109

The Maliks ruled that it is valid to sell an absent non-fungible based on
a description if its absence does not raise a doubt that its characteristics may
change prior to receipt. Then, if the object is delivered meeting the specified
description, the sale is binding, since this is a minor gharar, and a description
plays the role of inspection in the case of absent merchandise.

Moreover, using
description in place of inspection may have benefits such as avoiding costs of
showing it, including possible damage that may be caused by repeated transportation and/or display. However, if the object is not in accordance with the
description in the contract, then the buyer has the option.
The Maliks also ruled in their most commonly-held opinion that it is valid to
107 Ibn c Abid
n ((H
af ((M
alik), vol.1, p.229), Al-Im
am Al. anaf), vol.4, p.244), Al-Qar
Nawaw/Al-Subk ((Sh
u-Ish.
aq Al-Shr
az ((Sh
Qud
amah (, vol.5, p.599), Al-Amw
al wa Naz.ariyyaT Al-c Aqd by the late Muh.ammad Y
usuf
M
us
a (p.451 onwards), Al-Gharar wa Atharuhu f Al-c Uq
ud by S.iddq Al-Amn (pp.137-149).
108 Al-K
as
an ((H
am ((H
. anaf), vol.5, p.137).
109 This Had
th
has
been
narrated
both
with an isn
ad (i.e. someone saying that he heard
.
the Prophet (pbuh) saying such-and-such), and mursal (i.e. someone saying that the Prophet
(pbuh) allowed, forbade, or decided such-and-such) The musnad version was narrated in the
Sunan of Al-D
araqut.n on the authority of Abu Hurayra, and the mursal version was narrated
by Ibn Shayba and Al-D
araqut.n on the authority of Makh.u
l, and Al-Nawaw narrated an
agreement that it is a weak tradition. c.f. Al-H

), vol.4,
.
. adth
p.9), Al-Sakh
aw (, p.403).
111
sell an absent object without a specific description of its genus, type, or state.110
The Maliks call this type of sale program (or envelope) sales (al-bayc c al
a albarn
amaj), where the program refers to a list describing the contents of a
container of objects of sale (e.g. clothes), which were not inspected by the
buyer in terms of their genus and kind.111 Permission of this type of sale is
based on necessity due to the difficulty and effort that the seller would have to
exert to open containers, thus the description may satisfy the need for visual
inspection.
The most common opinion among the Shafics, and according to one of the
Ibad. opinions, is that it is never valid to sell an absent object of sale, where
absence is defined by as that which was not seen by one or both of the parties.
This is true even if the object of sale is present, since the sale contains gharar.
item
The Messenger of Allah (pbuh) forbade the gharar sales, and the sale of an
whose genus and kind are not known contains significant gharar. Even in cases
you my Arabian
where the genus and kind may be known, such as: I sold
horse, the sale is not valid in the new Shafic school since ignorance about the
characteristics of the object of sale results in gharar. Also, forward (salam) sales
are not valid if the object of the sale is not properly

described.
As for the H
of the inspection option: Whoever buys an item that he
. adth
did not see, then he has the option once he sees it, it is a weak H
as stated
. adth
by Al-Bayhaq. Also, Al-Daraqut.n says about this H

that it is an invalid
. adth
one, which was not narrated by any others.112

The H
. anbals have two opinions, the favored among them is that the sale of
an absent object that was not described or seen in the past is not valid. The
second opinion, which deems the contract valid, establishes an option for both
the buyer and the seller at the time of viewing the object. The first opinion is
based on the prohibition of gharar by the Prophet (pbuh).
to the buyer in a manner sufficient to make a
If the object is described
forward (salam) sale valid, then the majority of H
. anbals agree that the sale is
110 Al-Hatt
alik), vol.4, p.294 onwards), Al-Dardr ((M
alik)A, vol.3, p.25
. . . ab (1st edition (M
onwards), Al-Dardr ((M
alik)B, vol.3, pp.41-44), Ibn Juzayy ((M
alik), p.257). The M
aliks
have enumerated five conditions regarding the binding nature of sales based on description:
(i) that the object of sale is not so far away (e.g. the distance between Spain and Africa)
that it is likely that its condition will change prior to receipt; (ii) that it is not very near,
e.g. in the same city (however, the most common opinion is that an object present at the
sale session may be sold based on description); (iii) for some of them, the description must be
made by a person other than the seller (but the more correct opinion is that it is valid based
on a description given by the seller); (iv) that the description covers all relevant aspects; and
(v) that immediate price collection is not made a condition of the sale, except for objects
that are unlikely to change such as real estate. It is valid, however, to collect the price
unconditionally i.e. where the seller does not make it a condition that the buyer must pay
the price immediately, but the buyer does volunteer to pay it. This final condition relates to
non-fungibles that are possible to change. However, for objects of sale that are unlikely to
change in a short time-period, such as real estate, then it is valid to make immediate payment
a condition. The reason for this condition is to eliminate gharar from the contract based on
its possibility of being a forward sale (salam) or a regular sale.

111 See Al-B
alik), vol.2, p.160).
112 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic),
vol.9, p.315), Al-Khat.b Al-Shirbn ((Sh

afic), vol.2, p.18), Sharh. Al-Nayl (vol.4, p.143).
112
valid. Ah.mad ruled that it is not valid until the buyer sees the object, since
the description does not lead to knowledge of the object, thus the sale is not
validated by such a description. His argument in this case is that the described
but not seen object is deemed an object for which salam sales are not valid.
On the other hand, the more common opinion in the school is based on
the argument that it is a sale based on description, which makes it valid in
the same manner that salam sales are validated. Their argument, thus, is that
knowledge of the object of sale is indeed attained through description of the
apparent characteristics on which the price is based. Such a description is thus
sufficient, the proof being that it is sufficient for salam sales.113
In summary, the H
aliks, the majority of H
. anafs, the M
. anbals, the Z.ahirs,
the Zayds, the Imams, and some of the Ibad.s all allow the sale of an absent
object based on description.114 As for the sale without inspection and without
description, it was allowed only by the H
. anafs.
Sale of difficult to inspect items
Some objects of sale cannot be seen without the seller encumbering excessive
effort or the object being exposed to ruin. Examples include the sale of preserved
goods, medicines, and liquids and gases whose containers should only be opened
at the time of use. Other examples include underground produce such as carrots,
turnips, and potatoes. The H
. anafs have allowed the sale of such items in the
same manner they allowed the sale of missing objects of sale. Similarly, the
Maliks allowed such sales since the object of sale is known by custom, and the
inherent gharar is limited. However, the Shafics, H
. anbals, and Z.ahirs have
sales invalid, since it is not possible

deemed such
to describe the object of sale,
which results in ignorance and gharar that were prohibited.115
4.3.4
Trading by a blind person
The discussion on this issue relates to the condition of inspection of the object of
sale within the context of the above mentioned disagreement on sales of absent
merchandise.
The H
. anbals ruled that buying, selling, leasing, pawning, and gift giving, by a blind person are valid. In cases of inspection options,
the option refers to forms of inspection that give him information about the
object of sale; e.g. touch, smell, taste, etc. He may also rely on descriptions of
the object of sale, e.g. descriptions of fruits on the tree and of real estate. Their
proof relies on the H
: Sales are but based on mutual agreement.116 In
. adth
113 Ibn
Qud
amah (, vol.3, pp.580-582), Marc ibn Y
. anbal), vol.2, p.10).
c an
H
azm
(, vol.8, p.389), Al-H
(1st edition, (Shc ah Zaydiyyah), vol.3,
.
. usayn Al-S.an
p.259), Al-H
c ah Im
amiyyah), p.145), Sharh. Al-Nayl (vol.4, p.137).
. ill ((Sh
115 Ibn c Abid
n ((H
d Al-H
alik), vol.2, p.156), Al. anaf), vol.4, p.106), Ibn Rush
. afd ((M
Im
afic), vol.9, p.338), Ibn H
uc
. azm (, vol.8, p.456), and al-Buy
c
c
c
Al-Mamn
u a by Professor Abd Al-Sam (p.67).
116 Narrated by Ibn M
ajah and Al-Bayhaq, and authenticated by Ibn H
an on the au. ibb
thority of Abu-Sacd Al-Khudriy. Full references for this H
adth were previously provided.
.
114 Ibn
113
this case, the blind person has agreed to the sale, and he has multiple means of
gaining information regarding the object of sale. In this way, he is similar to a
person with sight, and just as sign-language is a valid substitute for voice for a
mute person, the senses of smell and taste may substitute for the blind persons
eyesight.117
Of course, the H
. anafs and Maliks, as we have seen, do not necessarily give
the seller the inspection (sight) option, whether he is seeing or blind.
The Shafics have ruled that buying and selling of a blind person is not valid,
unless he had seen the object of sale before losing his eyesight, and only if the
object of sale does not change, e.g. iron, etc. Their proof is based on the blind
persons inability of distinguishing between goods of good and bad quality, and
thus he is deemed ignorant of the object of sale.118
4.3.5
Sale with a forbidden price
If the price is forbidden, e.g. wine or pig, then the sale is defective for the
H
. anafs since there is indeed no sale, where a sale is the exchange of one private
property for another. Wine and pigs are considered private property by some
infidels, and although the H
. anafs consider them property, they are not valued
property for Muslims (i.e. m
al, but not m
al mutaqawwam from the viewpoint
of Islamic jurisprudence). In this case, the general juristic rule is thus: if one of
the two compensations (either the object of sale, or the price) is not considered
property in a revealed religion (Judaism, Christianity, or Islam), then the sale
is invalid whether the non-property is the price or object of sale. Thus, the sale
of a dead animal, blood, or a free human being, are all invalid. Similarly, the
correct opinion for the H
. anafs is that such items are invalid as prices, since a
condition for the conclusion of sales is that the price be a property.
If one of the two compensations is considered valued property in some religions but not in others, then: (i) If it may be specified as a price, the sale
is deemed defective. Thus the sale of a dress for wine, or wine for a dress are
both defective. (ii) On the other hand, if it is specified as the object of sale,
then the sale is invalid. Thus, the sale of wine for coins, or coins for wine are
both deemed invalid. In this case, if the price is forbidden, the sale must be
concluded based on value (qma), rather than price (thaman).119 It is clear
that this type of sale is invalid in the non-H

. anaf schools.
4.3.6
Time sales (buy

uc al-ajal)
The expression used for this type of sale is al-bayc nasa (which refers to deferring the price) wa al-shir
a naqdan (which refers to purchase with an immedi
ately paid cash price).
117 Al-Tah
as
an ((H
shiyat Al-Dus
uq
. . aw ((H
. anaf), p.83), Al-K
. anaf), vol.5, pp.164,298), H
.a
(vol.3, p.24), Ibn Qud

. anbal), vol.2,
p.10).
118 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.264).
119 Ibn Al-Hum

am ((H
anaf
),
vol.5, p.186), Al-K
as
an ((H
.
. anaf), vol., pp.141,305), Ibn
c Abid
n ((H
. anaf), vol.4, pp.105,108).
114
If a contract is used as an instrument to attain an illegal end, is the contract

concluded based on the satisfaction of its cornerstones of offer and acceptance, or
is it considered invalid due to its illegal motivation? For example,120 if a person
sells some property to another with a deferred price, then buys it back with an
immediate price, such as selling one ton of cotton for 5000 coins to be paid in a
year, then buying it back from the buyer for 4000 coins to be paid immediately,
two sales contracts have taken place. Both sales contracts are apparently (or
superficially) valid since they satisfy all the cornerstones and conditions of sale.
alik
These types of sales are called same-item sales (buy
uc al-cna) in the M
school. In reality, it is a type of time sales (buy
uc al-ajal). Notice, that
the Maliks have distinguished between two types of sale: (i) time sales (buy
uc
al-
aj
al), where the buyer sells what he bought to the seller or his agent, with
a time difference; and same-item sale-resales (buy
uc al-cna), where a person
says to another: buy this good for an immediate price of 10 coins, and I will
buy it from you for 12 coins as a deferred price.
The Shafics and the Z.ahirs ruled that this contract is valid since it satisfies
the cornerstones of offer and acceptance, and matters of intention are left for
Allah alone to judge.
The Maliks and H
. anbals ruled that this contract is invalid in order to
protect against abuses of the Law if there is proof that the intention was
defective. The applications of this disagreement appears in the issues of formmarriage (zaw
aj al-muh.allil),121 same-item sale-resales (bayc al-cna), and the
sale of grapes to a wine-maker.122
Abu-H
. anfa rendered valid form-marriage from a person other than the exhusband, and selling of grapes to the wine-maker, as long as the contract does
not explicitly contain a condition that invalidates it. However, he ruled that
same-item sale-resales (bayc al-cna) is defective as long as it does not involve a
third party.
Same-item sales (bayc al-cna)
This is a sale that is intended as a trick to allow borrowing with interest (rib
a).
It is conducted thus: a man sells an item with a deferred price, then buys it
back immediately for a lower cash price. It is called cna since the buyer of
the objects takes a non-fungible c ayn (in the form of present immediate monies)
instead of the object he bought. The reverse transaction is identical in its effect.
An example of this sale is the following: (i) a man sells an object to another for
a known price deferred to a known time period; (ii) then, he buys it back with a
different known price to a different known time period, or with an immediate and
lower price; (iii) at the specified time of the first (i) contract, the full (higher)
120 Al-Hatt
alik), vol.4, pp.390 onwards, 404), Al-Dardr ((M
alik)A, vol.3,
pp.76,88), Al-Dardr ((M
alik)B, vol., pp.116,132).
121 [tr.]: A form-marriage is a legal trick sometimes used following an irrevocable divorce by
using a muh.allil i.e., a person other than the ex-husband who marries the woman for the
sole purpose of divorcing her allow her to re-marry her ex-husband.
122 Al-Amw
al wa Naz.ariyyat Al-c Aqd (p.297 onwards), Us.u
l al-Buy
uc Al-Mamn
uc a (p.102).
115
first price is paid, thus the difference between the two prices becomes interest,
or rib
a, for the owner of the object who engages in this false sale. Thus, the
entire operation is a trick to borrow with interest (rib
a) disguised as purchases
and sales.
The two parties to this type of contract may use a third intermediary. After
the person who wishes to borrow with interest purchases the item from its owner
with a deferred price, the intermediary then buys it from him with an immediate
price. Then, the intermediary sells the object to its original seller for the same
price at which he bought it, and the seller thus collects the rib
a (interest).
Jurists disagreed over the case where an intermediary is involved, despite
the fact that dealing in rib
a is clearly the intention of the buyer and seller.
Abu-H
an
fa
ruled
that
it is a defective contract if there is no intermediary
.
between the buyer and seller. We notice that Ab
uH
. anfa thus diverged from
his general rule that would deem this contract valid.123 This divergence is based
on the H
we shall list below in the story of Zayd ibn Arqam. It is also
. adth
based on the fact that before the deferred price is paid by the buyer, the first
sale is not concluded. Since the second sale is built on the first, the first seller
may not buy any item from one who does not yet own it in this case the first
buyer who has not yet paid the deferred price, thus the second sale becomes
defective.
Abu-Y
usuf ruled that this type of sale is valid, and is not reprehensible
(makr
uh). Muh.ammad, on the other hand, ruled that it is valid but reprehensible, going as far as saying: The dislike in my heart for this sale is as large as
the mountains; it was invented by those who consume rib
a.124
The Shafics and Daw
ud of the Z.ahir school ruled that this contract is valid
but disliked. Their proof is that the contracts cornerstone of valid offer and
acceptance is satisfied, and a contract may not in their opinion be invalidated
based on unobservable intentions.125 Thus, the status of the contract is determined for them by its apparent characteristics, while perverse intentions are left
for Allah to judge.
The Maliks and H
. anbals ruled that the contract is invalid in order to avoid
permission of illegal transactions.126 Their ruling is also based on the story of
123 That rule being that what matters in contracts is the language of the contract, and not the
intentions of the contractors. This follows since the intention to achieve an illegal end is hidden,
and thus must be left to All
ah alone to punish the one who harbors such an intention. This
is in contrast to the school of Im
am Ah.mad Ibn H
. anbal who is rightfully firm in protecting
the correctness of the intention more than the language, c.f. Ibn Qayyim Al-Jawziyyah
c
((H
. anbal), vol.1, p.106 onwards), Naz.ariyyat Al- Aqd by Professor Sheikh Muh.ammad AbuZahra (p.215).
124 Ibn Al-Hum
c
n ((H
am ((H
. anaf), vol.4,
. anaf), vol.5, p.207 onwards), Ibn Abid
pp.255,291), Al-Amw
al wa Naz.ariyyat Al-c Aqd (p.301).
125 Al-Shac ar
c
an ((Sh
afi ), vol.2, p.70), Irsha
d Al-Fuh.u
l by Al-Shawk
ani (p.217), Ibn
Juzayy ((M
alik), p.271).
126 Ibn Rushd Al-Haf
alik), vol.2, p.140 onwards), H
ashiyat Al-Dus
uq (vol.3, p.91),
. d ((M
.
Al-H
ab (1st edition (M
alik), vol.4, p.404), Ibn Juzayy ((M
alik), pp.258,271 onwards), Al. at.t.
Dardr ((M
alik)B, vol.3, p.130), Ibn Qud
amah (, vol.4, p.175 onwards), Al-Shawk
an (, vol.5,
p.206), Al-Muw
afaq
at by Al-Sh
at.b (vol.2, p.361), Al-Qar
af ((M
alik), vol.3, p.266 onwards),
and Us.u
l Al-Fiqh by Dr. Al-Zuh.ayl (vol.2, p.895 onwards). Moreover, the H
. anbals deemed
116
bint Ayfac said: the wife

a (mAbpwh): Al-c Aliya
Zayd ibn Arqam with c Aish
127
c
of Zayd, the mother of his child
and I visited Aisha (mAbpwh), then the
mother of his child said: I sold a slave to Zayd ibn Arqam in exchange for
a
800 dirhams deferred, then I bought him back for 600 dirhams in cash, c Aish
said: Woe to what you sold and what you bought, tell Zayd that he has voided
his fighting with the Prophet (pbuh) unless he repents.128 Also, the Prophet
(pbuh) said: When people are miserly with their dn
ars and dirhams (gold
(Roman) and silver (Persian) coins, comprising the currencies being used at his
time), trade in cna, follow the tails of cows, and desert the striving in the cause
of Allah, Allah will send unto them a suffering that he will never lift until they
rediscover their religion.129
They have rationalized this ruling by analogy to the set of forbidden consequences that render these contracts defective, since those forbidden consequences are the sole reason for those contracts to exist.
In summary: the majority of non-Shafic jurists ruled that this sale contract
is defective since it is an excuse and means for committing rib

a. It is used in
order to permit that which Allah has forbidden, and therefore it is not valid. In
is not valid, and argued that if it is
contrast, Al-Shafic said that the first H
. adth
valid, then it shows that Zayd disagreed with the opinion of c Aish
a (mAbpwh),
and whenever the companions of the Prophet (pbuh) disagree among themselves,
his school resorts to analogy.
Note that the Shafics and the Z.ahirs relied on the apparent form of the
contract, thus ruling that it is valid based on the verse: And Allah has permitted trade [2:257]. This opinion is not accepted since the apparent form is
considered if there is no evidence to the contrary. In this case, convention provides significant information that the intention of those who use this contract is
to permit that which is prohibited. What is known by convention is one of the
strongest considerations, since it is given the same status as an explicit condition in the contract. Thus, this implicit condition known by convention deems
the apparent form of the contract a method to legalize prohibited transactions,
and thus ruling on the apparent form of the contract also leads to invalidating
the first contract invalid since it can be a vehicle for the second one. They ruled further that
if the characteristics of the object of sale changes positively or negatively, and if the initial
seller buys the item from a person other than the initial buyer, or if he buys it with the same
price or in a different currency, then the sale is valid. It is also deemed valid in their opinion
if his father, son, etc. buys it as long as it is not intended as a trick (h.la), in which case it
would be invalid, c.f. Marc ibn Y
. anbal), vol.2, p.20).
127 [tr.:] The mother of his child (umm walad of so and so) is used to denote a slave woman
who was impregnated by her owner and gave birth to his son.
128 This Had
is narrated by Al-D
araqut.n on the authority of Y
unus ibn Ish.
aq on the
. th
authority of his grandmother on the authority of Umm Muh.ibba on c Aish

a. Al-Sh
afic ruled
that it is not a valid H

, but Im
am Ah.mad narrated it in his Musnad, and ruled that
. adth
its chain of narration is good, even though Al-Sh

afic does not report it. Also, Al-D
araqut.n
himself said regarding the grandmother: she is unknown, and cannot be used as a trusted
narrator, c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.478).
129 Narrated by Ahmad,

and Abu-D
aw
ud on the authority of Ibn c Umar, also narrated by
.
Al-T
an and Ibn Qat.t.
an, who deemed it a valid (s.ah.h.) H
. Al-Dhahab said: this
. abar
. adth
H
is among the denied ones of c At.
a Al-Khur
as
an, c.f. Ibn Al-Athr Al-Jazar (, vol.5,
. adth
p.206).
117
the sale.130
Tawarruq sales
This is the type of transaction where a person buys a commodity with a deferred
price, then sells it to a third party (other than the original seller) for an immediate cash price. The purpose of this contract is to obtain cash immediately,
and it is considered a reprehensible (makr
uh) sale in the opinion of Malik and
one of the two opinions narrated on behalf of Ah.mad.
4.3.7
The sale of grapes to a wine-maker
Abu-H
afic ruled that this sale is valid based on the apparent
. anfa and Al-Sh
form of the contract, but it is reprehensible to sell grapes to a wine-maker, or

sell weapons to one who uses them to fight Muslims. The validity of the sale
relies on the uncertainty whether the grapes can be used to make wine, or that
the weapons will indeed be used to fight Muslims, and also since each man
should only be accountable for his intended goals. Thus, if it is known that
a person will use this valid contract for illicit ends, he may be prevented from
using such a contract. Thus what is prohibited in this case is the defective belief
of the person who may use this contract for illicit ends, but the contract itself
is not invalid. This is similar to the case of a seller who hides a defect in his
merchandise.131 In general, the status of a contract based on its apparent form
is one issue, and ruling on the intentions that lead to its use is another.
The Maliks and the H
. anbals have ruled that selling grapes to one who
uses them to make wine is invalid, and similarly invalid is the sale of weapons
to those at war or potentially at war with Muslims, or to highway robbers.
All those sales are invalid to prevent the means towards achieving prohibited
ends. The general rule, thus, is that the means towards achieving prohibited
ends (h.ar
am) are themselves prohibited, even if the ruling is based solely on
intended results. This is also based on the verse: Do not enjoin each other in
sin and transgression [5:2], which is an admonition that warrants prohibition.
Once the sale is deemed prohibited, it is automatically deemed invalid.132
4.3.8
Two sales in one & conditions in sales
It is accepted that the Prophet (pbuh) has forbidden two sales or two conditions
in one sale, based on the following H
s: Abu Hurayra (mAbpwh) is narrated
. adth
to have said: The Prophet (pbuh) prohibited two sales in one, and c Amr ibn
Shuc ayb narrated on the authority of his father that his grandfather said: The
Messenger of Allah (pbuh) said: The following are not permitted: a loan and
130 Usu
l
Al-Buy
uc Al-Mamn
uc a (p.105).
Al-Shr
az ((Sh
afic), vol.1, p.267), Ibn Al-Hum
am ((H
.
. anaf), vol.8, p.127),
Al-T
ah
a
w
((H
anaf
),
p.280).
. .
.
132 Ibn Qud
amah (, vol4, p.222 onwards), Al-Muw
afaq
at by Al-Sh
atb (vol.2, p.361).
.
.
131 Ab
u-Ish
aq
118
sale in one transaction, two conditions in one sale, profits on goods that were
not guaranteed, and selling that which you do not have.133
There have been differences over the definition of two sales in one. AlShafic said: It can be interpreted in two ways: In one case, the seller may say:
I have sold you this good for 2,000 deferred or 1,000 in cash immediately, take
whichever you wish. It is assumed in this case that the sale is binding at one
of the two prices, and this is a defective sale (i.e. invalid)134 since it introduces
confusion and suspends the sale. In the second case, the seller may say: I have
sold you my house on the condition that you sell me your horse.
The reason for prohibiting the first contract is the gharar it contains due to
know at contract time
ignorance regarding the price, since the buyer does not
which price will be relevant.
The reason for prohibiting the second contract is to avoid potential exploitation of the needs of others. Thus, if the buyer needs to purchase an item, the
sellers condition that the buyer must sell him something may be construed
as a form of exploitation and belie the mutual agreement necessary for a sale
contract. Moreover, this contract also contains gharar since the seller does not
know whether or not the second sale will take place.

There have also been differences over the interpretation of two conditions
in one sale. One interpretation is that a seller may say: I have sold you for
X in cash, or for Y deferred. Another interpretation is that the seller may
make it a condition of the sale that the buyer will not sell the good or give it
as a gift. A third interpretation is that a seller may say: I have sold you this
good for X, on condition that you sell me this other good for Y.135 Yet another
interpretation is that a person may lend him an amount of money in the form
of a measure of wheat. Then, when the term of the loan expires, and the lender
requests the return of his wheat, he says: sell me the measure you owe me for
two months in exchange for two measures. Thus, it becomes two sales in one,
since the second sale was initiated before the first was completed. In this case,
the worse of the two deals which is the first is returned to him.
We thus see that two sales in one and two conditions in one sale effectively
mean the same thing. Jurists differed on the status of this sale.
The H
. anafs ruled that it is a defective sale since it is unknown whether
the price in the sale is the immediate or the deferred one, and the sale is
133 Narrated by Ashab Al-Sunan, also narrated by Ahmad on the authority of c Amr ibn
..
.
Shuc ayb on the authority of his father on the authority of his grandfather (c Abdull
ah ibn
c Amr ibn Al-c As

. ). Al-Tirmidh ruled that this is a good (h.asan) and valid (s.ah.h.) H
adth.
.
Ibn M
ajah narrated an abridged version including only profits from goods that were not
guaranteed, and selling that which you do not have. What is meant by profits from goods
that were not guaranteed is that the seller is forbidden from taking profits from merchandise
that he never guaranteed, e.g. if he buys a good and sells it to another before receiving it
from the first seller; this sale is invalid, and its profits are not permitted since the object of
sale is still being guaranteed by the first seller and not the buyer, c.f. Al-H
.
edition, (H
an (, vol.5, p.179).
. adth
134 tr.: recall that

for the non-H
. anafs defective and invalid sales are the same.
135 Al-B
alik), vol.5, p.37), Al-Shawk
an (, vol.5, pp.151-153),
Al-S.anc
an (2nd printing, vol.3, p.16 onwards).
119
thus suspended. If the confusion is resolved and the sale is accepted in one
of the two forms, the contract is valid.136 The reason for the prohibition
of two sales in one is: (i) that the price is not determined when one object
is sold for two different prices; (ii) suspension on a future condition in the
sale of one item conditional on the buyer selling him something else; and
(iii) the clear involvement of rib
a in the case of selling a measure of wheat.
. anbals ruled that this contract is invalid. Since the
seller has not determined a single price, they argue, the ensuing ignorance
deems this to be a gharar sale. They draw an analogy between this contract
I sold you either this item or that item, or I sold
and the seller saying:
you one of my houses.137 Since the price is unknown, this is invalid in
the same manner that selling based on an unknown code is invalid.
Malik ruled that this sale is valid, and considered as a sale that contains
an option for the buyer. The contract is then determined ex post by the
actions of the contractors, as though the buyer said: I take it with a
deferred price of Y, and the seller said: then take it, or I accept, in
which case the contract conditions are satisfied.138
Notice that the H
prohibiting two sales in one is weak due to the
. adth
presence of a doubtful authority in its chain of narration (Muh.ammad

ibn c Amr ibn c Alqama, whose integrity was questioned by more than one
authority). Even if the H
is valid, it applies only if the seller says:
. adth
I sold you for X cash-and-carry or Y deferred. However, if he says in

the beginning only: I sold you for Y deferred, and the specified deferred
price was higher than the days cash price, the sale is valid.139
4.3.9
Deferred price and installment sales
c
The Shafics, H
. anafs, Maliks, H
. anbals, Zayd ibn Al, Al-Muayyad Billah,
and the majority of jurists ruled it valid to sell an object immediately, with a
deferred price possibly paid in installments greater than its cash price. They
ruled these sales valid as long as the contract is independently specified as such,
amah
and contains no ignorance as in the case of two sales in one.140 Ibn Qud
() said: It is agreed that sale with a deferred price is not forbidden, and it is
not reprehensible. Thus, if an agreement is reached to purchase a machine or
c
n ((H
((H
. anaf), vol.4, p.30).
c
Al-Sh
r
a
z
((Sh
a
fi
),
vol.1,
p.267), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2,
.
p.31), Ibn Qud

amah (, vol.4, p.234).
alik), vol.2, p.153), Al-B
alik),
. d ((M
vol.5, p.37). Ibn Juzayy ((M

alik), p.257) said: two sales in one is where one object is sold
for two prices, or one of two items is sold for a single price. In the first case, the seller says:
I sold you this dress for 10 in cash or 20 deferred, assuming that the sale is binding for one
of the two offers. The second form is where the seller says: I have sold you one of those
two dresses for so much, assuming that the sale is binding for one of them. Ibn Juzayy
considered this sale to be one of the ten prohibited gharar sales.
139 Al-Shawk
an (, vol.5, p.152).
140 Al-Sh
awk
an (, vol.5, p.152 onwards), Ibn Qud
amah (, vol.4, p.176).
136 Al-K
as
an
137 Ab
u-Ish
aq
120
commodity for 1,100 in deferred price possibly paid in installments despite

its cash price being 1,000, the sale is valid even if two prices (the cash price
and the installments price) are mentioned during bargaining, but one of them
is used finally to conclude the contract. However, consider the case where the
seller makes the single offer: I sold you for 1,000 cash, or 1,100 in installments,
and the buyer says: I accept, without specifying which of the two contracts
he wants. In this case, the contract is invalid for the majority of scholars, and
defective for the H
ala). Some of the
. anafs, due to its containing ignorance (jah
Zayds ruled that the sale of an item for [a deferred price] more than its cash
price is forbidden, due to deferment.
In reality, sale with a deferred price, possibly paid in installments, are different from rib
a, even though they are similar in the increase of the price due to
deferment. The difference is that Allah has permitted sales to meet mans needs,
and has forbidden rib
a since the increase is purely due to deferment of payment.
Moreover, rib
a is an increase in the same genus of what one of the two parties
to the contract pays in return for deferment. For example, an exchange of one
container of wheat for one and a half containers of wheat to be paid later, or a
loan of 1,000 Dirhams to be paid back as 1,100 in a few months are forbidden
rib
a. However, in a sale with deferred price, or a price paid in installments, the
object of sale is a commodity the value of which is 1,000 currently, and 1,100 in
a few months. This is not rib
a, but it is an ease in sales, since the buyer receives
the merchandise, and not money. Thus, what the buyer pays is not of the same
genus as what he receives. It is well known that any good is preferred and has
more value currently than the same good deferred to be delivered in the future.
Islamic law does not conflict with the nature of things in this case, since the
object of sale and price are not of the same genus. Moreover, the seller of an
object for a price to be paid in installments is sacrificing a benefit in order to
make the object available to the person who is buying it with a deferred price.
This sacrifice is made due to the suspension of delivery of the price, thus not
being able to use it to purchase more merchandise. Thus, the increase in the
deferred price may be viewed as a compensation to the seller.
4.3.10
Purposeful sale of appertainings
If an item belongs to another, but is sold independently, e.g. selling the

fat, leg, or head, of a live sheep, then the H
. anafs ruled that this sale is
invalid. Thus, this sale is void, and is not concluded. In this case, the
object of sale does not exist, since the flesh of the sheep does not become
meat until the sheep is slaughtered and skinned.
Similarly, if a person sells a jewel that is found out to be made out of
glass, or if he sells a piece of wool, only to be found out to be cotton, then
the sale is not concluded since the object of sale does not exist.
In the case of selling a sleeve from a dress, if the dress would be damaged
by cutting, then the contract is defective, since the object of sale belongs
to another and cannot be delivered without harming the other.
121
Similarly, the sale of a wooden beam out of a ceiling or a brick out of a

wall renders the contract defective.
However, if the sleeve is cut out of a dress, or the wooden beam is separated
from the building and handed out to the buyer before he nullifies the
contract, then it returns valid since the corrupting factor was removed
prior to the nullification of the contract. However, if the seller does the
same after the buyer has nullified the contract, then it is not permitted.
If the object of sale is not damaged by portioning, such a a measure of
grain out of a heap or 10 grams of gold or silver out of a melted bullion,
then the sale is permissible. In this case, there is no harm in choosing an
element out of many, and the object of sale does not belong to another.141
4.3.11
Sale of property before receiving it
The H
. anafs ruled that it is not permitted to resell a movable object of sale
prior to receiving it. This ruling is based on the Prophets (pbuh) prohibition
of selling that which has not been received.142 Prohibition deems that which is
prohibited defective. Moreover, this sale contains gharar due to the possibility
of voiding the contract if the object of sale perishes.

In this case, the buyer
does not know if the object of sale will still exist, or if it will perish prior to
receipt. Thus, the first sale is deemed invalid, and the second is deemed void.
The Messenger of Allah (pbuh) has forbidden sales that contain gharar.143
As for immovable objects, such as land and houses, Ab

uH
. anfa and AbuY
usuf ruled that they prefer the opinion that it is valid to sell such items prior
to gaining possession. They base their opinion on the general permissibility
of sales, and that it is not valid to restrict this generality based on a Hadth
with very few chains of narration. Moreover, there is no gharar in immovable
objects such as buildings, since there is no major threat of perishing or change

in the object of sale.144 In summary, the reason for which the H
. anafs ruled for
non-permissibility of selling an item before receiving it is gharar.
to receipt whether
The Maliks ruled that it is not valid to sell foodstuffs prior
145
or not their genus is subject to rib
a.
Their proof is the H
of Ibn c Abb
as
. adth
c
and Ibn Umar that the Messenger of Allah (pbuh) said: Whoever buys food,
141 Ibn
Al-Hum
am ((H
as
an ((H
. anaf), vol.4, p.193), Al-K
. anaf), vol.5, p.139 onwards), Ibn
((H
. anaf), vol.4, p.114).
142 A number of Had
s are narrated to this effect, including the one narrated by Abu. th
D
aw
ud on the authority of Ibn c Umar that Zayd ibn Th
abit told him: The Messenger of
All
ah (pbuh) has forbidden re-selling an object in the same place where it is purchased, until
the merchants have taken it to their caravan. Narrations of this H
have been mentioned
. adth
previously.
143 Narrated by Muslim, Ahmad, and Ash
c
.
. . ab Al-Sunan Al-Arba a, and documented above.
144 Al-Sarakhs
(1st edition (H
anaf), vol.13, p.8 onwards), Al-K
as
an ((H
.
. anaf), vol.5, p.234),
Ibn Al-Hum
am ((H
tas.ar Al-T
w (p.84).
. anaf), vol.5, p.264), Mukh
. ah.a
145 Foodstuffs for the M

aliks include all items for which zak
ah is prescribed, including grains
and fats such as oil, and honey, etc.
c Abid
122
he should not sell it until he receives it.146 However, other goods, and food
that was purchased gross-sale, may be sold prior to receipt.147
The reason behind prohibiting the sale of food prior to its receipt in the
Malik school is the possibility of its use as a means of effecting rib
a al-nasa.
Its similarity to selling food for food with deferment necessitates its prohibition
to avoid means for circumventing the Law.
The H
. anbals ruled that the sale of food prior to its receipt is not permissible
if the food is measured by volume, weight, or number. This opinion is based on
the ease with which foodstuffs measured by such means can be received. The
specific mention of food in the above cited H
suggests that selling items
. adth
other than food prior to receipt is permissible, especially that no other valid
H
on the prohibition of selling items prior to their receipt is cited. The
. adth
condition of measurability by volume, weight, or number is chosen due to fact

that the liability (d.am
an) for such items is only transferred from the seller to the
buyer through measurement. In this regard, the Messenger of Allah (pbuh) has
forbidden the sale of items that are not guaranteed. Thus, the H
. anbals prohibit
this sale, like the H
. anafs do, based on gharar. Items that are not measured by
volume, weight, or number, may be sold prior to receipt.148
Al-Shafic, Muh.ammad ibn Al-H
. assan, and Zufar ruled that it is not per
missible to sell items, movable or immovable, for which the sellers ownership
is not complete. They base their opinion on the generality of the prohibition
of selling that which was not received by the seller. The relevant narration is
by Ah.mad on the authority of H
. akm ibn H
. izam (mAbpwh) who said: I said:
O Messenger of Allah, I make many trades, which of them are permissible for
me and which are prohibited?. He (pbuh) said: If you buy something, do not
sell until you receive it, and He (pbuh) said: the following are not valid: a
loan and sale in one, profits made on items that were never guaranteed by the
seller,149 and the sale of that which you do not have.
In this case, selling items that are not completely owned by the seller is
classified under sales of items that he never guaranteed. Their proof is based
on the following logical argument: This is an invalid sale due to the inability of
the seller to deliver the object of sale. Moreover, the ownership of the object
which may result from this sale would not be complete, since the object may
perish, thus voiding the contract. It is also not permissible since it contains
gharar without a compelling necessity.150 Thus, the reason for prohibiting this
146 The Had

of Ibn c Abbas was narrated by Al-Bukh
ar, Muslim, Abu-D
aw
ud, Al. th

ab
Tirmidh, and Al-Nas
a. The H
of Ibn c Umar
. adth
Al-Kutub Al-Sitta except for Al-Tirmidh. See Ibn Al-Athr Al-Jazar (, vol.1, p.383), Al
Haytham (, vol.4, p.98), Al-Shawk
an (, vol.5, p.158).
147 Ibn
Rushd Al-H
afd ((M
alik), vol.2, p.142 onwards), Al-B
aj Al-Andalus (1st edition
.
(M
alik), p.258).
148 Ibn Qud
amah (, vol.4, pp.110,113 onwards).
149 One explanation of this prohibition of bayc m
a lam yad.man is that it refers to the sale
of that which was not received by the seller. This explanation is based on the fact that if the
object of sale were to perish prior to receipt by the first buyer, he is not liable for its loss of
value as it is still a liability on the first seller. This H
. adth was authenticated above.
150 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.364), Al-Shac ar
an ((Sh
afic), vol.2, p.66), Al
123
sale in the Shafic school, as in the H

. anaf school, is gharar.
I find it more compelling that the reason for prohibiting

the sale of that
which has not been received is its similarity to rib
a: as the buyer pays the
money to the seller, then sells it prior to receiving it, he has thus paid a certain
amount of money and gained a profit based solely on paying it to the original
seller without having to do any work. This is very similar to rib
a.151 Moreover,
this sale contains gharar due to the inability of the original buyer to deliver the
sale. Thus, the reasons for prohibiting the sale of items
object of the second
that have not been received are in fact the conjunction of all the ones given by
the jurists of the major schools.
4.3.12
Conditionality of deferment
If deferment is made a condition for the delivery of a specific (non-fungible)

object of sale or price, then the H
. anafs deem the sale defective. This follows
since the default requirement in a sale contract is delivery at the contract session.
This in turn follows from sales being commutative contracts, where the exchange
of ownership is effected through the mutual exchange of possession. Deferment
negates the requirement to deliver immediately, thus changing the nature of the
contract and rendering it defective.
However, it is permissible to defer the object of sale in forward sales (salam).
As a matter of fact, this type of sale is not permissible without deferment for
the H
. anafs. Similarly, it is permissible to defer the price as a liability on the
buyer if the term of deferment is known. This follows since deferment is natural
for fungibles, where deferment allows the buyer to earn the price during the
specified deferment period. This is in contrast to chattel, for which deferment
does not serve a similar purpose.152
4.3.13
Sales with defective conditions
For clarification of the discussion of this issue, it is necessary to list the types of
conditions in sale contracts. There are three types of conditions for the H
. anafs:
valid, defective, and invalid.153
Valid conditions (al-shart. al-s.ah.h.)
Valid conditions, which are legally accepted and binding on the contracting
parties, are classified into four categories:
1. Conditions that are requirements for the contract. Those include
the cases where a person purchases an item on condition that: (i) the seller
151
Us.u
l al-Buy
uc Al-Mamn
uc a (p.74).
152 Al-K
c
as
an ((H
n ((H
. anaf), vol.5, p.23).
153 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.5, pp.168-172), Al-Sarakh
. anaf), vol.13, pp.13
c
n ((H
18), Ibn Al-Hum
am ((H
. anaf), vol.4, p.126
onwards), c Aqd Al-Bayc by Professor Mus.t.af
a Al-Zarq
a (p.27).
124

delivers the object of sale, (ii) the buyer owns either the price or the object
of sale, (iii) the seller withholds the object of sale until the price is paid in
full, etc. Such conditions articulate the requirements of the contract, since
the establishment of ownership, exchange of possession, and withholding
of the object prior to the delivery of the price are among the requirements
of commutative contracts.154
2. Conditions that are legally permitted. Such conditions include deferment and options to one of the contracting parties that were legally
documented based on the actions of the Prophet (pbuh). Thus, deferment
to a specified term is permitted to meet the needs of people. Similarly,
the permissibility of conditional options for a specified term to conclude or
void a sale has been documented through the saying of the Prophet (pbuh)
to H
: If you trade, then say: no wheedle, and I have
. ibban ibn Munqidh
an option for three days.155 This issue will be discussed in greater detail in our discussion of options, and it is based on juristic approbation.
However, analogy dictates that the condition is defective since it negates
a requirement of the contract, which is the establishment of ownership for
both price and object of sale immediately and simultaneously.
3. Conditions that are conforming with the requirements of the
contract. Examples include sale with a deferred price, with a condition
that the buyer provides a guarantor or a pawned object to cover the price.
In this case, a guaranty or a pawned object are methods of documenting
and insuring the delivery of the price. They are thus in conformity with the
requirements of the sale contract, and eligible for delivery. This condition
requires further investigation, since the guarantor or pawned object may
or may not be known, and we need to determine whether a transfer of
liability has the same legal status as a guarantee or pawned object.156
If the pawned object or the guarantor are not known, then the sale
is defective. for instance, if the seller says: I sell you on condition
that you pawn an object of equal price with me, without specifying
the object to be pawned, or if he says: on condition that you find
a guarantor for the price, without specifying a particular person,
the sale is defective. The ignorance (jah
ala) that ensues from such a
contract may lead to dispute and prevent the exchange of price and
154 Al-K
as
an
((H
. anaf), ibid, p.171).
H
was narrated by Al-H
akim in Al-Mustadrak on the authority of Ibn c Umar
. adth
.
as: Sell, and say: no wheedle , and in the narration in Al-Bayhaq, it is: If you trade,
then say: no wheedle, then you have the option for every good you purchase for three nights,
if you are satisfied then keep it, and if you are not then return it. It was also narrated
by Al-Bukh
ar, Muslim, Ab
u D
aw
ud, Al-Nas
a, and in Al-Muwat..ta as: Whomsoever you
trade with, then say: no wheedle. Here, no wheedle means it is not permissible for you
to deceive me, or do not make your deception binding upon me. See Al-H
afiz. Al-Zaylac
.
(1st edition, (H
), vol.4, p.6), Ibn Al-Athr Al-Jazar (, vol.1, p.414), Al-Samarqand
. adth
((H
. anaf), vol.2, p.82).
156 Al-K
as
an ((H
anaf
),
ibid,
p.171
onwards),
Al-Sarakh
s (1st edition (H
.
. anaf), vol.13, p.18).
155 This
125
object of sale. This follows since, without specification, the assurance

and certainty of receiving the price through the pawning or guaranty
is only realized through delivery. This purpose is thus not satisfied
if the pawned object or guarantor are not known.
If the two parties to the sale agree on a specific pawned object during
the sale session, then the sale is permissible. Thus, the obstacle of
ignorance about the object to be pawned has been removed, realizing
the same effect that would have occurred had the object been known
from the beginning. This follows since the contract session is treated
as a single time unit.
Similarly, if they do not agree on an object to be pawned, but the
buyer pays the price in cash during the contract session, then the sale
is valid. In this case, the purpose of pawning, which is the eventual
delivery of the price, has taken place. Thus, the contractual aspect
of pawning is dropped.
However, if the contract session ends without specifying the pawned
object or paying the price in cash, then the sale is defective. In
this case, the full mutual agreement of the contracting parties is
suspended based on the nature of the pawned object that satisfies
the condition in the contract. Thus, without the specification of the
object of pawning, the true mutual agreement (without which no sale
is valid) has not been achieved.
If the object of pawning, or the guarantor, are known by identification or naming, then the ruling based on analogy is that the sale
is defective. This is the opinion endorsed by Zufar. This opinion is
based on the principle that a condition that is incompatible with the
requirements of the contract is defective originally. In this context,
the condition of pawning an object or specifying a guarantor are in
conflict with the requirements of the contract, and are thus defective.
The opinion based on juristic approbation of the most beneficial outcome is that such a condition is valid, and this is the best supported
opinion for the majority of H
. anaf jurists. Their argument is that
even though this condition is in conflict with the requirements of the
contract in form, it conforms with it in substance, since a pawned
object or a guarantor are legal means of insuring delivery of the price.
The sellers right is thus guaranteed by pawning or guaranty, rendering each in conformity with the intent of the contract requirements.
In this sense, such a condition is similar to one that requires high
quality of the price to be delivered.
Note that the validity of permitting a sale with the condition of guaranty
is preferably restricted to the case where the guarantor is present at the
contract session, and accepts the guarantee. An exception is that he may
be absent at the time of the contract, but arrives during the contract
126

session and accepts. This follows naturally since the contract session is the
relevant locus for the contract. However, if the guarantor was (i) absent,
(ii) did not accept, or (iii) accepted in absentia, then the guarantee is not
valid. In this case, the objective of guarantee has not been realized, and
the ruling according to analogy will remain in effect. This follows since
the guarantors liability to pay the price was caused by the sale, which
gives him the status of the buyer if the guarantee is a condition for the
sale. Since the presence of the buyer in the contract session is a condition
for the validity of the sellers offer, thus the presence of the guarantor in
this case is similarly necessary.
The case of a guarantor is contrasted with the case of a pawned object,
where that object need not be present at the contract session. In this case,
the pawned object is a liability on the buyer, who is present and commits
to the pawning, thus rendering it valid. In this case, if the buyer does
not deliver the pawned object to the seller, the status of the pawning is
not established. This follows since pawning requires delivery. Then, once
delivery of the pawned object is completed, the contract is concluded.
If, following the agreement, the buyer refuses to deliver the pawned object,
Zufar ruled that he may be forced to deliver it. Once the pawned object
is accepted as a condition of a contract, its delivery becomes one of the
rights guaranteed by that contract. It follows that enforcement of delivery
of the pawned object is one of the rights that must be fulfilled.
The majority of H
. anaf jurists ruled that the buyer is not to be forced
to deliver the pawned object, since pawning is originally viewed as a voluntary contract. Thus, making it a condition in a sale does not change
its voluntary nature, and enforcing a voluntary contribution is not legally
allowed. In this case, the buyer is not forced, but he should be told: you
must deliver the pawned object, pay its value or price, or void the sale.
This follows since the seller was only satisfied with making the price a liability on the buyer based on the guarantee offered by the pawned object.
If the buyer refuses to do any of the above, then the seller has the right to
void the sale, since he would not achieve his objective from the contract.
A transfer of liability (al-h.aw
ala) may be issued by the buyer or the
seller. If the seller stipulates a condition in the sale that the buyer transfers
the liability for the price to a debtor of his, then we must consider two
cases:
(a) If liability for the entire price is transferred, then the sale is defective.
This follows since the sale would thus be one with a condition that
the price be a liability on a party other than the buyer, which is
invalid due to conflicting with requirements of the contract.
(b) If the seller makes it a condition that half the price be transferred in
liability to a specific third person, then the sale is valid if that third
party is present and accepts the transfer. If the third party was not
127
present but arrives during the contract session, and accepts, then the
sale is valid.
If the buyer stipulates a condition in the sale that the seller transfers the
liability for the price to one of his (the buyers) debtors, or if the seller
makes it a condition that the buyer guarantees the price to a creditor of
the seller, then the sale is defective.157 This follows since the transfer and
guarantee conditions are not requirements of the contract, but they are
rather conditions to benefit the parties to the contract. Conditions that are
not requirements of the contract are originally defective, unless they are in
conformity with the requirements and effects of the contract and reinforce
them. The transfer of liability is a means of absolving the buyer from
liability for the price, which is not in conformity with the requirements of
the contract. This is in contrast to guaranty and pawning.
4. Conditions that are accepted by convention: For instance, purchasing a lock on the condition that the seller will affix it to a door, or a shoe
on the condition that the seller will finish it, or appliances with a repair
warranty condition, are all deemed valid on the basis of juristic approbation. However, the opinion based on analogy is that such sales are not
valid, which is the opinion of Zufar.
The argument based on analogy is that such conditions are not requirements of the contract, and provide a benefit to one of the two
parties of the contract. Thus, such conditions are deemed defective,
in the same manner that purchasing cloth on the condition that the
seller will sew it into a shirt would be defective.
The argument based on juristic approbation is that people have included such conditions in sales for a long time, and it is very similar
to commissioning to manufacture (istis.n
ac ). Thus, the ruling based
on analogy is overruled in the same manner that it is overruled in
the case of istis.n
ac .
Defective condition (al-shart. al- f
asid)
A defective condition is one that renders the contract in which it was stipulated a defective contract. All conditions that are not covered by the above
enumerated four categories of valid conditions (those that are (i) requirements
of the contract, (ii) conforming with those requirements, (iii) based on legal
precedent, or (iv) accepted by convention) are deemed defective. Thus, conditions that do not meet any of those four criteria and are simply stipulated to
obtain extra benefits for one of the parties to the contract are deemed defective.
Examples of such contracts include: (i) buying wheat on condition that the
seller will grind it, (ii) buying cloth on condition that the seller will sew it into
a shirt, (iii) buying wheat on condition that it will be kept in the sellers house
157 Al-K
as
an
((H
. anaf), vol.5, p.172).
128
for a month, (iv) selling a house with a condition that the seller will continue
to live in it for a month, (v) selling land on the condition that the seller will
continue to cultivate it for a year, or an animal on the condition that he will
ride it for a month, and (vi) sales with a condition that the buyer will make a
loan to the seller, or give him a gift, etc. All such sales are defective, since any
additional benefit that is made a condition for the sale is considered rib
a. Such
benefits are an increase in a sale contract without compensation, which is the
very definition of rib
a. In this regard, all sales that contain, or are suspected to
contain rib
a are defective.158
3. Invalid and nugatory conditions (al-shart. Al-laghw or al-b
a.til)
This category is comprised of conditions that result in a net harm to one of the
parties of the contract. For instance, a sale with a condition that the buyer
may not sell the item or give it as a gift is considered a permissible sale with
an invalid condition for the majority of H
. anafs. They ruled thus since the
condition does not result in a benefit for either party, and thus does not render
the contract defective. Indeed, the defectiveness of a sale based on this type of
condition would have to be based on rib
a, which requires an extra benefit for
one of the parties.159
It is notable that the H
. anafs agree that it is valid for one of the parties of
the contract to append a valid condition (e.g. a valid option) to the contract ex
post. In contrast, Ab
uH
. anfa ruled that attaching a defective condition to an
otherwise valid contract renders it defective, whether the defective condition is
linked to the contract at its inception (qir
anuhu bihi) or appended to it ex post
(ilh.a
quhu bihi). This follows in his opinion since legal consideration must be
given to the actions of an eligible party to the contract.
Ab
u Y
usuf and Muh.ammad, on the other hand, ruled that the defective
appended condition is not attached to the contract, and the contract is not
deemed defective. In this case, the defective appended condition is considered
nugatory (laghw), since if it is accepted, it would render an otherwise valid
contract defective.
Since this transformation is not valid, the contract remains
valid. In general, they ruled that appending a valid condition is an exception
to the general rule that renders the appending of all conditions invalid. This
general ruling is based on the expiration of the language of the contract, which
makes it invalid to add new conditions. The case of appending a valid condition
is exempted from this general ruling to satisfy legitimate needs.160 The more
correct of the two opinions is that of Ab
u Y
usuf and Muh.ammad, as reported
by Ibn c Abid
n based on J
amic Al-Fus.u
layn.161
158 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.13, pp.15,18),
n ((H
am ((H
Ibn c Abid
. anaf), vol.5, p.214).
159 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.15), Al-K
Al-Hum
am ((H
. anaf), vol.5, p.111).
160 Al-K
as
an ((H
am ((H
. anaf), vol.5, p.227).
161 Ibn c Abid
n ((H
. anaf), vol.4, p.127).
129
Status of a sale with an attached condition for non-H

. anafs
It is well known that a non-valid sale may be characterized interchangeably
for the non-H
asid) or invalid (b
a.til), with no distinction
. anafs as defective (f
between the two notions. Thus, if the attachment of a condition to a contract
renders it non-valid, it may be equivalently called defective or invalid. A sale
a, and the jurists differed on
with an attached condition is called bayc al-thuny
its status.162 We have discussed the H

afics ruled
. anaf positions above. The Sh
based on a H
ad
th
that
the
sale
is
rendered
defective.
The
H
anbal
s
ruled that
.
.
the sale and the condition are both rendered valid, since they do not accept the
above mentioned H
. The Malik views will be discussed in detail below.
. adth
The Shafic position is as follows:163
If a condition that is a prerequisite for the contract (e.g. that the object
of sale be delivered, or a defective good returned, etc.) is attached to the
contract, then the contract is valid. In this case, the attached condition
is considered a clarification of the contracts prerequisites.
The contract is also deemed valid if a valid condition (e.g. an option,
a deferment, a pawning, or a guaranty) is attached to it, even if such a
condition results in a benefit for one of the parties of the contract, and
it is not a prerequisite for the contract. In this case, the validity of the
contract relies on the legal validation of the condition, and the legitimate
need it meets.
Other conditions that are contrary to the prerequisites of the contract
render the sale invalid. Examples include conditions that the buyer may
not resell the item or give it as a gift; that the buyer either accepts to buy
an item or to lend the seller some money; that the seller of a house be
allowed to live in it for some time; that the seller of a cloth must sew it
into a dress for the buyer; that the seller of a crop reaps it for the buyer; or
that the seller of a piece of leather must sew it into a shoe for the buyer.
In all such cases, the sale is rendered invalid based on the H
that
. adth
the Prophet (pbuh) prohibited a sale with an attached condition (bayc wa

shart.).164
165
The H
have ruled that the attachment of two conditions to a sale
. anbals
renders it invalid, whereas the attachment of one condition does not. They base
162 Al-thuny
a refers to excluding (istithn
a) one part of the object of sale. If what is being
excluded from the sale is known, e.g. one of the trees, one of the houses, or a known lot
of land, then the agreement and the sale are valid. However, if what is being excluded is
unknown, then the sale is not valid.
163 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
pp.265,268).
164 Narrated by c Abd Al-Haqq in his Al-Ahk
c
uc ayb on
.
. am on the authority of Amr ibn Sh
the authority on his father on the authority of his grandfather. It was also narrated by Ab
u
H
. anfa.
165 Ibn Qud
amah (, vol.4, pp.224-226,235), Marc ibn Y
. anbal), vol.2,
p.23 onwards).
130
this ruling on the H

that the Prophet (pbuh) said: The following are not
. adth
permissible: a loan and a sale in one transaction, two conditions in one sale,
or selling that which is not in your possession.166 What is meant by two
conditions are conditions that are not among the standard benefits accrued
from the contract. Examples include the cases where a person buys a cloth and
makes it a condition that the seller sews it into a dress and shortens it, or buys
grains and makes it a condition that it is milled and carried to a destination. In
those cases, making only one of the conditions would render the sale permissible.
The H
. anbals divide conditions into four categories:
1. Conditions that are among the prerequisites of the contract; e.g. the condition of delivery, option during the sales session, and immediate exchange.
Such conditions are redundant, and thus do not result into a change of
status for the contract.
2. Conditions that result in an extra benefit to one or both parties of the
contract; e.g. deferment, options, pawning, guaranty, certification, or description of specific characteristics of the object of sale. Those are permissible conditions that must be fulfilled. Ibn Qudama said that he does not
know of any disagreement over the validity of those first two categories of
conditions.
3. Conditions that are not among the prerequisites of the contract or its
standard benefits, but that are not in conflict with the prerequisites. There
are two sub-categories of such conditions:
(a) Conditions pertaining to the object of sale that result in a benefit
to the seller: In this case, one condition is acceptable. Examples
include: if the buyer makes it a condition that he (the buyer) will
sew the cloth he buys into a dress; if a condition is made that a
pile of wood is carried to a specified destination; that the seller be
allowed to live in a house he sold for a month; and that the seller
be carried on an animal he sold to a specific place. The proof of
the permissibility of those conditions is the H
of Jabir that the
. adth
Prophet (pbuh) bought a camel from him, and stipulated a condition

that he will carry him on that camel to his house in Madnah.167
(b) Conditions that incorporate one contract in another: Examples of
this type of condition include: selling a person an item with a condition that he would sell him another item, buy from him another
item, rents an object to him, marry him to someone, lend him some
money, etc. This type of condition is defective and renders the sale
defective due to the prohibition of two sales in one.
166 Narrated by Ab
u D
aw
ud and Al-Tirmidh on the authority of c Abd All
ah ibn c Amr.
Al-Tirmidh deemed it a valid and good narration (H

adth h.asan .sah.h.).
.
167 This
is the meaning of the H
, which was narrated by Ah.mad, Al-Bukh
ar, and
. adth
Muslim on the authority of J

abir, c.f. Al-Shawk
an (, vol.5, p.178).
131
4. Conditions that are in conflict with the prerequisites of the contract: Examples of this type of condition include a seller who adds a condition that
the buyer may not resell the item or give it as a gift, or a condition that
the buyer must sell the item or must make it a trust. There are two reported opinions of Ah.mad pertaining to this type of condition, the more
valid of which is that the sale is valid, and the condition is invalid.
The Maliks distinguish between the following cases:168
If the condition restricts the buyers ability to make a private or public
transaction, then the condition and sale are rendered invalid. For instance,
the sale is not permissible if the seller attaches a condition that the buyer
may not resell the object or give it as gift. This condition renders the sale
a, and the Prophet (pbuh) has forbidden the thuny
a unless
a bayc al-thuny
it is known.169 If this condition is dropped, then the sale becomes valid.

If the seller stipulates a condition that benefits himself, e.g. riding the
sold animal, or living in the sold house for a known short period (e.g. a
month, up to a year in some opinions), then the sale with the attached
condition is valid. This is based on the above cited H
of Jabir.
. adth
If the seller stipulates a condition that results in a corruption in the price,

then the sale is permissible, while the condition is invalid. For instance,
if the seller makes it a condition that the sale is void if the price is not
delivered for three days, the condition is invalid, but the sale is valid.
However, if the seller says to the buyer: whenever I return the price to
you, you return the sold object to me, which is known for the H
. anafs as
a), then the sale is not permissible.
redemptive sale (bayc al-waf
4.3.14
Sale of fruits and vegetables
This is a topic of great practical relevance in markets, and thus must be discussed
in detail:
There is a consensus among legal scholars that selling fruits before they are
created is not concluded. This follows from the prohibition of selling that
which has not yet been created, and the multi-year sale (bayc al-sinn
and al-muc a
wama).170
alik), vol.2, p.159 onwards), Ibn Juzayy ((M
alik), p.259), Al. d ((M
Dardr ((M
alik)A, vol.3, p.65).
169 Narrated by Al-Nas
a and Al-Tirmidh (who deemed it valid = .sah.h.) on the authority
of J
abir, c.f. Al-Shawk
an (, vol.5, p.151).
170 The prohibition

of selling that which has not yet been created is a special case of the
prohibition of selling that which is not in the possession of the seller, the sale of the fetus
animal in its mothers womb, the gharar sales, etc. We have cited the relevant H
s for
. adth
the prohibition of multi-year sale (bayc al-sinn

those prohibitions previously. As for
and
c
al-mu a
wama), it is narrated in a number of different ways on the authority of J
abir ibn
c Abd Allah by Al-Bukh
ar, Muslim, Ah.mad, Ab
u D
aw
ud, Al-Tirmidh and Al-Nas
a. In
a narration of Al-Bukh
ar He (pbuh) prohibited al-muh.a
qala, al-muz
abana, al-muc a
wama,
132

It has been narrated that the Prophet (pbuh) prohibited the multi-year
sale of land (bayc al-sinn) and trees (bayc al-muc a
wama). Those were
prohibited since they involve selling non-existent items, and the Prophet
(pbuh) has prohibited the gharar sales. As we have seen, gharar is that
whose consequences are notknown. The type of gharar involved

in those
sales is the sale of an unknown item that may and may not come to
existence, and whose quantity if it comes to existence is not known.
am) is
The sale of fruits after they are collected (cut, al-qat.c or al-s.ir
unanimously deemed permissible.
There are differences among the scholars regarding the sale of fruits on
trees or plants in the ground after they are created. The H
. anafs distinguish between two cases: (i) sales prior to the manifestation of the
goodness of the produce, and (ii) sales after the goodness is manifested.
In each case, the sale can be (a) with a condition of cutting them, (b)
without any conditions, or (c) with a condition of leaving them on the
tree or in the ground.
1. If the sale is conducted prior to the manifestation of goodness of the

produce:
(a) If it is under the condition of cutting them, then it is permissible. In
this case, cutting the fruits is binding immediately, unless the buyer
gives the permission to wait.
(b) If the sale is devoid of any conditions, then it is deemed permissible
by the H
afics, Maliks, and Ah.mad.
. anafs , and forbidden for the Sh
This decision was reached by the H

. anafs since leaving fruits on the
tree is not made a condition through any legal text. Moreover, since
contracts are initially devoid of any contracts, it is not permissible to
restrict them with a condition of leaving the fruits on the trees without a formal proof. This is especially true if this artificial restriction
of the contract renders it defective. The H
. anafs also reasoned that
the sale is permissible since fruits are a beneficial good even if only
as fodder for the animals.
(c) If the sale contains a condition of leaving fruits on the trees or vegetables in the earth, then the consensus among H
. anaf jurists is to
and al-mukha
bara. In another narration: The Prophet (pbuh) has prohibited bayc al-sinn.
The meaning of al-muh.a

qala as stated in Al-Q
am
us: is the sale of plants before their quality
is known; selling wheat in its spikes; muz
aarac a for a third, fourth, less, or more; or renting
a land with the wheat in it. Al-muz
abana as explained in the S
ar and
. ah.h.ayn (of Al-Bukh
Muslim), is the sale of fresh palm-dates in exchange for dried dates, or fresh grapes for raisins.
Al-Muc a
wama is the sale of trees for a number of years, and some have explained it as the
rental of land for a number of years. Similarly, bayc al-sinn is the sale of the fruits of a
palm tree for more than one year in a single contract. This is a gharar sale, since it involves
of land in exchange for a
selling that which does not [yet] exist. Al-Mukha
bara is the rental
third or fourth of the produce as rental, c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.403 onwards),
Al-Shawk
an (, vol.5, p.175), Al-Haytham (, vol.4, p.104).
133
render the contract defective. Their proof is that this is a condition

that is not a prerequisite of the contract, and it results in a benefit
to one of the parties (the buyer). Moreover, this condition is not in
accordance with the contract, and is not conventionally used by people. This type of condition renders the sale defective: e.g. if a person
purchases wheat on condition that it be left in the sellers house for
a month, the sale is defective. [In the case of fruits and vegetables,
the buyer] cannot leave the purchased items unless he borrows the
trees or the land, both of which are owned by the seller. Thus, this
condition is tantamount to a condition of extending a loan, which
results in a contract within a contract. As we have seen above, this
inclusion of one contract in another is prohibited. Finally, they argue that this condition adds gharar to the contract since the buyer
does not know whether the fruits

will remain in good condition, or
whether they will perish due to some infection. Thus, there are three
reasons for rendering a sale including this condition invalid: gharar,
a defective condition, and a contract within a contract.

2. If the sale is following manifestation of the goodness of the produce:
(a) If the sale includes the condition of cutting the fruits or vegetables,
it is permissible.
(b) If the sale is devoid of any condition, it is also permissible.
(c) If he sells with a condition of leaving the fruits in the trees or the
vegetables in the earth, then: (i) if the object of sale has not reached
its full size, then the sale is unanimously deemed defective, as shown
in case (c) above; (ii) if the object has reached its full size, then the
sale is considered defective for Ab
uH
u Y
usuf. Their
. anfa and Ab
proof is that the condition of leaving the items in this case contains
a benefit to the buyer, and it is neither a requirement of the sale,
nor is it in accordance with the sales requirements. In this way, it is
again similar to the example of purchasing wheat on the condition of
leaving it in the sellers house for a month. Muh.ammad, on the other
hand, deemed the condition permissible based on juristic approbation
and its conventional use.171 The permission for Muh.ammad is not
based on the convention for people to add a condition of leaving the
object of sale, but rather the convention of being lenient in allowing
the buyers to leave the item without adding it as a condition in the
sale contract. This opinion is also reported and accepted in Al-Durr
Al-Mukht
ar.
171 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, p.195), Al-K
c
n ((H
al
Al-Hum
am ((H
. anaf), vol.4, p.40), Al-Amw
wa Naz.ariyyat Al-c Aqd (p.307 onwards).
134
Status of leaving fruits after the goodness of their quality is manifested when they are sold unconditionally
In this case:
1. If the purchased items have reached full size, but still need to ripen, then
the buyer does not need to purify them with charity whether he left them
with or without the sellers permission, since the object of sale will not
increase in size, but only change in quality. This is contrasted with plants,
whose growth is of benefit to the buyer. In this case, the stem of the plant
is deemed to be property of the buyer, in contrast to fruits on a tree where
the tree remains property of the seller.
2. If the sold object had not yet reached its full size, then leaving it is permissible if it is with the permission of the seller. If he leaves it without
the sellers permission, then he must give as charity that which has increased after the contract. In this case, the increase was corrupted by
unlawfully leaving the object. To get rid of this corruption, it must be
given as charity.
Status of newly-grown fruits during a waiting period not made a
condition of sale
If new fruits grow on the tree, they are the sellers property whether the sold
fruits were left on the tree with or without his permission. Since such fruits
are a growth from the tree, which is the sellers property, they belong to him.
However, if the seller makes it permissible to the buyer to take the new fruit,
then he may.
If it is not clear whether the new fruits grew on the tree after the sale was
concluded, we must consider two cases:
1. If the buyer had not yet been given full access (takhliya) to the fruits he
bought, the sale is invalid. This is the ruling of Al-Kasan in Al-Bad

aic .
In this case, the mixture between the object of sale and the new fruits
renders the object of sale undeliverable due to this invalidating ignorance
(jah
ala).
2. If the new fruits grew after the buyer was given full access, then the sale
remains valid, since obtaining full access is tantamount to receiving the
object of sale. In this case, the buyer determines the increment over what
he bought, and returns that increase to the seller. The buyer is given
possession, and thus the right to determine the amount of increase, due
to having been given full access to the fruits.172
The preceding was the opinion of the H
. anafs regarding the sales of fruits
and plants. The M
aliks, Shafics, and H
anbals ruled that if the goodness of the
.
fruits is ascertained, then it is permissible to sell them: (i) with no conditions,

172 Al-K
as
an
((H
. anaf), ibid.).
135
(ii) with the condition of cutting them, or (iii) with the condition of leaving
them.
On the other hand, prior to the manifestation of goodness of the fruits, the
consensus is that sales with the condition of leaving or remaining on the tree is
not valid. This opinion is based on the Prophet (pbuh) having prohibited the
sale of fruits until their goodness is manifested; he prohibited both the buyer
and the seller.173 The non-validity of this sale thus follows since a prohibition
implies the defectiveness of that which is prohibited. Ibn Al-Mundhir said:
Scholars agreed on the universality of this Hadth, based on the existence of
174
the same risk as in the sale of non-existent objects.
If the sale is conducted with a condition of cutting the fruits immediately,
then there is a consensus that it is valid. This follows since the prohibition was
based on the fear that the fruits may be ruined or maimed prior to receipt. The
proof of this ruling is the narration on the authority of Anas that The Prophet
(pbuh) forbade the sale of fruits until they are bright. When asked: what is
brightness?, Anas said: turning red or yellow. Then he said: do you wonder,
if Allah protected the fruit, how then would one of you take the property of his
brother?.175 This fear of perishing of the fruits is not applicable if the fruits
are cut immediately, thus rendering the sale valid as it would be if the goodness
of the fruits were manifested.
Ibn Rushd said: Since the reason for prohibition was fear of the fruits
being infected prior to ripening, scholars did not suggest that the prohibition of
sale prior to ripening is unrestricted. Indeed, they interpreted the prohibition
to apply to the sale with a condition to leave it on the tree until it ripens.
Thus, they have allowed selling it prior to ripening with the condition of cutting
immediately.
Jurists also ruled that it is not permissible to sell green plants in the soil
except with the condition of immediate cutting based on the H
of Ibn
. adth
c
Umar: The Prophet (pbuh) forbade the sale of date-palms until they bear
dates, wheat spikes until they turn white and there is no fear of infection; he
forbade both the buyer and the seller.176 Ibn Al-Mundhir said: I do not
know of anyone who prefers not to follow this H

.
. adth
If the sale is conducted prior to the manifestation of goodness of the fruits,

and contains no conditions of cutting or leaving, then it is invalid. The proof of
this ruling is that the Prophet (pbuh) issued an unrestricted prohibition of the
sale of fruits before their goodness (ripeness, brightness) is manifested. Thus,
such a sale may lead to conflict. An unrestricted contract makes it a prerequisite
ar, Muslim, Ab
u D
aw
ud, Al-Nas
a, Al-Tirmidh, and M
alik on the
authority of Ibn c Umar, c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.389).
174 Note that this claimed consensus may

be questioned, since Yazd ibn Ab H
. abb and AlLukhm of the M
alik school have both permitted this type of sale with the condition of leaving
the fruits on the tree, c.f. Ibn Rushd Al-H

alik), vol.2, p.148), Al-B
aj Al-Andalus
. afd ((M
(1st edition (M
alik), vol.4, p.218).
ar, Muslim, M
alik, and Al-Nas
a, c.f. Ibn Al-Athr Al-Jazar (,
vol.1, p.390).
176 Narrated by the trusted narrators with the exception of Al-Bukh
ar and Ibn M
ajah on
the authority of Ibn c Umar, c.f. Al-H

), vol.4, p.5).
.
. adth
136
to allow leaving fruits on the tree. This follows since an unrestricted contract
is interpreted based on customary behavior, and it is customary to leave the
fruits until they are ripe, as one can infer from the language of the H
.
. adth
Thus, an unrestricted contract is equivalent to one with a condition of leaving

the fruits until they are ripe, and both are equally prohibited by the H
.
. adth
The reasoning given by the Prophet (pbuh) regarding the fear of perishing or
infection of the fruit may thus be cited to render such sales invalid. More
generally, the inference may be made from the H
that the status of the
. adth
sale after the objective is met until their ripeness is manifested is treated
differently from its status before. Thus, this prohibition applies to sales that
are devoid of a leaving condition.177
In summary, we quote Ibn Al-Humam ((H
. anaf), vol.5, p.102): There is
no disagreement regarding the inadmissibility of: (i) selling fruits before they
appear, or (ii) after they appear but prior to manifesting their goodness with
the condition of leaving the fruits on the tree. There is also no disagreement
regarding the admissibility of: (i) selling the fruits before the manifestation of
their goodness with a beneficial condition of cutting, or (ii) selling them after
their goodness is manifested. The disagreement is only regarding selling them
before their goodness is manifested.
ala preferred following customary practice in making
Ibn c Abidn in his Ris
it permissible to sell fruits unconditionally before or after their goodness is
manifested, whichever is accepted in common practice. His proof is that a
defective condition becomes valid if it is accepted in customary behavior, thus
rendering the contract valid based on juristic approbation (istih.s
an).
Manifestation of goodness or brightness is defined by the majority of jurists
as: redness or yellowness for dates; the appearance of sweet nectar; softness;
and yellowness in grapes. For other fruits, ripeness is determined based on
whichever color the ripe fruit takes (e.g. redness, blackness, or yellowness for
dates, grapes, and apricots). In fruits that do not change colors, the test is
having a sweet nectar and softness. For grains and plants, the measure of
ripeness is their strength.178 The proof for this demarcation of ripeness is the
H
that the Prophet (pbuh) prohibited the sale of fruits until they are
. adth
ripe.179 He also prohibited the sale of fruits until they are bright, which was
explained as turning yellow or red.180 He (pbuh) also prohibited the sale of
grapes until they turn black.181 The H
. anafs explained the manifestation of
177 Al-B
alik), vol.4, p.218), Ibn Rushd Al-H
afd ((M
alik),
c .
vol.2, p.148), Ibn Juzayy ((M
afi ), vol.3, p.86,89),
Ibn Qud
. anbal), vol.2, p.69).
178 Al-B
alik),
. afd ((M

alik), p.261), Al-Im
afic), vol.11,
c
p.351,360), Al-Khat.b Al-Shirbn ((Sh
amah (, vol.4, p.87,89),
Marc ibn Y
. anbal), vol.2, p.70).
ar, Muslim, Ab
u D
aw
ud, and Al-Nas
a on the authority of J
abir
(mAbpwh).
ar, Muslim, M
alik, and Al-Nas
a on the authority of Anas.
181 Narrated by Ash

a, on the authority of Anas, c.f. Ibn Al. . ab Al-Sunan except Al-Nas
Athr Al-Jazar (, vol.1, p.390 onwards), Al-Shawk
an (, vol.5, p.173).
137
goodness as safety from the incidence of an infection or defect. Thus, the

H
. anafs have considered only the appearance of the fruit, while the majority
of jurists considered the appearance of ripeness and sweetness in fruits and
strength for grains and plants.
The H
. anafs required inspecting the appearance of goodness separately for
each type of fruit. The Shafics and most H
. anbals required the inspection of
goodness of each type of fruit separately even if they are grown in one orchard.
Thus, it is not sufficient to observe the manifestation of ripeness of the grapes
grown in some orchard to validate the sale of pomegranate grown in the same
orchard. It is also not valid to sell grapes from one orchard based on the manifested ripeness of grapes in another orchard. In all these cases, the ripeness of
one type or in one geographical location does not imply ripeness in another.
The Maliks, however, ruled that if the goodness of one type of fruits is
manifested, it is valid to sell the fruits [of the same type] grown in neighboring orchards. It is not valid, however, to sell one type of fruit based on the
appearance of goodness of another type.
The Z.ahirs ruled that the manifestation of goodness of one type of fruits in
an orchard validates the sale of all other types of fruits grown in that orchard
as long as the sale of all those fruits is in one contract. The exceptions from
this rule are dates and grapes, the sale of which requires brightness of color or
appearance of ripeness through blackness, etc. This exception is made due to
the existence of an explicit H
dealing with those specific fruits.182
. adth
Sale of fruits, cucumbers, and watermelon

This section deals with the sale of fruits or plants some of which were manifested
to be good, and it is likely that new produce will follow and be mixed with the
old. Examples include figs, cucumbers, bananas, roses, watermelon, eggplant,
zucchini, and pumpkins. In such cases, the most common H
. anaf opinion, also
supported by the Shafics, H
anbals, Z.ahirs, Zayds and Ib
ad.s is that it is
.
permissible to sell that which has appeared in the beginning. However, the sale
of that which has appeared, together with that which has not, is not permissible.
In the latter case, the contract would include known and unknown objects of
sale, where Allah may prevent the unknown from ever appearing. The invalidity
of this sale also follows from the undeliverability of the object of sale. The
need to sell those fruits and vegetables can be met by selling the entire plant.
In this case, a distinction is made between selling un-ripened fruits, which is
permissible, and selling those that have not yet been created, which is not.
For the impermissible sales discussed in this section, the H
. anafs rendered
the sales defective, while the other schools considered them invalid.183 Another
182 Ibid,
Ibn H
((H
afic), vol.11,

amah (, vol.4, p.90), Marc ibn
Y
a (1st edition (Shc ah Zaydiyyah),
. anbal), vol.2, p.68), Ibn Al-Murtad.
vol.3, p.317), Sharh. Al-Nayl (vol.4, p.72 onwards), H

a
shiyat Al-Shalab c al
a Al-Zaylac (vol.4,
.
c Abid
n
((H
anaf
),
vol.4,
p.40),
Al-Ras
ail of Ibn
p.12), Ibn H
azm
(,
vol.8,
p.471),
Ibn
.
.
c Abid
n ((H
n (vol.2, p.139). Ibn c Abid
. anaf), vol.4, p.40) said: It is clear that this type
183 Al-K
as
an
138
opinion in the H
. anaf school rendered such sales permissible, based on the common practice of selling fruits in this manner. In this regard, forcing people to
n
stop acting according to custom leads to unnecessary hardship. Ibn c Abid
has preferred this opinion, and it was adopted in the Majallat Al-Ah.k
am AlSharc iyya.
The ruling of the M

aliks, Ibn Taymiya, Ibn Al-Qayyim, the Imam Shc a,
and according to the most common opinion among later H

. anafs is that the sale
is valid. This ruling is based on assuming the best regarding Allah (swt) and the
forgiveness of man for the portion of the price corresponding to the fruits that
Allah (swt) allows to grow. The permission is also based on the customary use
of this means of sale, whereby the difficulty of discriminating between the fruits
leads to combining that whose goodness or ripeness is manifested with that for
which it is not.184 I accept this opinion since it agrees with the requirements of
practical life, and the customary usage of this sale. Indeed, if this type of sale
is not permitted, there will be endless disputes among the people.
Sale of wheat in its spikes
The H
. anafs ruled that it is valid to sell wheat in its spikes, beans in their shells,
as well as rice and sesame. Their ruling is based on the H
that the Prophet
. adth
(pbuh) prohibited the sale of palms until they are ripe, wheat spikes until they
turn white, and are safe from infection; he prohibited both the seller and the
buyer. Since wheat is a grain of positive benefit, it may be sold in its spikes
like barley.185
The Maliks, H
. anbals and Z.ahirs also allowed the sale of grains in their
spikes, but agree among themselves that it is not permissible to sell the grains
without their spikes, since their characteristics and amounts are not known.
Their proof is the H
cited above. Logically, if the grains are strong, their
. adth
goodness is manifested, which makes them equivalent in status to fruits whose

goodness is manifested. If some of the grains are strong, it is valid to sell the
entire crop of the same kind grown in the same field. This is in analogy to a
tree on which some of the fruits are evidently good.186
of sale is necessary in our time, especially in Damascus, where there are numerous trees and
fruits. Separating people from their customs leads to hardship, and if we make this sale invalid
the ruling would make it obligatory to prohibit the eating of fruits in such countries since they
are only sold this way. The Prophet (pbuh) has permitted the salam sale to meet a need,
despite its being based on the sale of a non-existent object. Since the need is apparent here
as well, we can make an inference based on the permission of salam. Thus, this sale does
not contradict the text, and may be approved based on juristic approbation, since the ruling
by analogy is that it is not permissible. The apparent ruling in Al-Fath. is leaning towards
permitting it, thus I included the narration on Muh.ammad. Moreover, we have cited above
the narration by Al-H
an on the authority of Ab
u Y
usuf and Muh.ammad. There is no
. alaw
hardship for which the religion does not find a solution, and it is clear that this is the reason
for averting the apparent ruling based on the H
.
. adth

d ((M
alik), vol.2, p.156), Bulgh
alik (vol.2, p.79), Al-B
aj Al.
. at Al-S
Andalus (1st edition (M

alik), p.261), Al-H
c ah
. ill ((Sh
Im
amiyyah), p.154), Ibn Qayyim Al-Jawziyyah ((H
. anbal), vol.2, p.12).
185 Ibn Al-Hum
am ((H
. anaf), vol.5, p.106).
186 Al-B
alik),
. afd ((M
4.4. STATUS OF DEFECTIVE SALES
139
The best supported Shafic opinion is that any grains of which the seeds are
not seen (e.g. wheat, lentils, and sesame in their spikes) are not valid to sell
with or without their spikes, even if they are observed to be strong. In both
cases, the warranted object of sale is hidden inside that which is not part of
its goodness. Thus, its sale is rendered invalid based on analogy to the sale of
wheat buried in the chaff after threshing, which is definitely invalid based on
gharar. As for the H
that the Prophet (pbuh) prohibited the sale of spikes
. adth
until
they are white, i.e. strong, it is judged to apply to barley and similar
grains. Rice and corn, whose grains are visible on their ears, are like barley;
whereas those that are hidden in their perianth are like wheat.187
4.4
Status of defective sales
This section covers the legal status of defective sales, and the ensuing discussion
on dealing with the object of sale. The buyers voiding of a defective sale, and
the increase in an object of a defective sale will also be discussed.
188
The H
One of
. anafs have a number of rulings regarding defective sales.
those rulings is that the defective sale is concluded in exchange for the value of
the object of sale or its equal, rather than the named price. Thus, receipt of
the object of sale results in ownership. The naming of a defective price (e.g.
wine), the inclusion of a defective condition, or ignorance regarding the price,
etc. are proof that the intention of the parties to the contract is to conduct a
sale. Thus, the sale is concluded with the compensation for the object of sale
being its value. This follows since the original objective of the sale is the value
of its object. Thus, the object of a defective sale is considered a liability on the
buyer, for which he must pay the seller a similar object if it is a fungible, or its
value if it is non-fungible.
The proof of the conclusion of a defective sale, and the ensuing exchange of
ownership, is that a cornerstone of sales which is the exchange of properties
has been fulfilled by eligible parties in a valid object of sale and price. Thus,
the contract must be judged as concluded. Indeed, prohibition in this case does
not pertain to the contract itself, but rather to an ancillary attribute of the
transaction (e.g. as in conducting an otherwise valid sale at the time of jumc a
prayers). The inclusion of such defective conditions is not valid, and therefore
their utterance is equivalent to their non-utterance.
Notice that ownership was not established prior to receipt in avoidance of
establishing defectiveness of the contract. In this regard, if ownership is deemed
to be established prior to receipt, delivery of the price and object of sale would
be binding, which establishes the defective contract. This is not permissible,
since elimination of defectiveness is a legal requirement.
vol.2, p.151), H
shiyat Al-Dus
uq (vol.3, p.16), Ibn Qud
amah (, vol.4, p.83), Ibn H
.a
. azm (,
vol.8, p.395).
187 Al-Khat
b Al-Shirbn ((Sh
afic),
.
vol.9, p.338 onwards).

188 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.23), Al-K
c
Al-Hum
am ((H
an
at (p.216).
. anaf), vol.5, p.227 onwards), Majma Al-D
. am
140
The majority of jurists ruled that a defective sale is not concluded, and
does not result in ownership, even if the object of sale is received by the buyer.
They base their ruling on the maxim that ownership may not result from a
forbidden transaction. In this regard, the prohibition of a defective sale renders
it illegal, and no legal result (e.g. transfer of ownership) may ensue from an
illegal contract.
The H
. anafs stipulate two conditions for a defective sale to result in ownership:
1. Receipt of the object of sale and/or price: Thus ownership is not established prior to receipt, since the contract at that time should be voided to
remove the defectiveness.
2. That receipt of the object of sale occur with the sellers permission: Thus,
ownership is not established if the seller explicitly forbade the buyer from
taking the object, or if it were received in his absence without permission.
If the seller neither prohibited the buyer from receiving the object of sale,
nor gave him permission, and the buyer received the object during the
contract session in the presence of the seller, then:
The most common H
. anaf opinion is that ownership is not established.
Muh.ammad in Al-Ziy
ad
at ruled that ownership is established in this
case.
Al-Mirghn
an ruled that Muh.ammads opinion is the correct one,
is a proof that the seller has given an implicit permission
since there
to the buyer to receive the object of sale. The status of this receipt
is similar to that of a gift-recipient taking the gift in the presence of
the donor who does not forbid him from taking it. In both cases, the
receipt is valid. In this regard, any sale is an authorization for the
buyer to receive the object of sale, thus receiving it in the presence
of the seller is tantamount to a prior authorization.
A well known opinion by the author of Al-
Id.a
h. is that there is no
authorization for receipt in a defective contract. In this case, receipt
of the object of sale is an establishment of defectiveness, which is
a legal obstacle for receipt. This distinguishes a defective sale from
a gift, where there is no legal impediment to receipt. Thus, in the
case of a defective sale, it is not possible to infer the sellers implicit
permission by means of a legal proof.189
4.4.1
Dispossession of an object purchased through a defective sale
One of the rulings regarding a defective sale is that the buyer who is in receipt
of the object of sale has all the privileges to conduct transactions that transfer
189 Al-K
as
an
((H
am ((H
. anaf), vol.5, p.230).
141
ownership of the item. Thus, all such transactions are executable, including
sales, gift giving, charity, pawning, and rental. Such dealings are deemed permissible and executable since they remove the right to benefit from an illegal
item. However, the H
uh)
. anafs find all such transactions reprehensible (makr
since the best legal solution is to void the defective contract. Since the above
listed dealings would prevent or delay the legal right to void the contract, they
are rendered reprehensible.
Dealings that involve benefiting from the item, such as eating food, wearing clothes, riding an animal, or residing in a house, are not permissible for
the buyer in a defective sale. This follows from the rule that ownership that
is established through a defective sale is corrupted ownership (milk khabth).
Corrupted ownership does not legitimize deriving benefit from the item thus
owned, since it should be legally invalidated. This is the most correct opinion
190
among the H
. anafs.
4.4.2
Invalidating the right to void
1. Dispossession of an item purchased in a defective sale:

It is well known that the ownership established through a defective sale is not
binding, and is best to void. Each party to the contract has the right to void it
unilaterally prior to receipt, regardless of the origin of defectiveness. Moreover,
they each have the right to void it after receipt if the defectiveness originates in
the compensation, e.g. if the price is wine or pork.
Ab
u H
u Y
usuf ruled that each of the parties has the right
. anfa and Ab
to void the contract if the defectiveness is not inherent to the compensation,
but involves a condition of extra benefit or deferment to an unknown time.
They thus ruled that the contract is not binding by itself. On the other hand,
Muh.ammad ruled that only the person for whom the extra benefit would accrue
has the right to void the contract. His proof is that the person who derives extra
benefit from the condition can validate the contract by removing its defective
attribute.191
The above mentioned rulings pertain to the defective transaction itself. One
may ask whether the right to void the contract is invalidated by subsequent
transactions of the buyer following the defective sale. We need to consider this
case in some detail:192
1. If the subsequent transaction removes all ownership rights (e.g. sale, gift
giving, or freeing of slaves), then the right to void the original defective
sale is invalidated. The buyer in the new transaction is liable for the value
or a similar object if the object is non-fungible or fungible, respectively.
The original buyer thus conducted a transaction with an object that is
owned by him, and thus the transaction is executed.
190 Ibn
Al-Hum
am ((H
as
an ((H
. anaf), vol.1, p.232), Al-K
. anaf), vol.5, p.304).
((H
am ((H
. anaf), p.231).
192 Al-K
as
an ((H
191 Al-K
as
an
142
2. If the subsequent transaction removes ownership rights only partially, or

if it doesnt remove ownership rights, then:
(a) If the subsequent transaction cannot be voided, e.g. stipulating the
freedom of a slave after the owners death, either (i) directly, (ii) by
having children with her, or (iii) by agreement that the slave is freed
if he or she pays a certain amount of money, then the right of the
original seller to void the original contract is invalidated.
(b) If the subsequent transaction can be voided, e.g. rental or leasing,
then the initial sale may be voided. In this case, the original seller
has the right to void the subsequent rental, and then void the original
sale based on its defectiveness. In this case, even though the rental
agreement is binding, it may be voided for a reason, and there is no
reason better than the removal of defectiveness.
If the original buyer in a defective sale writes the object of that
sale into his will, the will is valid, but may be voided during the
testators life. This ruling follows since the will is not binding during
the testators life.
If the testator dies prior to voiding of the original defective sale,
then the right to void that original sale is dropped. In this case,
ownership is transferred to the heir, in the same manner it would
have been transferred through a subsequent sale.
Note that the right to void is inherited. Thus, if the original buyer in
a defective sale dies and is inherited by his heirs, the original seller
and the original buyers heirs have the right to void the original sale.
In this case, the heirs take the place of the dead person in his right
to void that contract. Similarly, the heirs of the original seller have
the right upon his death to demand the return of the object of the
defective sale.
2. Increase in the object of a defective sale
If the object of a defective sale increases, this increase may be separable or
inseparable:
1. An inseparable increase may or may not be generated from the original
object:
(a) If it is generated from the original object such as the growth of fat,
or increase in beauty, then the defective sale may be voided. Such
increases continue to pertain to the original object of the sale. Since
the original buyer has a liability to return the original object in case
the seller voids the contract, all appertainings to that object must
also be returned. This argument is based on analogy to the case of
returning a usurped object.
143
(b) If the increase is not generated from the original object, e.g. by mixing flour with ghee or honey, then the original sale may not be voided.
In this case, if the initial seller is allowed to void the contract, he can
demand the return of the original object alone, or both the original
object with the increase. The first demand cannot be met due to
the difficulty of separating the object from the increase. The second
is not a valid demand since the increase is not part of the object of
sale, originally or by extension, and thus may not be included in the
voiding.
2. A separable increase also may or may not be generated from the original
object:
(a) If it is generated from the original object, e.g. newborns, milk, and
fruits, then the right to void is in effect. The original seller may thus
recover the original object together with the increase that pertains
to it. In this case, the original buyer is liable to return the original
object to the seller, and this liability extends to the increase that is
generated from that object. Again, the analogy is made in this case
to the return of usurped objects. We note that indemnity (arsh)193
belongs to this category, since it is a compensation for a part that is

lost from the original object. This loss is similar to excluding that
which is generated by the original object.
(b) If it is not generated from the original object, e.g. a gift, charity, or
income, the right to return or recover the object is still valid. Thus,
the seller has the right to recover the original object with the increase,
since the latter occurred on his property. However, it is not good for
him since it did not take place while he was liable for the original
object. Rather, the increase took place while the buyer was liable for
the original object.
In summary: The only increase that invalidates the right to void the
defective sale is an inseparable increase that is not generated from the
original object. In this case, the buyer is not liable for the increase
if it perishes, but he is liable for it if he consumes it.
Increase due to the buyers work invalidates the right to void the
contract. Again, analgoy to a usurped object that is transformed by
the usurpers labor is made. Thus, if the buyer in a defective sale
buys cotton and spins it, buys thread and weaves it, buys wheat and
mills it, buys sesame or grapes and squeezes it, buys land and builds
on it, or buys a lamb and cooks it, then the right to void is dropped.
The analogy between the receipt of the object of a defective sale and
the usurped object is thus: both are a liability on their possessor if
they remain in the same state, and their value or equal are a liability
193 In Arabic, the word arsh refers to financial compensation for damage to items other
than life and body organs. Compensation for life and body organs is called diyah.
144

if they perish. Thus, everything that invalidates the ownership of the
usurper invalidates it for the buyer in a defective sale. In the case of
an object that is transformed by the labor of the buyer in a defective
sale, the buyer is bound to pay the seller the value of the object of
the defective sale.194
Thus, the seller in a defective sale does not have the right to force
the buyer to demolish a building on the land he sold him. In the
opinion of Ab
uH
. anfa (mAbpwh), the buyer is liable for the value
of the land in this case.
Ab
u Y
usuf and Muh.ammad ruled that the right to void the defective
sale is not invalidated in this case, and that the seller has the right to
demolish the building or remove plants to recover the land. Again,
their ruling is based on analogy to the case of usurped land, where
the usurpers building on it does not invalidate the owners right.
The proof of Ab
uH
. anfa is that building and planting in the land
are long-term projects. In this case, the building or planting is seen
as taking place under the authorization of the seller, who allowed the
object of sale to become owned by the buyer. Moreover, demolishing
a building can cause a major loss, and thus should not be allowed,
and similarly plants should not be pulled out of the ground. The
analogy in this case is made to objects of a valid sale or a gift, in
contrast to the case of usurped land, where building would not be
done with the authorization of the owner.195
If the object of a defective sale is subject to diminution, the seller
is not prevented from recovering it, whether the diminution resulted
from a natural disaster or the actions of the buyer or the object of
sale itself. However, if the object was subject to diminution due to
the action of a third party, then the seller has the option of collecting
the equivalent value of the lost part from the buyer, and letting the
buyer collect from the transgressor; or collecting it directly from the
transgressor without approaching the buyer.196
4.5
Summary of forbidden sales in Islam
There are many sales that are forbidden or prohibited in Islam. The non-H
. anaf
jurists do not distinguish among the forbidden sales between the defective
and invalid ones, while the H
. anaf jurists make this distinction. We have covered
many of those forbidden sales. I shall cover in this section some of the most
important forbidden sales in terms of the reason for their corruption. There are
four such reasons:
194 Al-K
c
c
as
an ((H
n ((H
. anaf), vol.4, p.137), Majma
Al-D
an
at (p.216).
. am
195 Ibn Al-Hum
c
n ((H
am ((H
. anaf), vol.4, p.137),
Al-K
as
an ((H
anaf
),
vol.5,
p.304).
.
196 Al-K
as
an ((H
. anaf), vol.5, p.303).
4.5. SUMMARY OF FORBIDDEN SALES IN ISLAM
145
1. Flaws due to the ineligibility of a party to the contract.

2. Flaws due to the language of the contract.
3. Flaws due to the object of sale.
4. Flaws due to the inclusion in the contract of a description or condition,
or due to a legal prohibition.
4.5.1
Ineligibility of a contracting party
Jurists agreed that sales are valid for every sane person of legal age who engages
in a sale of his own free will, as long as he is not restricted in dealing for himself
(e.g. due to mental incompetence), or for another (e.g. an indebted person). In
what follows, I provide a list of individuals whose sales are not valid:
1. The sale of an insane person is not valid by consensus. An insane
person is not eligible legally and his status is equivalent to an intoxicated
person, or one in a coma.
2. The sale of a non-discerning young child is not valid by consensus,
except for minor items. The sale of a discerning child is rendered invalid
due to ineligibility for the Shafics and H
. anbals. However, such a sale is
deemed valid (and thus executable) conditional on the permission of his

guardian for the H
. anafs and Maliks. The proof of the latter schools is
that the mental abilities of the child cannot be tested except by giving him
the authority to buy and sell, and such a test is necessary based on the
verse test the orphans... [4:6]. The H
. anbals render valid the sales of a
discerning child or a mentally incompetent person with the permission of
their guardian.
3. The trading of a blind person, if the object of sale is described to him,
is deemed valid by the majority of jurists, based on mutual consent. However, the Shafics render this sale invalid due to the blind persons limited
ability in determining the quality of the object of sale, thus rendering the
object of sale unknown.
4. The sale of a coerced person is deemed suspended (non-executable) by
the H
l). If
. anafs, in analogy to the sale of an uncommissioned agent (fud.u
the coerced person approves the sale after all coercion is removed, then the
sale becomes executable. The Maliks render the coerced sale non-binding,
giving the coerced party the option to void or conclude the contract. The
Shafics and H
. anbals render the sale invalid due to violation of mutual
consent at the inception of the contract.

5. The sale of an uncommissioned agent is deemed by the H
. anafs and
Maliks to be valid but suspended pending permission of the true owner;
ruling that an ex post permission is equivalent to a prior permission. The
Shafics and H
. anbals ruled that this contract is invalid at its inception
146

due to the prohibition of selling that which is not owned by the seller.
The latter ruling is based on the defectiveness of every prohibited action.
6. The sale of a person under legal supervision due to mental incompetence, sickness, or bankruptcy: The sales of a spend-thrift person
who is not mentally competent are suspended for the H
alik, and
. anaf, M
the majority of the H
afics render such sales invalid
. anbal jurists. The Sh
due to ineligibility of such a person, whose offer and acceptance are thus
disregarded.
The sales of a person who is legally declared bankrupt due to unpaid liabilities to his creditors are rendered suspended by the H
. anafs and Maliks,
and not valid by the Shafics and H
anbals.
.
The non-Malik jurists render charitable contributions of a person on his

death bed executable within one third of his estate, and suspended for
anything over the third pending permission of the heirs. The Maliks
ruled that his dealings, even in the third, are not executable, except for
immovable properties that are unlikely to change, such as buildings, land,
trees, etc.
7. The sale of a person who needs to sell his property to avoid
transgression is considered defective by the H
. anafs and invalid for the
H
. anbals.
4.5.2
Sales forbidden based on the contract language
Jurists agree that a sale is validated by: (i) mutual agreement of the parties to
the contract, (ii) offer and acceptance corresponding to one another regarding
the price, object of sale, etc., and (iii) offer and acceptance must taking place
in a single uninterrupted session. The following sales are not valid:
1. Physical exchange sales (bayc al-muc a
.ta
h): This is the type of sale that
takes place when the buyer and seller agree on the object of sale and price,
and exchange them without a verbal offer or acceptance. The majority of
jurists agree that this is a valid sale, since a sale is concluded by any actions
that indicate mutual consent to exchange ownership of properties. This
indication may be accomplished formally by verbal offer and acceptance,
or informally by any actions that are conventionally accepted to indicate
consent. The latter case is consistent with the Islamic respect for common
conventions as long as they are not in conflict with an explicit legal text.197
On the other hand, the Shafics consider this type of sale not concluded.
They require verbal offers and acceptances in each contract, be it a sale,

lease, pawning, gift, etc. They require the name of sale to be indicated,
and consider the physical exchange sale lacking an explicit legal proof of
consent to satisfy the verse: but let there be among you traffic and trade
197 Ibn Al-Hum
c
n ((H
am ((H
. anaf), vol.4, p.137),
Al-K
as
an ((H
. anaf), vol.5, p.304).
147
by mutual good will [4:29], and the H

: sale is but based on mutual
. adth
consent.198 . In this regard, consent is a hidden matter that cannot be

observed, and thus the status of the contract must be determined by an
observable proof, in this case the language of the contract. Thus, they
ruled that the received object of a physical exchange sale has the same
status of a received object of a defective sale. This gives each party to the
contract the right to demand the return of what he delivered to the other
if it remains intact, or its compensation if it perished.
uyan, allowed physical exSome Shafics, including Ibn Surayj and Al-R
change sales for minor items such as a pound of bread or a small amount
of beans. Some of them ruled that the physical exchange sale is sufficient
for those who are habitual traders, and for commoners with a trader, but
verbal expression is necessary for those who are not commonly trading
thus. Al-Nawaw wrote in Al-Majm
uc : but if he takes some objects of
sale and pays him at a later time, as many people do, then there is a consensus that the sale is invalid. Such a sale is neither a verbal sale, nor is
it a physical exchange sale. On the other hand, Al-Nawaw validated the
physical exchange sale by saying: the preferred opinion based on legal
proof is rendering this sale valid. Since there is no legal obligation to have
a verbal exchange, it is necessary to consider conventional usage.199
2. Sales by correspondence or messenger are agreed upon by jurists
as valid contracts. The session during which the message arrives from
the first to the second party of the contract is considered the contract
session. Thus, if acceptance is uttered after that session, the contract is
not concluded.
3. Sales of mute persons by means of an understood signal or writing are agreed upon by jurists as valid. Thus, necessity requires equating
the actions of the mute person to the verbalization of a speaking person.
However, if the mute persons signals were not understood and his writing
is not legible, then the contract is not valid.
4. Sales with a party who is absent from the contract session are
agreed by jurists to be invalid. This follows since the unity of the contract
session is one of the conditions of conclusion of sale.
5. Sales where the offer and acceptance do not correspond are agreed
upon by jurists as invalid, unless the disagreement is beneficial. For example, if the buyer pays more than the agreed upon price, the H
. anafs
render the contract valid, while the Shafics render it invalid.
6. Non-consummated sales (ghayr munjaz): This category includes sales

or deferred to a future time. Such sales
suspended pending a condition
are considered defective by the H
. anafs and invalid by the other jurists.
198 Validated
by Ibn H
an.
. ibb
afic), p.89).
. ((Sh
199 Al-Suy
ut
148
4.5.3
Sales forbidden based on the objects of sale
The most general interpretation of objects of sale incorporates the properties

paid by both parties, one of which is labeled price and the other object of
sale. Jurists agreed that the sale is valid if the objects of sale are properties
that are: (i) owned, (ii) valued, (iii) existent, (iv) known to the parties, (v)
without any other party sharing in their rights, and (vi) not legally prohibited.
There are differences among jurists regarding the forbidden sales as detailed
below:
1. Sale of non-existent objects, or objects that are in danger of ceasing to exist: This category includes the sales of the sperms of he-camels,
the unfertilized eggs of she-camels, and the offspring of the offspring of a
pregnant animal. All of those sales are deemed invalid and not concluded
by the Imams of all four schools of jurisprudence, based on valid H
s
. adth
that prohibit them.

2. Sale of undeliverable items: Examples of such sales include birds in
the air and fish in the sea. Such sales are deemed invalid and not concluded
by all schools of jurisprudence based on a well-documented prohibition in
the Sunnah.
3. Deferred sale of debts: This type of sale (al-k
ali bilk
ali) is deemed
invalid by all jurists based on its legal prohibition. The immediate resale
of a debt to the debtor is agreed to be valid, while the immediate sale
of debt to a third party is deemed invalid by the H
. anafs, H
. anbals and
Z.ahirs and permissible for the other schools of jurisprudence.
4. Excessive gharar sales: Gharar is that whose existence is not certain,
and its sale is not valid by consensus based on its prohibition. However,
some of those sales are agreed upon as invalid, such as the sale of the
sperms and unfertilized eggs of camels and the offspring of the offspring of
animals, and some are rendered by the H
. anafs to be defective. Examples
of the latter category are: the sale of the catch of a diver or hunter, the
exchange of fresh dates on palms and grapes on vines with dried dates and
raisins at an estimated ratio, the sale of wheat in its spikes in exchange
for wheat grains at an estimated ratio, touch-sales, pebble sales, and the
sale of an unknown item out of more than three. Ibn Juzayy of the Malik
school said:200 The prohibited gharar can be divided into ten categories:
(a) That which is not possible to deliver such as a run-away camel: This
category also includes the sale of embryos in the womb without the
sale of its mother, and the exclusion of the embryo in a sale of the
mother, the sale of the offspring of the offspring of a she-camel, and
the sale of the sperm of he-camels.
(b) Ignorance of the genus of the price or object of sale: e.g. if the seller
says: I sell you what is in my sleeve.
200 Ibn
Juzayy ((M
alik), p.256 onwards).
149
(c) Ignorance of the characteristics of the price or object of sale: e.g. if

the seller says: I sell you one of the dresses in my house, or buying
an item without inspection or description.
(d) Ignorance of the quantity or size of the price or object of sale: An
example of the former is a seller saying: I sell you in exchange
for todays price, or at the price at which people trade, or for
whatever price so-and-so states, all of which are only valid if sold
in bulk. An example of the second case is the impermissibility of the
sale of wheat inside its spikes due to ignorance. However, it is valid to
sell wheat together with its spikes, in disagreement with the position
of Al-Shafic. Also impermissible is the sale of wheat in its chaff,
while its sale with its chaff is valid. It is not permissible to sell the
dust of jewelers. It is permissible to sell green beans, coconuts and
walnuts in their outer shells, also in disagreement with the position
of Al-Shafic.
(e) Ignorance of the term of deferment. Examples include a seller saying:

I sold you until Zayd returns or until c Amr dies. However, it is
valid for the seller to say: until harvest time, until the grains
are threshed, or until such-and-such month. In the last case,
deferment is understood to be to the middle of the month.
(f) Two sales in one: This is the case where one object is sold for either
of two different prices, or the sale of either of two objects for one
price. An example of the first is a seller saying: I sell you this dress
cash and carry for ten, or deferred for twenty, assuming that the
sale is binding for one of them. An example of the second is the seller
saying: I sold you one of these two dresses for so-much, assuming
that one of them is binding.
(g) The sale of that whose good status is not expected: e.g. a sick horse
or camel in a race.
(h) Pebble sales: This is the sale where one person carries a pebble in
his hand, and if it falls the sale is binding.
(i) Discarding sale: If one person discards his dress to the other, and the
other discards his dress to the first, then the sale is binding.
(j) Touch-sales: This is the sale that is made binding if the potential
buyer touches the item (say a dress), even if he never inspected it.
In summary, all of those types of sales involve: (i) the sale of non-deliverable
items, (ii) the sale of an unknown, (iii) the sale of probable items, or (iv)
the sales of the pebble, discarding, or touch.
5. Sale of impure or tainted objects: There is agreement that it is not
valid to sell impure objects such as wine, pork, the flesh of dead animals,
and blood. The majority of jurists also render as not valid the sale of
tainted objects that cannot be purified, such as ghee, oil, or honey in
150

which an impure object e.g. a rat had fallen. The Maliks allowed
the use of impure or tainted oil for lighting or manufacturing of soap,
while the H
. anafs allowed the sale of tainted objects for usage other than
eating, such as tanning leather, painting, and lighting of places other than
mosques. However, they do not allow any usage of the fat of dead animals
to avoid this practice of Jews, who when forbidden the flesh of dead
animals melted the fat of the animals, sold it, and consumed its price.
Also not valid in the eyes of the majority of jurists is the sale of musical
instruments, since their usage is forbidden. However, the Z.ahirs and some
of the Maliks allowed their sale, based on authentic H
s that render
. adth
the use of drums permissible.
6. Sale of water: The majority of jurists from the four major schools permit
the sale of owned water that is contained in containers, springs or wells.
The Z.ahirs, on the other hand, render the sale of water categorically
impermissible. There is a consensus among jurists that it is not valid to
sell public water, the rights of which are shared among the people. This
is based on the above mentioned H
that people are partners in fire,
. adth
grass, and salt.

7. Sale of unknown objects: The H
. anafs rendered as defective sales that
contain significant ignorance regarding (i) the object of sale, (ii) the price,
(iii) the term of deferment, (iv) the type of pawned object, or (v) the
guarantor. The majority of jurists render such contracts that contain
significant ignorance invalid due to the possibility of causing conflict and
dispute.
8. Sale of absent or unseen objects: The H
. anafs rendered as valid sales
with niether inspection nor description of the object of sale, giving the
buyer an option at the time of seeing the object. The Maliks rendered
such sales valid based on description, while maintaining that the buyer
has the option after inspecting the object. The Shafics and the majority
of the H
. anbals render such sales categorically invalid.
The Maliks201 stipulated five conditions for sales based on description
alone:
(a) That the item is not too far away, e.g. the distance between Spain
and Africa.
(b) That it is not too near, e.g. present in the same town.
(c) That the description is given by a person other than the seller.
(d) That the description covers all relevant aspects of the object.
(e) That its price is not collected by the seller with a condition, unless
the object is unlikely to change, e.g. real estate. Payment of the
price is permissible if there are no conditions.
201 Ibn
Juzayy ((M
alik), p.256).
151
If the sale is based on both inspection and description, then the sale is
binding, but if one is missing, then the buyer has an option.
It is permissible to sell homogeneous clothes based on their label.202 This
is in contrast to a folded dress that was not exhibited or inspected.
9. Sale of un-received items: This type of sale is impermissible for the
H
. anafs if the object of sale is movable, based on the prohibition of such
sales. However, the sale of immovable objects prior to receiving them is
permissible, since it is unlikely that the object will change. The Shafics,
on the other hand, render this type of sale categorically invalid, based on
the general prohibition in the H
: The Prophet (pbuh) has forbidden
. adth
selling the object where it is bought until the merchants possess it in

their caravans.203 The Maliks restricted this prohibition to foodstuffs,
whether or not they were eligible for Rib
a. The H
. anbals, on the other
hand, restricted the prohibition to foodstuffs measured by weight, volume
or number, based on the H
: If you purchase any foodstuffs, do not
. adth
sell them until you receive them in full.204

10. Sale of fruits and vegetables: It is agreed that such sales are invalid
if the objects of sale have not yet been created, since they are thus considered non-existent. If the sale is prior to manifestation of goodness with
a condition of leaving them, then it is rendered not valid by consensus;
being defective for the H
. anafs and invalid for the majority. If the sale is
concluded with the condition of cutting immediately, then it is rendered
by consensus to be valid. On the other hand, if the sale is without any
conditions, it is rendered valid by the H
. anafs and invalid by the majority
of jurists.
If ripeness has been manifested, then the H
. anafs ruled that the sale is
permissible, based on the decision of Muh.ammad ibn Al-H
. asan, even with
a stipulated condition of leaving fruits that had reached maximal size.
However, the sale is rendered defective if the objects of sale had not yet
reached full size. The majority of jurists, on the other hand, render the
sale in this case categorically permissible, even with a condition of leaving.
4.5.4
Sales forbidden based on a description, condition, or

legal prohibition
Jurists are in agreement that a sale is valid if all of its cornerstones and conditions are satisfied, provided that it does not have any characteristics that are
202 The label is a piece of paper on the container within which the clothes are hidden. This
type of sale results in the sale of an absent object without a description of its type and genus.
It is permissible with two conditions: (i) establishment of the buyers option after viewing the
object; and (ii) non-payment of the price to the seller at this time.
203 Narrated by Ab
u D
aw
ud and Al-D
araqut.n on the authority of Zayd ibn Th
abit, c.f.
Al-Shawk
an (, vol.5, p.157).
204
Narrated by Ah.mad and Muslim on the authority of J
abir, c.f. ibid.
152
detrimental to society, contain any conditions that are in conflict with the prerequisites of the contract, etc. Conditions and characteristics that may spoil
the validity of a contract are:
1. Downpayment sale (bayc u al-c urb
un): This type of sale is not permissible in the eyes of most jurists since it is forbidden in the Sunnah. The
H
afics
. anafs render this type of sale defective, while the Maliks and Sh
render it invalid if the seller is not obliged to return the downpayment in

case the sale is not concluded. However, if the seller is obliged to return
the downpayment in the event the sale is not concluded, they render the
downpayment sale permissible. The H
. anbals, on the other hand, render the contract permissible in either case, based on a permission by the
Prophet (pbuh). Neither H
in this regard has been authenticated.
. adth
2. Same item resale: This is the contract discussed above in detail, whereby
the two parties to the contract undertake permissible actions to reach a
forbidden outcome. Thus, the M
aliks and H
. anbals render this contract
invalid and forbidden, to prevent the means to the forbidden end. The
H
. anafs render this contract defective if there is no intermediation by a
third party, and the Shafics and Z.ahirs consider it valid but reprehensible.
There are three types of same-item re-sales:205

(a) A man may tell another buy this item for ten, and I shall buy it
back from you for a deferred price of fifteen. In the opinion of Imam
Malik, this is considered Rib
a, since his school of thought considers
only whatever is spent and received and ignores the intermediate
steps. Thus, the above mentioned transaction would be considered
equivalent to one man giving the other ten Din
ars, and taking in
exchange a deferred credit of fifteen Din
ars; and the intermediate
commodity is deemed legally irrelevant.
(b) A man may tell another buy this item for ten, and I shall buy
it back from you for a higher deferred price, without naming the
deferred price. In this case, the Maliks would render the contract
reprehensible but not forbidden.
(c) A man may approach another to buy a commodity, but find that
the potential seller does not have it. The potential seller may buy
it without the potential buyers order, then say: I have bought the
object that you sought from me, and you may buy it if you wish. In
this case, the seller may sell the item cash-and-carry, or for a deferred
price, regardless of whether the price is the same, more, or less than
what he paid for it.
3. Rib
a: Both credit rib
a (al-nasa) and surplus rib
a (al-fad.l) are considered
defective for the H
. anafs and invalid for the majority of jurists, based on
the established prohibitions in the Quran and Sunnah.
205 Ibn
Juzayy ((M
alik), p.258).
153
4. Sales with a forbidden price: If the price in a sale is a forbidden

item such as wine or pork, then the H
. anafs render the sale defective,
but concluded for the value of the object of sale, while the majority of
jurists render the sale invalid. This is based on the H
narrated in
. adth
Al-Bukhar and Muslim that the Prophet (pbuh) prohibited the sale of
wine, dead animals, pigs, and idols.

5. Sales by a city dweller on behalf of a bedouin who is unfamiliar
with the price levels: Many generalize this category to any sale to a
person who is new to a place, and unfamiliar with the market prices in
that new place. This generalization is valid in reflecting the true intent of
the prohibition of this type of sale. This sale is forbidden in the H
. adth
of the Prophet (pbuh), narrated by most narrators with the exception of

Al-Bukhar on the authority of J
abir: A city-dweller should not sell on
behalf of a bedouin, leave the people so that Allah may make them benefit
from one another.206
This prohibition is based on the valuation of the benefit of the many
over the benefit of any one individual, by forbidding one individual from
meeting the incoming person and preventing other market participants
from making a profit by dealing with him. The form of such a sale would
be as follows: A stranger would come to the city with a commodity that
he wishes to sell immediately at the going market price. A local merchant
may then come and tell him: leave this good with me, and I shall sell it
on your behalf over time at a higher price.
Jurists made this prohibition more specific.207 For instance, the H
. anafs
ruled that this prohibition is restricted to the times of high prices or
inflation, and to commodities that are considered necessities.
The Shafics and H
. anbals, on the other hand, generalized it to any incom
ing trader who is asked by a local to leave the good with him for sale at a
higher price. Ibn H
. ajar said in Al-Fath.: Thus, they have made the rule
applicable to bedouins and others who share their status. Thus, bedouins
were only mentioned since most incomers would be bedouins, but the intent was to include all others who do not know the local prices. However,
the Maliks insisted on the restriction only to bedouins. Malik said: No
other category of people may be added to bedouins in this prohibition,
unless they are similar. Thus, farmers who know prices and understand
markets are not included in this prohibition. The Maliks render this
sale defective and allow its voiding, in the same manner they allow the
voiding of bayc al-najash (price hiking). The H
. anafs render it valid, and
the Shafics and H

anbal
s
maintain
that
there
is an option in this sale.
.
6. Meeting caravans outside the city: When caravans bring goods for
sale, it is forbidden to meet them outside the market, whether they are on
206 Al-Shawk
an
207 Al-Sh
awk
an
(, vol.5, p.164).
(, vol.5, p.164).
154

foot or riding, many or few. The H
. anafs ruled that it is reprehensible to
the point of prohibition based on the H
: Do not meet the caravans
. adth
outside, and let not a city dweller sell on behalf of a bedouin.208 The
most common interpretation of this H
is that the incoming traders
. adth
are more than one, and riding.

Jurists disagreed with respect to this prohibition and whether or not it
results in defectiveness of the sale. While some scholars ruled that it does
result in defectiveness, the majority ruled that it does not. The opinion
of the latter is based on the extraneous nature of meeting the caravan,
which does not force the incoming traders to trade with the one who meets
them. In this regard, the Prophet (pbuh) said: The owner of the goods
a
has the option if he comes to market.209 Ibn Taymiya said in Muntaq
Al-Akhb
ar: This Hadth is proof of the validity of the sale. Thus, the
most common opinion is that this sale, as well as that of the city-dweller
on behalf of the bedouin, are valid. This is the opinion of the H
. anafs. The
c
s
stipulated
that
the
option
of
injustice
(khiy
ar alH
anbal
s
and
Sh
a
fi
.
ghubn) is established for this sale. The Maliks, on the other hand, forbade
for experienced traders, and rendered it defective.
it
7. Price hiking (bayc al-najash): Al-Shafic defined this behavior thus:
bayc al-najash is the sale wherein a person bids-up the price of a com
modity with no intention of buying it, only to induce others to buy it
for more than they would have otherwise. Thus, jurists condemned the
behavior of both the seller (who is part of the conspiracy) as well as the
potential buyer who drums-up the goods, and the latter was labeled a
sinner.
There is disagreement among jurists regarding the legal status of this sale.
The Z.ahirs ruled that it is defective, while the majority of the Maliks
and H
. anbals ruled that it is valid, but established an option for the buyer
if the inequity is excessive. The H
afics
. anafs and the majority of the Sh
ruled that it is a valid but sinful sale. Thus, it is considered reprehensible

to the point of prohibition for the H
afics.
. anafs and forbidden for the Sh
However, the H
sale reprehensible unless the
. anafs did not find the najash
ultimate sale price exceeds the true value of the sold item. If the price is
raised through the najash sale while remaining below the value of the sold
item, it is not deemed reprehensible since the net result is closer to justice.
It is important not to confuse this type of sale with public auctions, which
are permissible as detailed below.
8. Auctions: The Prophet (pbuh) was reported to have engaged in auction sales. It is narrated by Ah.mad and Al-Tirmidh on the authority
of Anas that: The Prophet (pbuh) sold a cup and a mini-rug by aucc
tion. Al-Bukhar narrated on the authority of At.a that he said: I wit
208 Narrated
by Al-Bukh
ar and Muslim on the authority of Ibn c Abb
as.
by the major narrators with the exception of Al-Bukh

ar on the authority of
Abu Hurayra.
209 Narrated
155
nessed people (companions of the Prophet (pbuh)) finding nothing wrong

with selling spoils of war by auction.210 Ibn Ab Shayba and Sacd ibn
Mans.u
r narrated that Muj
ahid said: There is no harm in selling by auction. This was the customary manner in which one fifths of the spoils of
war were sold. Al-Tirmidh, commenting on the above mentioned nar
ration on the authority of Anas, said: For some scholars, the inference
from this H
is that there is no harm in selling spoils of war and in. adth
heritance by auction. Ibn Al-c Arab, on the other hand, said: There is
no reason for restricting the permissibility of auctioning to spoils of war
and inheritance. The general topic is one, and its interpretation applies
more generally.
The most correct opinion is the unconditional permissibility of sales by
auction. The proof of this opinion is that the cup and mini-rug mentioned
in the H
of Anas were neither spoils of war nor inheritance. Thus,
. adth
their mention should be interpreted to imply permissibility for all other

items that they customarily sold by auction.211
Auction sales as described here are conducted as follows: the seller exhibits
the object of sale to the public, and they bid for it until the person with
the highest (last) bid buys it.212
It is reported that Ibrahm Al-Nakhc disliked auction sales, based on
an authentic H
of Jabir that the Prophet (pbuh) asked regarding an
. adth
213
item:
Who buys this from me? Then Nacm ibn c Abd Allah bought
it for eight hundred Dirhams. Al-Ismacl said in rebuttal to Ibrahm AlNakhcs opinion: There is no mention in this story of an auction sale; an
auction would require one person bidding one price, and another bidding
a higher price. In this regard, the H
of Anas was narrated by Ab
u
. adth
Daw
ud and Ah.mad thus: The Prophet (pbuh) offered to sell a cup and a
mini-rug to some of his companions. One of them said: I bid one Dirham,
and another said: I bid two Dirhams.
9. Sales during the call for Jumc a prayers: This period is specified as
the time between the Imams ascent on the minbar, and the end of the
prayer. However, the H
. anafs extended this period to begin at the time of
the first call for prayers (atha
n). Sales during this period are considered:
(i) reprehensible to the point of prohibition for the H

. anafs; (ii) valid but
forbidden for the Shafics; (iii) void for the majority of the Maliks; and
(iv) invalid at inception for the H

. anbals.
10. Sale of grapes to a wine-maker: This sale is valid in its form, but
considered reprehensible to the point of prohibition for the H
. anafs, and
forbidden for the Shafics. It is valid due to the satisfaction of the corner
stones and legal conditions of sale, but sinful due to the corrupt intention
210 Ibn
Ab Shayba narrated the same on the authority of c At.

a and Muj
ahid.
(, vol.5, p.169).
212 tr: That is an open-outcry first-price auction.

213 tr: The item mentioned in this Had
is al-c abd al-mudabbar.
. th
211 Al-Shawk
an
156

of the parties to the contract. Of equal status is the sale of a sword to one
who kills another unjustly, the sale of a hunting net to one who hunts in
holy places, or the sale of wood to one who uses it to construct instruments
of entertainment.
The Maliks and H
. anbals, on the other hand, render such sales invalid to
prevent the means to illegal ends (saddan li-l-dhar
aic ). Their ruling on
those sales is the same as their counterparts for the sale of weapons during
a civil war or to pirates, and the sale-resale contracts used as a means of
effecting rib
a. In this respect, their rulings are based on the maxim that
any means that lead to forbidden ends are equally forbidden, even if the
judgment has to be made based on intentions.
11. Sale of a woman without her young child, or a young child without his mother: Such sales are not permissible until the young child is
not in need of his or her mother. This prohibition is due to the separation
of the two, where the Prophet (pbuh) has forbidden such separation by
saying: Whosoever separates a mother from her child, Allah will separate him from his beloved ones on the day of judgment.214 However, the
Maliks permitted separation between the father and the child, despite the
prohibition of that as well in the H
: The Messenger of Allah has
. adth
cursed whomsoever separates a man from his child, or a brother from his
is valid, it is certainly wise to act accordingly.
brother.215 If this H
. adth
The sale of a mother without her young child is considered defective and
unconcluded for the majority of jurists. However, Ab
uH
. anfa ruled that
the sale is concluded.
12. Replacing the sale of another: The form of this sale is thus: An
original sale takes place, containing an option period. During the option
period, a third party approaches the buyer and urges him to void the first
sale, with a promise to sell him a similar item at a lower price or a better
item at the same price. This is called a sale to replace a sale (bayc un
c
al
a bayc ). Its mirror image is a purchase to replace a purchase (shir
aun
c
al
a shir
a), where a third party urges the seller during the option period
to void the sale on a promise that he will buy it for more. Bargaining
to replace bargaining (al-sawmu c al
a al-sawm) is a closely related notion,
where a third party intervenes after the seller and a potential buyer agreed
on the price but before they conclude the sale. The third party in this
type of intervention would say: I shall buy it from you for more.
Jurists reached a consensus that all such behaviors are forbidden, and
the one who perpetrates them is a sinner.216 This ruling is based on the
214 Narrated by Ahmad and Al-Tirmidh
u Ayy
ub. However, his
.
chain of narration includes disputable sources, c.f. Al-Shawk

an (, vol.5, p.161).
215 Narrated by Ibn M

ajah and Al-Daraqut.n on the authority of Ab
u M
us
a (ibid), with an
acceptable chain of narrators.
216 Al-Sanc
.
157
H
: Let none of you supplant the purchase of his brother.217 The
. adth
original H
refers to the case of liability, but the majority of scholars
. adth
have agreed that its applicability is general, covering even the trading of
non-Muslims.
Jurists differed, however, over the legal status of the mentioned sale. The
H
afics rendered it valid but sinful, while the H
. anafs and Sh
. anbals, Ibn
H
. azm, and some of the Maliks rendered it defective. However, the most
common opinion for the M
aliks and others with the exception of Ibn
H
. azm is that the prohibition applies after the gap between the negotiators
had narrowed down sufficiently.218 This opinion is based on the fact that
bargaining in an auction sale is agreed upon as permissible, following the
c
narration by Ibn H
. ajar on the authority of Ibn Abd Al-Barr. Thus,
the forbidden action is the initiation of new bargaining after the original
parties have almost reached an agreement.
a
13. A sale with a condition: This is the contract labeled bayc u al-thuny
by jurists, and they have disagreed over its legal status:

The H
. anafs ruled that a sale with a defective condition is rendered
defective. Defective conditions are ones that are not essential or in
accordance with the prerequisites of the contract, and that were not
accepted in a legal text or accepted as conventional practice. This
limits attention to conditions that result in a benefit to one of the
parties, e.g. where the buyer purchases a cloth on condition that the
seller sews it into a shirt. As for invalid conditions, they are ignored
and the base contract is rendered valid. Invalid conditions in this
case are ones that result in a harm to one of the parties, e.g. if a
person sells an item to another on condition that the other may not
sell or pawn it.
The Maliks ruled that a sale with a condition is rendered invalid
if the condition restricts the buyers ability to deal in the purchased
item privately or publicly. Thus, they disagree with the H
. anaf scholars over the status of an invalid condition. However, they permit a
sale with a condition if the buyer is stipulating a condition that is
of benefit to himself, again in contrast to the H
. anaf position on defective conditions. Finally, they permit the sale and invalidate the
condition if the latter renders the price flawed. An example of such
corrupting conditions is the seller stipulating: if you do not deliver
the price within three days, then there is no sale between us, where
the sale is valid, but the condition is voided. However, if the seller
says: whenever I return the price to you, you must return the object
of sale to me, then the contract is invalid. The latter is known in
c
a).
H
. anaf jurisprudence as a redemptive sale (bay u al-waf
217 Narrated by Ahmad on the authority of Ibn c Umar, c.f. Al-Shawk
an (, vol.5, p.167
.
onwards).
218 Ibn Juzayy ((M
alik), p.259), Al-Shawk
an (, vol.5, p.169).
158

The Shafics ruled that a sale with a condition is valid if the condition
involves a benefit to one of the contracting parties, as in the case of

options, deferment, pawning, and guaranty. However, the contract
is deemed invalid if the condition is in conflict with the prerequisites
of sale, such as conditions that the buyer may not sell the object of
sale, or give it as a gift. In this regard, their opinion is in agreement
with the Maliks.
The H
. anbals ruled that a sale with one condition that results in a
benefit to one of the contracting parties is valid, while a sale with
two conditions is invalid. They base their ruling on the H
: The
. adth
Prophet (pbuh) said: The following are not permissible: a loan and
a sale, two conditions in one sale, and the sale of that which is not
in your possession.219
Based on the latter mentioned H
, there is a consensus among
. adth
the jurists that a sale with a condition of borrowing from one of

the parties of the contract is not permissible. The Maliks, however,
distinguish the case where the one stipulating the condition does not
insist on it, and render the sale permissible if he drops that condition.
14. Combining a sale and one of six contracts in one agreement: The
la (promise or reward), currency exchange, sharesix contracts are al-jic a
cropping, partnership, marriage, and silent partnership. Combining a sale
with any one of those contracts in one agreement is rendered defective and
forbidden for the majority of the M
aliks. However, Ashhab permitted
such combinations, and Ibn Juzayy reported that this was in agreement
c
220
uH
The Maliks permitted
with the opinions of Al-Shafi and Ab
. anfa.
the combination of a sale and a lease, and two sales in one sale, always
interpreting the second as an imbedded option. The majority of jurists, on
the other hand, have forbidden the latter combinations, rendering them
defective for the H
afics and H
. anbals.
. anafs, and invalid for the Sh
Defective or invalid sales for the M

aliks
There are five aspects in which defectiveness or invalidity of a sale may be
considered:221 (i) what pertains to the parties of the contract; (ii) what pertains
to the price and the priced object (the first two items belong to discussions of
the cornerstones of a contract); (iii) what pertains to gharar; (iv) what pertains
to rib
a; and (v) the various types of sale that are explicitly
forbidden. The last
category consists of ten forbidden sales contracts:
1. The sale of foodstuffs prior to receiving them.
2. Same item sale-resale (bayc al-cnah).
219 Narrated
by Ab
u D
aw
ud and Al-Tirmidh on the authority of c Abd All
ah ibn c Amr.
Juzayy ((M
alik), p.360).
221 Ibn Juzayy ((M
alik), pp.257-260), Ibn Rushd Al-H
alik), vol.2, pp.125, 146
. afd ((M
onwards, 158-168).
220 Ibn
159
3. Downpayment sale (bayc al-c urb

un).
4. Sales by a city-dweller on behalf of a bedouin.
5. Meeting the caravan to receive their goods a mile or more outside the city.
6. Intervening to replace a party in a sale after the seller was close to an
agreement with the initial buyer. This type of sale is valid but sinful for
the majority of jurists, but defective for the H
. anbals. Its denouncement
is based on its prohibition, and due to its invitation of harm and dispute
between the potential buyers.
7. Sales during the Friday prayers.
8. The sale of a mother without her young child, or the sale of the young
child without its mother.
9. A sale and a condition in one contract (bayc al-thuny
a).
10. Combining a sale and one of six contracts (jic a

lah, currency exchange,
mus
aq
ah, partnership, marriage, and silent partnership) in one agreement
(safqa).
Invalid sales for the Sh
afics
There are numerous invalid sales in the Shafic schools thought, among which
the following thirty-one are the most important:222

1. The sale of un-received items, except in: (i) inheritance, (ii) items specified
in a will, (ii) an amount less or equal to a persons entitlement at the
Islamic treasury (bayt al-m
al), (iii) spoils of war, (iv) trusts, (v) returned
gifts, (vi) hunted animals captured in a net, etc., (vii) the object of an
Islamic forward sale (salam), (viii) monies invested in a partnership or
silent partnership, or (ix) a pawned object after the pawning is ended.
2. The sale of objects that are not immediately deliverable, such as birds
in the sky. There are six exceptions to this rule: (i) leased objects, (ii)
objects of Islamic forward sales (salam), (iii) a large quantity of grains
that cannot be measured in a short time period, (iv) a usurped object or
(v) a run-away slave being sold to a person who can collect the object of
sale, or (vi) a non-fungible object, moveable or immoveable, which is in
another country, etc. In those six exceptional cases, the sale is valid even
if the object of sale is not immediately deliverable, since the buyer still
achieves his objective from the sale.
222 Tuhfat Al-Tull
a Al-Ans.
ar (pp.152-158), Al-Sharq
aw ((Sh
afic),
.
. ab by Sheikh Zakariyy
vol.2, pp.50-64)
160
3. The sale of the offspring of the offspring of an animal: In this invalid

sale, a seller would say: If this she-camel gives birth to a she-camel, and
then the born she-camel gives birth to another camel, I have sold you the
offspring of the second. Another form of this invalid sale is the purchase
with a price deferred to the birth of the offspring of a specific she-camel
and the object of sale being the offspring of the offspring.
4. The sale of he-camel sperm.
5. The sale of unfertilized eggs of she-camels.
6. A sale with a condition other than: (i) pawning, (ii) guaranty, (iii) witnessing, (iv) option, (v) deferment, (vi) freeing of a slave, (vii) non-existence
of defects in the object of sale, including defects to the internal organs of
a sold animal, (viii) transportation of the object of sale from the sellers
point of origin, (ix) cutting of fruits or leaving them after their goodness is
mainfested, (x) description, such as a typewriter that can type in specific
languages, (xi) the condition that the seller will not deliver the object of
sale unless its price is received immediately and in full, or (xii) a condition
to return the object of sale if it contains a defect.
7. Touch sales, where a buyer touches a folded dress or inspects it in a
dark room, and then buys it without the option of returning it after he
sees it, despite having been satisfied with touching it without seeing it at
the time of sale.
8. Discard sales, where each of two parties discards a dress with the understanding that they have thus exchanged the two. In this type of sale, there
is no option if the dimensions of the clothing are known. Another form
of this sale is where a person discards an item to another for a monetary
compensation that is a known price.
9. The sale of wheat in its spikes (al-muh.a
qala).
10. The sale of goods that cannot be owned, except in the cases of a forward
sale (salam), or a lease with an increased price as a liability. The two
listed exceptions render the sale valid despite the benefit from the object
of sale not being exchanged at the contract time. Thus, a forward sale is
valid, e.g. where the object of sale is an amount of wheat or a dress of
specific characteristics, and where the seller does not possess such items
at the time of the sale. It is also valid to lease an item that is currently a
liability on another. Thus, a lessor may lease a transportation animal to
the lessee beginning at a future date, even though he will only collect that
animal at a point in time after the inception of the lease contract. It is
also valid to trade a fungible good that is currently a liability on another
in exchange for another fungible good that is a liability on a fourth party.
In such a case, both parties may collect the items from the liable parties
and exchange the objects of sale prior to parting.
161
The proof of the invalidity of selling un-owned objects is the narrated

H
: There is no divorce except in what is yours, no freeing of slaves
. adth
except in what you own, and no sale except in what you own.223 Their
ruling on the invalidity of the sale of an uncommissioned agent (al-fud.u
l)
was based on this H
ad
th
.
.
11. The exchange of meat for an animal (even if the latter is not edible). Thus,
the exchange of cow-meat for cows, sheep, or a donkey, are all considered
invalid based on the prohibition in a H
narrated by Al-Tirmdh.
. adth
12. The exchange of one milk producing sheep for another. Similarly, the
exchange of an edible animal or one carrying eggs for another is rendered
invalid. This ruling is based on ignorance of the appropriate price or
compensation for the milk or eggs, etc. Thus, such a sale is compared to
the sale of a Dirham and a dress in exchange for a Dirham and a dress.
13. Pebble sales, where a person sells another whichever dress a pebble falls
on.
14. The sale of running water or the water of a natural spring, even for a
specific period. Such water are not owned, and their amount is constantly
changing and thus unknown. This renders the object of sale undeliverable.
However, if one sells such water to another with a condition of collection
of the water, then the sale becomes valid. Also, the sale of still water is
permissible, provided that its volume is measured or estimated.
15. The sale of fruits before their goodness is manifested without a condition of
cutting. This opinion is based on the explicit prohibition in the H
of
. adth
selling fruits before their goodness is manifested. However, if the condition

of cutting is stipulated before or after goodness is manifested, the sale is
permissible. In this case, if a person sells a pollinated date-palm, then its
dates belong to the seller, otherwise, they belong to the buyer.
16. The exchange of fresh dates for fresh or dried dates, or
17. The exchange of fresh grapes for fresh grapes or raisins. The invalidity in
both cases is based on ignorance of equality in amount after the object
of sale dries. The Prophet (pbuh) was asked regarding the exchange of
fresh dates for dried dates, and he asked: Will the fresh dates be reduced
in volume or weight when they dry?, they said: Yes, he (pbuh) said:
Then no.224 However, jurists allowed such sales to meet needs, as long
as the amount being sold was no more than 653 kg.
18. The exchange of fresh wheat for fresh wheat, or
223 Narrated
224 Narrated
and deemed a (H
hasan) by Al-Tirmidh.
. adth
.
by Al-Tirmidh who deemed it a H
sahh.
. adth
. . .
162
19. The exchange of fresh wheat for dried wheat in different quantities, if they
are of the same genus. In such cases, the equality of the two exchanged
amounts is unknown, and rib
a is perpetrated.
20. The exchange of fresh meat for fresh meat, if they are of the same genus,
21. The exchange of fresh meat for dried meat, or
22. The exchange of dried meat for dried meat, of different amounts if they
are of the same genus. In all such cases, rib
a is perpetrated as in the case
of selling cow-meat for cow-meat in different quantities.
Note that the types of meats, milks, fats, fishes, shell-fishes, breads, etc.
can be of different genera. Thus, it is permissible to exchange items of
different genera in different quantities, e.g. cow-meat for sheep-meat of
different amounts.
23. The sale of impure objects, e.g. a dog, for which a price was forbidden, or
a pig.
24. The sale of a free man,
25. The sale of a slave woman who gave birth to her owners child, or
26. The sale of a slave under a contract permitting him to buy his freedom.
27. The sale of insects, scorpions, and rats, in which there is no benefit to
compensate for the paid price.
28. The sale of a male animals services for reproduction, which was forbidden
in a narration by Al-Bukhar.
29. The sale of a Muslim slave to a non-Muslim, since the ownership of a

Muslim by a non-Muslim is a humiliation.
30. Gharar sales, e.g. musk in its container, and wool on the backs of sheep,
where the prohibition is based on ignorance of the quantity being sold.

ay
a sale, which is the sale of fresh dates on the palm in exchange for
31. c Ar
dried dates, or fresh grapes on the vine in exchange for raisins, if the
amount is more than 653 kg. In amounts less than 653 kg, the exchange
is permissible after the goodness of the fresh fruits is manifested. The
Prophet (pbuh) permitted this sale for fresh dates. Grapes were added
to the ruling based on analogy (qiy
as), since both are fungibles. In such
cases, the volume of the fruits on the tree should be estimated, and the
dried ones should be weighed, and not vice versa.
Invalid sales for the H
. anbals
Those were discussed in detail in the section dealing with the conditions of a
sale.
163
Forbidden but valid sales for the Sh

afics
There are eight sales contracts that the Shafics render forbidden (h.ar
am) but
valid:225
1. Sale of an animal whose milk was forced to accumulate in its udder for days to give potential buyers the false impression that it produces
a large quantity of milk (bayc al-mus.arr
ah). This type of sale is forbidden
(h.ar
am) but valid. The prohibition is based on a H
narrated by Al. adth
Bukhar and Muslim on the authority of Ab

u Hurayra: Do not let milk
accumulate in the udders of camels and sheep ....

2. The sale of a city-dweller on behalf of a bedouin. This refers to the
case where a city dweller meets an incoming trader and convinces him not
to sell his goods, offering to sell them on his behalf over a period of time,
knowing that the residents of the city are in need of those goods. This
sale is forbidden due to the H
narrated by Al-Bukhar and Muslim
. adth
as: Let not the city dweller sell on behalf

of a bedouin.
3. Meeting a caravan outside the city to buy their goods at a price lower
than that borne in the market. This sale is forbidden based on the H
. adth
narrated by Muslim on the authority of Ab

u Hurayra: Do not meet the
caravans outside the city to buy their goods.
4. Monopoly, i.e. the storage of goods that are needed by people awaiting
the rise of their prices, is forbidden. This is based on the H
narrated
. adth
by Muslim on the authority of Muc ammar ibn c Abd Allah Al-c Adaw:
Only a sinner practices monopoly, since it leads to hardship for the
people.
5. Artificial price hiking (bayc al-najash), where a person bids-up the
price, with no intention to buy the item, to induce others to buy the
goods at the higher price. This trick is forbidden by the H
narrated
. adth
by Al-Bukhar and Muslim on the authority of c Abd Allah ibn c Umar:
The Prophet (pbuh) forbade al-najash.
6. Bargaining to replace bargaining, buying to replace buying, and

selling to replace selling are all forbidden. Thus, after the negotiating
parties have agreed on a price, it is forbidden for a third party to try to
intervene before the sale is concluded to bargain with one of the parties.
It is also forbidden to replace anothers sale before the sale is binding, i.e.
during the session or condition option period while the sale may be voided.
In this case, it is forbidden for a third party to invite the buyer to void his
sale so that he can sell him a similar item at a lower price or a better item
at an equal or lower price. Similarly, it is forbidden for a third party to
replace the buyer during the option period by suggesting to the seller that
225 Al-Khat
b
Al-Shirbn ((Sh
afic), vol.2, pp.35-38).
164

he should void the sale and that he will buy the item at a higher price.
The proofs of those prohibitions are in the following H
s: Al-Bukhar
. adth
and Muslim narrated: A Muslim should not replace the bargaining of his
brother, or Let not a man replace the sale of his brother. Al-Nasa
added in his narration: Until he either concludes the sale or leaves it.
The replacement of a purchase is included in meaning in the prohibition
of the replacement of a sale. The purpose of the prohibition is avoidance
of causing harm, disputes, enmity, and hatred.
7. Sales to a person whose entire wealth is known to be from forbidden sources (m

aluhu h.ar
am). For instance, if it is known that all the
monies of a potential buyer were earned through the sales of pigs, wine,
dead animals, or dogs, or that it was earned illegally through bribes, gambling, singing, dancing, or prostitution and pimping, then selling to this
person is forbidden.
However, if the potential buyers wealth was not all h.ar
am, but a combination, then dealing with him is reprehensible (makr
uh). This ruling is
based on the H
narrated on the authority of Al-Nuc man ibn Bashr:
. adth
The permissible is clear, and the forbidden is clear, and between them
there are many ambiguous things unknown to most people; so the one who
avoids the ambiguous things has saved his religion and honor, and the one
who falls into the ambiguous things would have fallen into the forbidden.
8. The sale of fresh or dried dates and grapes to a wine maker, who
is known or strongly suspected to plan to use them for wine-making, is
forbidden. Similarly, the sale of beardless boys to one who is known to
commit adultery/rape with them, weapons to a criminal or pirate, and
any sale of an item to a person who is expected to use them in violation of Islamic Law, are all forbidden. However, if the degree of doubt
that the sold item will be used illegally is minor, then the sale is merely
reprehensible (makr
uh).
Chapter 5
Options
As we have seen above, a binding contract is one that does not contain any
options that give one of the parties the right to void the contract. An option
based on a condition, inspection, or the finding of defect (khiy
ar al-shart., khiy
ar
al-ruya, or khiy
ar al-c ayb, respectively) is by definition a choice for one of the
parties whether to conclude the contract or to void it. On the other hand, a
selection option (khiy
ar al-tac yn) gives one of the parties the right to choose one
of two objects of sale.1 It is clear that the default in a sale contract is that it is
binding, since its intention is the transfer of property. However, the Legislator
has allowed for certain types of options to meet the needs of the contracting
parties.
Types of options
The H
iy
ar
at)
. anafs enumerated seventeen options, which are the options (kh
of:2 (1) a condition (al-shart.), (2) inspection (al-ruya), (3) defect (al-c ayb),
(4) description (al-was.f), (5) cash payment (al-naqd), (6) specification/selection

c
(al-ta yn), (7) injustice through excessive ignorance or uncertainty (al-ghubn
mac a al-taghrr), (8) quantity (al-kammiya), (9) entitlement (istih.q
aq), (10)
purposeful and active deception (al-taghrr al-fic liy), (11) discovery of condition
(kashf al-h.a
l), (12, 13) betrayal in a cost-plus or at-cost sale (mur
abah.a or
tawliya), (14) partitioning of the contract (tafrq al-s.afqa) due to the perishing
of part of the object of sale, (15) permission of the sale of an uncommissioned
l), (16, 17) a third party having a right in the object of
agent (bayc al-fud.u
sale, due to its lease or pawning. The first seven of those options are the ones
mentioned in Al-Majalla (M: 300-360).
The Maliks recognized two types of options:3
1. The option given to the parties of a sale to ponder the contract; this is the
1 Al-Amw
al
wa Naz.ariyyat Al-c Aqd by Dr. Muh.ammad Y

usuf M
us
a, (p.466).
((H
. anaf), vol.4, p.47).
3 Al-Dard
r ((M
alik)A, vol.3, p.91), Ibn Juzayy ((M
alik), pp.272-274), Ibn Rushd Al
H
alik), vol.2, p.169).
. afd ((M
2 Ibn c Abid
165
166
CHAPTER 5. OPTIONS
option based on condition (khiy
ar al-shart.) that is the default meaning of
the term option.
2. The option due to diminution (khiy

ar al-naqs.a), which is caused by a
reduction in the object of sale due to a defect or entitlement. This is

called the legal option since it elicits a legal judgment.
The Maliks, however, render the option of the contract session (khiy
ar
al-majlis) invalid. This is the opinion of the seven jurists of the Madna as
well as Ab
uH
. anfa. Thus, they consider the sale concluded once the offer
and acceptance have been uttered, even if the parties to the contract have
not parted from the contract session. This is in contrast to the permission
an Al-Thawr, and
of this type of option by Al-Shafic, Ibn H
. anbal, Sufy
Ish.aq. The latter opinion is that the parties to the contract maintain the
option to dissolve it after its conclusion as long as they have not parted
from their session. This opinion is based on the valid H
listed above
. adth
in the discussion of the cornerstones of a sale.

The Shafics classify options into two types:4
1. Choice options (khiy

ar al-tashahh), which include the options based on
the choices and wishes of the parties to the contract with no reference
to any diminution in the object of sale. Those options are based on the
continuation of the sale session or a stipulated condition.
2. Diminution options (khiy
ar al-naqs.a), which are caused by a verbal dis
agreement, a purposive and active deception, or a conventional legal judgment. Among such options are the option based on defect, Al-tas.riya5 ,
verbal disagreement with reality, meeting the caravans outside the town,
etc.
Based on this classification, the Shafics enumerate sixteen valid options:
1. Session option (khiy

ar al-majlis), based on the H
narrated by Al. adth
Bukhar and Muslim.
2. Condition option (khiy

ar al-shart.), which may not be extended beyond
three days. This option is based on the account narrated in Al-Bayhaq

and other sources. If the period of this option is extended beyond the
three days, it renders the contract invalid since it would then contain a
defective condition.
ar al-c ayb) once the defect is discovered, whether the
defect existed before the sale, or after the conclusion of the sale but prior
to receipt. The validity of this option is based on the account narrated in
Al-Trimidh and others.
4 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.43), Al-Sharq
aw ((Sh
afic), pp.150-152), Al .
Sharq
aw ((Sh
afic), H
a
shiya, vol.2, pp.40-50).
.
5
Mentioned above, which constitutes tying the udders of a she-camel, female sheep, etc.
to trick the buyer into thinking that it produces more milk than it actually does. This is an
example of deception by action and in description.
167
4. The option of meeting the caravans outside the city (talaqq al-rukb
an), if
the merchants of the caravan discover that the market price is higher than
that offered them by the person who met the caravan. The validity of this
option is based on the account narrated in Al-Bukhar and Muslim.
5. Partition of the contract option (khiy

ar tafarruq al-s.afqa), where part of
the object of sale is spoiled prior to the sale or prior to receipt. An example
of the former include the sale of a permissible and a prohibited item in
one contract while the buyer does not recognize that one of the items is
impermissible.
6. Loss of characteristic option (khiy
ar faqd al-was.f), i.e. if one of the desired
characteristics of the object of sale is no longer present.

7. (joint with 8)
8. An option based on ignorance that the object of sale was usurped, given
that it can be recovered from the usurper. This option is made valid to
prevent the potential harm that the buyer may face while recovering the
item from the usurper.
9. An option based on ignorance whether the object of sale is planted or
leased.
10. An option based on the inability to meet a valid condition, e.g. the condition of a pawned object or a guarantor in a sale.
11. An option based on potential disagreement on the method of executing
the contract, despite agreeing on its validity. In this case, one of them may
void the contract, or the judge may void it if they disagree. In the latter
case, the voiding of the contract may only ensue after they each swear an
oath denying the others claim.
12. An option to the seller who discovers that the price of an object sold on
a cost-plus basis was exaggerated. Thus, if the seller bought an item for
100, and he then sold it for 110, claiming to the buyer that he had bought
it for 110, and the buyer believed him, the seller has the option. This
option follows since the profit he makes in this case is not legitimate.
13. An option to the buyer if sold fruits are intermixed with newly grown ones
prior to being given access to the tree carrying the fruits. If the seller does
not give him the new fruits as a gift, he has the option.
14. An option based on the buyers inability to pay the price after receiving
the object of sale. The validity of his option to return the object in this
case is based on the account narrated in Al-Bukhar and Muslim.
15. An option caused by a change in the characteristics of the object of sale

after inspection, even if the change does not constitute a defect.
168
CHAPTER 5. OPTIONS
16. An option based on a defect in the fruits caused by the sellers not watering
the plants after giving the buyer access.
6
The H
. anbals enumerated eight types of options: (1) the contract session
option, (2) the condition option, (3) the deception option, (4) the concealment
(of defect) option, (5) the defect option, (6) the betrayal option, (7) the option
based on the parties disagreeing over the price, or the disagreement of lessor
and lessee over the rent, and (8) the option based on the partitioning of the
contract.
In what follows, I shall with the help of Allah discuss in detail the three
most prominent options: (1) the condition option, (2) the defect option, and (3)
the inspection option. The other types of options will be discussed in less detail,
and we remind the reader that the contract session option has been discussed
in detail above.
5.1
Characteristics option khiy

ar al-was.f
This option comes into effect if one of the desired characteristics of the object
of sale becomes missing.7 The H
. anafs define this option as follows: The buyer
has the option whether he accepts the sale for the full stated price, or to void
the sale if the object of sale is missing one or more of its desired characteristics. This applies to sales where the object of sale is absent from the contract
session. For instance, if he buys a cow based on the description that it produces milk, and then it is found that it doesnt, or if he buys an object based
on the description that it is a genuine gem, but it turns out to be an artificial
imitation of the original, then the buyer has the option to retain the object in
exchange for the entire price or to void the sale. Such characteristics are clearly
desired in the object of sale, and may be made a condition of the sale. Thus,
if such characteristics are found lacking, the buyer must get the option. In this
regard, since the buyer would not have accepted the object of sale without this
characteristic, its absence is equivalent to a defect in the object.
The H
. anafs explain why if the buyer decides not to exercise his option and
void the sale, then he has to accept the object in exchange for the full price as
follows: there is no explicit portion of the price of the object corresponding to
each of its characteristics. In fact, the characteristics of the object are a nonseparable part of the object, and that is how they are treated in the contract.
The proof the the validity of this option is based on juristic approbation of
jurists (istih.s
an), which is opposed to the ruling based on analogy alone (qiy
as).
anbal
s
consider
this
option
a
special
case
of
the
defect
option
The Shafics and H
.
(khiy
ar al-c ayb).
6 Al-Buh
ut
(3rd printing (H
. anbal), vol.3, pp.166,186-187,190,199,201,203,217,224).
((H
am ((H
. anaf), vol.4, p.49), Al-Majalla (M: 310-312), Ibn Al-Hum
. anaf),
7 Ibn c Abid
AL-NAQD)
5.2. PRICE PAYMENT OPTION (KHIYAR
5.1.1
169
Option conditions
1. That the characteristic of the object of sale, the satisfaction of which is

stipulated as a condition, is legally permissible. Thus, if the characteristic
was forbidden, the condition becomes invalid.
2. That the characteristic be one that is usually desired. Thus, if the characteristic is not considered customarily desirable, the condition is nullified,
and the sale is rendered valid without an option. For instance, the characteristics of the sex of an animal is nugatory, and if a person buys an
animal assuming that it was a male and finds out it is female, the sale is
valid, and there is no option for the buyer.
3. That the specification of the desired characteristic does not lead to ignorance that may in turn result in dispute. If the specification of the
characteristic does lead to such dispute, the condition and the sale are
both rendered defective. For example, if a person makes it a condition
that the cow being purchased must produce so many pounds of milk per
day, the condition is rendered defective since it cannot be controlled.
5.1.2
Status
1. The characteristics option is inherited. Thus, if the buyer who has a

characteristics option dies, and the object is discovered after his death to
lack the specified characteristic, the heir has the option to void the sale.
2. If the buyer with a characteristics option deals in the object of sale as its
owner, the option is null.
3. The buyer with such an option has the right to either void the sale or
retain the object in exchange for the full price. However, if the object of
sale perishes or becomes defective while in the possession of the buyer, he
may return it to the seller in exchange for a fair assessment of the value of
the object less the missing characteristic. This value can be determined
by pricing the object with and without the characteristic in question. The
buyer is due the differences between the two prices.
5.2
Price payment option (khiy

ar al-naqd)
This option8 is a special case of condition options. It is in effect if the parties

to a sale with a deferred price specify that the sale is void unless the price is
paid within three days. Notice that three days is the permissible period for a
condition option, thus if the condition is that the sale is void if the price is not
paid within four days, the contract is invalid. This is in contrast to the opinion
8 Al-Sarakhs
(1st edition (H
am ((H
n ((H
ut (3rd printing
wards), Ibn c Abid
. anaf), vol.4, p.51), Al-Majalla (M: 313-315), Al-Buh
(H
. anbal), vol.3, p.184).
170
CHAPTER 5. OPTIONS
of Muh.ammad, who allowed the specification of any mutually agreeable period,

taking into consideration the best interest of the parties of the contract.
If the price is paid within three days, there is a consensus among the H
. anafs
that the sale is permissible, since the price payment option follows the same
rulings for condition options. This option is also valid for the H
. anbals based
on the condition option, but they consider the sale void if the price is not paid
within the three days.
Another form this option may take is where the seller stipulates that if he
returns the price to the buyer within three days, then the sale is void.
The difference between the price payment option and the condition option
is that the default for condition options is that they are binding. Thus, if
the period of a condition option passes without the contract being voided, it
becomes binding by default. In contrast, the default for a price payment option
is that the sale is non-binding. Thus, if the price is not paid within the three
days, the sale becomes defective, provided that the object of sale remains in
its original condition. It does not become void. The proof of this opinion is
the general rule that the buyer takes possession of the object of sale upon the
sellers receipt of the price. The H
. anbals, however, ruled that the sale would
be voided in this case, and the H
anaf
s with the exception of Zufar agree with
.
this opinion. This opinion is based on classifying this option as a special case
of condition options (khiy
ar al-shart.). However, Zufar disagreed based on the
opinion that this is a condition that is not a prerequisite of the contract, and
results in a benefit to the one who has the option.
5.2.1
When is this option dropped ?
1. If the buyer with a price payment option dies during the option period,
the sale is rendered invalid.
2. If the buyer deals in the object of sale by reselling it or otherwise during
the option period and before paying the price, the option is dropped, the
sale is rendered valid and binding, and the payment of the price becomes
binding on him.
3. If the buyer or a third party caused a defect in the object during the
option period after receipt, the option is dropped due to the impossibility
of returning the object.
4. If the buyer causes a defect in the object that prevents him from returning
it to the seller, even before the price is paid, the option is dropped. In
this case, the seller has the option of taking the defective object and
surrendering his claim to the price, or leaving the object with the buyer
and demanding the price.
AL-TAC Y
5.3. SPECIFICATION OPTION (KHIYAR
IN)
5.3
171
Specification option (khiy

ar al-tac yn)
This is the type of option9 ensues if the parties to the contract agree to postpone
specifying the object of sale that must be specified for a known period, giving
the option of specifying the object to one of them. For instance, if a person
buys an unspecified dress out of two or three, where he has the option to take
whichever one he wishes within three days.
In similarity to the price payment option, there is a reverse side to this
option: the buyer may either take one of the objects of sale at the price he
agreed upon with the seller, or the seller may give the buyer whichever one of
the objects he chooses, and make the sale binding on the buyer unless the buyer
was absent in which case it must be by mutual consent. If one of the objects of
sale were to perish, the seller may make it binding on the buyer to select one of
the others.
The H
an)
. anafs rendered this option valid based on juristic approbation (istih.s
due to peoples need for such options. They have thus overruled the harm caused
by the ignorance of the object of sale based on convention and benefit to the contracting parties. The Shafics and H
. anbals, on the other hand, have rendered
the option invalid due to the resulting ignorance (jah

ala).
The H
. anafs further stipulate that it is not necessary for this option to be tied
to a condition option, but that it is permissible for the parties of the contract
to make it thus.
5.3.1
Option conditions
The H
. anafs have stipulated the following conditions for the specification option:
1. That the selection be among two or three items and not more. Their
ruling is based on the view that all things can be classified into three
categories: high, medium, and low quality, thus making it redundant to
allow a selection among four or more items.
2. That the seller agrees explicitly to this option, e.g. by saying to the buyer:
I have sold you one of those two or three items, and you have the option
of selecting which one. If the seller does not agree to this option, the sale
is rendered defective based on ignorance.
3. That the objects of sale are non-fungibles (e.g. clothes or furniture) and
not fungibles (e.g. new printed books), since there is no benefit in specifying one item out of a group of fungibles that are virtually identical.
4. That its period is the same as that of the condition option, which is three
days for Ab
uH
. anfa and any known and mutually agreeable period for
Ab
u Y
usuf and Muh.ammad.
9 Ibn Al-Hum
am ((H
. anaf), vol.5, pp.125,130), Ibn
wards), Al-Majalla (M: 316-319).
c Abid
((H
. anaf), vol.4, p.60 on-
172
5.3.2
CHAPTER 5. OPTIONS
Status
1. The sale is binding on an unidentified element from the agreed upon set
of objects of sale. It is binding on the party with the option to specify the
object he will purchase within the option period, and to pay its price.
2. This option is inheritable in the view of the H
. anaf jurists, in contrast to
the condition option. Thus, if a buyer with a specification option were to
die prior to specifying the object of the sale, it is binding on the heir to
specify one of the objects and to pay its price.
3. If one of two objects in a sale with a specification option were to perish,
the other object automatically becomes the object of sale, and whatever
remains is considered a liability-in-kind (am
ana) on the buyer. If both
objects of sale were to perish, the buyer is bound to pay half the price of
each, since neither was specified. If the two were to perish sequentially, the
first to perish is considered the object of sale. If the parties disagree on the
order in which the objects perished, then an oath by the buyer may specify
it, but evidence the seller may show would have priority. The treatment
of a new defect is the same as the treatment of perishing discussed above.
If the buyer sells both objects and then selects one, then his sale of that
object is valid. In this case, the liability for the object of sale is for its
price, while the liability for the other is in-kind.
5.4
Fraud option (khiy

ar al-ghubn)
This option10 is legally permissible for the H

. anafs if the fraud is based on
deception. Thus, it is commonly called the fraudulent deception option (khiy
ar
al-ghubn mac a al-taghrr). The deception by the buyer or seller may be verbal by
prices, or by action by communicating a false description

communicating
unfair
of the object of sale. The degree of fraud is considered minor (ghubn yasr) if
of the value
the resulting difference in price falls within reasonable assessments
of the object; otherwise, it is considered major (ghubn f
ah.ish), since the unjust
case, the
right to void the
increase in price is certain in this case.11 In this
contract is established to remove the injustice.
Verbal deception in price results if the seller or lessor says to the buyer or
lessee: this item is worth more, and you can never find its equal, or so-and-so
paid me so-much for it, etc. while none of this is true.
Actual deception in description results if the seller or buyer fraudulently
claims that the object of sale contains a characteristic that it does not. For
instance, a seller may put the best quality items on the top of a display, hiding
the worst at the bottom, to give the impression that the average quality is higher
than it is in reality. Other examples involve forcing milk to accumulate in the
udder of an animal. All such behavior is strictly forbidden (h.ar
am), and gives
10 Ibn c Abid
n
11 Al-K
as
an
((H
. anaf), vol.4, p.47), Al-Majalla (M:256-360).
((H
. anaf), vol.6, p.30).
AL-GHUBN)
5.4. FRAUD OPTION (KHIYAR
173
the deceived party the option to void the contract in analogy to the right to void
if a conditionally stipulated characteristic was missing. As for not revealing a
hidden defect that one of the parties knows, this comes under the defect option
(khiy
ar al-c ayb).
5.4.1
Status
The deceived party is given the right to void the contract to remove the unjust
loss he suffered. In this case, it is ruled that his consent was never realized
due to the deception and grave injustice. However, if the victim of fraudulent
deception dies, the right to void is not inherited by his heir.
If the deceived buyer deals in the object of sale after discovering the grave injustice, builds on the land thus purchased, or if the object perishes, is consumed,
or a new defect befalls it, then the right to void the contract is dropped.
The H
. anbals distinguish between three categories of options relevant for
this section: (1) the fraud option, (2) the concealment option, and (3) the
defect option.12
5.4.2
c
Three H
. anbal categories: ghubn, tadls, and ayb
1. Types of deception (ghubn)
1. Meeting the caravans outside the city: This category includes all incoming
traders with goods to sell, even if they are traveling on-foot. The majority
of jurists render this behavior forbidden (h.ar
am), while the H
. anafs rendered it reprehensible (makr
uh), even if the person did not intentionally
go out of the city to meet them. Thus, if the one who meets the caravan
buys from them or sells to them, they have the option to void those transaction once they reach the market and discover that they were deceived
into trading at unusually high or low prices. This option is rendered valid
by the H
:13 Do not meet incoming traders outside the market; and
. adth
if they do trade with someone and then reach the market, they have the
option.
2. Price-hiking (Al-Najash): This is the practice where a third party inten
tionally bids-up the price of an object with no intention of buying it. This
practice is forbidden (h.ar
am) since it deceives the buyer, and the buyer in
this case has the option if he bought at an unusually high price. Notice
that the sale is not considered a najash unless the third party was clever
and the buyer was ignorant of the price. Thus, if the buyer was alert to
this possibility but still fell prey to the trick, then he has no option, and
should blame his loss on his haste. If a third party with no intention to
buy bids-up the price without cooperation with the seller, or if the seller
12 Ibn Qud
amah (, vol.4, pp.134-142), Al-Buh
ut (3rd printing (H
. anbal),
pp.199,201,203).
13 Narrated by Muslim on the authority of Ab
u Hurayrah
vol.3,
174
CHAPTER 5. OPTIONS
himself raises the price, while the buyer does not know, then he has the
option to keep the object of sale or return it, since deception still exists.
3. Sale or lease with unsound judgment (bayc al-mustarsil): The unsound

judgment in this category may result from ignorance of the value of the
object of sale by either the buyer or the seller. In this case, if the injustice
in pricing was unusually high, the deceived party has an option. His claim
of ignorance is accepted by his oath, unless a close associate disputes his
claim of ignorance, in which case it is not accepted.
Their opinions are as flexible for the fraud option as they are in the defect
option.
2. Concealment of defect (al-tadls)
The option given to the buyer of an object with a defect that was concealed by
the seller is based on deception, while the contract is considered valid. There
are two types of concealment, both of which are forbidden (h.ar
am):
1. Concealment of a defect, and then the option will be called by the H
. anafs
a defect option (khiy
ar al-c ayb).
2. An action that raises the price, even if there is no defect in the object.
For example holding the water of a mill and releasing it at the time of
sale to make it unusually fast in its rotation, thus deceiving the buyer
into paying more for it. Other examples include improving the looks of a
pile of goods, polishing the top of shoes, showing the best part of a dress,
forcefully collecting milk in the udder of an animal, etc. This is called an
active deception in the description of the object by the H
. anafs.
In both types of concealment or deception, the buyer has the option to return
the object if he was not aware of the defect, or to keep the object. This ruling is
based on the H
:14 Do not forcefully keep the milk in the udders of camels
. adth
and sheep, and if one buys it thus, then he has the option after milking it, he
may keep it or return it together with a container of dates as compensation for
the milk?. Other forms of concealment inherit the same legal status as forcefully
keeping the milk in the animals udder.
The majority of jurists and Ab
u Y
usuf have accepted the implication of this
H
, which is giving the buyer the option to keep the object or to return it
. adth
with one container of dates. However, Ab

uH
. anfa and Muh.ammad ruled that
the buyer may return it with the decrease if he wishes.
ar al-c ayb)
The defect option in the H

. anbal school, on the other hand, must be caused by
a diminution in the object of sale itself, e.g. the castration of an animal, even if
that results in an increase rather than a decrease in its value. They also include
14 Agreed
upon on the authority of Ab

u Hurayrah, and it is a H
marf
uc .
. adth
KASHF AL-H
5.5. REVELATION OPTION (KHIYAR

. AL)
175
cases where the value of the object would decrease in common pricing, even if
the object of sale itself is not diminished in any way.
5.5
Revelation option (khiy

ar kashf al-h.al)
This option15 is in effect if a person buys an item of unknown weight, or unknown

volume. For instance, if a person buys an amount of gold of the same weight as
this stone, or this pile of food for a specified price per measure of volume. In
both such cases, the sale is valid, and the buyer has the option to conclude the
sale or void it.
5.6
Betrayal option (khiy

ar al-khiy
anah)
This option16 is in effect in trust sales (buy

uc al-am
anah) such as sales at-cost,
partnership, cost-plus, or below-cost sales if the seller informs the buyer of an
increase in the price, or conceals a deferment. In such cases, if the sellers
statement is found to be false by proof or confession (the H
. anafs also include
refusing to swear that he told the truth as proof that he lied), then the H
. anafs
and M
aliks give the buyer the option of taking the object of sale at the full
stated price, or returning it, since his consent was never established. In the case
of at-cost sales, he may take the object at an appropriately reduced price (i.e.
at the true cost of the object). On the other hand, the majority of the Shafics
and the H
. anbals ruled that the buyer has no option in this case, but that he
has the right to reduce the price by the appropriate amount to compensate for
the misrepresentation of the seller.
5.7
Sale partition option (khiy

ar tafarruq al-s.afqa)
This option17 is given to the buyer if the object of sale is partitioned. In this
case, he has the choice whether to void the sale and recover the entire price if
paid, or take the remainder of the object of sale after deducting the appropriate
amount from the price to account for the defect or perishing that befell part
of the object. There are many forms that this option may take, and they are
discussed in some detail in what follows.
For the H
. anafs, this option comes into effect if part of the object of sale
perishes or becomes defective while it is in the possession of the seller (i.e. prior
to receipt by the buyer). If the perishing of part of the object of sale was caused
15 Ibn c Abid
((H
. anaf), vol.4, p.47).
((H
alik)A, vol.3, p.168 onwards), Al. anaf), vol.4, p.47), Al-Dardr ((M
afic), vol.2, p.79), Al-Buh
ut (3rd printing (H
. anbal), vol.3, p.217
onwards).
17 Ibn c Abid
n ((H
alik)A, vol.3, p.469), Ibn Juzayy
. anaf), vol.4, p.47), Al-Dardr ((M
((M
u-Ish.
aq Al-Shr
az
((Sh
amah (, vol.4, p.238), Al-Buh
ut (3rd printing (H
anbal),
.
vol.3, p.166 onwards, p.291).

16 Ibn c Abid
176
CHAPTER 5. OPTIONS
by a natural event or by the seller, then the sale is rendered invalid. However, if
the perishing occurred because of actions by a third party, then the buyer has
the option to void the contract, or to conclude it holding the third party liable
for the damage.
The Maliks ruled that this option comes into effect if the object of sale is
defective, or if some members of a group of items sold in one contract become
defective or perish. In the latter case, the sale must be voided in their opinion,
and the buyer does not have a right to keep the remainder of what was sold.
In the former case, the buyer does have the option to retain the remainder of
the object of sale in return for a price to be determined by assessment of value,
rather than as a percentage of the original price. Thus, if the remaining part
is assessed to be worth eight, and the part that was ruined was assessed to be
worth two if it were in good form, the buyer should get back one-fifth of the
price he paid to the seller.
However, if the contract consisted of some permissible and some impermissible items (e.g. a permissible good together with wine or pork, etc.), then the
Maliks ruled that the entire contract is invalid. In contrast, if a person sells
some of his property together with the property of another in one contract, then
the sale is valid in both. In this case, the sale is binding on the part that is the
sellers property, and the bindingness of the other part is suspended pending
the consent of its owner.
Al-Shafic considered three categories of partitioning or enumeration of the
components of a contract:
1. If a person sells permissible and forbidden items in one contract (e.g. a
legally slaughtered sheep and a dead animal, vinegar and wine, a sheep and
a pig, something owned by himself and another owned by another person,
or an item for which others share some rights without the permission of
those parties) then the sale is valid for any item that is permissible and
that is owned exclusively by the seller, and the best opinion is that the sale
is invalid for the other components. Thus, each of the components of the
contract has its own legal status. If the buyer did not know the status of all
the components of the sale, then he has an option to take the permissible
part that was owned by the seller in exchange for a price determined by
its value, or to void the contract. The option comes into effect in this
case since the partitioning of the object of sale can cause potential loss
to the buyer. However, the seller has no option in this case, since he has
transgressed by attempting to sell that which is not permissible or that
which is not his property.
2. If a person sells two items (say two pieces of furniture) to another, and
then one piece becomes defective prior to its receipt, then the sale is voided
for the defective item, but not for the other. In this case, the buyer has
the option to void the entire contract, or to take the non-defective item
based on its value and the value of the defective part. This follows since
the price can be distributed among the two items at the inception of the
TAFARRUQ AL-S.AFQA) 177

5.7. SALE PARTITION OPTION (KHIYAR
sale, and this possibility of distributing the price is not affected by the
later defectiveness of one.
3. If two contracts of different legal status (e.g. a lease and a sale) are
combined in one agreement (e.g. I rented you my house for one month
for so-much, and sold you this dress for one Dinar), then both contracts
according to the best opinion are valid. Similarly, the two contracts are
valid if the two contracts combined in the agreement were a lease and a
salam (e.g. I rent you my house for a month, and I sell you a container
of wheat that is a deferred liability on me for so-much). In this case, the
named price is distributed according to the values of the objects of the
contracts; e.g. the rent for the leased house, and the value of the object
of sale or salam for that item.
In general, a contract is partitioned if the seller explicitly specifies the
price for each item (e.g. I sold you this for so-much, and this for so-much,
etc.). Also, if a single buyer were to buy from multiple sellers in one
agreement, the prices specified by each seller are associated with the item
sold by that seller. Cases with multiple buyers and/or sellers are treated
similarly.
In summary, the Shafics have two opinions on the issue of partitioning of a
contract. The more accepted view in their school is that the sale is considered
invalid for the items for which it is not permissible, and valid for the permissible
part. This opinion is based on the argument that invalidating both parts of the
contract due to the invalidity of part is of lesser legitimacy than validating the
part that is valid. Thus, each part of the contract maintains its legal status,
neither part altering the status of the other. The other view of the Shafics
is that the contract cannot be partitioned, thus the entire contract must be
invalidated according to this view.
The H
. anbals defined the partitioning of a contract thus: Partitioning of
items purchased in one contract occurs if some of the items may be sold validly
while others are invalid to sell, and if they were initially sold in one contract in
exchange for one price. They further explicate this definition by considering
three types of contract partitioning:
1. If a person sells a known object together with an unknown one whose value
is also unknown. For instance, if a person says: I sold you this mare,
together with what is in the womb of this other mare, for so-much, then
the sale is invalid. In this case, the unknown object may not be sold due
to ignorance, and the known may not be sold due to ignorance of its price,
which cannot be imputed. To impute the price of the known object, the
overall price must be distributed over the two options, but since the value
of the unknown object (e.g. what is in the womb of the mare) is unknown,
the imputation of the implied price for the other item in the sale becomes
impossible.
2. If a person sells an item that is jointly owned (masha
c ) with another
without the permission of his partner, the sale is valid for his share in
178
CHAPTER 5. OPTIONS
exchange for his share of its share of the price. This is in accordance
with the view of the majority of Shafics that is discussed above. If the
buyer was not aware that the item was jointly owned, he has the option
of keeping the share that was validly sold or voiding the contract. This
follows since partnership with another is tantamount to a defect in the
object he had thus purchased, thus justifying the option. However, if the
buyer was aware of the partnership in the object of sale, then neither party
has an option. If the buyer does keep the validly sold part of the object
of sale, he is entitled to indemnity, as he would be if he purchased a single
shoe from a pair.
3. If a person sells his property together with the property of another in one
contract, without the permission of the other party, or if he sells vinegar
and wine in one contract, then his sale is valid for his property in exchange
for its share of the price, and for the vinegar for its share of the price. In
this case, the price-share is determined by the ratio of the values of the
two objects of sale. In the case of wine sold with vinegar, its value is
assessed as if it were vinegar as well. In all such cases, the seller has no
option. Those rulings are all in accordance with the view expressed by
the majority of Shafic jurists.
The H
anbal
s
also
ruled
that if the sale consisted of items that are measured
.
by volume or weight, and then part of the object of sale was rendered defective
prior to receipt, the contract is not automatically voided. In this case, the
buyer takes the remainder of the object of sale for its share in the price, since the
contract was valid at its inception. Thus, the perishing or resulting defectiveness
of part of the object of sale does not render the sale void, before or after receipt.
The ruling is thus similar to finding one of two objects of sale defective after
receipt, and returning in exchange for its share of the price. It is also similar
to the ruling if one of the parties to the contract were to forgive the other from
delivery of part of the object of sale.
5.8
Uncommissioned agent (fud.u

l) sale option
This option18 comes into effect for the owner of an object if another sold his
property without his commission. The H
. anafs and Maliks consider this sale
suspended. The owner then has the choice whether to permit the contract, in
which case it is executable, or to reject it, in which case it becomes invalid.
5.9
Option based on rights of others
This option19 comes into effect when a person has a right to an object of sale,
whether that right is for a creditor pawn-broker, or a lessee. Thus, if a person
18 Ibn c Abid
19 Ibn c Abid
((H
alik), p.260).
. anaf), vol.4, p.47 onwards), Ibn Juzayy ((M
((H
. anaf), vol.4, p.48).
AL-KIMMIYYA)
5.10. QUANTITY OPTION (KHIYAR
179
buys a house and then discovers that it is pawned or leased, he has the option
whether to void the contract or not, to give him the ability to avoid a potential
loss. The apparent interpretation of this opinion is that the option is valid even
if he knew of this shared right at the inception of the contract; and this is the
correct opinion according to which we rule.
If the lessee or pawn-broker were not to permit the sale, then the buyer has
the option to void the contract, or to wait until the lease period is over or the
pawning is revoked. However, if the lessee or pawn-broker were to permit the
sale, then the buyer has no option.
5.10
Quantity option (khiy

ar al-kimmiyya)
This option20 comes into effect if a person purchases an item in exchange for
unseen items in a container or a hand, etc., where the seller does not know the
quantity or type of objects contained therein. In this case, the seller has the
option after opening the container or hand, thus seeing the price, whether to
conclude the sale or void it. The H
iy
ar al. anafs call the quantity option (kh
kimmiyya), to be contrasted with the inspection option (khiy

ar al-ruya) since
the latter is not applicable when the unseen item is money.
5.11
Entitlement option (khiy

ar al-istih.q
aq)
This option21 comes into effect for the buyer due to the entitlement of the whole
object of sale or part of it. The H
. anafs explain this option as follows:
If the entitlement for the object of sale takes place prior to receiving the
full object of sale, the option is in effect for the entire object of sale; and
if it takes place after receipt, then he is given the option in non-fungibles
to the exclusion of fungibles measured by volume and weight.
If the entitlement came into effect for part of the object of sale prior to
receipt, the contract is rendered invalid for the entitled part, and the buyer
is given the option of taking the remaining part in exchange for its share
of the price, or returning the object of sale.
If the entitlement came into effect for part of the object of sale after receipt,
then the sale is rendered invalid for the part that is entitled. In this case,
if the buyer can incur a loss by partitioning the object of sale (e.g. a house
or a dress), then he has the option whether to keep the remainder for its
share of the price, or to return it. If the partitioning cannot lead to a loss
(e.g. if the object of sale is fungible, measured by volume or weight), then
he is bound to keep the rest in exchange for its share of the price.
20 Ibn c Abid
n
21 ibid.
((H
. anaf), vol.4, p.47).
180
CHAPTER 5. OPTIONS
All of those rulings are for the case where the party with the entitlement
right does not allow the sale. However, if that party were to allow the
sale, then there is no harm in partitioning, and the sale becomes binding
on all parties.
5.12
Condition option (khiy

ar al-shart.)
This option will be discussed in five subsections:

1. Defect-inducing versus legal options.
2. The duration of permitted options.
3. Means of dropping an option.
4. The status of the contract during the option period.
5. Means of voiding or permission.
5.12.1
Defect-inducing options (al-khiyar al-mufsid) vs. leuc )

gal options (al-khiyar al-mashr
Defect-inducing options (al-khiy

ar al-mufsid)
The H
afics, and the majority of the H
. anafs, Sh
. anbals have ruled that if the
parties to a contract stipulate an eternal option, then the contract is not valid
due to excessive ignorance (jah
ala f
ah.isha). Examples include a person telling
the other: (i) I have sold (or I have bought) on condition that I have an
eternal option; or (ii) on condition that I have an option, thus mentioning
the option unqualified by a time-period; or (iii) if he stipulates the option period
to an unknown time such as until Zayd comes, or until the wind blows, or
until it rains, or some days, etc.
However, the Shafics and H
. anbals considered the contract in this case to be
invalid, while the H

anaf
s
consider
it to be only defective. Thus, if the condition
.
is dropped prior to the passage of three days, or if the excessive condition was
removed or the period of option made specific, then the sale would become
valid in the view of the H
. anafs, since the defect-inducing aspect would have
been removed.22
The proof of the Shafics and H
. anbals is that the period of the option be
comes appended to the contract, and thus may not be unknown, in analogy to
the impermissibility of ignorance of a deferment period. Moreover, they argue,
the stipulation of an eternal option restricts the buyer from dealing in the object of his purchase forever, which is in conflict with the prerequisites of the
contract. Thus, such an eternal option is as invalid as a sale with a condition
that the buyer not be able to re-sell the item.
22
Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.3, p.589).
AL-SHART
5.12. CONDITION OPTION (KHIYAR
.)
181
The H
. anafs, on the other hand, find proof in the argument that the condition
of an option alters the contract except in its essence. In this regard, it is only
made permissible based on the H
of H
, in which the
. adth
. ibban ibn Munqidh
period of the option was specified to be three days. Thus, the contract discussed
here remains in accordance with its essence except for the stated period of the
option.
In contrast, Malik, and Ah.mad in one narration, have permitted options
of unspecified periods. Imam Ah.mad said in this regard: They may then
maintain the option eternally, they may cut it to a finite time, or it may expire.
Imam Malik, on the other hand, said: The ruler (Sult.a
n) decides an option
period equal to conventional option periods of similar contracts; since the option
is determined for any object of sale by convention, not specifying an optionperiod would be tantamount to specifying it to be of conventional length. the
Maliks render the sale defective if an option period is stipulated for a period
appreciably longer (i.e. a day or more) beyond its conventional length. They
also consider the sale defective if the stipulated condition has an unknown term
such as until it rains, or until Zayd comes.23
Legal options (al-khiy
ar al-mashr
uc )
Permitted options are ones with an appropriately known period. We shall discuss the differences among jurists regarding such options. More generally, the
legal permissibility of conditional options (khiy
ar al-shart.) has been established
by the H
of H
ibban ibn Munqidh, who used to cheat in buying and sell. adth
.
ing. His family complained about this behavior to the Messenger of Allah, who
(pbuh) said: If you sell, then say: no cheating,24 and I have the option for three
days. Its permissibility is further dictated by peoples need for it to avoid being
cheated.25
The condition option is legally permissible in the opinion of the majority
of H
afic and other jurists, regardless of whether the condition was
. anaf, Sh
stipulated for one of the contracting parties or for another, to meet peoples
needs. Zufar, on the other hand, ruled that a condition option is valid only for
a contracting party. Moreover, options and deferment are not valid for sales
that may contain rib
a, which are: (1) currency exchange (s.arf), for the H
. anafs
the sale of items measured by weight or volume, and for the Shafics exchanging
food for food. All of those contracts require receipt prior to physical separation,
and the mention of options or deferment contradict such immediate receipt.26
23 Ha
shiyat
Al-Dus
uq (vol.3, p.95), Ibn Rushd Al-H
alik), vol.2, p.208).
.
. afd ((M
other words, it is not permissible for you to cheat me, and if you do cheat me then I
am not bound. We have authenticated its narrations previously in Al-dH
akim, Al-Bayhaq,
Al-Bukh
ar, Muslim, Ab
u D
aw
ud, Al-Nas
a, and M
alik, on the authority of Ibn c Umar;
c.f. Tuh.fat Al-Fuqah

a with the authentication of its H
s) by the author with Professor
. adth
Al-Kitt
an (vol.2, p.82).
25 Al-Sanc
an (2nd printing, vol.3, p.35), Al-K
as
an ((H
aj Al.
. anaf), vol.5, p.174), Al-B
Andalus (1st edition (M
alik), vol.5, p.108).
26 Ibn Al-Hum
am ((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.258).
. anaf), vol.5, p.372), Ab
24 In
182
CHAPTER 5. OPTIONS
5.12.2
Jurist opinions regarding option period
Jurists took three distinct positions on the period of an option:

1. Ab
uH
afic ruled that stipulating an option as a
. anfa, Zufar, and Al-Sh
condition with a known period is valid for any period of three days or less.
Their proof is that options are originally forbidden since they prevent the
transfer of property or its bindingness, thus resulting in a conflict with the
nature of a sale. However, an exception to this original ruling were established based on the H
of H
listed above, which was
. adth
. ibban ibn Munqidh
narrated by Ibn c Umar. The period for this exception was established by
the H
of Anas: A man bought an animal from another, and stipu. adth
lated an option for four days, but the Messenger of Allah (pbuh) voided
the sale, and he said: options are [only] for three days.27 Another argument for the three-day period is that it is customarily sufficient to meet
the needs of the contracting parties. Thus, if the period is in excess of
three days, the sale is defective for Ab
uH
u
. anfa and Zufar. However, Ab
H
. anfa ruled that it returns valid if the option is dropped during the three
days, since the defective aspect would be dropped prior to rendering the
sale defective. Zufar, on the other hand, ruled that a defective contract
may never return to validity.
a, conAl-Shafic, in contrast to what was mentioned in Tuh.fat Al-Fuqah
sidered the contract with an option for more than three days invalid. His
proof is that the option introduces uncertainty (gharar) into the contract,
and its allowance for three days or less is an exceptional

license (rukh.sah),
which may not be extended. In summary, this opinion is based on the

view that options are in contradiction with the prerequisites of sales, and
they are allowed only based on the legal authority of the above mentioned
H
s.28
. adth
2. Muh.ammad, Ab
u Y
usuf and the H
. anbals ruled that it is permissible to
stipulate any known option period that is agreed upon by the buyer and
seller, no matter how long or short. Their proof is the narration that Ibn
c
Umar permitted an option for two months.29 They also argued that the
option is a right that may be stipulated as a condition, and thus its term
may be determined by the one stipulating it, as in the case of determining
a deferment term. In other words, the period of an option is appended to
the contract, and thus is left to the judgment of the parties of the contract,
27 Narrated by c Abd Al-Razz
aq in his Mus.annaf. c Abd Al-H
am
. aqq listed it in his Ah.k
based on the narration of c Abd Al-Razz
aq, but found fault with its chain of narration that
included Ab
an ibn c Ayy
ash, saying that his narrations are not accepted despite being a pious
man; c.f. Al-H

), vol.4, p.8).
.
. adth
28 Al-Sarakhs
(1st edition (H
anaf), vol.13, p.40 onwards), Al-K
as
an ((H
.
. anaf), vol.5,
p.174), Ibn Al-Hum

am ((H
at.b Al-Shirbn ((Sh
afic),
. anaf), vol.5, p.110 onwards), Al-Kh
vol.2, p.47).
29 Al-Zaylac
said that this H
is very strange (gharbun jiddan); c.f. Al-H
afiz. Al. adth
.
Zaylac (1st edition, (H

), vol.4, p.8).
. adth
AL-SHART
.)
183
as in the case of deferment.30

3. The Maliks ruled that the period of the option may be as long as necessity
dictates. Such necessity varies across objects of sale. Thus, fruits that
perish in a day may not be sold with an option of more than a day, clothes
and animals may have options for up to three days, and land that cannot
be reached in three days or less may be sold with an option for more than
three days. They ruled also that a house or similar object would require
an option period of one month.
Their proof is that the objective of permitting options is giving the contracting parties enough time to inspect the object of sale. Thus, the period
of the option must be restricted in a manner that allows for the inspection
of the object, which varies across different objects of sale. They use the
text of the H
as proof of this general concept: that options are al. adth
lowed due to the need of the contracting party, and thus its period must be
determined by that need. Thus, they classify this text among the specific
ones that were intended to convey a general concept (kha
ssun urda bihi
..
c
a
m).31 This is in contrast to the opinions of the Shafics, Ab
uH
. anfa,
and Zufar, who found this text to be a specific one intended to convey
a specific purpose (kha
ssun urda bihi kha
ss). The period of the option
..
..
begins with the date of the contract
Determination of the option period limit
Ab
uH
. anfa ruled that if an option is stipulated until tonight or until tomorrow,
then the night or tomorrow is included in the option period. In this regard, he
argued, the purpose of defining a limit to the time period is to exclude what
comes after it from what comes before, as in the verse: Wash your faces, and
your hands (and arms) to the elbows;... [5:6]; where the elbows are specified
as the limit of the area to be washed, and are included in the washing. As
further proof, he argues that if the time limit were not mentioned, then the
option would be valid for the entire time up to the three day limit, of course.32
Ab
u Y
usuf and Muh.ammad, the M
aliks, the Shafics, and the H
. anbals
ruled that the night or tomorrow, stipulated as the limit of the option, are not
included in the option period. The rule that the term il
a (to or until)
specifies the end of the limit. Thus, the beginning of the stipulated limit is
the demarcation between what comes before it and what comes after, as in the
verse: Then complete your fast till the night... [2:187]; where the fasting is
completed as soon as the disk of the sun sinks below the horizon, thus excluding
the night from the fasting period. Thus, the term is understood literally, as if
30 Ibn Qud
. anbal), vol.2, p.30),
Al-Sarakhs (1st edition (H
anaf), vol.13, p.41), Ibn Al-Hum
am ((H
anaf), vol.5, p.111), Al.
.
K
as
an ((H
. anaf), vol.5, p.174).
31 Ibn Rushd Al-Haf
alik), vol.2, p.207), H
shiyat Al-Dus
uq (vol.3, pp.91,95), Ibn
. d ((M
.a
Juzayy ((M
alik), p.273).
32 Al-K
as
an ((H
. anaf), vol.5, p.267).
184
CHAPTER 5. OPTIONS
the linguist said: As soon as you hear this term, understand that the period
has reached its end.33
5.12.3
Methods of dropping an option
A contract with an option is non-binding, and it becomes binding once the

established option is dropped. There are three ways an option may be dropped:
1. Manifest dropping of an option
An option is manifestly dropped if the person holding the option says: I have
dropped this option, I have invalidated this option, I have agreed to the
sale, etc. In all such cases, the option is no longer valid, whether the buyer
knows of the permission or not. This follows since the option was legalized to
permit its voiding, thus when it is dropped it becomes invalid, returning the
contract to its original state of bindingness and executability.
Moreover, the option is dropped if the person holding the option says: I have
dissolved the contract, I have violated the contract, or I have voided the
contract. This follows since the option is in essence a choice between dissolving
the contract or permitting it, and thus it is dropped if either (dissolution or
permission) is established.34
2. Inferred dropping of an option
If the person holding the option takes an action from which the permission of the
sale and the establishment of new property rights may be inferred, the dropping
of the option is inferred simultaneously from the same action. For instance:
If the buyer has an option and is in possession of the object of sale, and if
he offers the object for re-sale, his option is invalidated. Thus, offering to
sell the object to another implies that he chose ownership, which in turn
requires invalidating the option.
If the seller has an option and then offers the object for sale, then the
more correct of two opinions narrated on the authority of Ab
uH
. anfa is
that the option is dropped. This follows since offering the object for sale
implies that he chose to keep the object of the original sale.
Similarly, a buyers option is dropped if he sells the item that he had
purchased, pawned, leased, or given as a gift, whether or not he had
delivered the object. All such actions imply ownership of the object, thus
necessitating the permission of the original sale.
If the seller who holds an option undertakes any of the above-mentioned
actions with respect to the price of the original sale, his option is dropped.
33 Ibn Qud
. anbal), vol.2, p.31),
Al-Shac ar
an ((Sh
afic), vol.2, p.64), Al-K
as
an ((H
anaf), ibid).
.
34
Al-K
as
an ((H
. anaf), vol.5, pp.267,271).
AL-SHART
.)
185
However, the two cases of the buyer and seller differ with respect to the
delivery of a gift or a pawned object. In those two cases, the option held
by the seller is not dropped except after delivery, in contrast to the option
held by the buyer.35 On the other hand, leases are treated the same for
buyers and sellers. In this case, the option is dropped without requiring
receipt, since the contract is thus binding, in contrast to pawning and gift
prior to receipt, where they are non-binding.
Another example of inferring the dropping of an option is the case of a
buyer allowing people to move into the house he bought, with or without
a rent, making repairs or improvements in the house, adding or removing
parts of the building, etc. All such actions imply that he has chosen the
ownership of the house.
Similarly, if a buyer water plants, reaps its fruits, uses it as food for
his livestock, etc., he has permitted the sale and dropped the option by
implication.36
On the other hand, riding an animal to allow it to drink or to return it to
the seller does not drop the option. This is the preferred opinion (based
on istih.s
an) since the animal may be impossible to direct without riding
it. However, the ruling according to analogy (qiy
as) is that the option is
dropped, based on the argument that riding the animal implies choosing
ownership.
Similarly, riding an animal to test its manner of walking and its strength
does not drop the option.
Another example is wearing a dress to test its size, which does not drop
the option. However, wearing it a second time for the same reason drops
the option.
In this respect, riding the animal a second time to test a different feature
(ex. running speed, etc.) does not drop the option, whereas riding it a
second time for the same purpose as the first test drops it.
However, some of the H
. anaf masters ruled that riding an animal for a
second time to test the same aspect does not drop the option, since a true
test may require more than one trial. Thus, multiple trials may be needed
to test the animals behavior, in contrast to the dress whose attributes
can be tested with one trial.37
Options dropped by necessity
We can enumerate five cases where an option may be dropped by necessity:
35 Al-K
as
an
((H
. anaf), vol.5, p.267), Al-Samarqand ((H
. anaf), vol.2, p.95).
((H
as
an ((H
. anaf), vol.5, p.270).
37 Al-Samarqand
((H
as
an ((H
. anaf), vol.5, p.270).
36 Al-Samarqand
186
CHAPTER 5. OPTIONS
1. Passage of the option period

If the option period elapses without the contract being voided, then the option
is dropped. This follows since the option elapses with the elapsing of its period,
thus rendering the contract binding.38 This is the opinion of the Shafics and
H
. anbals. In this respect, they ruled that the option period is appended to the
contract, and thus it is voided when the period is ended in the same manner
that deferment is voided when the deferment period ends. Thus, extending the
option beyond the end of its period would violate the treatment of conditions in
contracts. Once the condition (in this case the option for its specified period)
is eliminated by the elapsing of its specified period, the contract returns to its
original state of bindingness.39
On the other hand, Imam Malik ruled that the sale does not become binding
simply by the elapsing of the option period. Instead, he ruled that a decision
must be made at that time. His proof is that the option period was stipulated
as a right to the holder of the option, and not an obligation on him. Thus, the
passage of time by itself cannot necessitate an outcome for the contract. This
is analogous to the passage of time for a contract where the slave has the right
to buy his freedom at the end of a specified term. In this case, the passage of
that term does not by itself oblige the owner to free the slave.40
2. Death of the option holder
If the person holding an option buyer or seller dies, the option is dropped
and the contract becomes binding since voiding the contract is no longer possible. However, jurists agreed that the defect option (khiy
ar al-c ayb) and the
c
specification option (khiy
ar al-ta yn) are inherited. On the other hand, they
have agreed that the option of permitting the sale of an uncommissioned agent,
and the inspection option (khiy
ar al-ruyah) are not inherited. Also, deferment
is not inherited.41 The H

. anafs and Maliks ruled that the acceptance option
(khiy
ar al-qab
ul) is not inherited.
The Shafics ruled that contract session option (khiy

ar al-majlis) is inher
ited.42 Thus, if the option holder dies or faints during the contract session, the
option is not invalidated, but rather transferred to his heir or the party taking
care of him. The H
. anbals, on the other hand, ruled that this option is voided
by death, but not by insanity or fainting.43
As for the inheritance of a conditional option (khiy
ar al-shart.), jurists dif
fered:
The H
. anafs ruled that this option is not inherited, and is thus dropped
by the death of its holder. In this regard, the heir is entitled only to that
38 Al-K
as
an
((H
. anaf), vol.5, p.267).
c
), vol.2, p.64), Ibn Qud
amah (, vol.3, p.591).
. . Al-Zayla (1st edition, (H
. adth
40 Ha
iyat Al-Dus
uq (vol.3, pp.95,98).
. sh
41 Al-K
as
an ((H
d Al-H
alik), vol.2, p.209).
. afd ((M
42 Al-Im
afic), vol.9. p.196), H
a
shiyat Al-B
aj
ur (vol.1, p.160).
.
43 Marc
ibn Y
. anbal), vol.2, p.30).
39 Al-H
afiz
AL-SHART
.)
187
which is left after the death of the benefactor, and this option does not
remain after his death, when he can no longer exercise his choice. This
is in contrast to the defect and specification options, where the object of
sale is inherited, but the option by itself (without being attached to an
object) does not stay after the persons death.44
In summary: the acceptance option, the permission option in the sale of
an uncommissioned agent, deferment, and the conditional option are not
inheritable. However, the defect option, the specification option, retribution (al-qis.a
.s), the inspection option, the characteristics option, and the
deception option are not inheritable.45
The H
. anbals ruled that the conditional option is invalidated once its
holder dies. However, an option held by the other party remains valid
unless the dead party had exercised his right to void the contract during
the option period and prior to his death, in which case the option is
transferred to his heirs.46
The Maliks and Shafics ruled that if an option holder dies, his heirs inherit
all of his options. They base this opinion on the argument that options are
rights established to guarantee the quality of the buyers property. Such
rights, such as pawning, withholding the object of sale until the price is
delivered, and similar financial rights, are not dropped due to death. Thus,
all options are transferred to the heir in the same manner that deferment,
the defect option, the right to void the sale, and dissolution of a sale by
mutual oath are inherited.47
We note that the source of disagreement in the inheritance of options is
whether rights are inherited in the same manner that properties are. The majority of jurists ruled that rights and properties are inherited in the same manner
unless there is a proof in a given case that differentiates the two. The H
. anafs,
on the other hand, endorsed the general ruling is that properties are inheritable but rights are not, unless there is a proof in a given case that makes them
similar.
3. States equivalent to death
States that render a person equivalent to dead (e.g. insanity, coma, sleep,
intoxication, apostasy, and joining the land of war) are treated similarly to
44 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.125),
c
n ((H
Al-K
as
an ((H
. anaf), vol.4, p.57).
45 Ibn c Abid
n ((H
. anaf), vol.5, p.538).
46 Ibn Qud
. anbal), vol.2, p.33).
47 Ibn Rushd Al-Haf
alik), p.273), Ab
u-Ish.
aq
. d ((M
Al-Shr
az ((Sh
afic), vol.2, p.45). Dissolution
of a sale by mutual oath ensues when the buyer and seller disagree on the amount of the price
or object of sale, and where neither of them has a proof of his claim. In this case, if they
cannot reach an agreement, a judge solicits an oath from each of them negating the others
claim, and if they swear their oaths, he dissolves the sale; c.f. Nat
aij Al-Afk
ar (vol.6, p.183
onwards).
188
CHAPTER 5. OPTIONS
death.48 Thus, if the option holder becomes insane or faints during the option
period, and if the option period passes while he is in that state, the contract
becomes binding. In this case, the option holder was incapable of voiding the
contract, and thus the benefits of the option are dropped. However, if he returns
to consciousness and sanity during the option period, the option remains, since
he may exercise the right to permit the contract or to void it.
Similarly, an option is dropped if its holder remains asleep for the duration
of the option period. Moreover, the most accepted opinion is that the option is
dropped if the person is intoxicated for the duration of the option period.
If the holder of an option reverts from Islam, and was killed or died as an
apostate, then the sale becomes binding. The ruling is the same if he joins the
land of war (d
ar al-h.arb), and a judge orders him to be chased. In this case,
apostasy is [legally] equivalent to death once the person joins the land of war.
However, if the apostate were to repent and return to Islam during the option
period, the option remains valid.
The above rulings regarding options held by an apostate apply to the case
where he does not exercise the option by voiding or permitting the sale. However, if he does take such an action during the option period, we have to consider
the circumstances in more detail:
Jurists agree that if he permits the sale, then it becomes valid.
If he voids the contract, then Ab
u H
. anfa considers the contract suspended: if he reverts to Islam, his exercise of the option to void is accepted; and if he dies or is killed as an apostate, then his exercise of the
option is voided [and the sale is concluded].
Ab
u Y
usuf and Muh.ammad, on the other hand, ruled that the dealings
of the apostate are executable. Thus, they disagreed with Ab
u H
. anfa
who ruled that the dealings of an apostate are suspended; whereas they
ruled that they are executable regardless of whether he reverts to Islam,
dies, or is killed.49
The Shafics and H
. anbals ruled that if the option holder faints or is muted,
then his option is transferred to his guardian (a judge or otherwise).50

4. Object of sale perishing
The status of the option and sale in this case requires considering the circumstances in some detail: the perishing may occur before or after receipt; and the
option may be held by the buyer or the seller:51
48 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.121).
the detailed discussion in Ibn Al-Hum

am ((H
50 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.45), Marc ibn Y
. anbal),
.
vol.2, p.33).
51 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.44), Al-K
Al-Hum
am ((H
. anaf), vol.5, p.117).
49 See
AL-SHART
.)
189
1. If the object of sale perished prior to receipt (i.e. while still in the possession of the seller), the sale is invalid and the option is dropped. This is the
legal status of the sale and option regardless of whether the option was
held by the buyer, the seller, or both. This opinion follows since the sale
would be invalidated due to the impossibility of delivery even if it contained no options. Thus, when an option based on a condition is added,
that further reinforces the opinion to invalidate the sale.
2. If the object perished after receipt (i.e. in the possession of the buyer),
then:
(a) If the seller is the option holder, then the sale is invalidated and the
option is dropped. In this case, the buyer is liable to compensate
the seller by a similar item if it is fungible, or by its value if it is
non-fungible.
Ibn Ab Layla ruled that the perishing of the object of sale in the
possession of the buyer is treated the same way as the perishing of an
entrusted object (am
ana). His ruling is based on the view that the
existence of an option impedes the conclusion of the contract. Thus,
the objects compensation if it perishes is legally equivalent to the
compensation for an entrusted object.
The more correct opinion, however, is that shared by the majority
of jurists. This follows since the buyer was in receipt of the object
of sale based on the rules of the sale, despite the fact that the sale
itself was never concluded as a contract. Thus, the compensation for
the perishing object in such a sale cannot have a lower legal status
than the compensation for an object that is held by the buyer after
bargaining.52 In the latter case, there is no contract to start with,
whereas in the former there is at least a contract, and therefore the
compensation is necessary in this case.
(b) If the buyer were the option holder, and if the object of sale perishes
due to the actions of the buyer, the seller, or a natural cause, then
the sale is not invalidated, the option is not dropped, and the sale is
binding. In this case, it perishes in the property of the buyer, and
its compensation is its price, which the buyer no longer needs to pay.
In this case, despite the fact that the buyer does not own the object
in the opinion of Ab
uH
. anfa, is unable to return the object of sale
since it has a new defect that ensued after it left the possession of
the seller. Thus, since the object of sale may not be returned to the
seller, the option is rendered useless, and the sale becomes binding.
In this regard, the contract is concluded, and the object perishes in
compensation for its price.
52 An item thus received by the potential buyer (al-maqb
ud. c al
a sawmi al-shir
a) is an object
held by the buyer as if he were going to buy it at a price named by the two parties, with the
intention of pondering whether to keep it for the named price. In such a case, if the object
perishes in the potential buyers possession, he is liable to compensate the seller for its value;
c.f. Ibn c Abid

n ((H
. anaf), vol.4, p.52).
190
CHAPTER 5. OPTIONS
The Shafics agree with the H

. anaf ruling in the case of perishing caused by
natural events prior to receipt, in which case the sale is voided and the option is
dropped. They also agree that the contract is voided and the option is dropped
if the perishing occurs after receipt of the object of sale by the buyer. In the
latter case, the buyer is liable to compensate the seller for the value of the
merchandise if the seller held the option.
If the buyer was the option holder, the Shafics ruled that he is liable for the
value of the merchandise. This follows since voiding the sale is problematic due
to the impossibility of returning the object of sale. Thus, if the buyer exercises
his option, he is liable to pay the seller the value of the merchandise. Moreover,
if he does not exercise the option, thus permitting the sale, then the object
perished in his property, and he is liable to pay the seller its value.53
The Maliks ruled that if the object of sale perishes in the possession of the
seller, then in all cases he is liable for the object, and the sale is voided.
However, if the object perishes while it is in the possession of the buyer, then
its legal status is equivalent to that of a pawned or loaned object:
If the object of sale was possible to hide (e.g. clothes or jewelry), then the
buyer must pay the seller the greater of its price and its value. In this case,
the seller had the right to conclude the sale if the price was greater than
the value, or voiding it if the value was larger than the price. However, if
there is a verifiable proof that the object of sale perished, then the buyer
is not liable.
If the object of sale cannot be hidden (e.g. houses, real estate, etc.), then
the seller is liable for it. If the seller contests the buyers claim that the
object did not perish out of his own negligence, then the buyers oath
would render the seller liable for the object, unless there is a verifiable
proof that the buyer lied.54
The H
. anbals ruled that if the object of sale perished during the option
period prior to receipt, and if it is fungible (measured by weight or volume), the
sale is voided. In this case, the seller is liable for the object, and the buyers
option is invalid. However, if the object were non-fungible, and if the seller did
not prevent the buyer from receiving it, the most common ruling in the school
is that it becomes the buyers liability, as if it perished after receipt.
However, if the object of sale perished after receipt but during the option
period, then it is automatically the liability of the buyer, and his option is
invalid. If the buyer had an option, then there are two opinions in the school:
1. The sellers option is invalidated, by analogy to the option of returning a
defective item. This is the opinion of Al-Khirqiy and Ab
u Bakr.
53 Ab
u-Ish
aq
Al-Shr
az ((Sh
afic), vol.1, p.260).
.
Rushd Al-H
afd ((M
alik), vol.2, p.208), H
shiyat Al-Dus
uq (vol.3, p.104 onwards).
.
.a
Note that Ibn Rushd Al-H

alik)) rendered the seller unconditionally liable for the
. afd ((M
object, ruling that the buyer is entrusted with the object, regardless of whether both parties
or only one party holds an option.
54 Ibn
AL-SHART
.)
191
2. The sellers option is not voided, and he has the option to void the sale
and requiring compensation for its value from the buyer.55
5. New object of sale defects
In this case, we must distinguish between the cases where the option holder is
the buyer or the seller:
1. If the buyer holds the option, then his option is dropped if the object of
sale becomes defective because of a natural event or the actions of the
seller. This is the case regardless of whether the buyer or the seller is in
possession of the object of sale. This follows since a portion of the object
of sale thus perished without compensation. In this case, the seller is not
liable to the buyer for the part of the object that perished, since it is his
property. The sale is thus voided for the part that perished, and may not
remain in effect for the other part, since that would constitute partitioning
the contract with the buyer after the contract was concluded. The latter,
as we know, is not valid.
If the ensuing defect was caused by actions of the buyer, or a third
party, then the sale is not voided. The seller thus retains his option, since he may permit the sale for the object of sale even after
its diminution. In this case, the diminution in the object of sale is
compensated for by the liability of the buyer or the third party, who
caused a defect in anothers property without permission. Thus, the
value of the diminution is implicitly calculated.
If the seller retains his option thus while the object of sale is in the
possession of the buyer, then he may either permit the contract or
void it. If he permits the sale, then the buyer must pay the entire
price, since the sale is valid for the entire object of sale. In this case,
the buyer does not have the option of returning the object of sale
based on its change, since this change happened while the object was
in his possession, and thus while he was liable for it.
The difference in the two cases where the defect was caused by the
buyer himself or by a third party is that in the former case he is
personally liable for his losses. However, if the defect was caused
by a third party, then the buyer has the option of imposing a fine
(indemnity, arsh) since the object becomes his, and thus the damage
caused by the third party was a transgression on his property.

On the other hand, if the seller voids the sale, we must consider the following cases:
If the defect was caused by the actions of the buyer, then the seller
may take the remainder of the object and collects the indemnity
55 Ibn
Qud
amah (, vol.3, p.569).
192
CHAPTER 5. OPTIONS
(arsh) from the buyer. In this case, the buyer was liable for the
value of the object of sale, and is thus liable to compensate the seller
for the part that he ruined.
If the defect was caused by a third party, then the seller has the option
of demanding compensation from the perpetrator, or demanding it
from the buyer. The first demand is valid since the infraction affected
his property, and the second demand is valid since the infraction
occurred while the object was in the possession of the buyer.
If the seller decides to demand compensation from the third party
who caused the defect, then that party is liable for paying the indemnity. If he demands compensation from the buyer, then by paying the
compensation, the buyer may in turn demand compensation from the
perpetrator. Thus, the buyer takes the right originally belonging to
the seller to collect compensation for the harmed object, even though
he never took over the property rights for the object.
2. If the buyer holds the option, then his option is dropped once the object
becomes defective. The sale, thus, is not voided, regardless of the cause
of the defect, be it an action by the buyer, the seller, a third party, or
nature. In the cases of defects caused by nature or the seller, the object of
sale was affected while it was in the possession of the buyer, and thus he
is liable to return its value. In the cases of defects caused by the actions of
the buyer or a third party, since the object of sale may not be returned in
full, and since the buyer may not validly partition the sale contract with
the seller, he must return the value of the object.56
Thus, if the defect occurred while the object was in the possession of the
buyer (e.g. if a wall in a house falls without being caused by anyones
actions), the option is dropped based on this diminution. This follows
since returning the object of sale as it was received becomes impossible.
Thus, the buyer is liable for the entire price since the diminution occurred
while he was liable for the object.
5.12.4
Status of a contract during its option period
The H
. anafs ruled that a sale with a stipulated option condition is not concluded instantly in terms of its legal purpose of transferring ownership. Instead,
they ruled that such a sale is suspended until the option is dropped either by
permitting the sale or by voiding it. Then, if the holder of the option permits
the sale, it is considered concluded at its inception, i.e. prior to the permission,
provided it satisfied all other conditions of conclusion. On the other hand, if
56 Al-Samarqand
((H
am ((H
as
an ((H
. anaf), vol.5, pp.269,272). Notice the difference between this opinion
and that of Al-K
as
an who considered the option to remain if the defect was due to natural
causes and occurred while the object was in the possession of the seller.
AL-SHART
.)
193
the holder of the option voids the sale, it remains unconcluded. This issue is
discussed in more detail in what follows:57
If both parties to the contract have the option, the contract is not concluded in terms of its legal purpose for both of them. In other words,
the object of sale does not leave the ownership of the seller or enter the
ownership of the buyer; and the price does not leave the ownership of he
buyer or enter the ownership of the seller. In this case, the option that
prevents conclusion in terms of legal status applies to both the buyer and
the seller.
If the seller alone has an option, the contract is not concluded on his
part in terms of its legal purpose. Thus, the object of sale remains in
his ownership. However, the price is no longer owned by the buyer, since
the contract is binding on him. On the other hand, Ab
u H
. anfa ruled
that the price is not considered owned by the seller either so that the two
compensations (object of sale and price) will not both be in the possession
of one person. Such a biased holding of the two compensations is not
allowed in commutative contracts for which equality between the buyer
and the seller is a prerequisite.
Ab
u Y
usuf and Muh.ammad, however, ruled that the price becomes the
property of the seller, and it is his right to collect it since the sale is
binding on he buyer who did not stipulate an option for himself. Their
proof is that it is not permissible for an item (in the case, the price) to be
without an owner. Thus, Ab
uH
. anfa considers the contract unconcluded
in both compensations (object of sale and price), while Ab
u Y
usuf and
Muh.ammad ruled that it is only unconcluded for the object owed by the
option holder.
If the buyer is the sole option holder, the sale is not concluded on his
side of the contract. Thus, the price remains his property. On the other
hand, the object of sale is no longer the property of the seller, who can
not sell it to another. The object of sale in this case is not considered the
property of either party in the opinion of Ab
uH
. anfa and is considered
the property of the buyer for Ab
u Y
usuf and Muh.ammad; in analogy to
the previous case.
This disagreement between Ab
uH
u Y
usuf
. anfa and his two colleagues Ab
and Muh.ammad leads to the following conclusions:
1. If a Jew or Christian buys wine or pork from another Jew or Christian
with a stipulated option, and if the buyer receives the object of sale and
then embraces Islam, the sale is invalidated in the opinion of Ab
uH
. anfa.
In this case, his ruling is that the object of sale was never the property of
57 Al-K
as
an ((H
as
an ((H
n ((H
Ibn c Abid
194
CHAPTER 5. OPTIONS
the buyer during the option period, and once he becomes a Muslim, he is
forbidden from owning wine or pork.
For Ab
u Y
usuf and Muh.ammad, on the other hand, the sale is not invalid.
Their ruling is that the option is dropped and the sale is binding, since
the buyer owned the object of sale during the option period as a Jew or
Christian. Once he embraces Islam, however, he does not have the right
to return the forbidden object of sale, thus voiding the option.
On the other hand, if the seller embraces Islam while the buyer held the
option, the sale is not invalidated, and the three scholars agree that the
buyer retains his option, while the sale is binding on the seller. In this
case, if the buyer permits the sale, it becomes binding. If he voids the sale,
the object remains the property of the seller. In this regard, note that it
is legally permissible for a Muslim to own wine or pigs, for instance if a
Jew or Christian embraces Islam while owning wine or pigs.
However, if the seller is the option holder and he embraces Islam during
the option period, the option and the contract are both invalidated. This
follows since all three scholars agree that the option prevents the object
of sale from leaving his property. Once he embraces Islam, he is forbidden
from transferring the ownership of wine and other forbidden items. On
the other hand, if the buyer is the one who embraces Islam, the contract
is not invalidated, and the seller retains his option. In this latter case,
the contract is binding on th buyer, who may own the forbidden items
as discussed above if the seller permits the sale. Of course, if the seller
then voids the contract, he retains ownership of the object of sale.
2. If the object of sale is a house, and if the seller holds an option, the three
scholars agree that preemption is not permissible, since the sellers option
retains the object of sale in his property.
If the buyer held the option, then the three scholars agree that preemption
is valid, since as Ab
uH
. anfa ruled the buyers option removes the object from the property of the seller while preventing it from becoming the
property of the buyer. In this case the right of preemption is established
once the sellers ownership is removed. Ab
u Y
usuf and Muh.ammad, on
the other hand, ruled that the buyers option does not prevent him from
owning the object of sale, thus establishing the right of preemption.58
The preceding was a detailed account of the H
. anaf opinions. The opinions
of the non-H
anaf
schools
are
as
follows:
.
The Malik opinion, and one account of the opinion of Ah.mad, is that the
seller retains ownership of the object of sale for the duration of the option
period. Permission of the sale would result in the transfer of the object of
sale from the property of the seller to the property of the buyer, but does
not establish permanent ownership. Their proof is that the object of sale
58 Ibn
Al-Hum
am ((H
. anaf), vol.2, p.113).
AL-SHART
.)
195
is the property of the seller, while the buyers ownership is not final since
he may return the object. Based on this ruling, the produce of an object
of sale during the option period is considered the property of the seller.59
The more prominent Shafic opinion is as follows:
If the seller holds the option, then the ownership of the object of
sale and all its appertainings (e.g. milk, offspring, fruits, etc.) are
for him. However, if the buyer holds the option, then the ownership
is his. Thus, if only one party holds the option, then that party
alone has the right to deal in the object of sale, which renders it that
partys property.
However, if both parties hold an option, then ownership of the object
of sale is suspended. In this case, neither party has a stronger legal
claim on the object of sale, and thus its ownership is suspended.
Then, if the sale is concluded, the buyer is considered the owner
from the inception of the sale; otherwise the seller is considered to be
the continuous owner, as though the object never left his property.
The most common H
. anbal opinion is that ownership is transferred to the
buyer at the time of the contract, regardless of whether an option is held
by one or both parties. Their proof is the H
of the Prophet (pbuh):
. adth
Whoever sells a slave who has some property, that property belongs to
the seller; unless the buyer stipulated [the transfer of its ownership] as a
condition, as well as the H
: Whoever sells a palm tree after it has
. adth
been pollinated, the dates belong to the seller unless the buyer made it a
condition that they are his.60
Thus, the Messenger of Allah (pbuh) rendered the object of sale the property of the buyer simply by the latters stipulation of the condition. This
applies generally to all sales. Thus, every valid sale results in the transfer
of ownership regardless of whether or not a condition is stipulated. In this
regard, a sale is a transfer of ownership, the proof being the use of the
phrase: I have made this your property.61
This difference in opinions among jurists results in differences among the
schools over the legal status of delivery of the price or the right of the seller to
receiving it. For instance, the H
. anbals ruled that the delivery of the price is
binding if the buyer holds the option, while it is not binding if the seller or both
parties hold the option.
59 Ha
shiyat
Al-Dus
alik), vol.2, p.113).
in Al-Muwat..ta and the major books of H
on the authority of Ibn c Umar,
. adth
and it has other narrations; c,f, Al-H

), vol.4, p.5), Ibn
.
. adth
Al-Athr Al-Jazar (, vol.2, p.34 onwards).
61 Ibn Qud
. anbal), vol.2, p.32), Ibn
Rajab (1st edition (H
. anbal), p.377).
.
60 Narrated
196
CHAPTER 5. OPTIONS
5.12.5
Means of voiding or permission
Voiding and permission may ensue voluntarily or involuntarily:62

Involuntary voiding or permission is valid even if the other party is not
present or is not aware of the actions of the one holding the option. Examples include the termination of the option period, and the perishing of
the object of sale or its diminution, as mentioned above.
The H
. anaf jurists agreed that the option holder has the right to permit
the sale voluntarily without the knowledge of the other party of the sale.
This follows since the second party has expressed his consent of the sale,
and the suspension of the executability of the contract is conditional solely
on the permission of the option holder. However, the permission must be
uttered verbally, as in saying: I have permitted this sale or I have
accepted this sale, rather than simply be determined in thought. This
is the case since legal rulings pertain to manifest actions and utterances
that serve as proof of intentions and thoughts.
Voiding also requires verbal manifestation.63 If the option-holder voids
the contract verbally, and if the other party knows of that voiding, then
the H
. anaf jurists agree that the voiding is valid, whether or not the other
party approves of it. However, if the other party did not know of the
voiding, then it is not valid in the opinion of Ab
uH
. anfa and Muh.ammad,
whether the option-holder is the buyer or the seller. In this case, the
voiding is suspended: if the other party knows of it during the option
period, it is executed; but if the option period elapses without the second
partys knowledge of the voiding, the contract becomes binding.
This follows since voiding a contract is dealing in the legal right of another, which necessitates the knowledge of both parties who have rights
pertaining to that contract. For instance, if the seller held the option, the
buyer might have dealt in the object after the passage of the option period
assuming that the sale is executed. In that case, he would be liable to
pay the seller the value of the commodity, which may exceed the price,
thus leading to harm. On the other hand, if the buyer held the option,
the seller may refrain from seeking other buyers based on the assumption
that the sale is concluded. This too may lead to harm and loss.
Ab
u Y
usuf ruled that if the seller held the option, then it is not a condition
that the buyer should know of the voiding. However, if the buyer held the
option, he ruled, it is necessary for the seller to know of the voiding for
it to be valid. Another narration on his opinion states that he ruled that
knowledge of the other party is not necessary in any case. This second
62 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.120).
that both permission and voiding may be by words or actions. For instance, if a
buyer holding an option deals in the object of sale in a manner that implies ownership (e.g.
pawning, renting, offering for sale, etc.), that is a permission of the sale. Those same actions,
if taken by a seller with an option, would constitute voiding the sale.
63 Note
AL-SHART
.)
197
opinion is based on the view that the one who voids the contract has the
right to do so, and the other has no right to stop the voiding. Thus, the
voiding would not be suspended according to this opinion, in analogy to
the sale of a commissioned agent, which is valid regardless of whether or
not the one who commissioned him is aware of the sale.64
This difference in opinion pertains to the inspection option (khiy
ar al
ruyah). As for the defect option, the H
. anaf jurists agreed that voiding
requires the knowledge of the seller.65
If two individuals hold an option jointly (be it a conditional option, an
inspection option, or a defect option) then neither one of them can unilaterally void the contract. This is the opinion of Ab
u H
. anfa, and he
based it on the view that the object of sale exited the property of the
seller without the defect of joint rights. However, if one of them returns
it to the sellers ownership, it can only be returned with that defect, thus
causing loss and harm.
Ab
u Y
usuf and Muh.ammad agreed, ruling that it is valid for one of the
two option-holders in this case to void the sale unilaterally. In this case,
each of them has an established option, which is not dropped based on
the other partys dropping of his option. If that were the case, the first
partys right would not be respected.66
Thus, Ab
uH
. anfa ruled that it is valid for the two parties to agree on permitting or voiding. However, if one of them permits and the other voids,
then the above mentioned disagreement needs to be resolved. Similarly, a
dispute needs to be resolved if they choose to return half of the object of
sale and permitting the other half.
The above was a detailed discussion of the means of voiding and permission
in the H
. anaf school. The non-H
. anaf jurists disagreed with their opinion thus:
anbals ruled that it is valid for an option holder
The Maliks, Shafics, and H
.
to void a sale in the presence or absence of the other party. They base their
ruling on the view that the other parties permission of an option is an implicit
permission to void the contract whenever the first party wishes. Thus, the
second partys presence or knowledge is not a prerequisite for the validity of
the voiding. Moreover, since voiding is a breakage of a contract, it does not
require the consent of the second party, and thus does not require his presence,
in analogy to divorce.67
64 Al-K
c
as
an ((H
as
an ((H
n
. anaf), vol.5, p.273), Al-K
((H
. anaf), vol.4, p.57).
65 Al-K
as
an ((H
. anaf), ibid).
66 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.50), Al-K
. anaf), vol.5, p.268).
67 Ibn Qud
amah (, vol.3, p.591), Al-Khat.b Al-Shirbn ((Sh
an
((Sh
198
5.13
CHAPTER 5. OPTIONS
Defect option (khiy

ar al-c ayb)
There is proof that this option may be established if stipulated as a contract

condition. Thus, I discuss it following the section on the conditional option.
The defect option will be discussed in six subsection:
1. The legality and legal status of the defect option.
2. Defects that result in an option.
3. Means of establishing the existence of a defect, and the conditions for
establishing the option.
4. Consequences of the option, and the methods of returning defective merchandise.
5. Impediments to returning defective merchandise, and dropping the defect
option.
6. Differences among jurists regarding the condition that the seller is not
liable for defects.
5.13.1
Option legality and contract status
Legality of the defect option

The legality of this option is founded on a number of H
s, among which is
. adth
the narration that the Prophet (pbuh) said: A Muslim is a brother to other
Muslims. It is not permissible for a Muslim to sell a defective item to his
is: It is not
brother without showing it to him.68 A second relevant H
. adth
permissible for a person to sell any item without showing its defects, and it is
not permissible for a third party who knows the defect not to identify it.69 A
third relevant H
is: Whoever deceives us is not one of us.70
. adth
Al-Kasan stated that the foundation for the legality of the defect option is
the narration that the Messenger of Allah (pbuh) said: Whoever buys a sheep
with an udder full of milk, and later discovers that its udder was tied to force
the milk to accumulate, then he has a choice of one of two actions for three
days. In another narration: He has a choice of one of two actions for three
days: if he wishes, he may keep it, and if he wishes he may return it and a
68 Narrated by Ahmad, Ibn M
ajah, Al-D
araqut.n, Al-H
akim, and Al-T
an on the au.
.
. abar
thority of c Uqbah ibn c Amir.

It narration is identified in Al-Fath. as a good one; c.f. AlHaytham (, vol.4, p.80), Al-Shawk
an (, vol.5, p.211). It was narrated by Al-Bukh
ar with a
different wording; c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.420).
69 Narrated by Ahmad, Ibn M

ajah, and Al-H
akim in Al-Mustadrak. In Al-Shawk
an (),
.
.
two individuals in its chain of narration are named: Ah.mad Ab

u Jac far Al-R
az and Ab
u
Sib
ac ; the first being subject to debate, and the second being unknown.
70 c.f. Al-Shawk
an (, vol.5, p.211 onwards). Narrated by Muslim, Ab
u D
aw
ud, Al
Tirmidh, Ibn M
ajah, and Ah.mad on the authority of Ab
u Hurayrah. The narration of
Ab
u D
aw
ud is: Whoever deceives is not one of us; c.f. Ibn Al-Athr Al-Jazar (, vol.1,
p.419 onwards), Al-Haytham (, vol.4, p.78), Al-Shawk

an (, vol.5, p.212).
AL-C AYB)
5.13. DEFECT OPTION (KHIYAR
199
container of dates.71 Thus, the two potential actions that are mentioned here
are keeping the merchandise or returning it. The mention of three days in the
H
is not meant to restrict the time; rather it is based on common practice.
. adth
The container of dates is intended to compensate the seller for the milk that
the buyer obtained.
Note that the majority of jurists consider forcing milk to accumulate in the
udders of camels and sheep to be deception regarding characteristics of the
object of sale. This type of deception requires giving the deceived an option to
invalidate the contract. This is true even if there is no grave injustice involved
in the contract, since this option is among the characteristics options.72 The
jurists thus establish the buyers option to keep the object of sale or to return it
with a container of dates. Ab
u Y
usuf agrees with the majority of jurists in this
opinion, while Ab
uH
. anfa and Muh.ammad ruled that the buyer may return
the diminished object of sale alone if he wishes.
Legal status of the sale
The legal status of the sale of a defective item is the immediate establishment
of its ownership by the buyer, since the cornerstones of sale are unconditional.
However, what is established is the condition of the object of sale being void
of defects. Then if the object is defective, the contract is affected in its bindingness, not in its fundamental legal status. This distinguishes this type of
option from the conditional option, since an option that is explicitly stipulated
in the contract fundamentally affects the contracts legal status, preventing the
conclusion of the contract from taking place during the option period.73
Therefore, the legal status of the sale of a defective item is: concluded, resulting in ownership by the buyer, but not binding. This follows since the quality of
the two compensations in a commutative contract is commonly required. Thus,
the acceptability of the quality of the merchandise is an implicit and inferred
condition of the contract. Such implicit and inferred conditions are equivalent
to those that are explicitly stated from the point of view of bindingness, thus
giving the buyer the option and rendering the contract non-binding.74
5.13.2
Defects that result in an option
A defect in merchandise is defined as any attribute that is not normally part

of the goods, and that would result in a substantial or minor reduction in price
71 See for comparison Al-Shawk
an (, vol.5, p.214), Ibn Al-Athr Al-Jazar (, vol.1, p.420
onwards), Al-Haytham (, vol.4, p.108), and Al-Muwat..ta (vol.2, p.170). There are multiple
narrations of this H
ad
th
by
Al-Bukh
a
r
,
Muslim,
Ah
mad,
Al-Muwat
b Al-Sunan
.
.
..ta, and As.h.a
Al-Arbac a on the authority of Ab

u Hurayra. It seems to me that the narration listed above
is synthesized from multiple narrations.
72 See Ibn c Abid
n ((H
a Al-Zarq
as Al-Madkhal
. anaf), vol.4, p.47), and Professor Mus.t.af
(Seventh printing, vol.1, p.374).

Al-Fiqh Al-c Am
73 Al-K
as
an ((H
anaf
),
vol.5,
p.273).
.
74 Al-K
as
an ((H
. anaf), vol.5, p.274).
200
CHAPTER 5. OPTIONS
in conventional trading (e.g. blindness, one-eyedness, or cross-eyedness in animals).75 This is the H

. anaf definition of a defect.
The Shafics, on the other hand, define a defect as any uncommon attribute
that constitutes a diminution in the item itself or its value, or prevents a valid
use of the object. They ruled based on the last restriction that the cutting of
an extra finger or a small part of the thigh or leg does not permit returning
the object of sale if it does not constitute a major scar or prevent a use of the
animal.76 An example of diminished value is a riding animal that resists being
mounted, and an example of prevention of a valid usage is the cutting of part
of the ear of a sheep purchased with the intention of ritual sacrifice. In such
cases, the buyer has the option of returning the animal.
Thus, the H
afic definition
. anaf definition is purely materialistic, while the Sh
has an idiosyncratic component depending on the usage a buyer intended for

the object of sale. We can now identify two categories of defects: (1) those that
result in diminution of part of the object of sale, or an otherwise manifested
change in its nature; and (2) those that result in a non-manifested diminution
in the object of sale.
Examples of the first category abound: blindness, one-eyedness, cross-eyedness,
infirmity, hairlessness, chronic illnesses, missing fingers, black teeth, missing
teeth, extra teeth, black finger nails, deafness, dumbness, ulcers, scars, fever,
and other physical illnesses.77 Examples of the second include a riding animals
aversion to being mounted, unusual slowness in its movement, etc.78
5.13.3
Finding a defect, and establishing an option
Conditions for establishing a defect option:

The conditions for the establishment of a defect option are:79
1. A defect that ensues during the sale session or afterwards but before receipt
of both price and object of sale by the seller and buyer, respectively.
2. A defect that ensues after the buyer receives the object. In this regard, it
is not sufficient to consider only defects that were found while the object
was in the possession of the seller, as all jurists agree on the right to return
defective merchandise.
3. The buyers ignorance of the existence of a defect at the times of the
contract and receipt. However, if he was aware of the defect at either
75 Ibn
Al-Hum
am ((H
as
an ((H
. anaf), vol.5, pp.151,153), Al-K
((H
alik)B, vol.3, p.152 onwards).
76 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.51). The H
. anbals defined a defect as a reduction
.
in the actual object of sale, e.g. the cut of a finger, even if it results in an increase in the
animals value; or any attribute that commonly reduces its value (e.g. sickness, etc.); c.f.
Marc ibn Y
. anbal), vol.2, p.35).
77 Al-K
as
an ((H
. anaf), vol.5, p.274).
78 Al-K
as
an ((H
am ((H
. anaf), vol.5, p.154-155 on
n ((H
wards), Ibn c Abid
. anaf), vol.4, p.78).
79 Al-K
as
an ((H
as
an ((H
. anaf), vol.5, p.153).
c Abid
AL-C AYB)
201
time, then there is no option, since he would have implicitly accepted it.
4. The absence of a condition in the contract that the object of sale be free
of defects. However, if the condition is stipulated, then the buyer has no
option, since he would be dropping his right by declaring that the object
is indeed free of defects.
5. That it is customary for similar merchandise to be free of similar defects.
6. That the defect is not removed prior to voiding the contract.
7. That the defect is not a minor one that can be removed effortlessly (e.g.
pollution of a washable dress).80
Means of establishing the existence of a defect
The means of establishing the existence of a defect depends on the type of defect,
of which there are four:
1. An observable defect, such as an extra or a missing finger, a missing tooth,
blindness, one-eyedness, etc.
2. An unobservable defect, which only a physician may detect.
3. A defect that may only be inspected by women.
4. A defect that requires experimentation and testing to discover.
The means of establishing the existence of each type of defect are then as
follows:
1. In the case of observable defects, the judge need not require the buyer
to provide proof that there is a defect, since the latter would be obvious.
Thus, the buyer may sue the seller, and the judge can make a direct
decision without need of further proof.
If the defect is not customary in the relevant category of merchandise (e.g.
an extra finger, etc.), the object of sale is returned to the seller. In this
case, it is not necessary that the buyer prove that the defect ensued while
the object was in the sellers possession, since that is obvious. The sellers
only recourse, thus, is to claim that the buyer knew of the defect and
accepted it. If the seller can provide proof to that effect, the judge should
rule accordingly. If he cannot provide such a proof, the buyer is required
to take an oath that he did not know of the defect and/or did not accept
it. If he refuses to take the oath, the object is not returned; but if he does,
then it is returned to the seller.
If, on the other hand, the defect is one that may have occurred while the
object was in the buyers possession, then the judge must inquire from the
80 tr.: the text contains an item 8 that is identical to item 4. Also, items 1 and 2 in the text
seem to be contradictory, and have been adjusted in the translation to maintain consistency.
202
CHAPTER 5. OPTIONS
seller: did this defect occur while you were in possession of the object?.
If the seller answers in the affirmative, then the object is returned to him,
unless he claims that the buyer knew of it and accepted it. However, if he
answers in the negative, then the onus of the proof that the defect occurred
in the sellers possession is on the buyer. If the buyer can produce such
a proof, then the object is returned to the seller unless the latter claims
that the buyer knew of it and accepted it. However, if the buyer has no
such proof, he may require the seller to swear an oath that he sold the
item and delivered it without the defect in question. In this final case,
the sellers oath must be unequivocal (e.g. I sold him this item and
delivered it without this defect), and simply denying knowledge in this
case would not suffice. If this is the case , the buyers claim, if accepted,
would require the seller to take back the merchandise, and thus denying
it requires an oath. The ruling, thus, is that he must affirm that the
defect did not exist at the time of sale or at the time of delivery. This
combination is precautionary since the defect can ensue during the period
sale and delivery. This is the opinion of Muh.ammad.
Other jurists disagreed with this analysis, saying that no precaution is
taken by requiring this format for the sellers oath. They argue that the
language of this oath denies the existence of the defect at both the sale
and delivery times. Interpreted thus, the seller can be truthful in his
oath if the defect ensued during the period between the conclusion of the
sale and the delivery of the merchandise. They require a more legalistic
language such as an swearing by Allah that the buyer does not have the
right to return this object based on this defect that he claims. Others
required swearing by Allah that I delivered this item to him free of this
defect that he claims. Al-Kasan ruled that such language is valid, since
it covers the case of a defect that ensued after the conclusion of the sale
but prior to delivery. Some jurists chose to solve the problem by adding
to the language of the oath mentioned by Muh.ammad, making it more
precise: I sold him this item and delivered it to him free of this defect;
it was free of the defect at the times of the sale and delivery.81
In such cases, if the seller takes the oath, then he is not obliged to take
back the merchandise. However, if he refuses to take the oath, then the
contract is voided and the merchandise is returned to him, unless the seller
then claims that the buyer knew of the defect and accepted it.
2. If the defect was an unobservable one that only specialists (e.g. physicians
and veterinaries) can detect (e.g. a disease of the liver or spleen), then
a legal challenge may be brought to a judge based on the testimony of
two Muslim men, or one Muslim man with an honorable record. In this
case, the judge would ask the seller: did the defect in question ensue in
your possession?. If he affirms, then the merchandise is returned to him,
81 Al-K
as
an
c Abid
((H
. anaf), vol.5, p.279 onwards), Al-Samarqand ((H
((H
aw ((H
. anaf), vol.4, p.92), Al-T
. ah.
. anaf), p.80 onwards).
AL-C AYB)
203
and if he denies, the buyer needs to provide proof. If the buyer could not
provide proof of his claim, then he may require the seller to take an oath,
as discussed in the previous item. In this case, if the seller takes the oath,
then the object is not returned to him, and it is returned if he refuses to
take the oath.82
3. If the defect is one that only women may observe, then the judge must rely
on the testimony of women. In this case, he lets one honorable woman,
or two to be safer, to inspect the defect and give testimony, based on the
verse: if you realize this not, ask of those who possess [knowledge] [21:7].
In such cases where men are not allowed to inspect the item in question,
a womans testimony is legal proof, in analogy to a midwifes testimony
on maternity. While one womans testimony suffices, it is better to have
the testimony of two.
If the woman in question testifies that the defect is indeed there, then there
are two narrations each on the opinions of Ab
u Y
usuf and Muh.ammad:
The two narrated opinions of Ab
u Y
usuf are as follows:
In one narration, he distinguishes between the two cases where
the object of sale is in the possession of the seller or the buyer. If
it is in the possession of the seller, then her testimony is sufficient
to establish the existence of the defect, and the sale is voided.
However, if the object were in the possession of the buyer, then
her testimony establishes the buyers right to a legal dispute.
In this case, the woman/womens testimony is not sufficient to
establish the buyers right to return the object to the seller. The
judge would then ask the seller: did this defect occur while
the object was in your possession, ... and proceed in the same
manner outlined in the case of unobservable defects.
The other narration on the opinion of Ab
u Y
usuf bases his ruling on the commonality of the defect in question. Thus, if the
defect is uncommon in similar merchandise, the sale is voided by
the testimony of the woman/women. In this case, the existence
of a defect is established by the womens testimony, and the uncommon nature of the defect is sufficient to be certain that the
defect must have occurred in the sellers possession. On the other
hand, if the defect was a common one, the womens testimony is
not sufficient to warrant voiding the contract, since other parties
knowledge and assertions come to bear on the legitimacy of the
buyers claim.
The two narrations on the opinion of Muh.ammad are as follows:
The first narrated ruling is that the sale is never voided based
solely on the testimony of the women.
82 Al-K
as
an
c
n ((H
((H
. anaf), vol.4, p.92).
204
CHAPTER 5. OPTIONS
The second narrated ruling is that the sale may be voided before
or after receipt based on the womens testimony. This second
ruling is based on the view that womens testimony is tantamount
to a proof in matters that may not be inspected by men, in
analogy to matters relating to maternity.
In summary, the testimony of one or two women is sufficient to establish
the existence of a defect that may not be inspected by men. This provides
sufficient justification for a legal dispute, but is not sufficient to establish
the buyers right to return the merchandise, regardless of whether the
defect ensued before or after the buyers receipt of the object. This is
the most apparent ruling according to the three major H
. anaf jurists, and
thus becomes the schools doctrine.83
4. Establishing the existence of a defect that is not observable at the time of

legal dispute, and that may only be detected by usage and experimentation, requires the testimony of two men or a man and two women. Such
defects include a tendency to escape, insanity, theft, and bed-wetting. In
such cases, if the buyer establishes that the defect exists in the object of
sale while in his possession, then the judge should ask the seller: did this
defect manifest itself in your possession?. If the seller answers in the affirmative, then he must take back the merchandise, unless he claims that
the buyer knew of the defect and accepted it. If he denies that he had
observed this defect, then the buyer is required to provide proof. If the
buyer can provide proof that this defect existed in the sellers possession,
then it is returned. If the buyer has no such proof, he may require the
seller to take an oath that he had never observed this defect. In this case,
if the seller takes the oath, the object is not returned to him, and it is
returned if he refuses to take the oath.
Jurists disagreed over whether or not the judge should require the seller
to take an oath if the buyer cannot provide a proof. Ab
uH
. anfa ruled
that he should not require the seller to take an oath, while Ab
u Y
usuf
and Muh.ammad ruled that he should. The proof of the latter two jurists
is that the buyer is claiming a legal right to return the object of sale,
which he can only do if he can establish that the defect exists in his own
possession. The existence of such a defect can only be established by a
direct proof or by the sellers refusal to take an oath. In the absence of
a proof, the only recourse for the buyer is to require the seller to take an
oath. This ruling is in analogy to the requirement that the buyer take
an oath if he cannot prove that the object of sale was affected while in
the seller possession. Ab
uH
. anfas proof for his opinion is that requiring
the seller to take an oath may only take place after a legal claim against
him is established. However, such a legal claim does not exist without
a proof that the defect ensued in the sellers possession. Thus, in the
absence of such proof, the buyer has no case against the seller, and the
83 Al-K
as
an
c
n ((H
((H
AL-C AYB)
205
latter is not required to take an oath. Thus, the chain of: (i) legal claim,
(ii) requirement to take an oath, (iii) refusal to take an oath, which may
only occur in sequence, is aborted at the first step.84
Soliciting the sellers oath
The seller should swear an oath regarding his knowledge of the defect rather
than a definitive oath regarding the fact of the matter. For instance, he may say:
I swear by Allah that I did not know that this defect existed in this object at
such a time. The reason for this ruling is that the seller is swearing regarding
something other than his own actions. It is a general rule that oaths regarding
matters other than ones own actions should be restricted to knowledge (or lack
thereof). This is in contrast to the case of a person swearing an oath regarding
his own actions, in which case he would swear definitively. For our purposes, if
the seller refuses to swear an oath, the existence of the defect is established, and
the buyer has the legal right to request voiding the sale. However, if the seller
does swear the required oath, then he is immune from such legal disputes.85
5.13.4
Option consequences, and voiding the contract
Consequences of the defect option

If a defect is discovered in the object of sale, the buyer has to choose one of two
actions: (1) he may permit the contract to continue, in which case he is liable
for the full price; or (2) he may void the contract, in which case he may recover
the price if he had already paid it, and is relieved of the liability of paying it if
he had not already done so. In the latter case, if the buyer had already received
the defective item, he is required to return it to the seller.86
. anbals ruled in the case where the defect ensues in
the possession of the seller, or if part of the merchandise were ruined by natural
causes, that buyer has the option of accepting the diminished merchandise at
the full price, or voiding the contract.87
Voiding the contract
The object of sale may belong to one of two categories:
1. It may be in the possession of the seller. In this case, the sale is voided
once the buyer says: I have returned [the merchandise], and there is no
need to refer the matter to a judge or an arbitrator in the opinion of the
H
afics.
. anafs and Sh
2. It may be in the possession of the buyer. In this case, the sale may not
be voided except by a judge or through arbitration and mutual consent
c
((H
n ((H
. anaf), vol.4, p.92).
((H
. anaf), ibid.).
86 Ibn Al-Hum
am ((H
. anaf), vol.5, p.151).
87 See Al-Rawdah by Al-Nawaw
(vol.3, p.504), and Ibn Qud
.
84 Al-K
as
an
85 Al-K
as
an
206
CHAPTER 5. OPTIONS
in the opinion of the H
. anaf jurists. This opinion is based on the fact
that voiding the sale after receipt has the same status as a contract. In
this regard, since the conclusion of a contract may not occur through the
actions of one party alone, similarly its voiding requires that the actions
of one is met with the consent of the other or the order of a judge. This
is in contrast to the case of voiding a contract prior to receipt. In the
latter case, the contract is not finalized, and thus voiding has the same
legal status as receipt [which requires only one party, without the consent
of the other or the order of a judge].
Al-Shafic, on the other hand, ruled that the sellers utterance of I have
returned the merchandise voids the contract without the sellers consent
or the order of a judge. His proof is that voiding of a contract does not
require the order of a judge or the consent of the seller, in analogy to the
unanimous opinion in the conditional options, as well as the inspection
88
option in the original H
. anaf tradition.
Timing of contract voiding

The H
. anafs and H
. anbals ruled that the option of returning defective merchandise can be relaxed in its time delay. Thus, if the buyer learns of the defect
and does not return the item immediately, his option is not voided unless he
takes some action that implies his consent. In particular, consider the case of a
buyer who alerts the seller that the merchandise was defective, and they dispute
whether or not he may return the merchandise. If the buyer moves away from
that dispute and then returns and demands that he return the merchandise, his
option is still valid as long as there is no obstacle to returning the merchandise.
This follows since the objective of establishing the defect option is to remove
a realized loss and harm, which allows for delay in analogy to taking revenge
compensation. Thus, we do not accept the view that holding the object to be
an implicit expression of consent. 89
The Shafics, on the other hand, required that the merchandise be returned
immediately after the buyer learns of the defect. Thus, they ruled that if the
buyer discovers the defect and defers returning it with no excuse, then his right
to return it is dropped. In this regard, the differentiation between immediately
and with delay is determined by convention. For instance, if the delay is for
the duration of a prayer at its due time, or to eat a meal, etc., then this is
not conventionally considered a delay and his right to return the merchandise
remains intact. Other examples include the inability to return the merchandise
immediately due to sickness, fear of theft or other dangers, etc. In all such
cases, the buyers right to return the goods is intact, unless he commits an act
that implies that he has consented to the sale (e.g. using the purchased animal,
wearing the dress, etc.). Their proof for this opinion is that the original status
88 Al-K
as
an ((H
atb Al-Shirbn ((Sh
u. anaf), vol.5, p.281), Al-Kh
.
Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.284).
89 Ibn c Abid
n ((H
usuf (1st
. anaf), vol.4, p.93), Ibn Qud
printing (H
. anbal), vol.2, p.41).
AL-C AYB)
207
of a sale is bindingness. The overruling of the bindingness of the sale is thus

viewed as a transitory property, allowed in the law to prevent financial harm,
and thus must be instantaneous in analogy to shufc a. It is thus voided by any
delay without excuse.90
5.13.5
Return impediments and option dropping
There are several reasons why the defective merchandise may not be returned,
in which case the defect option is dropped after its establishment. Those reasons
may be divided into two categories: (i) those that ensue after the establishment
of the sellers liability for the defect; and (ii) those where the seller is not initially
liable for any defects.
The developments that may ensue after the sellers liability is established,
and that prevent returning the defective merchandise, are as follows:
1. The buyers consent to the defect after knowing of its existence: This consent may be expressed explicitly, by saying I have accepted the defect,
or I have permitted the sale; or it may be inferred from the buyers
actions. Actions that imply acceptance of the trade are dealings such as
staining a dress or cutting it, building on land, threshing of wheat, cooking
meat, etc. They also include selling the item, giving it as a gift, pawning
it (even if it is not delivered), or any other use similar to those discussed
in the section on the condition option. Another set of reasons that would
prevent returning the defective merchandise are receiving a compensation
for the defect, either in effect or in lieu of another collected compensation.
Those reasons result in dropping the option since the right to return the
merchandise is based on the absence of a quality implicit in the contract.
If the buyer accepts the defect, we infer that he did not make that quality
a condition for the contract. Moreover, if he accepts the defect, he is
implicitly accepting whatever harm comes with it (i.e. declining the sellers
liability to compensate him for the defective part). In the case of receiving
compensation, the buyer has in effect received an alternative to returning
the defective part to its perfect form. In this respect, receiving the value
of the defective part replaces that part with its value, which is equivalent
to selling that part.
2. An explicit or equivalent dropping of the option: For instance, the buyer
may say: I have dropped this option, or I have voided it, I have
made this sale binding, etc.
The developments that prevent returning the defective merchandise in the
cases where the seller is not initially liable for any defects in the object of sale
are as follows:
90 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.274).
208
CHAPTER 5. OPTIONS
1. Natural impediments: Those include the cases where the object of sale
perishes by natural causes, through the actions of the object itself, or due
to being used by the buyer (e.g. eating the food). In such cases, the
perishing of the object of sale prevents its return, but the buyer still has
an established right to seek compensation for the defect from the seller.91
2. Legal impediments: Those comprise: (a) non-derivative connected changes
that occur in the object of sale before or after delivery (e.g. staining a
dress, building on land, etc.), and (b) derivative non-continuous additions
that occur after delivery (e.g. giving birth, bearing fruit, etc.). Other
changes and additions do not prevent returning the defective merchandise.
We now elaborate on the above:92 Any changes or additions to the object
of sale may occur: before or after receipt; and each may be continuous or
discontinuous.
Changes that occur prior to receipt
Such changes may be:
(a) If the addition is continuous, it may be derivative of the item itself
(e.g. beauty, age, weight, etc.), and this class of additions does not
prevent returning the merchandise since they are integral to the item.
Thus, the buyer has the choice of returning the entire merchandise,
or keeping it in exchange for the full price.
On the other hand, the additions may be continuous but not derivative of the merchandise (e.g. staining a dress, sewing it, building,
planting vegetables, etc.). Such changes or additions prevent returning the object of sale since they constitute an independent item. In
this case, the object of sale may not be returned without those items
due to the obvious difficulties that would entail, but it cannot be
returned with the changes since they are not appended to the sale
and thus may not be appended to a voiding of the contract.
(b) If the changes or additions were not continuous, it may be derivative
from the object itself (e.g. child, fruit, milk, etc.), and such changes
do not prevent returning the merchandise. In this case, the buyer
may return both the object of sale and the additions, or he may keep
both for the full price.
The additions may also be discontinuous and non-derivative (e.g.
income, charity, produce, etc.). Such additions also do not prevent
returning the merchandise since they were never sold, but were rather
owned by whoever owned the original object.
c
91 Al-K
c
n ((H
as
an ((H
. anaf), vol.4, pp.86,99), Majma
Al-D
an
at (p.219), c Aqd Al-Bayc by Professor Al-Zarq
a (p.110), Al-Khat.b Al-Shirbn
. am
((Sh
c Aqd
92
c Abid
n
((H
anaf
),
vol.4,
pp.85,98),
Al-K
as
an ((H
anaf
),
vol.5,
p.284
onwards),
Ibn
.
.
Al-Bayc (ibid, p.111).
AL-C AYB)
209
Changes that occur after receipt

(a) If the addition or change is connected to the object of sale, it may be
derivative of it (e.g. the fat of an animal). For this class of changes
or additions, the H
afics, H
aliks all agree
. anafs, Sh
. anbals, and M
that there is no impediment to returning the defective object.93 In

such a case, the legal status of the defect is attached to the original
object of sale. Thus, if the buyer decides to return the change or
addition with the original object, he may. On the other hand, if the
buyer demands compensation for the defect, and the seller refuses to
pay, then we have multiple opinions:
Ab
uH
u Y
usuf ruled that the seller does not have
. anfa and Ab
the right to refuse, and the buyer has the right to take compensation for the defect. Their proof is that the connected addition
to the object of sale prevents voiding the sale after receipt if the
owner of the addition (the buyer) does not wish to return it.
Muh.ammad ruled that the seller has the right to reject the
buyers demand for compensation. His proof is that the connected addition does not prevent voiding the contract after receipt in his opinion.
The origin of this difference in opinion ensued over the legal status of an increase that is connected to the dowry if the husband
divorced his wife prior to consummation.
If the addition is not derivative of the object of sale, then there is
agreement that it does not prevent returning the defective merchandise. In this case, the addition is the property of the buyer, and the
seller may not take it without compensation. In this case, the object of sale should be returned, and the seller should compensate the
buyer.
(b) If the addition is disconnected and derivative from the original object
of sale (e.g. child, fruit, milk, etc.), the H
. anafs ruled that it prevents
returning the object of sale to the seller. Their proof is that returning
the original object of sale without the addition would leave the buyer
with this addition without having paid a compensation for it. This
is forbidden rib
a.
c
The Shafi s and H
. anbals, on the other hand, ruled that such an in
crease does not prevent returning the object of sale, and the addition
remains with the buyer. Their proof is that the addition ensued in
the property of the buyer, and thus does not prevent returning the
original object, in analogy to non-derivative additions. This ruling is
also based on the narration that a man bought a young slave from
another. After a time, the buyer found a defect in the slave, and
93 Al-Khat
b Al-Shirbn ((Sh
amah (, vol.4, p.144), H
shiyat
.a
.
Al-Dus
uq (vol.3, p.121).
210
CHAPTER 5. OPTIONS
disputed the validity of the sale in front of the Prophet (pbuh). The
Prophet (pbuh) ruled that he may return the slave to the seller. The
seller protested: O Messenger of Allah, he used my slave, and the
Prophet (pbuh) responded: The output is the property of the one
who held the liability (Al-khar
aj bi-l-d.am
an).94 The meaning of this
H
is that the benefits derived from the object of sale are com. adth
pensation for the liability on the buyer regarding potential perishing

or diminution in the object of sale. This compensation is implicit in
the determination of the objects price.
However, if the addition is not derivative (e.g. income or charity),
then there is no impediment to returning the original object of sale to
the seller. In this case, the buyer is entitled to keeping the addition,
since it was never part of the sale, and thus voiding the original sale
(without the addition) remains possible.
3. Impediments caused by one of the buyers rights: This class of impediments is caused by the development of a new defect in the buyers possession (i.e. after receipt), while the object contained an old defect that
occurred in the sellers possession (i.e. before receipt). In this case, the object of sale exited the property of the seller with only one defect. Thus, if
it is returned with two defects, the seller is harmed. Moreover, a condition
of returning an object of sale is that it be returned in the same condition
in which it was received. In this case, the only recourse for the buyer is
to demand a compensation for the initial defect from the seller, unless the
seller chooses to take back the merchandise itself. The reduced value for
which the buyer deserves compensation is to be determined for the day
the contract was initiated.95 However, if the new defect is removed (e.g.
if a sick animal is healed), then the initial option the right to return the
defective merchandise is re-instated.
4. Impediments caused by the rights of a third party: An instance of this
class of impediments occurs if the buyer transfers his ownership of the
defective merchandise to another (through a sale, a gift, etc.), and then
discovers that it had an old defect. In this case, the first buyer is incapable
of voiding the initial sale since a third party (the new buyer) has a legal
right that was established by the initial buyer.96
5. If the buyer ruins the merchandise (e.g. killing the purchased animal,
tearing the purchased dress, etc.), and then discovers the existence of an
94 Narrated by Ahmad, Ab
u D
aw
ud, and Ibn M
ajah on the authority of c Aish
a
.
(mAbpwh). The narration listed above is that of Ab

u D
aw
ud. The meaning of Al-khar
aj
bi-l-d.am
an is that income is only justified by the taking of risk. In this case, the produce of
the object of sale is the benefit that the buyer collects in compensation for his taking liability
for the object of sale itself; c.f. Ibn Al-Athr Al-Jazar (, vol.2, p.28), Al-Shawk
an (, vol.5,
p.213).
95 Majmac Al-Dam
an
at (p.220), Ibn Al-Hum
am ((H
.
. anaf), vol.5, p.164).
96c Aqd Al-Bayc (ibid).
AL-C AYB)
211
old defect, then he is liable for the price named in the contract, with no
right to demand compensation for the defect. The difference between this
class of impediments and the preceding one is that the impediment may be
removed in the previous case (thus returning the right to return the merchandise), whereas it is impossible for this impediment to be removed.97
If a new defect ensues in the buyers possession, and then he discovers an
earlier defect that ensued in the sellers possession, the buyer may demand
compensation for the earlier defect. In this case, the object of the sale may
only be returned by mutual consent. If compensation is paid, its amount
must be assessed in relation to its value on the day of the sale.98
In summary, the buyer may demand compensation from the seller for the
value of the defect in three cases: (i) the perishing of the object of sale; (ii) the
development of a new defect; and (iii) a fundamental change in the object of
sale, which gives it a new label.
The previous discussion covered the case where the buyer was buying on
behalf of himself. However, if he were contracting on behalf of another, we need
to consider multiple cases:
If the person contracting on behalf of another may be made liable in a
legal dispute (e.g. a commissioned agent, a partner, a silent partner, etc.),
then he is bound by such a disputation to return the object to the seller.
This follows since returning defective merchandise is one of the rights of
the contract. In this regard, the rights of the contract are available to
the contractor who may be liable in a legal dispute, in analogy to the
contractor on his own behalf. Thus, whatever decision the ultimate party
to the contract makes is transferred to the one who conducted the contract
on his behalf.99
If the immediate contractor may not be made liable in a legal dispute
(e.g. a judge or religious leader making a legal decision), then he may
commission an adversary for a legal dispute regarding the defect. Then
any compensation that he ruled for that adversary goes to the ultimate
party of the contract. If that party is all Muslims, then the compensation
goes to the Muslim treasury (bayt al-m
al).
If the immediate contractor were a boy under guardianship who bought or
sold with the permission of another, then he is not liable in legal disputes.
The party to the dispute in this case is the ultimate buyer who commissioned the boy. In this case, the ultimate buyer is the mediate contractor,
and the immediate contractor is not bound by any of the rights of the
contract. The role of the boy, thus, is restricted to performing the transaction for another, in analogy to a messenger or an agent in a marriage
contract.
97c Aqd
Al-Bayc (p.112 onwards).

Al-D
an
at (p.220), Ibn Al-Hum
am ((H
. ama
. anaf), vol.5, p.164).
99 Ibn c Abid
n ((H
. anaf), vol.4, p.89).
98 Majmac
212
CHAPTER 5. OPTIONS
5.13.6
Seller liability for defects
Jurists disagreed over the case of a seller who stipulates a condition in the
contract that he is not liable for defects, where the buyer accepts the condition
based on the apparent lack of defects. What is the ruling if the buyer later
discovers an old defect?100
The H
. anafs ruled that a sale with a condition that the seller is not liable
for defects is valid,101 even if the specific potential defects are not named.
They ruled that such a sale is valid whether the seller does not know
of the defect and stipulates the condition for self-protection, or knows
of it and does not tell the buyer about it. The sale is valid since the
non-liability condition drops one of the rights of the buyer, and is not
a transfer of ownership. Ignorance when dropping a right does not lead
to legal disputes since it does not require delivery of any object of sale.
Stated generally, such a stipulated condition covers all defects that may
occur prior to the sale or after it and before receipt. In all such cases, the
defective merchandise may not be returned. This is the narrated opinion
of Ab
u H
u Y
usuf. Their proof is that the objective of
. anfa and Ab
the seller is to make the contract binding by dropping the buyers right to
specify the condition in which the merchandise needs to be. He would thus
be trying to make the sale binding immediately, which limits the possible
defects covered by the condition to those that exist prior to delivery.
Muh.ammad, Zufar, Al-H
alik, and Al-Shafic, in what
. asan ibn Ziyad, M
became the standard in our civil law, ruled that such a condition covers
only defects that existed at the time of the contract. Thus, such conditions
exclude defects that develop after the contract and before receipt. Their
proof is that lack of liability covers things that already exist, whereas
making a person not liable for things that have not yet occurred is not
reasonable.102
The above differences in opinion apply to the case where a buyer says: you
are not liable for any defects. However, if the seller says: I sell you this item
on the condition that I am not liable for any defects it may have, then all
jurists agree that new defects are not covered by this condition. In this case,
the seller did not make the excuse from liability in general, but restricted it to
defects that existed at the time of the contract.
Consider the case of a seller who stipulated a general condition of nonliability for all defects, and then the buyer and seller disagreed over whether or
not a defect existed at the time of the contract. Assume, further, that the seller
claimed that the defect existed at the time of the contract, and therefore covered
by the condition, while the buyer claimed that it occurred afterwards and is not
(p.377), c Aqd Al-Bayc (p.107).
Al-Fiqh Al-c Am
c
c
((H
. anaf), vol.4, p.100), Aqd Al-Bay (p.117).
102 Al-K
c
n
as
an ((H
anaf
),
vol.5,
p.227),
Ibn
Al-Hum
a
m
((H
.
((H
. anaf), vol.4, p.100).
100 Al-Madkhal
101 Ibn c Abid

n
AL-C AYB)
213
covered by the condition. In this case, Muh.ammad ruled that the sellers claim
is accepted if he swears an oath to its truth. His proof is that the non-liability
is general, and the buyer is claiming the right to return the merchandise after
the establishment of general non-liability of the seller to accept any returns
based on defect. Thus, when the seller denies the buyers claim, his statement
is the relevant one. Zufar and Al-H
. asan, on the other hand, ruled that the
buyers claim has precedence. Their proof is that the right to return defective
merchandise was established initially and then dropped by the buyer. Thus, the
buyer must determine what falls under the non-liability that he has given the
seller.103
Note that the condition discussed so far covers all manifest and hidden defects. However, the language of the condition may specify a particular set of
defects to the exclusion of others. For instance, if the buyer says: you are
not liable for all diseases, Ab
u Y
usuf ruled that the condition applies only
to manifest diseases to the exclusion of internal ones (e.g. liver disease, etc.).
Ab
uH
. anfa, on the other hand, was reported to have ruled that this language
would apply only to internal diseases to the exclusion of manifest ones, which
n
would be called sickness (marad.) rather than disease (d
a). Ibn c Abid
favored the latter opinion, arguing that it is consistent with conventional usage.
However, the most accepted opinion in the H
. anaf school is that linguistic and
conventional use equate the two terms (sickness and disease), and therefore both
manifest and non-manifest diseases are covered by this condition.104
Similarly, if a buyer exonerates the seller of all major transgressions such as
adultery, theft, etc., then the condition covers those defects as well as any other
that is conventionally understood to be in the same category.105 However, if
the exoneration is restricted to a specific set of defects (e.g. burns), then the
condition is not generalized, since the buyer in this case dropped a specific right,
rather than a more general set of rights.106
Consider a case where the stipulated condition of non-liability was restricted
to a specific defect that was named by the buyer and that existed at the time
of the contract. Further assume that the buyer and seller later disagree, with
the buyer claiming that the defect developed after the contract and the seller
claiming that it existed prior to the contract. In this case, Muh.ammad ruled
that the buyers claim has precedence. His proof is that the non-liability relates
to conditions at the time of the contract, and while the buyer claims that the
defect happened in the more recent past, the seller claims that it happened
in the more distant past. Thus, he ruled that the circumstances support the
buyers claim.107
The discussion above covered the opinions in the H
. anaf school regarding a
general condition of non-liability for conditions. The other schools of jurisprudence discussed this condition in the context of knowledge or ignorance of the
103 Al-K
as
an
((H
. anaf), vol.5, p.277).
((H
as
an ((H
. anaf), vol.4, p.100), Al-K
. anaf), vol.5, p.278).
c
n ((H
((H
. anaf), ibid).
106 Al-K
as
an ((H
. anaf), vol.5, p.277).
107 Ibn c Abid
n ((H
. anaf), vol.5, p.278)
104 Ibn c Abid
n
105 Al-K
as
an
214
CHAPTER 5. OPTIONS
existence of a defect:
The Maliks ruled that the condition of non-liability for defects is not valid
except for defects in slaves who have lived long with the seller, and that
are unknown to the seller. On the other hand, non-validity for defects that
are known to the seller, exist in any object of sale other than slaves, or in
slaves who have not lived with the seller for some time, is not valid.108
The Shafics ruled that the general condition of non-liability for defects
applies only to non-manifest defects in animals, provided that the defects

are unknown to the seller. Thus, the non-liability would not apply to
defects in items other than animals (e.g. clothes or buildings), nor to
manifest defects in animals, regardless of whether or not the seller is aware
of them. Also, the non-liability does not apply to non-manifest defects in
animals if they are known to the seller.
Moreover, they ruled that non-liability applies only to defects that existed
at the time of the contract, and not to those that develop afterwards and
before receipt. If the two parties to the contract dispute whether or not the
defect existed at the contract time, the sellers claim has the precedence
in their school.
They also ruled that if the seller stipulates a condition of non-liability for
defects that may develop after the contract and prior to receipt (or both
defects that existed before and those that develop), then the condition is
not valid. Their proof is that this condition would amount to dropping
something prior to its establishment, analogous to non-liability for a price
of an item that he had not sold to him.109
The H
. anbals have two reported narrations regarding Ah.mads opinion.
One narration reports his ruling that non-liability is not applicable unless
the buyer is aware of the defect (this is also the opinion of Al-Shafic),
and the other narration reports his ruling that the seller is thus not liable
for all conditions of which he was ignorant, but liable for the ones that he
knew.
Ibn Qud
amah and others ruled that non-liability is not in effect for one
who sells an animal to another with a condition of non-liability for any
defects, or a specific existing defect. This is their ruling regardless of
whether the seller knew of the defect or did not know.110
5.14
Inspection option (khiy

ar al-ruyah)
Some of the authors list this option before the defect option, since it has more
serious consequences. In this regard, the inspection option prevents the conclu108 Ha
iyat Al-Dus
alik)B,
. sh
vol.3, p.164).
109 Al-Khat
irbn ((Sh
. b Al-Sh
110 Ibn Qud

. anbal), vol.2, p.27).
AL-RUYAH)
5.14. INSPECTION OPTION (KHIYAR
215
sion of sale, whereas the defect option only prevents the bindingness of its legal
status, consideration of which only comes after conclusion. However, I chose to
diverge from this practice due to the similarities between the condition option
and the defect option, as noted above. Moreover, the condition option, the
defect option, and the specification option (khiy
ar al-tac yn) are established by
the contractors stipulation; whereas the inspection option is established based

on the Law (sharc ).
The discussion of the inspection option will proceed in seven subsections:

1. Legality of the inspection option.
2. Time of its establishment.
3. Means of its establishment.
4. Characteristics of sales with inspection options, and their legal status.
5. Conditions for the establishment of the inspection option, and their consequences.
6. Reasons for dropping the inspection option.
7. Reasons for voiding the contract, and the conditions of voiding.
5.14.1
Legality of the inspection option
The H
. anafs rendered the inspection option valid in sales of items that were not
seen or inspected by the buyer. Thus, the buyer is given the option at the time
when he inspects the merchandise of either taking the merchandise for the full
named price, or returning it to the seller. Thus, even if the buyer said: I have
accepted this sale, and then saw the merchandise for the first time, he has the
right to return it. This follows since the option is tied to the inspection of the
merchandise, and consent to something prior to knowing its characteristics is
not given any consideration. In this respect, his expression of acceptance prior
to inspection should not be considered. This is in contrast to his expression
of willingness to return the object, which does not require inspection. The
H
narrated on
. anafs proof of the legality of the inspection option is the H
. adth
as (mAbpwt): If someone buys

the authority of Ab
u Hurayrah and Ibn c Abb
an item without seeing it, then he has an option until he sees it.111
They also relied on the narration that c Uthman ibn c Affan (mAbpwh) sold
a land to T.alh.ah ibn c Abd-Allah (mAbpwt), when neither of them had seen
the land. Someone told T
. alh.ah: You have been subject to injustice, to which
he replied: I have the option, since I bought an item that I have not seen.
They took the matter to Jubayr ibn Mut.c am, who ruled that T
. alh.ah had the
111 This Had
has narrations with a full chain of narrators (musnad), on the authority of
. th
Ab
u Hurayrah; as well as a mursal narration on the authority of Makh.u
l. Al-Nawaw reported
that there is a consensus among those who memorized Ah.a
dth that it is a weak one (d.acf).
216
CHAPTER 5. OPTIONS
option.112 Thus, the option is for the buyer to the exclusion of the seller, even
if the latter sold what he himself had not seen. This incident took place in
the presence of companions of the Prophet (pbuh), and none of them contested
this ruling. Thus, this narration constitutes Ijmac (consensus among the early
Muslims) regarding the legality of this option. They also relied on the following logical argument: ignorance of the characteristics of an item renders the
buyers consent incomplete. Such lack of total consent to the trade results in
the establishment of the option.
Based on those arguments, the H
. anaf jurists legalized selling an absent item
without a description, relying on the establishment of the buyers inspection
option. They have also legalized selling an absent item with a description of
warranted properties, in which case the buyer has the characteristics option,
as we mentioned previously. Thus, the buyer has the option when he sees
the merchandise: he may execute the sale, or he may return the merchandise,
regardless of whether or not he agreed to the characteristics mentioned in the
contract.
On the other hand, the H
. anafs did not legalize an inspection option for the
seller who sold what he did not see. For instance, if a person inherits some land
in a different country, and sells it prior to seeing it, the sale is valid without any
options for the seller. Ab
uH
. anfa initially ruled that the seller in this case has
the same option afforded the buyer, in analogy to the condition option and the
defect option. However, he later changed his opinion to the one listed above.113
The differential treatment of the buyer and seller in this case is logical, since
the seller must have more information about the merchandise than the buyer.
In this regard, the seller has no option, and should investigate the merchandise
prior to the contract so that he does not fall prey to an injustice for which he
may demand voiding the contract.114
The Maliks legalized only the characteristics option to the buyer alone.
Thus, they ruled that an absent item may be sold based on a description of its
characteristics, as long as the object of sale is unlikely to change prior to receipt.
Thus, if the item is found to meet the listed characteristics, the contract becomes
binding.115
Similarly, the H
. anbals legalized only the characteristics option. Thus, it is
valid in their school to sell a missing object that was described to the buyer,
as long as the description is sufficient for a forward (salam) sale. Their proof
in this case is that this is a sale based on description, which makes it valid in
analogy to salam. In this regard, knowledge of the object of sale in this case
and in salam is accomplished through knowledge of its apparent characteristics
that affect its price. Hidden characteristics that were not part of the description
112 Narrated by Al-Tah
c
as.
. . aw and Al-Bayhaq on the authority of Iqlimah ibn Ab Waqq
c Uthm
that T
alh
ah
bought
some
property
from
a
n
...,
c.f.
Al-H
a
fiz. Al-Zaylac (1st edition,
. .
.
(H
), vol.4, p.9).
. adth
113 Al-Sarakh
s (1st edition (H
anaf), vol.13, p.69 onwards), Ibn Al-Hum
am ((H
.
. anaf), vol.5,
c
n ((H
pp.137-140), Al-K
as
an ((H
. anaf), vol.4, p.68).
114 Al-Amw
usuf M
us
a (p.481).
d ((M
alik), vol.2, p.154), H
a
shiyat Al-Dus
.
.
AL-RUYAH)
217
are thus excluded from the option, and if the buyer finds that the object of sale
meets the named characteristics, the contract becomes binding and may not be
voided.
The more accepted of two opinions in the H
. anbal school states that it is
not valid to sell an absent object without a description or prior inspection. The
only exception to this rule is the program or envelope sale discussed above. In
the general case, sales of items without inspection or description falls under the
Prophets (pbuh) prohibition of gharar sales.116 In this regard, the sale of an
item without inspection of description is analogous to buying the seeds inside
the dates.
The H
of the inspection
. anbals note that chain of narration for the H
. adth
ahm Al-Kurd, whose narrations are not acoption contains c Umar ibn Ibr
cepted. Moreover, they argue that perhaps what was meant by this H
is
. adth
that buyer has the option whether or not to enter into this contract.
. anbals and the Z.ahirs have legalized the inspection
option to the seller if he sold an item that he had not inspected, and that he
had described to the buyer.
Al-Shafic in his new system (madhhab) ruled that the sale of an absent
object is initially unconcluded, regardless of whether or not it was described.

His proof is the H
u Hurayrah that the Messenger
. adth
of Allah (pbuh) forbade the gharar sales. Since the sale of an absent object
is a sale that contains gharar, it is not valid if the buyer is ignorant of the
of sale, in analogy to salam. Moreover, this sale is
characteristics of the object
prohibited in the category of sales of what is not in the sellers possession, which
includes that which is not present and that is not seen by the buyer. Al-Shafic
finds the H
of the inspection option discussed above, to be weak (d.acf),
. adth
following the opinion of Al-Bayhaq. It is also noteworthy that this H

was
. adth
found by Al-D
araqut.n to be invalid (b
a.til).
With regards to the Shafic condition of inspection of the merchandise, they
have ruled that inspection prior to the contract is sufficient for non-changing
items such as land or iron, to the exclusion of changing items such as foods. They
have also found it sufficient to inspect part of the object if it is an indication of
the quality of the rest (e.g. inspecting the top layer of wheat, nuts, flour, fat,
dates, or food in a container). Similarly, the inspection of a random sample of
a homogeneous commodity (e.g. grains) is sufficient.117
The H
. anafs countered the arguments of others with the argument that ignorance of an absent object of sale does not lead to dispute as along as the
buyer has the option to return it and void the contract if the merchandise does
not meet his expectations. In this regard, they argue that the H
prohibit. adth

c
u Hurayrah,
.
. . ab Al-Sunan Al-Arba a on the authority of Ab
narrated by Al-T
an in Al-Kabr on the authority of Ibn c Abbas, and narrated in Al. abar
Aws.at. on the authority of Ibn c Umar and Sahl ibn Sac d. The authentication of this H
. adth
has been listed previously.

117 Al-Khat
c
c
b
Al-Sh
irb
n
((Sh
a
fi
),
vol.2,
p.18
onwards),
Ab
u
-Ish
a
q
Al-Sh
r
a
z
((Sh
a
fi
),
.
.
vol.1, p.263).
218
CHAPTER 5. OPTIONS
ing selling that which is not in ones possession118 is actually a prohibition of

selling that which he does not own. Moreover, they argue that the prohibition
of gharar sales refers only to items that are not properly specified.119
5.14.2
Time of establishment of the inspection option
The inspection option is established when the buyer sees (or inspects) the object
of sale, and not before. In this regard, if the buyer permits the sale prior
to inspecting the merchandise, the sale is not binding, and the option is not
dropped. This follows since the Prophet (pbuh) established the option for the
buyer following his inspection of the merchandise. If we were to establish an
option of permitting the sale prior to inspection, and if he were to execute
that option, the inspection option will no longer be established for him at the
inspection time. That would contradict the text of the H
, and therefore
. adth
must be rejected.
On the other hand, jurists disagreed with respect to voiding the contract
prior to inspection:
Some jurists ruled that the buyer does not have the option to void the
contract prior to inspection, since that would constitute an option that is
established prior to inspection. Since we have seen that the buyer does not
have the option of permission prior to inspection, he consequently does
not have an option of voiding at such a time.
The more correct opinion is that of the other jurists, who ruled that the
buyer may void the contract prior to inspection. This opinion is not based
on any option (since no options are established at that time), but rather
on the non-bindingness of the purchase of that which the buyer had not
inspected. In this regard, the non-binding contract may be voided in
analogy to the case where a defect option is established, as well as the
contracts of lending and depositing.120
5.14.3
Means of establishing the inspection option
The H
. anaf jurists differed over the means of establishment of this option:
The better of their two opinions is that of Al-Karkh and others that the
inspection option is unconditionally established for all times, unless one of

the reasons for its dropping exists (see discussion below). Their proof is
that this is an option tied to the inspection of the object of sale, and thus
is analogous to returning defective merchandise. Moreover, the reason for
establishing this option is the incompleteness of the buyers consent. In
this regard, a legal ruling remains in effect for as long as its reason remain
in existence.
c
.
. . ab Al-Sunan Al-Arba ah, and considered a H
. adbth h.asan
by Al-Tirmidh.
119 Al-Sarakhs
(1st edition (H
120 Al-K
as
an ((H
. anaf), vol.5, p.295).
AL-RUYAH)
219
Other jurists argued that the option is established temporarily until it is

possible to void the contract after inspection. Thus, if the buyer inspected
the merchandise and had the opportunity to void the contract but did
not, the inspection option is dropped, even if none of the other reasons for
dropping it (discussed below) exists.121
It is interesting to contrast those opinions with the H
. anbals view that
the inspection option is established immediately.122
5.14.4
Sales with inspection options
Characteristics of such sales

The purchase of an item that was not previously inspected by the buyer is
not binding on him. Thus, the buyer is given the option of voiding the sale or
permitting it after he sees the merchandise. This ruling is based on the blocking
of contract conclusion based on the lack of inspection of the merchandise. The
latter implies ignorance of the characteristics of the merchandise, which in turn
puts into question the buyers consent, and necessitates an option to avoid post
hoc regret. The H
. anafs regard this ruling as effective regardless of whether
or not the merchandise fit its description.123 The Maliks, H
. anbals, and the
Imam Shic ites, on the other hand, ruled that the sale is binding on the buyer
if its characteristics agree with its description, and he has an option if they
disagree with it.124 The Z.ahirs, in contrast, ruled that the sale is binding if the
characteristics agree with the description, and invalid otherwise.125
Legal status of the sale
The legal status of this sale is equivalent to that of a sale without any options.
Thus, it does not prevent the establishment of ownership in the two exchanged
items (i.e. the buyer becomes the owner of the merchandise, and the seller
becomes the owner of the price following the offer and acceptance). Thus, the
inspection option only prevents the bindingness of the sale, in contrast to the
condition option.
The reason for differentiating between the inspection and the condition options is thus: The sale in the inspection option case was conducted unconditionally, implying that it would be binding, other things being equal. However, the
right to return the merchandise based on the inspection option has been legally
established, thus suspending the bindingness of the contract. In contrast, the
121 Ibn Al-Hum
c
am ((H
as
an ((H
n
. anaf), vol.5, p.141), Al-K
((H
anaf
),
vol.?,p.67).
.
122 Ibn Qud
amah (, vol.3, p.581).
123 Al-K
as
an ((H
am ((H
. anaf), vol.5, p.137).
124 Ibn Juzayy ((M
alik), p.256), Ibn Qud
amah (, vol.3, p.582), Al-H
c ah
. ill ((Sh
Im
amiyyah), p.146).
125 Ibn Hazm (, vol.8, pp.389,394).
.
220
CHAPTER 5. OPTIONS
condition option is accepted by both parties to the contract, thus affecting its
immediate legal status, as detailed above.126
5.14.5
Establishing the inspection option
Unless the following conditions are satisfied, the inspection option would not be
established, and the sale would be binding:
1. That the object of sale can be specified (i.e. be a non-fungible c ayn).
Thus, if a sale involved the exchange of two identifiable objects, both
the buyer and seller would have an option if neither one had inspected
the respective items prior to the contract.127 In contrast, for the case
of exchanging a liability for another (currency exchange or .sarf), neither
party has an option since there is no benefit from such an option, as
explained below. Finally, when exchanging a specified object (c ayn) in
exchange for a liability (dayn), the buyer has an inspection option, while
there is none for the seller.
The reason for this ruling is that in the case of non-specification of the
object of sale, the contract may not be voided by such an option. This
follows since that which cannot be specified is not owned by virtue of the
contract, but rather by virtue of receipt. Moreover, voiding of the contract can only affect those items that are owned by virtue of the contract.
Thus, there is no benefit from allowing an option for non-specified items
exchanged in a sale. In contrast, identifiable objects have specific benefits to their owners, thus establishing the option for the buyer to decide
whether or not the specific merchandise meets his needs.
Thus, the inspection option is established in all contracts that may be
voided; e.g. sales, leases, financial compensation for release from liability
for anothers property, distribution of rights, etc. All such contracts can
be voided by returning such items, and thus allow for the establishment
of an inspection option. On the other hand, an inspection option cannot
be established for any contracts that may not be voided; e.g. dowry, the
financial compensation for divorce at the instance of the wife (khulc ), fi
nancial compensation for intentional killing, etc. All such contracts do
not allow for voiding by returning such properties. Thus, the general fundamental rule according to Al-Kasan ((H
. anaf), ibid) is this: Whatever
can be used to void a contract by returning is subject to an inspection
option, and whatever cannot is not.
2. Non-inspection of the object of the contract is a condition for the establishment of the inspection option. Thus, whatever was inspected prior to
the contract, if it remains in its same condition, is not subject to an inspection option. However, if the item changes after inspection, the purchase
126 Al-K
as
an
127 Al-K
as
an
((H
. anaf), ibid.).
((H
. anaf), ibid.).
AL-RUYAH)
221
would still be considered a purchase of that which was not inspected, thus
establishing the inspection option.128
Means of effecting inspection
The buyer may inspect all of the merchandise or part of it. The criterion for
establishment of whether or not the merchandise was inspected is whether or
not the buyer gets enough knowledge about the merchandise.129 To be more
precise, if that which was not inspected is derivative of that which he inspected,
then the buyer has no option regardless of whether or not what he inspected
was sufficient to know the status of what he did not. This follows since the
status of the derivative is the same as the status of the original item.
However, if that which was not inspected was not derivative of that which
was inspected:
If that which was inspected gave him enough information regarding what
he did not inspect, then he has no option if that which was not inspected
was in fact equivalent or superior to what was inspected. In this respect,
the inspection of part is sufficient for knowledge of the whole.
If what he inspected did not give him enough information regarding what
he did not inspect, then he has an option in that which was not inspected.
In this case, inspecting the part is equivalent for the other part to not
having inspected anything.
Based on this ruling, it is sufficient to inspect the top layer of a pile of
purchased grains, or the face and backside of a purchased animal. This is the
opinion of Ab
u Y
usuf. For clothing, Muh.ammad ruled that inspection of the
front and back of a folded dress is sufficient. However, Zufar ruled that the
entire dress must be spread, which is the chosen opinion among the H
. anafs.
n elaborated that if the inside of the dress was no

In this respect, Ibn c Abid
different from its outside, then the option is dropped; but if its inside is found
to be of lower quality, then the buyer retains the option.130
In the case of purchasing an animal for its meat, it is necessary to touch the
animal to determine the amount of fat. Thus, if the buyer only saw the animal
from a distance, he retains his option, since such a sight is not sufficient to gain
information about its meat, which is the reason for the sale. Similarly, if the
animal is being purchased for its milk and offspring, then the rest of its body,
including its udder, must be inspected, since inspection from a distance will not
give the necessary information.131
128 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.72), Al-K
. anaf), ibid., pp.292-3).
c
((H
n ((H
. anaf), vol.4, p.68).
130 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.72), Al-K
c
n ((H
wards), Ibn Al-Hum
am ((H
. anaf), vol.4, p.69).
131 Al-K
c
n ((H
am
as
an ((H
((H
. anaf), vol.5, p.143).
129 Al-K
as
an
222
CHAPTER 5. OPTIONS
As for carpets and covers for which there is a variance between the front and
the back, inspection of the front alone results in no option, while inspection of
the back alone maintains it.
In the case of buying homes, real estates, and gardens, the inspection of the
outside and inside of the building, or the inspection of the outside of the garden
and the tops of its trees, would result in no option. However, the inspection
of the courtyard of a house would not be sufficient due to the great variance
between houses, thus establishing the option. In the past, the leaders of the
H
. anaf school (with the exception of Zufar) had ruled that the inspection of the
outside of a house and of its courtyard would be sufficient, even if the rooms were
not inspected. However, this is not sufficient nowadays, making the difference
in rulings a function of time and space rather than legal proof.132
The above rulings apply to a single object of sale. However, if the object of
sale is multiple, then we must consider different cases:
If the objects of sale are varying countables (e.g. animals, clothes, watermelons, pomegranate, etc.), then if the buyer inspects only some of the
items, he has an option in the rest. The variation between the items makes
inspecting some insufficient for obtaining information about the whole.
If the objects of sale are measured by weight or volume, or if they are
homogenous countables (e.g. nuts, eggs, etc.), then inspection of part
drops the option in he rest, provided that the un-inspected portion is
similar to the inspected one. In such cases, inspection of part is sufficient
for obtaining information about the whole.
The above rulings relate to the case where all the objects of sale are in
one container. However, if they are distributed over two containers, and
of two different kinds, or of one kind with two different descriptions, then
jurists agree that the buyer has an option. In this case, observing part
of the contents of one container does not provide sufficient information
regarding the contents of the other container.
If the contents of both containers are of the same type and same description, then the leaders of juristic schools have differed in opinion:
The leading jurists of Balkh ruled that the buyer has an option, thus
rendering the plurality of containers a plurality of types of merchandise.

The leading jurists of c Iraq ruled that there is no option in this case,
since inspection of part of a homogeneous bundle provides sufficient
information regarding the rest, irrespective of the number of containers.133
132 Al-K
c
n ((H
am
as
an ((H
((H
anaf
),
vol.5,
p.144).
.
133 Al-K
as
an ((H
shiyat Al-Shalab c al
a Al-Zaylac (vol.4, p.26).
. anaf), vol.5, p.294), H
.a
AL-RUYAH)
223
If the object of sale is hidden under soil (e.g. carrots, onions, garlic,
potatoes, etc.), then Ab
u Y
usuf provided the following analysis:
If the merchandise is measured by weight or volume after cutting
(e.g. garlic, onions and carrots), then if the buyer pulls some of the
merchandise with the sellers permission, or if the seller pulls some
with the buyers permission, the buyers option in the remainder is
dropped. In this case, inspection of part of what is measured by
volume is tantamount to inspecting the whole.
If the buyer pulled some of the merchandise without the sellers
permission, then he has no option whether or not he approves of the
quality of what he pulled. In this case, pulling the items from the
soil renders it defective by stopping its growth and speeding-up the
spoiling process. Since the ensuing of a defect in the merchandise
while in the buyers permission prevents returning it in all cases, this
is particularly relevant if the defect was caused by the buyers actions.
If the merchandise in the soil is sold by number (e.g. carrots, turnips,
etc.), then inspection of some is not tantamount to inspection of the
whole. The variation between items in this case is similar to the case
of clothes discussed above.
If the buyer pulls some of the merchandise without the sellers
permission, then his option is dropped based on the resulting defect,
in case what he pulled has some value. However, if what he pulled
was of no value, then the option is not dropped.
Al-Karkh mentioned his ruling for merchandise hidden in the soil without
distinguishing between those cases. His ruling was the establishment of the
option for the buyer who inspected only part of the merchandise. Thus,
after seeing the whole, the buyer has the option of accepting the contract
or returning the merchandise.
It was narrated that Muh.ammad stated Ab
uH
. anfas opinion to be the
establishment of an option for the buyer whether he pulled part or all of
the merchandise. However, Muh.ammads own opinion is similar to Ab
u
Y
usufs, where pulling part of the merchandise, and accepting its quality,
makes the sale binding on the buyer.134
If the object of sale is fat in a glass jar, and if only the outside of the
jar is inspected, then there are two opinions narrated on the authority of
Muh.ammad:
The first narrated opinion is that this inspection is sufficient, thus
dropping the option. In this case, inspection of the outside of the
transparent jar gives sufficient information on its contents.
134 Al-Samarqand
((H
224
CHAPTER 5. OPTIONS
The second narrated opinion asserts that inspection of the outside
of the glass container does not give enough information about its
contents, since the color of the glass may give false information about
the color of its contents. Thus, this inspection does not satisfy the
purpose of giving information about the merchandise.135
Some of the H
. anaf scholars also ruled that inspection is not established by
viewing the reflection of the merchandise in a mirror or in water. Their logic
is that the buyer thus did not inspect the merchandise itself, but its image,
thus his option is not dropped. However, the correct opinion is that the buyer
in this case would have indeed seen the merchandise itself and not anything
else, since face-to-face observation is not a condition for sight. For instance,
we do see Allah without face-to-face witnessing. In this case, the option is
indeed established and not dropped, since the mirror may distort the shape and
size of the merchandise, thus not providing sufficient information to satisfy the
buyers need. This is the reason for keeping the option, not the one given by
the mentioned jurists.136
Similarly, if a buyer observes fish in shallow water from which the fish can
be collected without fishing or using other instruments, and if he takes the fish,
some jurists ruled that he would have dropped his option, while the correct
opinion held by others is that the option is not dropped. In this case, the water
distorts the perceived size of the merchandise, making it look larger. This
means that the buyer would not have obtained sufficient information on the
merchandise, thus retaining his option.137
Opinions of non-H
. anaf jurists
The Maliks ruled that the sale of root crops (such as carrots, onions, turnips,
etc.) is permissible provided that: (i) its unhidden part is inspected, (ii) some
of it is pulled and inspected, (iii) and an estimate of its volume or weight is provided. In contrast, they ruled as impermissible conducting such a sale without
an estimate based on the cultivated area. They also ruled that it is permissible
to sell based on inspection of part of homogenous fungible merchandise (e.g.
cotton), in contrast to non-fungibles where inspection of part (e.g. one dress
out of many) is not sufficient.138
The Shafics and H
. anbals ruled that the sale of root crops (e.g. carrots,
onions, garlic, and turnips) is not permissible. Their opinion is based on the
ruling that this is the sale of an unknown, which contains excessive uncertainty
(gharar).
c
n ((H
((H
. anaf), vol.4, pp.70-106).
((H
. anaf), vol.5, p.295).
137 Al-K
as
an ((H
. anaf), ibid.).
138 Al-Dard
r ((M
alik), vol.2, p.156), Al. afd ((M
Dardr ((M
135 Al-K
as
an
136 Al-K
as
an
AL-RUYAH)
225
Sale based on a sample (bayc al-num

udhaj)
In general, the majority of jurists render the sale valid and binding if the buyer
inspects part of the merchandise that gives full information regarding the quality
of the whole. In this respect, I mention sales based on a sample as a common
example of such sales.
An instance of such sales is thus: a buyer may purchase a large amount of
wheat after inspecting only a sample of the merchandise. Such sales are only
possible for fungibles such as grains, cotton, etc.
The legal status of this type of sales in the different schools is the following:
it is permissible in the H
alik and Shafic schools, and impermissible
. anaf, M
for the H
. anbals and Z.ahirs. In what follows, we discuss those rulings in some
detail:
139
ruled that items measured by weight and volume may be
The H
. anafs
sold based on the inspection of part. This is based on the conventional
satisfaction of buyers by inspecting part of a homogenous good. However,
if the remainder of the merchandise is in fact of lower quality than the
inspected part, then the buyer has an option in the whole merchandise,
to avoid partitioning the contract prior to the sale. The more accepted
of the H
. anaf opinions is that this ruling applies regardless whether the
merchandise is in one or two containers, as detailed above. Note also that
clothes today are considered fungible, in contrast to their status at the
time of writing the older cited references.
The Maliks140 ruled that the sale based on inspection of part is permissible for fungibles measured by volume or weight (e.g. cotton). This is
in contrast to their ruling for non-fungibles (e.g. a container full of different pieces of cloth), in which case their best accepted opinion is the
impermissibility of sales based on inspection of some items.
The Shafics141 had three rulings on sale based on a sample: one opinion
renders it valid, the other renders it invalid, and the third most correct
one is that it is valid if the sample is part of the sold merchandise, and
invalid otherwise.
142
The H
ruled that sale based on a sample is invalid. For instance,
. anbals
if the seller shows the buyer a measure of wheat from a large container,
and then sold him the entire container based on the claim that it is of
the same kind, they render the sale invalid. This ruling is based on their
condition that the two parties inspect the merchandise in a manner that
agrees with the sale. This condition is satisfied either by inspecting the
entire merchandise, or by inspecting part that gives sufficient information
139 Al-Zaylac
((H
. anaf Jurisprudence), vol.4, p.26).
((M
afic), vol.9, pp.327,333 onwards).
142 Marc
ibn Y
anbal
), vol.2, p.10), Al-Buh
ut (3rd printing (H
.
. anbal),
vol.3, p.152)
140 Al-Dard
r
141 Al-Im
am
226
CHAPTER 5. OPTIONS
about the rest (e.g. one of two sides of a plain dress, and the top layer of
a container of homogeneous grains or dates, and other random samples of
homogenous goods).
The Z.ahirs ruled that sale based on a sample is invalid.143
Commissioning an agent for inspection or receipt

If the buyer commissions another to inspect the merchandise without himself
inspecting it, then: (i) if the inspecting agent accepts the merchandise, he renders the sale binding on the buyer, otherwise (ii) the inspecting agent may void
the sale if he chooses. In this case, the commissioned agent replaces the original
buyer in inspection, and the decision is delegated to him.
If the buyer commissions an agent to receive items purchased prior to inspection, the inspection of the agent takes the place of he buyers inspection,
thus dropping the buyers option in the opinion of Ab
u H
. anfa. In contrast,
Ab
u Y
usuf and Muh.ammad ruled that the agents receipt and inspection does
not drop the buyers option in this case. Their argument is that the buyer commissioned the agent to receive the merchandise, not to drop the option if he sees
fit. Thus, they ruled that the agent in this case cannot drop the buyers inspection option, in analogy to his inability to drop the buyers condition and defect
options. Ab
u H
. anfas logic, on the other hand is that there is no difference
between a legal agent commissioned to receive merchandise and one commissioned to conduct a purchase. Since the inspection of the latter is sufficient by
consensus and drops the inspection option, so it is for the former. Thus, he
argues that the commissioned agent for some action is an agent for completing
the transaction, and dropping the option is part of the completion of receipt.144
All three have agreed on the case of a buyer who sends a messenger to receive
the merchandise, where the messenger inspects the merchandise and accepts it.
In this case, the final buyer retains his option. They differentiate between a
messenger (ras
ul) and legal proxy or agent (wakl) thus: the commissioned legal
proxy or agent is a primary party (as.l) to the receipt process, and thus the
completion of the receipt is up to him despite the fact that the effects of his
action affect the one who commissioned him. In contrast, the messenger is
simply an agent (n
aib) of the one who sent him in receipt. Thus, the receipt of
the messenger is in fact receipt by the one who sent him, and the completion of
such a receipt remains with the ultimate buyer.145
They have also agreed with respect to the defect option (khiy
ar al-c ayb) that
if a commissioned agent receives the merchandise, and accepts the defect after
knowing of its existence, the buyers option is not dropped.
With respect to the condition option (khiy
ar al-shart.), the leaders of the
H
. anaf school have differed: some maintain that the above mentioned difference in opinion between Ab
u H
u Y
usuf and
. anfa on the one hand, and Ab
143 Ibn
H
. azm (, vol.8, p.457).
((H
am ((H
. anaf), vol.5, p.145).
145 Al-K
as
an ((H
. anaf), ibid.).
144 Al-K
as
an
AL-RUYAH)
227
Muh.ammad on the other, applies here, whereas others asserted that the three
agreed that this option is not dropped.
The Shafics ruled generally that what is considered when discussing whether
or not the merchandise was inspected relates only to the parties of the con146
tract.
Effective inspection of the merchandise
In summary, inspection is not necessarily limited only to viewing by sight, but
relates to the use of the appropriate sense to test the relevant attributes of the
merchandise. For instance, inspection is attained by smelling items that are
known thus, tasting foods, touching items that are known by texture, touching
the fatty spots in sheep purchased to slaughter even if its color is not inspected,
feeling the udder of sheep purchased for its milk, etc. In such cases, using
eyesight is neither necessary nor sufficient for inspection, as detailed above.147
In this respect, a blind persons inspection is considered as complete as a
sighted persons for those items whose characteristics are known by other senses.
Thus, a blind persons inspection by smell, touch, taste, etc. is sufficient for
inspections that do not require eyesight. For those items that require eyesight
for a full inspection, a description provided by a sighted person is sufficient in
lieu of his lost eyesight. For instance, if a blind person purchases fruits on a
tree, a description alone takes the place of inspection, according to the most
common opinion. Similarly, in a blind persons purchase of a house or real
estate, description is sufficient for adequate inspection.
If a blind person recovers his sight, his inspection option does not return
at such a time. This follows since the description was legally sufficient as a
replacement of direct eyesight. In general, the recovered ability to conduct
the primary function (in this case direct eyesight) after obtaining a suitable
replacement (badl, in this case the description) does not invalidate the legal
status of the replacement. This ruling is thus in analogy to the case of one who
prayed with a purification by dirt (tayammum), and then finds water.148
In contrast, if a sighted person purchased an item without inspection, and
it is described for him, his option is not dropped. In this case, the replacement
(badl) is unacceptable while the primary action (al-as.l) is possible.
Disagreement regarding inspection
If the seller maintains that the buyer had already inspected the merchandise,
and the buyer maintains that he had not, then the buyers assertion is accepted
if accompanied by his oath. In this case, the seller is claiming that the contract
is binding, while the buyer denies it, and thus the latters claim is the one to
consider, but only based on his oath. The need for an oath follows since the
146 Al-Im
am
afic), vol.9, p.329).
Al-Bayc by Professor Mus.t.af

a Al-Zarq
a (p.46).
148 Al-Sarakhs
(1st edition (H
anaf), vol.13, p.77), Ibn Al-Hum
am ((H
.
. anaf), vol.5, p.146
c
n ((H
onwards), Al-K
as
an ((H
147c Aqd
228
CHAPTER 5. OPTIONS
seller is claiming that the right of voiding the contract is dropped (thus rendering
the sale binding), which is a valid legal claim, thus requiring an official oath
solicitation to resolve the matter.149
Inspection in the distant past
If a person purchased an item that he had inspected a month or so prior, then:
(i) If the merchandise had the same characteristics at the time of sale as it had
at the time of inspection, the buyer has no option, since his prior inspection
gave him sufficient information. (ii) However, if he finds that the merchandise
has changed, he has an option, since the prior inspection in this case did not
provide sufficient information about the characteristics of the merchandise, and
is thus as good as no inspection at all.
If the buyer and seller disagree regarding whether or not the merchandise had
indeed changed between the inspection and sale times where the seller claims
no change and the buyer claims change then the sellers claim is accepted
provided it is accompanied by an oath. In this case, the claim of a change in
the merchandise is a claim of a new event, while the default is that it did not
take place, thus requiring a proof to support the claim. This is in contrast to
the case where the disagreement was over whether or not the merchandise was
ever inspected by the buyer, in which case the seller was the one claiming a
new event (which is knowledge of the characteristics of the merchandise), and
in that case the buyers claim is accepted with his oath.150
5.14.6
Dropping the inspection option
The inspection option is not dropped simply by an explicit verbal assertion: I

have dropped my option, regardless of whether the assertion is made before
or after inspection. This is in contrast to the condition and defect options that
are dropped by such an assertion. The main difference between the inspection
option and the other two is its legal establishment to meet legal needs. Thus,
man has no right to drop it. This ruling is in analogy to the option of repealing
a divorce during the permitted period. This option is legally proscribed and
cannot be dropped by man during the specified period (c iddah). In contrast,
the condition option is established by a stipulation of the contractors, and thus
may be dropped by them, and the defect option is an implicit stipulation since
safety from defects is expected in objects of sale.151
The inspection option is dropped, and the sale rendered binding, by a voluntary (ikhtiy
ar) or an involuntary (d.ar
ur) action. Voluntary actions, in turn
can be divided into ones where consent is explicitly manifested and ones where
it is inferred. Explicit manifestation of consent is accomplished by a statement:
I have permitted the sale, I have agreed, or I have made my choice, or
similar explicit actions, regardless of whether or not the seller knows of the
c
n ((H
Al-Hum
am ((H
. anaf), vol.4, p.72).
c Abid
n ((H
((H
anaf
),
vol.5,
p.149),
Ibn
. anaf), ibid.).
.
151 Al-K
as
an ((H
. anaf), vol.5, p.297).
149 Ibn
150 Al-K
as
an
AL-RUYAH)
229
permission. Implicitly inferred consent is manifested by dealing in the object

of sale after inspection (and not before) in a manner that implies consent and
permission. For instance, if the buyer receives the merchandise after inspecting
it, his receipt would imply consent and render the sale binding. In this respect,
receipt carries this legal weight due to its similarity to the sale contract.152
Consequently, if the buyer gives the merchandise as a gift without delivering
it, or if he offers it for sale, etc. prior to inspection, then the option is not
dropped. This follows since the option in this case (prior to inspection) cannot
be dropped by an explicit manifestation of consent, and therefore cannot be
dropped by implicitly inferred manifestation of consent.
If the buyer pawns the merchandise and delivers it, or if he rents it or
sells it to another, with the stipulated condition that the new buyer has an
option, then the first buyers option is dropped, regardless of whether this takes
place before or after inspection. Even if the buyer dissolves the pawning by
paying his debt, if the rental period elapses or if the new buyer returns the item
based on the latters condition option, and then the original buyer inspects the
merchandise, he no longer has the right to return it based on the inspection
option. The reason for this ruling is that the original buyers action established
a legal right for another in the merchandise, which requires his ownership of
the goods. Such ownership, in turn negates the establishment of his inspection
option, thus voiding it since it does not serve any purpose.153
The involuntary actions that drop the inspection option include all events
that are not caused by the buyer and that drop the option and render the sale
binding. Those include the death of the buyer in the H
. anaf school, in contrast
to the opinion of Al-Shafic as discussed above under the condition option. Other
examples include: (i) the permission of one of two purchasing partners in the
H
. anaf school, (ii) the perishing of part or all of the object of sale, (iii) increase in
the object of sale in a disconnected, connected and derivative, or non-derivative
as detailed for the condition option.154
Al-Kasan said: The general rule is that whatever invalidates a condition
or defect option invalidates the inspection option as well. However, the first
two can be dropped by an explicit statement of dropping, whereas the third
cannot be dropped thus, before or after inspection.155 This follows since the
inspection option has been legally established as a right of Allah (swt)156 Thus,
the contractor cannot drop this option on purpose. In contrast, the condition
and defect options are established by the will of the contractors, and thus may
be dropped by the will of the one holding it whenever he wishes. Thus, the
differentiation is between the right of Allah (or general right for all mankind) in
the case of the inspection option, vs. the right of man in the humanly stipulated
152 Al-K
as
an
((H
am ((H
. anaf), vol.5, p.141).
((H
Al-Hum
am ((H
. anaf), vol.5, p.141).
154 Al-K
as
an ((H
am ((H
. anaf), vol.5, pp.141,149).
155 Al-K
as
an ((H
. anaf), vol.5, p.297).
156 i.e. it is established to protect the general good of all people as a general rule from which
individuals may not reach an agreement to diverge.
153 Al-K
as
an
230
CHAPTER 5. OPTIONS
condition and defect option.

Al-Mirghn
an said ruled that whatever invalidates the condition option (e.g.
a defect, or a dealing in the merchandise by the buyer) also invalidates the
inspection option. Moreover, if the dealing was one that cannot be reversed
(e.g. freeing a slave), or a dealing that establishes a legal right for another
(e.g. a sale, a pawning, or a lease) then the option is invalidated whether
the action took place before or after inspection. In such cases, voiding the
contract becomes impossible, thus invalidating the option. If, on the other hand,
the dealing did not establish a right for another (e.g. a sale with a condition
option, bargaining, or a gift without delivery), then the option is not invalidated
before inspection since it is not of higher status than an explicit manifestation
of consent (which does not invalidate an inspection option prior to inspection).
However, such actions would invalidate the option after inspection based on the
inferred implication of consent.157
5.14.7
Conditions of voiding
What voids a contract in this context

A contract is voided based on the inspection option by explicitly manifesting the
voiding. For instance, the buyer may say: I have voided the contract, I have
negated the contract, I have returned the merchandise, etc. The contract
may also be voided by the perishing of the object of sale prior to receipt, since
one of the cornerstones of the sale would no longer be satisfied.158
Conditions of voiding the contract based on the inspection option
The following conditions must be met for voiding based on the inspection option
to be valid:
1. That the option be still in effect. Thus, if the option were dropped by
one of the means described above, the contract is binding, and may not
be voided.
2. That the voiding does not result in a partitioning of the contract for the
seller (e.g. by returning part of the object of sale and permitting it for
another). This follows since the partitioning of the contract causes the
seller a loss. Moreover, the inspection option (before and after receipt)
prevents the contract from being concluded, and the partitioning of a
contract prior to its conclusion is invalid without any doubt.
3. That the seller knows of the voiding, so that he may know the status of
his merchandise and deal with it accordingly. This is the opinion of Ab
u
H
an
fa
and
Muh
ammad.
Ab
u
Y
u
suf,
on
the
other
hand,
does
not
require
.
.
the knowledge of the seller, as seen before in the condition option.159
157 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.141 onwrds).
((H
. anaf), vol.5, p.298).
159 Al-K
as
an ((H
. anaf), ibid.).
158 Al-K
as
an
AL-RUYAH)
231
Note also that the inspection option, similar to the condition option, is not
inherited by the heirs of a dead buyer. This follows since such options were
legally established for the parties of the contract, and the heir is not a party to
160
the contract. This is the opinion of Al-Zaylac and the H
. anbal jurists.
Malik, on the other hand, ruled that the inspection option is inherited in
analogy to the specification and defect options. His argument is that inheritance
is established for rights acquired by sale in the same manner that it is established
for properties.161 This ruling is more logical, since the heir inherits all the
properties and rights that belonged to the one whom he inherits, including the
option right.162
160 Al-Zaylac
c
((H
. anaf Jurisprudence), vol.4, p.30), Mar ibn Y
. anbal),
vol.2, p.33).
161 Al-K
as
an ((H
. anaf), vol.5, p.268), Ibn Hubayrah ((H
. anbal), vol.1, p.211), Al-Dardr
((M
162 Al-Amw
usuf M
us
a (pp.477,487).
Part II
Types of Sale (anw

acu
al-buy
uc )
233
235
Preliminaries
Sales may be partitioned into four categories with respect to the two compensations:163
1. Exchange sale (bayc al-muq
ayad.ah), which is the exchange of one specific
non-fungible for another (e.g. the exchange of a dress for an animal, etc.).
2. General sale (al-bayc al-mut.laq), which is the exchange of a non-fungible
for a fungible. This includes the common example of selling goods in
exchange for general prices defined in: (i) a particular currency commonly
in circulation, (ii) goods measured by weight or volume and assessed as a
liability on the buyer, or (iii) homogeneous goods measured by numbers
and assessed as a liability on the buyer.
3. Currency exchange (al-s.arf), which is an exchange of one non-fungible for
another, i.e. a general price for another. This includes the exchange of
any common currency for another.
4. Forward sales (bayc al-salam) that is the exchange of a liability (as the
object of sale) for a non-fungible (as the price). In this contract, the price
may be a non-fungible (c ayn) or a fungible (dayn), but since it must be
received during the contract session, it becomes non-fungible.
Receipt is not a condition for the first two types of sales (direct exchange
and general sales), but it is a condition for the latter two. In the currency
exchange contract, both compensations must be received, and in the forward
sale the price (capital) must be received, as discussed above.
Sales may also be divided into four categories with respect to the price:
1. Cost-plus sale (bayc al-mur
abah.ah), which is the exchange of an object of
sale for a price equal to the original price plus a determined profit.
2. At-cost sale (bayc al-tawliyah), which is the exchange of an object of sale
at the same price originally paid for it by the seller.
3. Below-cost sale, or sale at a loss (bayc al-wad.c ah), which is the exchange
of an object of sale at a price below the price for which the seller bought
it, i.e. at a given loss.
4. Negotiation or bargaining sale (bayc al-mus
awamah), where the object of
sale is exchanged for a price that is agreed upon by the buyer and seller.
This is the most common sale currently, since sellers typically do not wish
to disclose the cost at which they obtained the merchandise.
There are other types of historically known sales such as commission to
an).164
manufacture (istis.n
ac ) and the sale of fruits on the trees (bayc al-d.am
163 Al-Sarakhs
(1st edition (H
c
c
vol.5, p.134), Ibn Al-Hum
am ((H
.
. anaf), vol.5, p.323), Aqd Al-Bay
by Professor Al-Zarq
a (p.11 onwards).
164 Al-K
as
an ((Hanaf),
236
In what follows, we shall discuss in separate sections the forward sale, currency exchange, cost plus sales, at cost sales, and commission to manufacture.
We have discussed general sales previously, but we mention in this chapter two
items related to it that are usury (rib
a) and revocation of the sale (iq
alat albayc ).
Chapter 6
The Forward Contract

(salam)
This chapter will proceed in five sections:
1. Legality of forward contracts.1
2. The definition of forward contracts, and its cornerstones.
3. Conditions of the forward contracts.
4. The legal status of forward contracts.
5. Differences between general sales and forward contracts.
6.1
Legality of forward contracts
The legality of forward contract has been established in the Quran, the Sunnah,
and the consensus of the Muslim nation:
In the Qur
an, the verse of debts, O you who believe! When you deal with
each other in transactions involving future obligations in a fixed period of
time, put them in writing [2:282], established that legality. Ibn c Abb
as
said: I bear witness that the guaranteed lending for a known term was
legalized by Allah in his Book, and thus permitted. He then recited the
verse [2:282].2
In the Sunnah, Ibn c Abb
as narrated that the Messenger of Allah (pbuh)
came to Madnah, and found its inhabitants using forward (salam) contracts in fruits for one, two, and three years. He (pbuh) said: Whoever
1 tr.:
in what follows, we use the terms salam and forward contract interchangeably.
c
), vol.4, p.44), Ibn H
. . Al-Zayla (1st edition, (H
. adth
. ajar (, p.242), narrated in
Al-Sh
afic, Al-T
abar
an, Al-H
akim, and Al-Bayhaq.

.
.
2 Al-H
afiz
237
238
CHAPTER 6. THE FORWARD CONTRACT (SALAM)

enters into a forward contract, let him specify a known volume or weight,
and a known term of deferment.3
As for the consensus of the Muslim nation, Ibn Al-Mundhir said: All
the scholars whose opinions we have memorized agreed that forward contracts (salam) are permissible, and acknowledged peoples need for this
contract. This follows since the growers of fruits and vegetables, as well
as regular merchants, need funds to spend on themselves and their plants
and businesses, thus permitting forward contracts to meet their needs.
In this respect, the forward (salam) contract was made an exception for
the rule of impermissibility of the sale of non-existent items. This is a
special license (rukh.sah) given to the people to meet their economic needs
and facilitate their daily lives.4
6.2
6.2.1
Defining salam and its cornerstones

Defining salam
Salam or salaf (lit: forward payment) is the sale of a deferred item in exchange
for an immediate (forward) price. In other words, it is the sale of a liability
whose characteristics are described in exchange for a price or capital-sum (ras
m
al) paid in advance.5 The Shafics and H
. anbals defined the forward contract
thus: It is a contract over described merchandise sold as a deferred liability on

one party, in exchange for a price that is received during the contract session.6
The Maliks defined it thus: It is a sale in which the capital sum (price) is paid
in advance, and the object of sale is deferred to a specified term.7
Thus, the conditions of the salam or forward sale include all the conditions
of sales in general, and adds specific conditions that we discuss in detail below.
6.2.2
Cornerstone of salam
The cornerstone of the forward sale is offer and acceptance. For the H
. anafs,
Maliks, and H
. anbals, the offer is established by using the terms: salam = salaf
= forward, or bayc = sale together with the conditions of the forward contract.
Thus, if the forward buyer (rabbu al-salam) said: I pay this price to buy X
3 Authenticated by the six Im
ams in their books on the authority of Ibn c Abb
as; c.f. Ibn
Al-Athr Al-Jazar (, vol.2, p.17), Al-H
), vol.4, p.46),
.
. adth
Al-Samarqand ((H
. anaf), vol.2, p.4).
4 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.323),
c
n ((H
d Al-H
Al-K
as
an ((H
. afd
c
((M
alik), vol.2, p.199), Al-Khat.b Al-Shirbn ((Sh
amah (, vol.4,
p.275).
5 ibid. Note that linguistically, salam = salaf, where the former is the term used in Hij
. az,
and the latter is the term used in c Ir
aq.
6 Marc
ibn Y
atb Al-Shirbn ((Sh
afic),
. anbal), vol.2, p.71), Al-Kh
.
vol.2, p.102), Al-Buh

ut (3rd printing (H
anbal
),
vol.3,
p.276).
.
7 Al-Dard
r ((M
6.3. CONDITIONS OF FORWARD SALE
239
from you forward (salam or salaf), and the other party says: I accept, the
cornerstone of the contract is met. Similarly, it is met if the forward seller (almuslam ilayh) says: I have sold you X, and listed the conditions of salam,
and the forward buyer says: I accept.8
Zufar and the Shafics ruled that the salam contract is not concluded unless
the term forward (salam or salaf) is used. Their proof is that the ruling by
analogy dictates the non-conclusion of this sale of a non-existent objects, but
that the Law allowed it only if one of those two terms is used. With respect
to the term sale (bayc ), the Shafics have two opinions. Some ruled that the
salam cannot be concluded with the term of bayc (=sale), otherwise it would be
a sale. Thus, they ruled that salam is different from regular sales, and cannot
be concluded based on the usage of the latters name. Other Shafics ruled that
it may indeed be concluded thus, since they considered salam to be a type of

sale, which requires receipt of the price during the contract session, thus being
concluded under the name of sale in analogy to currency exchange (s.arf).9
The technical Arabic terms for the various parties in a salam contract are
as follows:
Forward buyer: rabb al-salam or al-muslim.
Forward seller: al-muslam ilayhi.
Object of forward sale: al-muslam fh.
Price (capital sum) of a forward sale: ras m
al al-salam.
For the non-H
. anafs, the forward sale has the same three cornerstones of a
regular sale: (i) parties to the contract (buyer and seller), object of the contract,
and language (offer and acceptance).
6.3
Conditions of forward sale
The conditions of a forward sale may pertain to the price or to the object of sale.
The leaders of juristic schools agreed that salam is valid if it satisfies six conditions: that the object of sale is of known (i) genus, (ii) characteristics, and (iii)
amount; (iv) that the term of deferment be known, (v) that the price be known,
and (vi) that the place of delivery be specified if the objects transportation is
costly.
They have also agreed that salam is permissible for all commodities measured
by volume, weight, length, or number of similar items (e.g. nuts, eggs, etc.),
as detailed below. On the other hand, they have disagreed over some of the
conditions pertaining to the price and object of a forward sale, and with respect
to dismissal of part of a salam. In what follows, I shall list those conditions as
well as the most important differences in opinions in this regard.
8 Al-K
as
an
9 Al-Khat
b
p.297).
c
((H
. anaf), vol.5, p.201), Mar ibn Y
. anbal), ibid.).
Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
240
6.3.1
Conditions for the price of a forward sale
The H
. anafs stipulated six conditions for the price of a forward sale:
1. The genus of the price: The price has to be specified in monetary form
(e.g. gold or silver coins), items measured by volume (e.g. wheat and
barley), or items measured by weight (e.g. cotton, iron, etc.).
2. The type of the price: If there are multiple types of the specified genus
in the area (e.g. multiple gold coins from different sovereign states, multiple types of barley, etc.), then the type must be specified, otherwise
specification of the genus is sufficient.
3. The characteristics of the price must be specified (in terms of good, average, or poor quality).
Those three conditions were stipulated to avoid ignorance in the contract.
In this respect, ignorance of the genus, type, or characteristics of the price
could lead to dispute, and would render the sale defective.10
4. Specification of the amount of the price if it is measured in volume, weight,
or number. Thus, it is not sufficient to point to the price without explicitly
stating its amount. This condition was stipulated by Ab
u H
. anfa and
Sufy
an Al-Thawr. Thus if the forward buyer says: I give you those coins
[or wheat, etc.] as a price of a forward sale, by pointing to the coins or

wheat without their weight or volume being known, then the salam is not
valid. In this respect, ignorance about the price results in ignorance about
the object of sale, and the latter renders the contract defective.11
However, if the price was measured by length (e.g. cloth, rugs, etc.) or
number of non-homogenous items (e.g. watermelons, etc.), then the length
or value of the items need not be stated explicitly. In this case, pointing
to the price and specifying the items suffices for the H
. anafs. Similarly,
specifying the amount or value of the price is not required if it is a specific
and familiar object that was identified by pointing.12
On the other hand, Ab
u Y
usuf, Muh.ammad, the Shafics, and most of
the H
. anbals ruled that knowledge of the amount of the price is not a
condition. In this regard, they ruled that it is sufficient for the seller to
see the price in order to determine its amount. This ruling renders the
price an inspected compensation, in analogy to a specified price of object
of sale in a regular sale.13 No record of Imam Malik is available on this
issue. However, it is known that he permitted gross-sale except in cases
of major uncertainty (e.g. if the amount was very large).14
10 Al-K
c
as
an ((H
am ((H
n
((H
anaf
),
vol.4,
p.215).
.
11 ibid.
12 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol.5, p.338), Al-K
. anaf), vol.5, p.202).
13 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.300), Ibn Qud

amah (, vol.4, p.298).
14 Ibn Rushd Al-Haf
alik), vol.2, p.203), H
shiyat Al-Dus
uq (vol.3, pp.197,218).
. d ((M
.a
241
5. Ab
u H
. anfa stipulated a condition that all coins be inspected to avoid
the ignorance that may lead to dispute and defectiveness of the contract.
However, Muh.ammad and Ab
u Y
usuf ruled that this is not a condition.
6. The payment and receipt of the price during the contract session prior to
the parting of the contractors is a condition, whether the price is fungible
or non-fungible. Thus, if the two parties separate prior to the receipt of
the price, the contract is invalid and void. This follows since the objective
of salam, which is to give the seller the means to produce the object of
sale, is no longer met. Moreover, if the price was a non-fungible object,
and the parties separate without the seller receiving the price, the very
nature of salam (price-forwarding) would not be met. This follows since
the Messenger (pbuh) said: Pay the forward price for a known volume.15
In this regard, the terms salam and salaf (=forward) were used to indicate
the forward payment of the price. Thus, if the price payment is deferred,
the sale would not be salam, and would be invalid. Thus, one of the two
compensations must be received at the contract session for the term salam
to apply.
If the price is a fungible (e.g. currency) it must also be delivered during
the contract session. Otherwise, the sale would be an exchange of one
liability/debt for another, since the object of sale is itself a liability on the
seller. Such deferment would fall under the prohibition of the Messenger
ali bil-k
ali).16
(pbuh) of trading one deferred item for another (bayc al-k
In this respect, since salam by its nature includes an element of uncertainty
(gharar), where the object of sale may perish or fail to exist, it is not
permissible
to add to it the gharar involved in deferring the delivery of the
price.
17
This condition is agreed upon by the H
afics, and H
. anbals.
. anafs, Sh
Imam Malik, on the other hand, ruled that deferment of receiving the
price is permissible for three days or less, even if this deferment is stipulated as a condition of the contract. He ruled thus regardless whether the
15 This is part of the above listed Had
, c.f. Al-H
),
. th
.
. adth
vol.4, p.46).
16 Narrated by Al-D
araqut.n in his Sunan, by Ibn Ab Shaybah, Ish.
aq ibn R
ahawh, and
Al-Bazz
ar in the Musnad of each, on the authority of Ibn c Umar. The language of AlBazz
ar is: The Messenger of All
ah (pbuh) forbade the gharar sales, the sale of one deferred
This language was also narrated
item for another, and the discount re-purchase of debts.
c
by Ibn Udayy in Al-K
amil, and found fault in its chain of narration that included M
us
a
ibn c Ubaydah. Al-H
akim rendered the narration of Al-D
araqut.n (as it appears in the text
.
above) valid, but expressed his concern that the only narration chain included M
us
a ibn
c Ubaydah. Ahmad rendered it a weak narration (dac
.
. f), but recognized that everyone agreed
on the impermissibility of trading debts or liabilities for debts or liabilities. Al-Sh
afic said:
c
The H
ad
th
scholars
consider
this
a
weak
narration.
c.f.
Al-H
a
fiz
Al-Zayla
(1st
edition,
.
. .
(H
), vol.4, p.39), Al-Haytham (, vol.4, p.80), Al-B
alik),
. adth
vol.2, p.153), Al-Shawk

an (, vol.5, p.156).
17 Ibn Al-Hum
c
n
am ((H
as
an ((H
. anaf), vol.5, p.342), Al-K
((H
at.b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az
((Sh
usuf (1st printing
(H
. anbal), vol.2, p.79).
242

object of sale is fungible or not, and bases his opinion on the argument
that salam, as an exchange, remains a forward contract (i.e. with the
price paid before the delivery date for the merchandise) even if the price
receipt is deferred. In this respect, a deferment of three days or less is
close to deferment to the end of the contract session, and this similarity
and proximity should give the two cases the same legal status. Thus, such
a short deferment does not render the price deferred in the legal sense
of al-k
ali.
Malik then ruled that if the price delivery is deferred for more than three
days, then: if the deferment was a stipulated condition, the contract is
defective regardless of the length of deferment. However, if the deferment
was not a condition of th contract, then there are two narrated opinions of
Malik in al-Mudawwanah Al-Kubr
a: one rendering the salam defective in
this case, and the other rendering it not defective regardless of the length
of deferment. The accepted opinion is that any deferment past three days
renders the contract defective.18
6.3.2
Conditions for the object of a forward sale
The H
. anafs stipulated eleven conditions for the object of a forward sale:
1. That its genus is known (e.g. specify whether it is wheat, barley, etc.).
2. That its type is known (e.g. type A wheat, type B wheat, etc.).
3. That its characteristics are known (e.g. high quality, medium quality, or
low quality). Note that specification of the genus, type, and characteristics
is sufficient. Thus, it is not valid in the contract to mention that the price
will be part of new produce, which has not yet formed. That would
constitute a direct sale of a non-existent item, which is not permitted.
4. That its amount is known by volume, weight, number, or size.
The reason for those four conditions, as in the case of the price, is to
eliminate potential ignorance that may lead to dispute and render the
contract defective. The Prophet (pbuh) said: Whoever participates in a
forward sale, let him buy a known volume or known weight for a known
term of deferment.19
5. That the two compensations would not fall under surplus rib
a (rib
a alfad.l); i.e. they should not both be measured by volume or weight, and
they should not be of the same genus. Those two characteristics would
render the sale inclusive of rib
a al-fad.l, and due to deferment also inclusive
of rib
a al-nasah.
18 Ha
iyat Al-Dus
uq (vol.3, p.195), Al-B
alik), vol.4, p.300),
. sh
Ibn Juzayy ((M

alik), p.269).
19 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.337
c
n ((H
onwards), Al-K
as
an ((H
. anaf), vol.4, p.215).
243
Thus, if the price and object of a forward sale are different (e.g. wheat
for money) then the forward sale is valid. In other words, if the two
compensations are measured by different means, and if they are of different
kinds, then the forward sale is valid.20
The Maliks expressed this condition as follows: the price and object of a
forward sale must be of different genera in a manner that permits deferring
one. Thus, it is not permissible to have a forward sale of gold for silver,
since that would constitute rib
a. Similarly, it is not permissible to conduct
a forward sale of food in compensation for other food. However, it is
permissible to forward sell animals for gold and silver, regular goods for
food, and regular goods for other regular goods.21
6. That the object of a forward sale be identifiable by specification (yatac ayyan
bi-l-tac yn). Thus, forward sales are not permissible if the object of sale is
gold or silver coins, which are not identifiable and thus do not qualify as
an object of sale. As for gold bullion and raw gold, there are two opinions:
one states that they may not be objects of forward sales in analogy to gold
coins, and another states that they are regular goods and may be objects
of forward sales.
As an exception, Ab
uH
u Y
usuf ruled that forward sales of
. anfa and Ab
fiat money (copper coins in their case) are permissible. They reasoned that
such coins (or monies) are not a universal price, since they are only used as
a price by convention. Thus, they view such coins as regular commodities
that can be identified. Muh.ammad, on the other hand, ruled that such
coins are universal prices, and may not be sold in a forward contract.22
7. Jurists differed over the condition that the object of a forward sale be
deferred. Thus, we discuss the legal status of the forward sale of an immediately delivered good.
The H
. anbals ruled that deferment of the object
of sale is a condition for validity. Their proof is the Prophets (pbuh)
saying: Whoever participates in a forward contract should buy a known
volume or weight for a known deferment term, which makes deferment a
condition, just as it makes measurement by weight or volume a condition.
Moreover, they argued, the legalization of salam was meant to relieve
the people of unnecessary burdens, and such relief is only effected by
deferment. Thus, if there is no deferment, there is no relief, and the
contract is not valid. In this regard, viewing the permissibility of salam as
a license requires that it be restricted only to the circumstances for which
it was permitted.23
c
((H
n ((H
. anaf), vol.5, pp.186,214), Ibn Abid
. anaf), vol.4, p.217).
Juzayy ((M
alik), p.269).
22 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, p.136), Al-K
. anaf), vol.5, pp.208,212).
23 Al-Sarakh
s (1st edition (H
as
an ((H
. anaf), vol.12, p.125), Al-K
Al-Hum
am ((H
alik), vol.4, p.297),
. anaf), vol.5, p.335), Al-B
Ibn Rushd Al-H
afd ((M
alik), vol.2, p.201), H
a
shiyat Al-Dus
uq (vol.3, p.205 onwards),
.
.
20 Al-K
as
an
21 Ibn
244

Al-Shafic ruled that forward contracts are valid whether the object of
sale is deferred or not. He reasoned thus: if salam is permitted with a

deferred object of sale, then it must be permitted with an immediately
delivered object of sale, since the latter case eliminates gharar. Therefore,
he argues that the statement in the H

of a known term
of deferment
. adth
necessitates knowledge of that term and not the deferment itself. He

further argued that salam still serves a purpose in this case that is not
served by regular sales, in that the former permits the contract while
the object of sale is absent at the contract session. In this regard, the
Shafics render as invalid sales of items that are not present and seen at
the contract session. This follows since deferring the contract to bring the
merchandise may cause the latter to become defective, or since the buyer
may not be able to collect the merchandise or to void the contract that
would be established and binding.24
Jurists also disagreed over the deferment period in a forward sale:
The H
. anafs and H
. anbals ruled that the term of a salam should be
approximately one month, since that is the earliest for an item to be
considered deferred, and the shortest for it to be considered forward.
The Maliks ruled that the shortest a deferment can be is half a
month. Their proof is that this period is sufficiently long for market
conditions to change, which may make it possible for the seller to
obtain the object of the forward sale. An exception to this rule
is considered if a condition of the forward sale was receipt of the
object of sale as soon as it arrived to a city other than that where
the contract took place, and where the distance between the two
cities is two days or more. In this case, the distance between the
two cities gives sufficient reason to expect differences in markets in
the two places. Moreover, for this exception to apply, the contract
must also include conditions that travel to the other city will begin
immediately, and the buyer and seller (or their agents) must indeed
leave, and the price must be delivered during the contract session or
thereafter. Finally, the travel distance between the two cities must
be two days on land or without wind, otherwise the distance may
be cut in half a day with favorable wind, resulting in immediate
forward sale (al-salam al-h.a
ll). Thus, if any of those five conditions
is not satisfied, the period of deferment must be specified. However,
the Maliks rule that if all five conditions are satisfied, then the term
of deferment need not be specified.
Jurists agreed that the term of deferment must be known, based on
the verse: When you deal with each other in transactions involving
Ibn Qud
amah (, vol.4, p.289), Ibn Juzayy ((M
alik), p.269), Marc ibn Y
. anbal), vol.2, p.78).
24 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
p.105).
245
future obligations in a fixed period of time [2:282], and the Prophets

(bpuh) saying: To a known term of deferment. Moreover, by knowing the term of deferment, the date of delivery of the object of forward
sale is specified, while lack of knowledge of that date would constitute gharar for the forward buyer. However, they have differed over
the means
by which this term of deferment is known.
The H
afics ruled that precise date must
. anafs, H
. anbals, and Sh
be specified. Thus, they do not consider valid a deferment until

harvest time, some festival with a variable, or any season such as
summer or winter etc.25 Their proof is the Messenger of Allahs
(pbuh) saying: To a known term of deferment. In this regard,
specifying a vague date would give rise to legal dispute. This
as: Do
opinion is further supported by the saying of Ibn c Abb
not sell with a deferred term until harvest or threshing time,
and do not sell with deferment unless you specify a particular
month.26
The Maliks ruled that salam is permissible when its term of
deferment is specified as vaguely as the times stated above. In
such cases, the specific time of delivery is considered the most
likely time for the occurrence of such events, which is usually the
middle of the period when its occurrence is possible. Their proof
is that such a deferment is to a time that is known by convention, and that cannot vary significantly, thus being equivalent to
deferment until the first of the year.27
8. That the genus of the object of sale exists in the market in the specified
type and characteristics continuously from the contract time until the
delivery time, and where it cannot be imagined to become unavailable
(e.g. grains). Thus, if the object of sale does not exist at the time of
contract or the time of delivery, or if it becomes unavailable in the interim
(e.g. fruits, milk, etc.), then the forward sale is not permitted. In this
regard, the ability to deliver the merchandise may be put in doubt if
the object is not available at any such time, while its availability in the
market establishes its deliverability. In short, this condition is stipulated
to guarantee that the object of the forward sale will be delivered.
Based on this ruling, if the object of a forward sale is restricted to a
specific location, then if its existence can be jeopardized by natural
causes (e.g. the wheat of a specific village or plot of land), then the
forward contract is not permitted. In this case, the deliverability of
the merchandise is not certain, which results into gharar that is not
necessary, thus rendering the contract invalid. However,

if there was
25 Ibn
Al-Hum
am ((H
. anaf), vol.5, pp.222,336).
that Al-Bayhaq narrated this saying in Kit
ab Al-Mac rifa on the authority
c
of Al-Sh
afic, c.f. Al-H
a
fiz
Al-Zayla
(1st
edition,
(H
ad
th
),
vol.4,
p.21).
. .
.
27 Al-B
alik), p.269).
26 Al-Zaylac
said
246

no or, perhaps, a very remote possibility that the object of sale would
not exist (e.g. where the object of the forward sale is Iraqi wheat, or
Irani wheat, etc.), then the forward contract is permitted, since such
merchandise will most probably exist at delivery time, and most
probable events have the same legal status as ones that are certain.
On the other hand, some of the major H
. anaf jurists ruled that forward sales are not permitted if the object of sale is defined by as
product of a large city or state. Literally, they ruled that such sales
are not permitted in this case unless the object of sale is foodstuffs
produced in a particular state, since the probability of non-existence
of the produce of any smaller unit is non-negligible. The correct
opinion, however, is the one stated earlier.28 Those are the views of
the H
. anafs.
. anbals stipulated the condition that the
object of sale be generally existent, and very unlikely to vanish, only

at the time of delivery, regardless of whether or not it existed at
the contract time. In this regard, they argue that what matters is
the deliverability of the merchandise, thus only the time of delivery
should be considered. Another proof is the tradition that the Prophet
(pbuh) arrived to Madnah and found the merchants trading in fruits
with one and many year forward contracts, then said: Whoever
engages in a forward sale, let him specify a known volume or weight,
and a known term of deferment. Thus, he (pbuh) did not make it
a condition that the object of sale exist at the time of the forward
contract. If such a condition had existed, he (pbuh) would have
mentioned it, and he would have forbidden them from engaging in
forward sales of term two years, since the fruits will clearly fail to
aliks stipulated
exist in the middle of the year.29 In addition, the M
the condition that the liability for the object of forward sale be for a
fungible, thus rendering impermissible forward sales in the produce
of a specific village or a particular building.30
It is apparent that the inferences made by the non-H
. anafs are more compelling and more wide-ranging.31 One of the aspects of the H
. anaf inference is the following: if the time of delivery of the object of a forward sale
arrives, and if the object of sale is not available at that time, then the
buyer has the option of waiting until it is available, or to void the sale and
take back the price.32
28 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.331),
Al-K
as
an ((H
. anaf), vol.5, p.211).
29 Al-B
alik), vol.4, p.300), H
shiyat Al-Dus
uq (vol.3, p.211),
.a

u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.298),
Ibn Qud
. anbal), vol.2, p.79).
30 Ibn Juzayy ((M
alik), p.269).
31c Aqd Al-Bayc by Professor Al-Zarq
a (p.120).
c
c
32 Ibn c Abid
n ((H
. anaf), vol.4, p.214), Aqd Al-Bay (ibid.).
247
9. That the contract is binding, with no condition options for either of the
parties to the contract. Thus, if a person engages in a forward sale of one
unit of currency in exchange for one measure of wheat, on condition that
he has an option for three days, and then if he receives the price and the
two parties leave the contract session, the forward contract is rendered
defective. In this regard, the permissibility of sales with a conditional
option was established against the rule by analogy (qiy
as) based on the
need for such contracts. However, since the ruling was not in accordance
with analogy, it cannot be used in a further analogy from regular sales to
forward sales. Moreover, there is no need for options in a forward sale,
since options are legalized to avoid inequity (ghubn), while salam is built
on inequity and price reduction, thus not beinga candidate for the validity
of options.
In the above mentioned case, if the two parties of the forward sale agreed
to void the option prior to leaving the contract session, and if the price
was already in the possession of the seller, then the contract is rendered
valid by the majority of H
. anafs, while Zufar had the opposite opinion.
However, if the price perished, then the contract is not considered valid,
since the price in this case was a liability on the seller, and a forward
contract cannot be established with a price that is a liability.
We can infer from this condition a subsidiary condition that the price of
a forward sale be received during the contract session, since stipulating a
condition would have led to a delay in the payment of the price.
Note that the inspection and defect options as they relate to the price
of a forward contract do not render the contract defective if the price
is a specific fungible or non-fungible item. This follows since the two
mentioned options do not prevent ownership of the compensation for this
price from being established.
On the other hand, jurists agree that the inspection option is not established for the object of a forward sale, since such an option is not applicable
to items that are owned as a liability on another. In this case, there is
no benefit to be derived from such an option, since its effect would be
the buyers ability to return the absent merchandise if it does not meet
the buyers expectations. However, the object of a forward sale is not a
specific item, but rather a liability that can be replaced by a similar one.
Thus, if upon seeing the object the buyer were to return it to the seller,
the object of sale returns to its status as a liability on the seller (to be satisfied by another object), and no progress is made. Thus, the description
of the object of a forward sale is sufficient for its validity since it plays the
role of inspection.
In contrast, the defect option for the object of a forward sale is established
in such sales. This follows since such options do not prevent the receipt
by means of which the contract is concluded.33
33 Ibn
c
c
Al-Hum
am ((H
a (p.119).
248
10. The location of delivery must be specified if the objec of a forward sale is
not easily portable (e.g. wheat or barley). This condition for the permissibility of salam is stipulated by Ab
u-H
u Y
usuf
. anfa, in contrast to Ab
and Muh.ammad who do not stipulate it. All three agree that ignorance of
the location of delivery renders the salam impermissible since it may lead
to dispute, but differ over whether or not the specification of the delivery
location is made necessary by the difficulty of moving the merchandise.
In this regard, Ab
u H
. anfa ruled that the location of the contract
session is not rendered the delivery location by default. Thus, unless
the delivery location is specified, it remains unknown and this ignorance may lead to legal disputes over the cost of transportation. In
contrast, Ab
u Y
usuf and Muh.ammad ruled that the location of the
contract session is the default location of delivery, thus eliminating
ignorance and rendering the salam valid. In this regard, the obligation to deliver stems from the contract, and thus inherits its location
by default, in analogy to the sale of a specific non-fungible.
A counter-argument may be phrased as follows: the contract takes
place because of its parties, and not its place. Thus, the location of
the contract session is the location of the parties to the contract, but
not necessarily the location of the contract itself. Thus the location
of the contract is not necessarily specified.
This difference of opinion is relevant for the specification of the delivery location for the rent in a lease contract if its transportation
is costly. Ab
u H
. anfa thus ruled that the contract is not valid if
the location of rent delivery is not specified. For Ab
u Y
usuf and
Muh.ammad, on the other hand, the contract is valid, and the location of rent delivery is the same as the location of delivery of the
object of lease. Thus, if the leased object were a house or plot of
land, then the rent should be delivered there; if the leased object is
an animal, then the location of delivery is the point from which the
animal began its motion; and if the leased object is a dress sent to a
dye house, then the rent is delivered at the same location where the
dress is delivered. Note that the delivery location is implicitly specified for Ab
u Y
usuf and Muh.ammad at the location of the contract
session if delivery at such a location is possible. If it is not (e.g. if
the contract session was on a ship or on top of a mountain), then the
closest feasible location is specified as the delivery location.
In case the object of a forward sale was easily portable (e.g. jewelry,
etc.), there are two narrations of opposite opinions of Ab
uH
. anfa :
one is that the delivery location is specified by default as the location
of the contract session, in accordance with the opinions of Ab
u Y
usuf
and Muh.ammad. However, the more accepted narrated opinion of
the H
. anafs is that the object should be delivered wherever the two
parties meet, and not necessarily at the location of the contract session. In this regard, all locations will be equally good, since the value
249
of easily portable merchandise does not depend on its location.34

If the parties to the contract did indeed specify a delivery location,
then this specification is binding if the object of sale is not easily
portable. However, if it is easily portable, then there are two narrated
opinions: the first is that this specification of location is not binding, and the seller may deliver the merchandise wherever he wishes;
but the second and more correct opinion is that the specification is
binding since it saves the buyer the risk of travel.35
The Maliks ruled that it is always better to specify the delivery
location as a condition of the forward contract.36
The Shafics ruled that if the object of a forward sale were to be de
livered at an inappropriate delivery location, or one that imposes significant transportation costs, then the specification of delivery must
be stipulated as a condition. However, if it were to be delivered to
an appropriate location and if it were easily portable, then the specification of the delivery location is not a condition, and convention
dictates that the contract session location is the delivery location.37
The H
. anbals ruled that the specification of a location of delivery is
not a condition for a forward contract, unless the location of the contract was not on a ship or similar location. In case of disagreement,
the contract session location is specified by default as the delivery
location.38
11. The object of a forward sale must have the same distinguishing characteristics as the price, i.e. that it must be a fungible good, which may thus be
established as a liability on the seller. Specifically, the object of sale must
be measurable by volume, weight, size, or numbers of homogenous items
(e.g. grains, fruits, flour, clothes, cotton, iron, lead, medicines, walnuts,
and eggs). In such commodities, the quality and quantity of the objects
of sale to be delivered can be specified in a highly accurate manner, thus
preventing the potential for legal dispute.
However, if the objects cannot be accurately described (e.g. nonhomogenous items measured by number or size such as homes, buildings, jewelry, leather, wood, parts of edible animals, and large nonhomogenous fruits), then they may not be used as objects of forward
sales. In such cases, the specification of the genus, type, characteristics, and quantity of the good is not sufficient to eliminate major
ignorance that may lead to dispute, due to the vast range of items
that fit in this category. The significant differences within such categories lead to significant differences in price and value, and thus the
34 Al-K
as
an
((H
am ((H
. anaf), vol.5, p.213).
c
((H
n ((H
Juzayy ((M
alik), p.270).
37 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.104).
.
38 Mar
c
ibn Y
. anbal), vol.2, p.80).
35 Al-K
as
an
36 Ibn
250

sale would be among the forbidden sales of unknowns. This is the
opinion of the H
. anafs. We note, further, that they have permitted
forward sales of homogenous countables by any measure (volume,
weight, or number). However, for heterogeneous countables, they
have rendered forward sales impermissible whether by weight or by
number.39
The Maliks ruled that forward sales are valid for objects that can
be described sufficiently well. For those objects that cannot be sufficiently well described, the sale is still valid if the buyer specifies
items that have known genus, characteristics (as well as weight, volume, size, or number for items thus measured). Thus, they argue
that the condition of validity for a forward contract is the ability to
control the nature of the object of sale, where such control is determined by convention via weight, volume, size or number. As for
homogenous countable items, they rule that forward sales are valid
by number, since there is no significant variance among such items.40
The Shafics ruled that forward sales are valid if and only if the object
of sale can be controlled by description. In the case of homogenous

countables, they ruled that they may be sold in a forward contract by
volume, weight or size, but not by number since there is some variance
among them (in analogy to watermelons). As for non-homogenous
countables (e.g. watermelon, eggplant, etc.) they may be forward
sold by weight but not volume (due to variance in shape and volume)
or number (due to the same variance).41
The H
. anbals ruled that forward sales are valid if and only if the
object of sale can be controlled by description (e.g. items measured
by weight and volume). With respect to non-homogenous countables,
there are two types: one type for which the size of the units can be
controlled, and can be forward sold by number, and a type that may
only be forward sold by weight, as argued by the Shafics.42
Thus, the Shafic and H

. anbal opinions on this matter are similar to
those of the H
. anafs, with differences only over homogeneous and nonhomogenous countables. The M
aliks, on the other hand, were the only
ones to permit forward sales for items that cannot be controlled by description.
39 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, pp.131,136), Al-K
. anaf), vol.5, p.208
c
n ((H
onwards), Ibn Al-Hum
am ((H
. anaf),
. anaf), vol.5, p.324 onwards and 354), Ibn Abid
c
vol.4, p.213), Al-Far
aid Al-Bahiyyah fI Al-Qaw
a id Al-Fiqhiyyah by Sheikh Mah.m
ud H
. amzah

(p.39).
40 Ibn Rushd Al-Haf
alik), vol.2, p.200), H
shiyat Al-Dus
uq (vol.3, pp.207,215), Al. d ((M
.a
B
alik), vol.4, pp.292,294,296).
41 Ab
c
u-Ish.
aq Al-Shr
az ((Sh
afi ), vol.1, pp.297,299), Al-Khat.b Al-Shirbn ((Sh
afic),
vol.2, p.107).
42 Ibn Qud
amah (, vol.4, pp.276,288 onwards).
251
In what follows, I list the legal status of some objects of sale with regards to
the possibility of controlling the object by means of description:
6.3.3
Forward sales of animals and their parts
There is a consensus that the fat tails and other fats of animals may be forward
sold by weight. However, jurists differed over forward sales of the entire animal:
The H
. anafs ruled that forward sales of animals are categorically not permitted. Their proof is the narration on the authority of Ibn c Abb
as that
the Prophet (pbuh) prohibited forward sales of animals.43 Another proof
is the fact that animals are very heterogeneous, and thus their characteristics cannot be controlled sufficiently accurately to determine its fair price,
thus leading to potential legal disputes in analogy to the sales of heterogeneous countables.44 Thus, forward sales of sheep (which is a common
practice) is not valid due to their vast heterogeneity.
. anbals ruled that forward sales are permissible
for animals in analogy (qiy

as) to the permissibility of loaning an animal.
Muslim narrated that the Prophet (pbuh) borrowed a young camel.45
Ab
u D
aw
ud narrated that the Prophet (pbuh) ordered c Abdullah ibn
c
. (mAbpwh) to buy one camel in exchange for the deferred
Amr ibn Al-c As
price of two camels.46 This latter transaction is a forward sale (salam)
and not a loan, since it includes an increase over the merchandise as well as
deferment. With regard to the H
forbidding forward sales of animals,
. adth
Ibn Al-Samc an said that it is not established, despite the fact that it
was narrated by Al-H
. akim. However, the validity of forward sales of
animals in those three schools is conditioned upon the specification of its
genus, age, gender, color, and approximate size.47
43 Narrated by Al-H
araqut.n on the authority of Ibn c Abb
as. Al-H
akim
. akim and Al-D
.
judged that its narration chain is valid (s.ah.h.), but that it was not narrated by Al-Bukh
ar
.
and Muslim. The correct analysis, however, is that its chain of narration contains Ish.
aq ibn
Ibr
ahm ibn J
ut, whose narrations are considered weak. Ibn H
an said that this persons
. ibb
narrations are very doubtful; he narrates rejected sayings on the authority of well-accepted
narrators, and it is only permitted to list his narrations to express astonishment, c.f. Al-H
afiz.
.
), vol.4, p.46), Ibn H
. adth
. ajar (, p.245).
44 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, p.131), Al-K
wards), Ibn Al-Hum
am ((H
. anaf), vol.5, p.209).
45 The chain of narration of this Had
will be discussed in the section on loans.
. th
46 Narrated by Ab
u D
aw
ud, and Al-D
araqut.n and Al-Bayhaq on his authority. Its chain
of narration includes Ibn Ish.
aq, resulting in differing opinions on its authenticity. However,
Al-Bayhaq also narrated it in Al-Khil
afiy
at on the authority of c Amr ibn Shuc ayb on the
authority of his father and grand father, and rendered it valid (s.ah.h.), c.f. Ibn H
. ajar (,
p.235).
47 Al-B
alik),
. afd ((M
vol.2, p.200), H
shiyat Al-Dus
uq (vol.3, pp.207,209), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2,
.a
p.110), Ibn Qud

amah (, vol.4, pp.278,282), Marc ibn Y
. anbal), vol.2,
p.72).
252
6.3.4
Forward sales of meat attached to bones
Ab
u H
. anfa ruled that forward sales of meat attached to bones is not
permitted due to excessive ignorance that may lead to legal dispute. Such
ignorance may relate to the fatness or leanness of the meat, and the proportion of meat to bones. The better supported of his opinions further
renders not permissible the sale of meat that was detached from bones
since it still contains ignorance with respect to fatness or leanness. In this
regard, he finds that this one type of ignorance is sufficient, since a legal
status based on two independent reasons is equally established by only
one of them.
Ab
u Y
usuf and Muh.ammad, the M
aliks, the Shafics and the H
. anbals all
ruled that forward sales of meat are valid provided that its characteristics
are controlled for by listing the type of meat (lamb or beef), as well as
the characteristics of the animal (gender, whether or not it was castrated,
fed or wild, its age, its fatness, the part of the body from which it was
taken, and its amount). Their proof is the H
: Whosoever engages
. adth
in a forward sale, let the contract be in a known volume or weight. The

apparent ruling based on this H
is the permissibility of sales of all
. adth
goods measured by weight. Moreover, if forward sales of an animal is

permissible, then surely the forward sales of its meat will be more worthy
of permissibility.48
6.3.5
Forward sales of fish
The majority of jurists treat forward sales of fish the same way they treat
forward sales of meat. There are multiple narrations on the opinion of Ab
u
H
. anfa on this matter, the most accepted in his school is that forward sales of
small fish by volume or weight is not permitted. In this regard, fresh and salted
small fish are treated equally, since small fish cannot be distinguished in terms
of fatness or leanness, or the proportion of bone to meat, as it is possible in
meat. As for old fish, the apparent narration is that he permits their sale in
any form by weight.49
6.3.6
Forward sales of clothes
Clothes are among the heterogeneous countable goods for which the H
. anafs
ruled by analogy that forward sales are not permissible, based on the vast heterogeneity. Forward sales of clothes can be permitted based on juristic approbation (istih.s
an) only if the genus and type are specified, as well as the thickness
of the cloth, and its size. In such a case, clothes are treated in the same manner
48 Ibn Rushd Al-Haf
alik), vol.2, p.200), H
shiyat Al-Dus
uq (vol.3, pp.207,209), Al. d ((M
.a

afic), vol.2, pp.111 onwards), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
c
p.298), Ibn Qud
amah (, vol.3, p.280), Mar ibn Y
. anbal), vol.2, p.71).
49 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.211),
c
n ((H
Al-K
as
an ((H
. anaf), vol.4, p.213).
253
as homogeneous goods due to the need and customary practice of people to deal
in them with forward contracts.
However, if the dress is made of silk, the masters of the school have disagreed regarding the specification of its weight. The best accepted opinion is
the requirement that its weight be specified, since it is part of what is desired
in the dress, and since the value of silk is determined by its weight.50
. anbals permitted the forward sales of clothes
as we noted earlier.51 Ibn Al-Mundhir reported that they all agreed on the
permissibility of forward sales of clothes.52
6.3.7
Forward sales of hay
The H
. anafs ruled that forward sales of straw or hay by bunches or volumes is
not permitted, due to significant heterogeneity between two bunches. However,
they ruled that its forward sale by weight is permitted. The same ruling applies
to wood, which may not be forward sold by volume, but may be by weight.53
6.3.8
Forward sales of bread
There is agreement that forward sales of bread by the number of loaves is not
permitted due to extreme heterogeneity between loaves. Moreover, Al-Karkh
ruled that forward sales of bread by weight is not permissible either, due to
extreme heterogeneity between baked and unbaked bread in weight. Thus, ignorance that may lead to legal dispute persists even if it is forward sold by
weight.
It is reported in the Naw
adir of Ibn Rustum that such sales are not permitted in the opinion of Ab
uH
. anfa and Muh.ammad, and that is also the position
of the Shafics. This ruling is based on the fact that it is difficult to control the
characteristics of the bread to be delivered due to the great variance in its characteristics caused by its varying exposure to fire. However, Ab
u Y
usuf permits
the forward sales of bread if specific type, weight, and term of deferment are
stipulated.54
The Maliks and H
. anbals ruled that forward sales of bread, and similar
goods that can be controlled and that are exposed to fire, are valid. Their proof
is that the apparent meaning of the H
: Whoever engages in a forward
. adth
contract, let him contract over a known volume or weight is the permission
of forward sales for all goods measured by volume, weight, or number. In this
regard, the effect of exposure to fire is known by custom, and can be controlled
by the degree of moisture of the bread, thus permitting forward sales.55
50 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, p.133), Al-K
Al-Hum
am ((H
. anaf), vol.5, p.209).
51 Ibn Juzayy ((M
afic), vol.2, p.107), Marc ibn
Y
. anbal), vol.2, p.72).
52 Ibn Qud
amah (, vol.4, p.276).
53 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.209).
54 Ibn Al-Hum
am ((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.297).
. anaf), vol.5, p.211), Ab
55 Ibn Qud
amah (, vol.4, p.277), Al-Shac ar
an ((Sh
254
6.3.9
Lending bread
Ab
uH
. anfa ruled that it is not permissible to lend or borrow bread by
weight or number, in analogy to forward sales. In contrast, Ab
u Y
usuf
permitted lending bread by weight, but not by number, also in analogy
to his ruling on forward sales of bread. Muh.ammad, on the other hand,
permitted lending bread by number or weight based on meeting the needs
of people and acceptance of convention, even if the bread is not homogeneous. The latest opinion is the accepted one in the H
. anaf school based
on customary practice and need.56
The Maliks ruled that lending bread is permitted by number or weight
to meet peoples need, and since loaves are sufficiently homogeneous to
permit lending by number.57
The more accepted opinion among the Shafics and H
. anbals is the permis
sibility of lending bread by number or weight, based on the commonality
ah (mAbpwh) narof this practice across times and countries.58 c Aish
rated: I said: Oh Messenger of Allah, people borrow bread and yeast

from their neighbors, and they return more or less, is this permissible?
He (pbuh) said: there is no harm in this; it is a common practice of the
people, and the increase or diminution is not what they intend.59
6.3.10
Sh
afic conditions for forward sales
I summarize here the conditions of forward sales (salam) in the Shafic school
to contrast them with the H

. anaf conditions:
1. The conditions pertaining to the parties of a forward sale are the same
as the conditions for a regular sale contract (being of legal age, sanity,
discernment, and freedom of choice). However, forward sales are permitted
for a blind person, since the object of the forward sale is established as a
liability on the seller determined by description (maws.u
f f al-dhimmah).
This is in contrast to their ruling of invalidity of a regular purchase by a

blind person due to their requirement of inspection (viewing) of the object
of sale.
2. The conditions pertaining to the language of a forward sale are the same
as those for a regular sale (unity of the contract session, correspondence of
56 Al-Samarqand
c
((H
n ((H
as
an
. anaf), vol.4, p.195), Al-K
((H
. anaf), vol.5, p.299).
57 Ha
iyat Al-Dus
uq (vol.3, p.222).
. sh
58 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
p.119), Ibn Qud

amah (, vol.4, p.319).
59 Narrated by Ab
ah (mAbpwh), and also on the

u Bakr Al-Sh
af on the authority of c Aish
authority of Muc
adh ibn Jabal that He (pbuh) was asked about the borrowing and lending of
bread and yeast. He (pbuh) said: Glory be to All

ah, this is indeed one of the best character
traits of mankind, so take the larger amount and give the smaller, or take the smaller and
give the bigger, the best among you is the one who is best in paying back his debts. I heard
ah (pbuh) say that, c.f. Ibn Qud
amah (, vol.4, p.319).
6.4. LEGAL STATUS OF FORWARD SALES
255
the offer and acceptance), and they add the condition that the language of
the forward contract explicitly uses the term for forward payment (salam
or salaf), and render the contract invalid if it does not use this language.
They also make it a condition that the contract is void of conditional
options that would delay the payment of the price in the forward contract,
which is forbidden in salam.
3. The price must be known to both parties in quantity and description,
and it must be delivered during the contract session prior to the physical
parting of the parties of the contract, to prevent a [forbidden] trade of one
debt for another.
4. There are seven conditions for the object of a forward sale:
(a) That its characteristics can be controlled by a description that would
negate any ignorance, and that the degree of heterogeneity in this
good is minor.
(b) That its genus, kind, amount, and characteristics are known to both
parties.
(c) That it is not a mixture of different genera (e.g. wheat and barley,
etc.).
(d) That the object of sale is a fungible established by description as a
liability on the seller. Thus, if the object of a forward sale is specified
to the point of being non-fungible (i.e. it becomes a c ayn), then the
forward sale is not valid.
(e) That it is deliverable according to the specified description at the
specified time. Thus, the object of a forward sale may not be replaced
by another good (e.g. delivering wheat instead of fat, or iron in place
of clothes, etc.). Consequently, forward sales are invalid if the object
of the forward sale is usually non-existent at the specified delivery
time (e.g. fresh grapes in the winter time).
(f) That the term of deferment, i.e. the time of delivery, is specified
precisely. Thus, forward sales for an unknown term or without the
specification of a specific term (e.g. when so-and-so returns, or at
harvest time, etc.) are invalid.
(g) If the location of the contract is not eligible as a place of delivery
of the object of forward sale, or if the object is not easily mobile,
then the location of delivery of the object of sale is necessary for the
validity of the contract.
6.4
Legal status of forward sales
The legal consequence of a forward sale is the establishment of deferred ownership of the object of sale to the buyer, in exchange for the establishment of
256
immediate ownership of the specific price (or one established by description as

a liability on the buyer) to the seller. This contract was permitted as a special
license (rukh.sah) to meet peoples needs. However, it has a number of extra
conditions for its validity, which are not conditions for regular sales, and that
we have listed above.
6.5
Differences between forward and regular sales
The special conditions imposed on forward sales result in a number of differences

between this type of contract and a standard sales contract:
6.5.1
Exchange during the contract session
Exchanging the price of a forward sale for another good of a different genus
prior to its receipt was ruled impermissible by the H
. anafs. This is in contrast
to the price in a regular sale, which may be exchanged if it is fungible. The
difference between the two cases is the fact that receipt of the price is one of the
conditions of a forward sale. In this regard, exchanging the price of a forward
sale for other goods in effect results in non-receipt of the price named in the
contract. In contrast, the immediate receipt of the price is not a condition for a
regular sale, and thus a replacement may play the same role as the named price.
This ruling also applies to the currency exchange contract, where immediate
receipt of the two exchanged items is a condition, and neither may thus be
replaced by another good.
The H
. anafs also ruled with the impermissibility of the exchange of different
goods for the object of a forward sale prior to receipt, in analogy to the sale of
a mobile non-fungible good. In this regard, while the object of a forward sale is
fungible, it is mobile, and the sale of a mobile object of sale prior to receipt is
impermissible.60
If a forward sale is voided or revoked by the contracting parties, it is not
permissible for the seller to exchange the price of the forward sale (which he
now holds) for other goods. In other words, the buyer in the forward sale may
not replace the original contract with a purchase of goods with the same price
he paid in advance in the salam. Ab
uH
u Y
usuf, and Muh.ammad all
. anfa, Ab
agreed on this opinion based on juristic approbation (istih.s
an).61 Their proof
is the H
ad
th
of
the
Prophet
(pbuh):
Do
not
take
a
replacement
in lieu of your
.
60 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.203).
ruled that this practice is impermissible only if the object of the forward sales was
foodstuffs, based on the prohibition by the Messenger of All
ah (pbuh) of selling foodstuffs
prior to their receipt, c.f. Ibn Rushd Al-H
afd ((M
alik), vol.2, p.205). Al-Sh
afic, and in one
.
of the opinions reported on behalf of Ah.mad, permitted this sale, since the forward buyer
has regained ownership of the price through the revocation, thus establishing that price as a
liability on the forward seller, who is exonerated from the liability to deliver the object of the
forward sale. Thus, they argue, the buyer can use this price to buy whatever he wishes from
whomsoever he wishes, c.f. Al-Sh
afic (, vol.3, p.117), Ibn Qud
amah (, vol.4, p.304).
61 M
alik
6.5. DIFFERENCES BETWEEN FORWARD AND REGULAR SALES 257

object or price of a forward sale,62 Another proof is derived from the fact that
revocation is a new sale that includes rights for a third party other than the
buyer and seller, where the third party in this case is the Law itself. In this new
sale, the price is the object of sale, and thus there is a similarity between the
price and the object of sale. Since as a general rule the object of sale may
not be resold prior to receipt, the same applies to other items that are similar
to the object of sale.
Reasoning by analogy would render the exchange of the price after revocation
or voiding of the forward sale permissible, whether the price were fungible or
non-fungible. This is the ruling of Zufar, since the price after the revocation is
established as a liability on the forward seller. Thus, such an exchange becomes
permissible in analogy to the exchange of other liabilities. This opinion is refuted
by the H
and logical arguments listed in the previous paragraph.63
. adth
The H
. anaf jurists agreed that replacing one of the two sides of a currency
exchange contract by another good, prior to receipt and after revocation, is
permissible. In this regard, the counterpart of the currency to be exchanged
cannot be identified by identification (l
a yatac ayyan bi-l-tac yn). Thus, the two
parties may keep what they had agreed on in the currency exchange contract,
and exchange replacements prior to departing from the revocation session.
They also agreed that receipt of the price in a forward contract is not a
condition for the validity of a revocation of that contract. This follows since the
legal status of the revocation contract is not similar to the status of the contract
establishing the forward sale in all regards. In this regard, the condition of
immediate receipt of the price in a forward contract was established to avoid
the forbidden sale of one liability for another. Since the revocation renders
object of the forward sale is no longer a liability, the danger of trading one
liability for another is no longer present, and immediate receipt is no longer a
condition.64
In contrast, immediate receipt in currency exchange contracts is a condition
for the validity of revocation. In this regard, if we consider the revocation as
a new sale as Ab
u Y
usuf argued then the reason for requiring receipt is
obvious. On the other hand, if we consider the revocation a voiding of the
rights of the parties of the contract as Ab
uH
. anfa argued then it is legally
considered to be a sale. In this context, Ab
uH
. anfa ruled that revocation is a
new sale resulting in rights of parties other than the buyer and seller. Once the
revocation is rendered a sale, the price and object of sale must be exchanged to
avoid the danger of prohibited trading of one liability for another.65
Finally, the H
. anaf jurists agreed that if the forward sale was defective at
its inception, then there is no harm in replacing one or both of its exchanged
62 The text of this Had
, as narrated by Al-D
araqut.n on the authority of Ibn c Umar,
. th
is: Whosoever engages in a forward sale, let him not take an item other than the price or
the object of the his forward sale, i.e. if the contract is voided. Other narrations exist in
Ab
u D
aw
ud and elsewhere, c.f. Al-Shawk
an (, vol.5, p.227), Al-H
afiz. Al-Zaylac (1st edition,
.
(H
), vol.4, p.51).
. adth
63 Al-K
c
n ((H
as
an ((H
64 Al-K
c Abid
n
((H
as
an ((H
anaf
),
ibid.),
Ibn
. anaf), vol.4, p.219).
.
65 Ibn Al-Hum
c
n ((H
am ((H
. anaf), vol.4, pp.219-245).
258
elements prior to receipt. This follows since the defective forward sale does not
have the legal status of a valid forward sale, thus permitting replacement of its
exchanges in analogy to other liabilities in fungibles.
Note that other schools of jurisprudence have also agreed with the ruling
of impermissibility of replacing the price or object of a forward sale with other
goods.66
6.5.2
Revocation of part of a forward sale
It is permissible for the forward buyer to take part of his price and part of the
object of the forward sale before or at the term of the forward sale, provided
that this is done with the consent of the forward seller. The legal status of
the sale would thus be a revocation of part of the forward sale, while keeping
the rest of the contract in place. This is the ruling of the majority of jurists,
based on the argument that taking back the price is a total revocation, which
is unanimously permitted in total. Thus, a partial revocation is also permitted,
in analogy to sales of non-fungibles. This ruling is based on the more accepted
opinion that revocation is a voiding of a previous contract, and is not in itself a
sale.
Imam Malik and the Judge Ibn Ab Layla ruled that such a partial revocation is not permitted, and thus renders the contract defective.67 They thus
rule that the buyer should recover the rest of the price, based on the H
:
. adth
Do not take anything other than the object of the forward sale or its price.
Thus, by taking part of each, he would have taken neither. Another proof is
that by taking part of the price, he voided the contract, the entire contract.68
Thus, the parties of the contract may only choose one of two actions: revoke the
entire contract or keep it intact. The majority of jurists refute this argument
by asserting that what is meant by the cited H
is the prohibition of taking
. adth
a third good other than the price and object of the forward sale.
There is consensus in the case of regular sales that the two parties may
revoke part of the contract and keep the other part. There is also consensus in
the case of forward sales that if a forward buyer re-takes the entire price with
the consent of the forward seller, if they revoke the entire forward sale, or if
they agree to exonerate each other of all liabilities by returning the price to
the buyer, then this would constitute a valid revocation. In all such cases, the
forward sale would be voided.
It is not permissible for the forward buyer to re-take part of the price prior
to the maturity of the term of deferment in order to expedite the rest of the
66 Ibn Juzayy ((M
afic), vol.2, p.115), Marc ibn
Y
. anbal), vol.2, p.80).
67 This ruling is based on avoidance of potential routes of circumventing the law (saddan
lil-dhar
aic ), since it would allow a legal implementation of the prohibited combination of a
sale and loan in one transaction.

68 Al-Sarakhs
(1st edition (H
aj Al-Andalus (1st edition
. anaf), vol.12, p.130), Al-B
(M
alik), vol.4, p.302), H
shiyat Al-Dus
uq (vol.3, p.215), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic),
.a
vol.1, p.302), Ibn Qud

anbal
),
vol.2,
.
afic), vol.2, p.103).

forward sale. In this case, Ab
u H
. anfa and Muh.ammad consider the buyers
behavior a valid revocation of the forward contract, since such a transaction
would otherwise be an exchange of goods for time, which constitutes a defective
condition. The revocation remains valid, however, since they consider revocation a voiding of a contract, and thus it is not rendered invalid by defective
conditions. This is in contrast to sales, where a defective condition (such as the
one considered here, which leads to rib
a), which is affected by defective conditions. As for revocation, which is a voiding of a sale, there is no possibility that
it can result in rib
a.
For Ab
u Y
usuf, the defective condition renders the revocation invalid, thus
keeping the entire forward contract intact. This follows since he considers the
revocation a new sale, which is thus invalidated by the defective condition,
since it may result in rib
a.69 We shall discuss the respective proofs of whether
revocation is a voiding or a new sale in more detail in the section on revocation.
6.5.3
Exonerating the buyer of the price
The seller in a forward contract is not permitted to exonerate the buyer of the
price without his consent. If the buyer consents, the exoneration is valid, but
the forward sale becomes invalid since the exoneration of the price results in
non-receipt of that price. However, if the buyer refuses the exoneration, the
forward contract remains valid.
In contrast to a regular sale, the seller may exonerate the buyer of the
price without his consent, although the buyer retains the right to return the
merchandise to him. In this case, exoneration of the price has the effect of a
charitable transfer of ownership to the buyer, where the harm done by being a
recipient of charity does not require the buyer to return the merchandise.
The crucial difference between forward and regular sales in this regard is
that receipt of the price is a condition of validity for forward sales, but not for
regular sales. Were it possible for exoneration to be effected without the consent
of the other party, it would be possible for the forward contract to be voided
without the consent of the other party. However, since one party alone may
not void the contract, this invalidates the unaccepted exoneration. This is in
contrast to regular sales, where receipt of the price is not a condition, and thus
exoneration does not result in voiding the contract.
On the other hand, it is permissible for the buyer in a forward contract to
exonerate the seller of his liability for the object of sale, without the consent of
the seller. In this case, receipt of the object of the forward sale is not a condition
for the validity of that sale, thus validating the exoneration without consent.
Legally, the exoneration of a liable party for a liability that is not legally required
to be delivered is a pure dropping of the right of the exonerating party. Such a
dropping of ones own right is permitted. In contrast, exoneration of the seller
in a regular sale for the object of sale is not valid. In this latter context, the
69 Ibn Al-Hum
am ((H
Juzayy ((M
alik), p.270).
260
object of the regular sale is an identified non-fungible. Since exoneration is a

dropping of a right, and dropping the right of ownership of an identified object
is illogical.70
6.5.4
Bill of exchange (h.aw

alah), assumption of responsibility for a liability (kafalah), and pawning of the price
and object of a forward sale
It is permissible to transfer liability for the price of a forward contract to a

present party, and it is also permissible for such a present party to assume
responsibility for the price, or have the price pawned. It is also permissible
for a present party to engage in all such actions with regards to the object of
a forward sale. This is the opinion of the majority of H
. anafs, based on the
satisfaction of the cornerstone and conditions of the forward sale.
Zufar, on the other hand, permitted such transactions for the object of a
forward sale, but not for its price. His proof is that the contracts of transfer of
liability, assumption of responsibility, and pawning, were legalized to help ensure
a right that may be satisfied after the contract session. However, the payment
of the price cannot be delayed till after the contract session in a forward sale,
thus eliminating the basis on which such transactions were legalized, rendering
them non-valid. A refutation of his opinion is provided by the argument that
such transactions ensure receipts for both compensations, and thus is permitted
for both equally.
Of course, transfers of liabilities, assuming responsibilities for them, and
pawning, are all permitted in regular sales. However, the difference between a
regular and a forward sale in this regard comes into effect if the two contractors
part prior to receipt, as detailed below:
In a forward contract, the seller must receive the price from the buyer,
the party to whom the liability was transferred, or the party who assumed
responsibility for that liability; or the pawned object perished prior to parting
from the contract session, provided that the value of the pawned object was
equal or greater to the price. In the last case, the right of the forward seller is
transferred to the value of the pawned object, thus resulting in receipt of the
price if the value of the pawned object was at least equal to the price. In this
regard, receipt of the pawned object satisfies the obligation of the buyer. Thus,
once the pawned object perished, it becomes the responsibility of the one in
whose possession it perished, and considering the seller in receipt of the price
in this case can thus serve as a compensation for the buyer. If, however, the
70 Ibn Al-Hum
am ((H
. anaf), vol.5, p.203). This is clarified by the juristic principle that
ownership of identified non-fungibles (ac y
an) cannot be dropped, but may only be transferred. Thus, if a person drops his ownership of an item, it remains his property. Based
on this principle, they ruled that exoneration from liability for a non-fungible item is invalid,
since it is a dropping of a right contaminated with ownership. Thus, even if a person has a
right to an item deposited with or usurped by another, the first partys exoneration of the
second is invalid, and the item remains in the property of the first, c.f. Al-Madkhal Al-Fiqh
by Professor Al-Zarq
a (p.123).

value of the pawned object was less than the agreed-upon price, the contract is
concluded for the value of the pawned object and invalidated for the remainder.
If the forward buyer and seller part prior to receipt, the forward contract is
invalidated, even if the parties to whom liability was transferred or who assumed
responsibility for the liability remain with the seller. On the other hand, if the
latter parties were to leave, while the buyer and seller remain together, the
forward contract is not invalidated. Thus, the only relevant information for the
validity of the contract is whether or not the buyer and seller parted without
receipt, since receipt is one of the rights of the contract, which is built on the
buyer and seller.
As for the pawned object, if it does not perish prior to the parting of the
buyer and seller, and the latter did not receive the price, then the forward sale is
invalidated. In this case, the seller must return the pawned object to the buyer.
All those rulings apply to currency exchange contract in the same manner
as they apply to forward sales.
All of the preceding related to the price in a forward sale. As for the object of
sale, the seller is exonerated by the transfer of liability contract, and the object
of sale becomes a liability on the one to whom the liability was transferred, at
the specified term of the forward contract. Thus, the buyer may only demand
the object of sale from the person to whom the liability was transferred, and
not from the original seller. If a person accepted responsibility for the sellers
liability of the object of sale, the buyer has an option whether to demand the
goods from the original seller or the one who took responsibility for his liability.
Finally, in the case of pawning, if the seller pawned an item with the buyer in
support of his liability for the object of sale, the buyer may keep the pawned
object until such a time when he receives the object of the forward sale.71
It is not permitted for the non-H
. anafs to transfer liability, assume responsibility for liability, receive exoneration, or pawn an item in lieu of the price,
if any of the parties to such legal actions were not present during the contract
session.72 This follows since receipt of the price is in fact a fundamental condition for the validity of forwrad sales. The only exception, as we have seen,
is the Maliks permission of delaying delivery of the price for three days. The
Shafics went to the extreme in strictness by not permitting the sellers receipt
of the price from the party to whom responsibility was transferred unless the
buyer were to receive it first and then give it to the seller. Their argument is
that the right attached to the transferred liability becomes a liability on the
party to whom it was transferred, and thus if he pays the price, he is paying it
on his own behalf and not on behalf of the buyer.
In summary, transferring liability for the object of sale is permitted by the
H
. anafs and not permitted by the majority of jurists, where the Malik restricted
the impermissibility to the case of foodstuffs. The majority of jurists allow taking a pawned object or allowing another to assume responsibility for the object
71 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.12, pp.151 onwards), Ibn Al-Hum
. anaf),
vol.5, pp.203 onwards).

72 Al-Dard
r ((M
alik)A, vol.3, p.195), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.103), Marc
ibn Y
amah (, vol.4, p.302).
. anbal), vol.2, p.80), Ibn Qud
262
of a forward sale, since such permission is beneficial to the contracting parties. The best accepted opinion among the H
. anbals rejects such legal actions,
however, based on the H
narrated by Ab
u D
aw
ud and Ibn M
ajah on the
. adth
authority of Ab
u Sacd Al-Khudriy: Whoever engages in a forward contract,
let him not transfer it to another.
6.5.5
Receipt of a defective price
If the seller in a forward contract receives the price, and then finds that it
contains counterfeit currency, other types of monies that are not legal tender,
or any other form of defect, then we consider two cases:
First, if the buyer agrees with the sellers assessment: then the seller has
the right to return the price. In this case, the price may be a non-fungible
or a fungible.
1. If the price is a non-fungible, and was found by the seller to contain
the rights of others,73 then if the party with a right to the price allows
the sale, it becomes valid, otherwise it is invalid. If the seller finds a
defect in the price, then if he accepts the price with the defect, the
forward sale is valid, otherwise it is invalid, whether the defect was
detected before or after the buyer and seller parted. The reason for
invalidating the forward sale in such cases is the negation of receipt
of the price due to the rights of others or return due to a defect.
Moreover, no other item may replace the price since it becomes an
identified non-fungible. Thus, the parties would have parted prior to
receipt, which invalidates the forward sale. If, however, the relevant
parties permit the contract, then receipt of the price would have
indeed taken place prior to parting.74
2. If the price is fungible, and the seller finds it defective after receiving
it, then we consider two cases depending on whether the defect is
detected during the contract session or afterwards:
(a) If he detects the defect during the contract session:
i. If the defect is caused by other parties rights to the price,
then the validity of the receipt is suspended pending the
permission of those who have such rights. Thus, if those
parties permit the receipt, it is permitted, otherwise it is
invalid.
ii. If the received price is found to be counterfeit monies minted
in a different metal (e.g. lead), then the contract is not valid,
even if the seller accepted the price. In this case, if the named
price is in silver coins and it is paid in lead, then what was
received was not of the same genus as the named price, and
73 For example if it is owned totally or partially by someone other than the buyer, if it is in
a legal trust (waqf), etc., c.f. c Aqd Al-Bayc by Professor Al-Zarq
a.
74 Ibn Al-Hum
am ((H
. anaf), vol.5, p.204).

might as well be a completely different good (e.g. clothes).
Acceptance of something of a different genus in lieu of the
price is not permitted as we have seen above. If, on the
other hand, the seller refuses to accept this defective price
and exchanges it for an appropriate price, then the contract
is permitted, and the previous defective price is ignored.
iii. If the received price was counterfeit or poor quality coins
of the same genus (e.g. silver coins minted by parties other
than the financial authority), then the contract is valid if the
seller accepts them. In this case, the genus of the price is
satisfied, and the defect may be viewed as a lower quality,
for which the seller may exonerate the buyer and accept the
coins he received as price. Also, if he refuses the defective
coins, returns them and receives good coins in their place,
then the contract is valid.75
(b) If the seller detects the defect after the contract session:
i. If the defect was caused by the rights of others to the price,
then the receipt is again suspended pending the consent of
the parties holding such rights. Thus, if those parties agree,
the contract is valid, otherwise it is invalid.
ii. If the price was counterfeit monies minted in a different
metal, the forward sale is invalid. In this case, since the paid
price was of a genus other than that named in the contract,
receipt did not in fact take place prior to parting, which invalidates the forward sale. In this case, receipt of the correct
price after the contract session cannot revert the contract to
validity after it was rendered invalid.
iii. If the received price was counterfeit or poor quality coins
of the same genus named in the contract, then the forward
contract remains valid. In this case, if the seller accepts the
coins he thus received, the sale is valid. If he refuses the
coins and returns them to the buyer, the H
. anaf jurists agree
that if those coins were not exchanged for good ones during
the contract session, then the forward sale is invalidated in
proportion to the amount he returned after the session.
However, if he replaces the bad coins with good ones during
the session, the ruling by analogy is invalidating the forward
sale in proportion to the part returned after the contract.
This was the ruling accepted by Ab
uH
. anfa and Zufar. In
this case, the received coins are of the same genus specified
in the contract, but not of the same characteristics. This
variance in the characteristics establishes the sellers right
to return the coins, thus establishing that his right was determined both by the genus and the characteristics of the
75 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.204).
264

price. In this regard, if either of those components was not
satisfied, and if he does not accept what he received, then he
had not in fact received his right during the contract session,
thus invalidating the forward contract.
On the other hand, the ruling based on juristic approbation
is that the forward sale is not invalidated. This is the ruling
accepted by Ab
u Y
usuf and Muh.ammad. In this regard,
they ruled that since the seller received items of the same
genus as his right, the receipt is valid. The variance in characteristics is thus viewed as a defect that does not negate the
validity of receipt. Therefore, replacing the defective price is
permitted in the return session, which is thus appended to
the contract session.76
If part of the receipt price was genuine money, and part was
defective money of the same genus, Ab
uH
. anfa ruled based
on juristic approbation that if the bad coins are exchanged for
good in the return session, and if the ratio of defective coins
was small, then the contract remains fully intact. He ruled
thus since having a few defective coins is difficult to avoid.
On the other hand, if the defective portion was large, the
contract is invalidated in proportion to the returned defecuH
tive coins.77 There are multiple narrations on Ab
. anfas
chosen point of demarcation between small and large proportions of bad coins. The best supported of those narrations
is that a third or more is considered large, while less than a
third is considered small.78
This pertains to the legal status of the received price. As for the object of
the forward sale, the buyer has a defect option that he may exercise after
receipt if he detects a defect in the merchandise. This follows since the
buyer has a right to receive goods without defects.79 On the other hand,
the inspection and conditional options are not established in a forward
sale, as we have seen above.
Second, if the buyer denies that the price is defective, e.g. if the
buyer claims that the defective coins shown by the seller were not the ones
he delivered to him, while the seller claims that they are, then there are
six possibilities depending on whether the seller admitted receipt of some
coins and said: (i) I received good ones, (ii) I received my right, (iii) I
received the price, (iv) I received all the coins, (v) I received the coins, or
(vi) I received, without saying anything else.
1. In the first four cases, his later claim to have received counterfeit coins
76 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.205).
Al-Hum
am ((H
. anaf), vol.5, p.206).
78 Al-Samarqand
((H
. anaf), vol.2, p.27).
79 ibid.
77 Ibn

is ignored, and he has no right to demand an oath in the name of Allah
from the buyer that he did not give him the defective coins. In those
four cases, his admission of accepting good coins would contradict his
later claim. Such a contradiction of claims renders the latter claim
invalid, and the requirement to take an oath can only be based on a
valid claim.
2. If the seller said I received the coins, and then he later said they
are counterfeit, then the ruling by analogy requires the buyer to
claim that the counterfeit coins were not his, with a supporting oath.
In such a case, the onus of the proof falls on the seller to establish
that the defective coins came from the buyer. Thus, the seller is
claiming that the buyer gave him counterfeit coins, while the buyer
denies it and provides a supporting oath. In this case, [if the seller
fails to provide a proof], the buyers denial with the supporting oath
has legal precedence.
The ruling according to juristic approbation is that the sellers claim
together with his supporting oath would have legal precedence, and
the onus of the proof falls to the buyer. The argument for this opinion
is that the seller is in fact denying that his right to a price paid in
good coins was satisfied, while the buyer is claiming that that right
was indeed satisfied. Thus, the legal precedence would go to the one
making the denial (the seller, according to this logic) when supported
by his oath, and the onus of the proof falls to the one making the
positive claim (the buyer). This opinion also agrees with the ruling
by analogy in the first four cases, except that in those cases the
sellers claims contradicted one another, while they dont in the fifth
case, where his claim to have received coins applies to both good and
defective ones.
3. If the seller said: I received without saying anything more, and
then he claims I found them to be counterfeit, then his claim has
legal precedence, as ruled in the previous case.
In this case, even if he says: I found them to be lead or silver-plated
copper coins, his claim is accepted. This is contrasted with the case
where he says: I received silver coins, and then claims that they
were lead or silver-plated, in which case his claim is not accepted.
Thus, the statement I received includes receipt of anything, including coins made of other metals, and thus does not contradict his later
claims.
On the other hand, a claim to have received silver coins would in fact
contradict later claims that they are lead or silver-plated copper.80
80 Al-Samarqand
((H
. anaf), vol.2, p.28 onwards). We have copied the text here without
further elaboration due to its exhaustive treatment and simple language.
Chapter 7
Commission to
Manufacture (istis.nac)
Prologue
Islam is not, never was, and never will be a heavy burden on people in terms
of their economic and contractual freedom. On the contrary, Islam has always
been responsive to peoples needs, permitting and legalizing all transactions that
meet legitimate and lawful needs based on justice and fair compensation in their
commutative transactions. This responsiveness of Jurisprudence to economic
needs is apparent in the methodology of inferring juristic rules and the sources
for juristic reasoning. It is also apparent in the reality of juristic inference for
specific practical situations.
One of the most prominent examples of this practical tendency is the legality of a number of common contracts as special cases to textual prohibitions
and general juristic principles. Such special cases include the forward (salam)
contract, as well as the commission to manufacture (istis.n
ac ) contract. The
permission of those contracts was explicitly inferred by jurists to make it easier
for people to meet their lawful economic needs without imposing unnecessary
hardship. In this regard, we recall the general principles that needs are treated
as necessities, and hardship calls for simplification of the rules, for Islam is
a religion of ease, not a religion of hardship.
Istis.n
ac evolved into Islamic jurisprudence historically due to specific needs
in the areas of manual work in the areas of leather products, shoes, carpentry,
etc. However, it has grown in the modern era as one of the contracts that
make it possible to meet major infrastructure and industrial projects such as
the building of ships, airplanes, and various large machinery. Accordingly, the
prominence of the commission to manufacture contract has increased with the
scope of the financed projects.
267
268
C )
CHAPTER 7. COMMISSION TO MANUFACTURE (ISTIS.NA
Plan of this chapter

The chapter will be divided into three sections, detailed as follows:
1. The first section deals mainly with the legal aspects of istis.n
ac :
(a) The definition of commission to manufacture (istis.n
ac ).
(b) Is commission to manufacture a promise, or is it a sale?
(c) Proof of the legality of the commission to manufacture contract.
(d) Conditions that may or may not be appended to the contract, and
their effect on its legal status.
(e) The legal status and characterization of the commission to manufacture contract.
2. The second subsection deals with the similarities and differences between
forward (salam) and commission to manufacture (istis.n
ac ) contracts.
(a) Commission to manufacture vs. forward contracts.
(b) The relationship between the two contracts, and the extent of their
similarity.
(c) The conditions of the two contracts.
3. The third subsection deals with the positive effect the commission to manufacture contract has on boosting industrial production.
7.1
7.1.1
Commission to manufacture (istis.nac )

Definition
The Arabic term istis.n

ac lexically means requesting a .sanc ah, where the latter
Arabic term refers to the work of a small or large scale manufacturing worker,
c.f. definitions in Al-Mis.b
ah Al-Munr, Mukht
ar Al-S.ah.h.a
h., and Al-Q
am
us Al
Muh.t..
Jurists use this term to refer to the request of manufacturing a specific item
in a specific form.1 Another juristic definition is: istis.n
ac is a contract commissioning a worker to manufacture an item that is defined as a liability on
him.2 Thus, the commission to manufacture contract is a contract to purchase
the item to be manufactured by the worker, where the worker provides both
the raw materials as well as the labor to produce the final product specified in
the contract. This is to be contrasted with the case where the raw materials
are provided by the buyer, in which case the contract is one of employment
of the workers labor, and not commission to manufacture (istis.n
ac ). However, some jurists argued that the object of the contract is only the workers
1 Ibn c Abid
n
2 Al-Majallah
((H
. anaf), vol.4, p.221).
(M.124).
C )
7.1. COMMISSION TO MANUFACTURE (ISTIS.NA
269
work, since commission to manufacture only requests the manufacture that

is accomplished by the worker.
An example of commission to manufacture is thus: A buyer/lessor requests
from a worker/seller (e.g. a carpenter, shoe maker, etc.) to manufacture a
specific item with specific characteristics (e.g. furniture, etc.) in exchange for a
specified price. This contract was traditionally used in instances where customproduction is common (e.g. gloves, shoes, etc.).3
The commission to manufacture contract is concluded through the offer and
acceptance of the buyer and seller or manufacturer. The technical Arabic terms
are thus: the contract is istis.n
ac , the buyer is called mustas.nic , the seller
s.a
nic , and the object of sale is called mas.n
uc .4
The commission to manufacture contract is similar to forward contracts in
three respects: (i) it involves trading an immediate item in exchange for a
deferred one, (ii) it is a sale of a non-existent object, and (iii) the object of sale
is established as a liability on the seller. However, the two contracts differ in
three important aspects: (i) the price need not be paid immediately and (ii) the
deferment period need not be specified in the commission to manufacture, and
(iii) the object of a commission to manufacture need not be one that customarily
exists in markets.
The commission to manufacture contract is also similar in some respects to
hiring a worker in exchange for a specified wage. The fundamental difference
between the two contracts, however, is that in a commission to manufacture,
the seller provides the raw materials, whereas the buyer provides them in the
employument contract.
7.1.2
A promise or a sale?
The H
. anaf jurists differed on their classification of the commission to manufacture contract. Is it a sale? Is it a promise to sale? Is it a form of employing
the manufacturer? Is the object of sale the manufactured object, or is it the
manufacturers work?
Al-H
. akim Al-Marwaz, Al-S.affar, Muh.ammad ibn Salamah, and the author
of Al-Manthu
r all ruled that commission to manufacture is a mutual promise,
and that it is concluded as a sale at the time of exchange following the completion
of the work. Thus, the worker or manufacturer is not obliged to perform the
work, in contrast to forward contracts where he is. On the other side, the buyer
in a commission to manufacture has the right to reject the object delivered to
him, and is not obliged to conclude the transaction.
On the other hand, the more correct and more widely accepted H
. anaf opinion, is that commission to manufacture is a sale of the object of sale and not
a sale of the manufacturers work. This opinion thus ruled that the contract
is neither a promise to buy, nor is it a wage compensation for work. Thus, if
3 Ibn
Al-Hum
am ((H
Al-Hum
am ((H
as
an ((H
. anaf), vol.5, p.355), Indian Authors
c
c
c
n ((H
((H
. anaf), vol.4, p.222), Aqd Al-Bay by Professor
Mus.t.af
a Al-Zarq
a (p.122).
4 Ibn
270
C )
the manufacturer were to provide a product that he did not produce himself,
or that he had produced according to the contracts specifications but prior to
the incidence of the contract, he would have fulfilled his part of the contract.
The proof for this position is the fact that Muh.ammad ibn Al-H
. asan mentioned
opinions pertaining to commission to manufacture that were based both on
analogy (qiy
as) and on juristic approbation (istih.s
an), which do not apply to
promises. Moreover, he permitted the contract for commonly traded items to
the exclusion of ones that are not traded. Had it been a promise, it would have
applied to both types of goods. Moreover, he explicitly called this contract a
purchase by saying: when the commissioner to manufacture (buyer) inspects
the goods, he has an option, since he had thus purchased that which he had
not inspected. Also, the commissioned to manufacture (seller) owns the price
upon its receipt, which would not be the case in a promise.
In this regard, the establishment of options for both parties of the contract
does not constitute a proof that it is not a sale, since in an exchange sale
(muq
ayad.ah) both parties have an option if they had not previously inspected
the exchanged goods. The establishment of the inspection option for the commissioner to manufacture is thus one of the characteristics of sale contracts, thus
providing a proof that this sale is permitted as a sale not as a promise. Thus,
according to this opinion, since the contract is considered a sale, the manufacturer is obliged to perform the task, and the commisioner to manufacture is not
allowed to drop his obligation to purchase the manufactured item if it meets the
specifications. Such obligations would not be binding for a promise.
Another point of view was championed by Ab
u Sacd Al-Baradic, who argued that the object of the commission to manufacture contract is the work
involved. His proof is that linguistically, istis.n
ac is a request to manufacture
or work. However, this opinion is not the most accepted among the H
. anafs who
favor the view that the object of sale is the manufactured item itself and not the
work or act of manufacturing it. Thus, they ruled that if the commissioned to
manufacture delivers goods that meet the specifications to the satisfaction of the
commissioner, the sale is valid, regardless of whether or not the commissioned
party or a third party manufactured the goods, and whether or not the goods
were manufactured prior to the contract. All such rulings would not apply had
the work been the object of sale. Thus, Al-Kasan said: If performing the
work was a condition for the contract, delivering goods that were manufactured
prior to the contract would not be permitted; since the condition would apply
to future work and not to past work.
The correct opinion is that the object of sale in commission to manufacture
is the object to be manufactured, with the stipulated condition of work by the
commissioned. This follows since commissioning to manufacture (istis.n
ac ) is
a request of the action of manufacturing (al-s.unc ). Thus, if the condition of
working to manufacture were not stipulated, the contract would not be called
commission to manufacture. In contrast, if it were considered simply a sale of
an item established as a liability on the seller, it would be called a forward sale
(salam). In this regard, if the commissioned party delivers an item that he had
manufactured prior to the contract, and it is accepted by the commissioner, the
C )
271
transaction is permitted based on a new exchange contract by mutual consent,

and not based on the initial contract.5
7.1.3
Proof of legality
The H
as), as well as inference
. anf jurists argued that reasoning by analogy (qiy
from general juristic principles, would render the contract of commissioning
to manufacture (istis.n
ac ) impermissible. This follows since it constitutes the
sale of a non-existent item (as in the case of salam), which is not permitted
based on the Prophets (pbuh) prohibition of selling that which the seller does
not have. Thus, it is impermissible as a sale (of a non-existent item), and it
is not permissible as an employment of the seller, since the latter works on
his own property. The latter arrangement is not permissible, in analogy to
the case of a person paying another to carry his own food from one place to
another, or paying him to die his own dress a certain color, etc., all of which
are not permissible. This is the ruling of Zufar, Malik, Al-Shafic and Ah.mad,
who permit commissioning to manufacture (ists.n

ac ) as a forward sale (salam),
with all the stipulated conditions for the latter contract. The most important
such condition is the full delivery of the price in the contract session, with an
allowance for one or two days in the Malik school. Another condition that
they apply to commissioning to manufacture is the specification of the term of
deferment, as in the case of salam, otherwise they render the contract defective.
They further stipulate the condition that the worker is not specified as the
manufacturer, and the object of sale is not specified as the manufactured
object. Thus, they render the commissioning to manufacture contract nullified
if any of the following three conditions holds: (i) the non-specification of the
delivery time, (ii) the specification of the worker, and (iii) the specification of
the manufactured object, which renders the object non-fungible and thus cannot
be established as a liability on the seller, which is a condition of validity for both
salam and istis.n
ac .6 The Shafics ruled that the contract is valid if it satisfies
the above conditions of salam, whether or not the term of deferment is specified,
since they permit immediate forward sales (al-salam al-h.a
ll), by means of which
the seller is liable for the object of sale starting from the contract session.7
The H
. anaf jurists, on the other hand, permitted commissioning to manufacture based on juristic approbation (istih.s
an), due to its common usage in
various times without any objections, thus constituting a consensus (ijm
ac ).
They thus base their ruling on the Prophets (pbuh) saying: My nation never
reaches a wrong consensus.8 This approach was also supported by the state5 Al-K
c
as
an ((H
am ((H
n
((H
. anaf), vol.4, p.222).
6 Al-Hatt
alik)A, vol.3, p.217),
Al-Dardr ((M
7 Al-Suy
ut. ((Sh
afic), p.89), Al-c Urf wa Al-Sunnah by Professor Ah.mad Fahm Ab
u Sin
nah (p.131 onwards).
8 Narrated by Ahmad in his Musnad, Al-Tabar
an in his Al-Kabr, and Ibn Ab Bas.rah
.
.
Al-Ghaff
ar as a H
adth marf
uc : I asked my Lord that my nation never reaches a wrong
.
consensus, and He granted my request. Ibn M

ajah also narrated it as a H
marf
uc on
. adth
272
C )
ment of Ibn Masc u

d that Whatever the Muslims view as fair, it is indeed fair
in the eye of Allah.9
The Messenger of Allah (pbuh) is reported to have commissioned the manufacture of a ring and a cupping. In the latter case, he paid the cupper his wage,
despite the fact that the act and frequency of cupping is unregulated, like the
amount of water one drinks from a water carrier. Moreover, it is narrated that
the Prophet (pbuh) heard of the existence of a public bath, and allowed its usage provided that the men cover their lower bodies. Following this permission,
many people including the companions of the Prophet (pbuh) and their followers have continued to use it in that manner, without mentioning the amount
of water to be used or the time to be spent in the bath. In this regard, the
non-existent object of sale the water delivered by the cupper or the manager of
the bath may be considered existent for legal purposes.10
7.1.4
Appended conditions and legal status
The H
. anafs stipulated three conditions for the permissibility of commissioning
to manufacture, the absence of any of which would render it defective in their
view. Thus, if any of those three conditions is violated, the legal status of
commissioning to manufacture would be the same as a defective sale, which
transfers the ownership by receipt, but only as a tainted ownership that does
not allow the new owner to use the object of sale thus acquired. In such cases,
the corrupting factors must be removed in respect of the Law. Those three
conditions are:11
1. The specification of the genus, type, amount, and characteristics of the
object to be manufactured. This follows since the object to be manufactured is an object of sale, which must be known by specifying those
aspects. Thus, if any of those aspects of the object of the contract is
not specified, the contract would be rendered defective due to ignorance
that may lead to legal dispute. Thus, if a person were to commission the
manufacturing of a pot, he must specify the type of metal, its genus, its
dimensions, its characteristics, and its number (if more than one is to be
manufactured). Otherwise, the contract would be considered to contain
sufficient ignorance to render it defective.
2. That the object to be manufactured is commonly traded among people
(e.g. jewelry, shoes, pots, means of transportation, etc.). Thus, they
the authority of Anas: Indeed my nation never reaches a wrong consensus. There are many
other narrations for this H
, c.f. Al-Haytham (, vol.1, p.177; vol.5, p.218), Al-Sakh
aw (,
. adth
p.460).
9 This is a Had
mawq
uf at Ibn Masc u
d, with other narrated variations. It was narrated
. th
by Ah.mad, Al-Bazz
ar, and Al-T
an in Al-Kabr with a highly trusted chain of narrators.
. abar
It was also narrated on the authority of Ibn c Abb
as; c.f. Al-H
.
(H
), vol.4, p.133), Al-Haytham (, vol.4, p.177), Al-Sakh
aw (, p.367).
. adth
10 Al-Sarakh
s (1st edition (H
am ((H
. anaf), vol.5,
p.209), Al-K
as
an ((H
. anaf), vol.5, p.355).
11 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.209
c
n ((H
onwards), Al-K
as
an ((H
C )
273
ruled impermissible commissioning to manufacture a dress or other goods

that have not been customarily commissioned to manufacture (e.g. grape
juice), which may nonetheless be accomplished through forward sales that
satisfy the conditions of that contract. In the latter cases, if the contract
is stated as a commissioning to manufacture, but satisfies the conditions of
a forward sale, the contract may be rendered defective as a commissioning
to manufacture, but valid as a forward sale. In this regard, it is the legal
content of the contract that matters, and not its label. Such forward sales
would also be valid for non-fungibles such as clothes, rugs, etc. We note
in closing that commissioning to manufacture clothes is valid today since
it has become customary, and customary practices vary across time and
space.
3. That no specific term of deferment is specified. Thus, Ab
uH
. anfa ruled
that if the parties to the contract specify a term of deferment, the commissioning to manufacture becomes defective and the contract is converted to
a forward sale that must satisfy all the other conditions of the latter contract (e.g. full receipt of the price during the contract session, the negation
of options if the seller delivers acceptable goods at the term, etc.). His
proof is that by specifying a term of deferment, the contracting parties
have indeed introduced the notion of a forward sale. In this regard, what
matters in contract is their substance and not their labels.
In this ruling, a term of deferment is defined as one month or longer.
Thus, if a specified term of deferment is less than one month, and if
the object of sale is customarily commissioned to manufacture, then the
contract is valid. This ruling thus applies if the purpose of specifying a
term of deferment was to expedite the delivery rather than to defer it (e.g.
if the buyer says on condition that you finish the object tomorrow or the
day after). However, if the term is specified to defer the delivery of the
goods, then the contract is not valid as a commission to manufacture, and
it would not be valid as a forward sale if the term is less than one month.
In summary, thus, we may conclude that any term of deferment of one
month or more would render the contract a forward sale, while a term of
less than one month that is mentioned to expedite delivery may render it
valid as a commission to manufacture.
Ab
u Y
usuf and Muh.ammad, on the other hand, ruled that the contract
is a commission to manufacture whether or not a term of deferment is
specified, since it is customary practice to specify the term in such contracts, thus rendering it a valid condition. This opinion is in agreement
with the practical facts of life, and peoples needs, and therefore seems
more appropriate for implementation.
Item #389 of Al-Majallah stated: Any item that has been customarily
commissioned to manufacture is unconditionally a valid object for that
contract. A contract to manufacture an item that is not customarily commissioned to manufacture, if it specifies a term of deferment, becomes a
C )
274
forward sale (salam), and the conditions of forward sales must be considered. Such a contract in which the term of deferment is not specified
would still be considered a commission to manufacture. In such cases,
if the term expires without the object of sale being finished or delivered,
then the most common opinion is to offer the commissioner to manufacture a choice between waiting for the object or voiding the contract, which
is the same solution in the case of forward sales.12
Appended conditions
The H
. anafs have agreed that an appended condition is treated in the same
manner as included conditions with respect to its legal status, if the condition
is valid. If the condition is defective, then Ab
uH
. anfa ruled that if appended
to the contract, it renders it defective as if it were included in the original
contract; but Ab
u Y
usuf and Muh.ammad ruled that a defective condition is
not appended to the contract, which remains valid. Thus, the latter two consider
a defective appended condition nugatory (laghw), to protect the validity of the
existing contract.
Legal status and characteristics
The legal status of commissioning to manufacture is in fact determined by its
consequences, which are:13
1. The fundamental legal consequence of commissioning to manufacture is
the establishment of the commissioners ownership of the object to be manufactured, which is defined as a liability on the commissioned party, and
the establishment of the commissioned partys ownership of the agreedupon compensation.
2. The characteristic of this contract is that it is not binding on either party
before or after the manufacturing of the object. Thus, each party has
the option to fulfill the contract or to void it prior to the commissioners
inspection of the manufactured object. Thus, it is permissible for the
manufacturer to sell the object before showing it to the person who commissioned its manufacture, since the contract is not binding, and its object
is not the specific manufactured item, but rather an item like it described
as a [non-binding] liability on the manufacturer.
3. If the manufacturer delivers the manufactured object to the one who commissioned its manufacture, he would thus have dropped his option through
the deliver. Thus, if the buyer inspects the goods and accepts them, the
contract is binding on the seller, who has no option.
12c Aqd
Al-Bayc by Professor Mus.t.af

a Al-Zarq
a (p.123).
(1st edition (H
anaf), vol.12, p.139), Al-K
as
an ((H
.
c
n ((H
Al-Hum
am ((H
. anaf), vol.4, p.223).
13 Al-Sarakhs
C )
275
The commissioner to manufacture, on the other hand, has the option after
receiving the goods that meet the characteristics specified in the contract.
Ownership of the goods are established for him, but are not binding on
him. Thus, Ab
u H
. anfa and Muh.ammad ruled that he had purchased
an item that he had not seen, which allows him the inspection option, in
contrast to the manufacturer as seller of that which he had not seen
who has no option at this point.
Ab
u Y
usuf, on the other hand, ruled that if the commissioner to manufacturer receives the goods and finds that they satisfy the specified characteristics, then the contract is binding on him. He thus ruled that the
object of sale in this case has the same legal status as the object of a
forward sale, which does not allow for the inspection option. This would
protect the manufacturer from the losses he may incur if no other buyer is
willing to buy the items he was commissioned to manufacture, especially
if the raw materials used can no longer be used for other purposes. This
opinion was questioned on the basis that the potential buyers loss from
eliminating of the inspection option is greater than the potential sellers
loss from allowing it, since the manufacturer surely must find another
buyer for his merchandise. This line of reasoning is rebutted by asserting
that the possibility of another sale is but a hope, and that the more likely
loss would befall the manufacturer, thus requiring the ruling that the sale
is binding on the buyer.
Thus, Al-Majallah adopted the stated opinion of Ab
u Y
usuf, and ruled in
#392: The contract of commissioning to manufacture, once concluded,
is binding on both parties. Thus neither party has the right to change his
mind, even prior to manufacturing. This ruling is valid since the buyer
continues to hold the characteristics option (khiy
ar al-was.f), which he
may use if the manufactured object does not meet the terms specified in
the contract.14
In my opinion, the opinion stated in Al-Majallah is very valid, since it
prevents legal disputes between the contracting parties while protecting
the manufacturer from potential losses in the likely event that he fails
to sell the goods to another party. This opinion is also in agreement
with the general legal notion of the binding power of contracts, as well
as contemporary needs to commission the manufacture of major goods
such as ships and airplanes, in which cases it is not logical to make the
commissioning to manufacture non-binding.
4. The commissioner to manufacture has no right to the manufactured item
prior to its delivery by the manufacturer. Thus, the manufacturer has the
right to sell the item to a third party prior to showing it to the commissioner to manufacture, as stated before.
14 The text of this item is thus: If the commissioning to manufacture contract is concluded,
then neither party may change his mind; then if the manufactured object does not meet the
specified characteristics, the commissioner to manufacture retains his option.
C )
276
7.2
Commissioning to manufacture vs. forward

sales
We have seen that commissioning to manufacture is a contract between the

buyer and the worker, where the latter provides the raw materials. The condition of this contract is the specification of the object to be manufactured with
sufficient accuracy to remove ignorance.
Forward sales, on the other hand, are exchanges of an immediate price for
a deferred object of sale, where the latter is established by description as a
liability on the forward seller. The object of the forward sale does not exist at
the contract session, and its delivery is deferred to a definite future time period.
7.2.1
Similarities and differences
Both contacts involve sales of non-existing items, permitted to meet economic

needs, and based on common practice. The motivation for forward sales is the
sellers need for immediate funds to spend for his family sustenance as well as
to help him with his production (e.g. to buy seeds and fertilizer). Commission
to manufacture, on the other hand, is a commercial contract that results in
profits for the manufacturer, while meeting the needs of the commissioner to
manufacture. Thus, the motivating need for this contract is the need of the
buyer rather than the seller.
There are other differences between the two contracts, which I summarize
below:
1. The object of a forward sale is a liability on the seller, and thus must be a
fungible measured by volume, weight, length, or number of approximately
homogeneous items. In contrast, the object of sale in a commission to
manufacture is non-fungible (c ayn, which can be identified by identification, such as pieces of furniture, shoes, etc.) as opposed to a fungible
liability.
2. Deferment is a condition in forward sales, since it is not permitted for
the majority of non-Shafic jurists for a term of deferment less than one
month. This is in contrast to commissioning to manufacture, where Ab

u
H
an
fa
has
ruled
that
the
specification
of
a
term
of
deferment
converts
it
.
into a forward sale. Another difference he highlighted is the ruling that
there is no conditional option in forward sales.
u Y
usuf and Muh.ammad ruled that commissioning
to manufacture is valid whether or not a term of deferment is specified,
since as we have discussed such specification is customary. Also, the
Shafics have permitted immediate forward sales, in disagreement with the
other schools of jurisprudence.

3. The forward contract is binding on both parties, and may only be voided
by mutual agreement. In contrast, commissioning to manufacture is not
7.2. COMMISSIONING TO MANUFACTURE VS. FORWARD SALES 277

binding, and may be voided by either party. Also, if the manufacturer
delivers the manufactured object to the commissioner to manufacture, he
loses his option, but the buyer retains his.
4. A condition of forward sales is the delivery of the price in full during the
contract session. This is not a condition in commissioning to manufacture,
where people usually pay a downpayment equal to half or one-third of the
price, following the H
. anbal schools ruling. This difference is the most
important one from a practical viewpoint.
7.2.2
Conditions of both contracts
Both contracts require full knowledge of the price in terms of genus, type,
amount, and characteristics, otherwise the contract would be considered defective due to ignorance. On the other hand, only the forward contract requires
full payment and receipt of the price during the contract session, prior to the
physical parting of the buyer and seller. Imam Malik allowed a deferment of
the price payment for up to three days, ruling that a payment within three days
is legally equivalent to an immediate payment, since anything approximately
equivalent to another inherits its legal status. In contrast, advance payment of
the price is not a requirement of the commission to manufacture contract, where
the common practice is a partial advance payment during or shortly after the
contract session, with full payment only at the time of delivery.
In both contracts, the object of sale (to be delivered or manufactured, respectively) must be well known to the buyer and seller in terms of its genus,
type, amount, and characteristics. Thus, in both contracts, the object to be
delivered is considered an object of sale, which must be fully known to the
contracting parties.
Both contracts may not include direct rib
a, for instance through the unity
of genus for the price and object of sale (e.g. wheat for wheat, etc.) with an
increase in one of the two compensations (rib
a al-fad.l), or with deferment and
increase (rib
a al-nasah). The commodities for which such trading is forbidden
are the six from the above-cited H
(gold, silver, wheat, barley, dates, and
. adth
salt), and ones that can be inferred to carry the same legal restriction.
Moreover, the conditional option is not established in forward sales, thus the
contract must be binding on both parties. In contrast, commission to manufacture is not a binding contract, thus establishing options prior to the work or
manufacturing (as well as after manufacturing, in the opinions of Ab
uH
. anfa
and Muh.ammad, while Ab
u Y
usuf rendered it binding after manufacturing and
consent of the buyer).
On the other hand, the inspection and defect options are both established
for the price of a forward sale if it is a fungible or non-fungible identified object.
. anafs have agreed that the inspection option is not
established for forward sales, to prevent the object from returning as a liability
on the seller. However, the defect option is indeed established, since it does not
prevent the buyer from receiving the merchandise, thus concluding the contract.
278
C )
Ab
u H
. anfa ruled that Both contracts require a clarification of the location of delivery of the object of sale if transportation of the object is costly.
Ab
u Y
usuf and Muh.ammad, on the other hand, ruled that the location of the
contract session is the default delivery location.
The H
. anafs further stipulate the condition that the genus of the object of a
forward sale must be very likely to exist in the markets in the specified type and
characteristics throughout the period between the time of the contract and the
time of delivery (e.g. grains). However, this is not a condition for commission
to manufacture. Note, on the other hand that the condition of existence of the
goods in the market is not stipulated by the non-H
. anaf schools of jurisprudence,
being satisfied by the likelihood of existence of the genus of the object of sale
at the stipulated delivery time.
The H
afics, and H
. anbals stipulated a condition for controlling
. anafs, Sh
the object of sale, by requiring that it be fungible (i.e. measured by volume,

weight, size, or number of homogenous items; e.g. cloths, metals, etc.). Thus,
forward sales are not permissible for items that may not be controlled through
a description, e.g. houses, buildings, jewels, etc., due to great heterogeneity of
their values. In contrast, commissioning to manufacture is valid in any goods
for which people customarily use the contract. Note, however, that the Maliks
rendered as valid forward sales in goods that cannot be controlled by a priori
description, and the H
. anafs have also permitted forward sales of some nonfungibles such as rugs, clothes, etc. Also, the jurists permitted forward sales of
bricks if the buyer stipulates a specific brick factory, since that would make the
bricks sufficiently homogenous to be forward sold by number.
Forward sales are permitted for the above-mentioned classes of goods regardless of whether or not the contract is customarily used for those goods. However,
commission to manufacture is regulated by restriction to the goods in which its
use is customary. For instance, a contract in which a tailor is responsible to
sew a fabric that he had himself weaved is not permitted since this practice is
unconventional. This follows since reasoning by analogy renders commissioning
to manufacture impermissible, and it is only permitted based on its customary
usage. Thus, it is restricted to those goods in which its use is customary, and
reasoning by analogy remains the measuring tool for other goods. However, it
must be noted that customary usage of a contract varies by time and space,
thus restricting the applicability of this principle.
7.3
The positive role of commissioning to manufacture
Past utilization of the commissioning to manufacture contract has played a

historical role in encouraging production and innovation of the industrial sector
in Islamic societies. This contract has also proved to be a very useful tool in
meeting the ever changing needs of users of industrial products.
More recently, the commissioning to manufacture contract has seen signif-
7.3. THE POSITIVE ROLE OF COMMISSIONING TO MANUFACTURE279

icant growth of usage beyond its humble beginnings in artisan production of
shoes, furniture, safes, etc. It has now become a vital tool for financing advanced
industrial production of airplanes, ships, cars, trains, etc., thus encouraging the
growth of large scale as well as small scale industrial production. This growth
has, in turn, been a vital force in improving the standards of living for members
of the society.
The uses of this contract have not been restricted to the traditional industrial
production, but has also extended to the construction sector, thus providing an
important tool in solving a serious problem in many Muslim countries. Thus,
one of the main uses of commissioning to manufacture has been the sale of
houses and apartments according to agreed-upon characteristics and lots of land
detailed on a map. The large implementation of such housing projects would
not have been possible without the utilization of binding promises to purchase
the real estate thus commissioned to be built. In this regard, once a permission
to build is obtained, the lots of land are carefully specified on a map, and the
characteristics of proposed building are clearly specified, the commissioning to
manufacture (build) becomes valid since there is no room left for potential legal
disputes.
This application of the contract has become widely available for usage due to
the ease with which the building specifications can be controlled and regulated.
In most cases, the price is paid according to a specified schedule of installments.
Those installments are applied towards the price of real estate, and therefore
are exempt from Zakah, unless the contract is voided. While delivery time of
the homes thus built is commonly specified in the contract, it is mentioned
to ensure that the building process is expedited and completed as quickly as
possible given the well-known impediments that may be faced by the builders
during the lifetime of the project. Clearly, this building activity would be very
difficult to validate under the category of forward sale (salam) contracts, since
that legal form would require full payment of the price at the contract session,
which may not be possible for many potential buyers. Moreover, since the State
commonly recognizes sales of real estate on lots of land described on a map to
be binding, the employment of commissioning to manufacture has proved to be
an ideal legal conduit to finance such building projects.
As for penalties that may be levied on a contractor if he is late in finishing
and delivering the buildings that he was commissioned to build, such penalties
are indeed legally permitted. Such financial penalties fall under the category of
penalty conditions (al-shart. al-jaz
a), which was approved by Judge Shurayh.
and supported by the supreme jurists of Saudi Arabia in the year 1394 after
Hijra. Judge Sharh. said: Whoever willingly, and without coercion, imposes
upon himself a condition, that condition is binding upon him.15
15 Ibn
Qayyim Al-Jawziyyah ((H

. anbal), vol.3, p.400).
Chapter 8
Currency Exchange (s.arf)

Definition
The legal definition of the currency exchange (s.arf) contract is: the exchange of
one monetary form for another in the same or different genera, i.e. gold for gold
coins, silver for silver, gold for silver, silver for gold, etc., whether it is in the
form of jewelry or minted coins.1 Such trading is permitted since the Prophet
(pbuh) permitted the exchange of properties for which rib
a applies hand-tohand in equal quantities in the same genus, or with differences in quantities in
different genera.
Conditions
There are four general conditions for the currency exchange contract: (1) mutual
receipt prior to the contracting parties parting, (2) equality of quantities if
monies of the same genus are traded, (3) inapplicability of options, and (4)
non-deferment. We now discuss those four conditions in some more detail:
1. Mutual receipt prior to the physical parting of the two contracting parties
is postulated as a condition to avoid the danger of effecting the forbidden
rib
a al-nasah. This follows from the Saying of the Prophet (pbuh): Gold
for gold, in equal amounts, hand-to-hand; and silver for silver, in equal
amounts, hand-to-hand,2 as well as his (pbuh) saying: Do not trade one
1 Al-K
as
an
((H
am ((H
((H
afics also defined it thus, c.f. Al. anaf), vol.4, p.244). The H
. anbals and Sh

. anbal), vol.2,
p.59), while the M

aliks distinguished between .sarf and mur
a.talah, where the former refers to
exchanging one type of money for another type, while the latter refers to exchanging money
for money of the same type, c.f. H
shiyat Al-Dus
uq (vol.3, p.2).
.a
2 Narrated by the major narrators

with the exception of Al-Bukh
ar on the authority of
c Ub
adah ibn al-S.
amit: Gold for gold, silver to silver, wheat for wheat, barley for barley,
dates for dates, and salt for salt, in equal amounts, hand-to-hand; and if the genera differ [in
an exchange], then trade as you wish provided it is hand-to-hand, c.f. Al-H
afiz. Al-Zaylac
.
(1st edition, (H
), vol.4, p.4).
. adth
c Abid
281
282
CHAPTER 8. CURRENCY EXCHANGE (S.ARF)

of them absent (thus, deferred) for the other immediately delivered.3
Thus, if the contracting parties were to part prior to receipt of one or both
compensations, the contract is considered defective by the H
. anafs, and
invalid by the other schools of jurisprudence, since the condition of receipt
would be violated. Once the condition is violated, the contract would in
effect become a trade of deferred liabilities, or debt for debt, rendering
it rib
a, especially if the two quantities thus traded were not equal.4 In
this respect, mutual receipt is a condition regardless of whether the two
compensations are of the same or different genera.
Physical parting of the contracting parties refers to moving away from the
contract session location in different directions, or the movement of one
away from the contract location while the other remains there. Thus, if
both parties remain in the same place of the contract session, no parting
would have taken place, regardless of the length of their stay physically
in that place. This applies even if one or both parties were to sleep or
faint at the place of the contract session, or if they were to move together
in the same direction for any distance. Thus, physical parting of the
contracting parties is to be interpreted literally in this case.5
2. If a money is exchanged for another money of the same genus (e.g. gold
for gold or silver for silver), then the two compensations must be equal
in weight, even if one of the two compensations is of a higher quality
or workmanship than the other. This follows from the above referenced
H
gold for gold in equal amounts,.... Thus, the quantity of gold
. adth
(measured by weight) is the only consideration, irrespective of the quality,

following the juristic principle that its high quality and low quality are
equivalent.6
3. The currency exchange contract is binding, i.e. devoid of any conditional
options, since mutual receipt is a condition of the contract. Thus, since
a conditional option would prevent the establishment of final ownership,
as we saw previously, it would violate the condition of receipt, thus rendering the contract defective. However, if the person with the stipulated
3 One narration of this Had
in M
aliks Muwat..ta on the authority of c Umar (mAbpwh)
. th
is thus: Do not trade gold for gold except in equal quantities, and do not trade silver for
gold where one is absent and the other immediately delivered. Also narrated by Ah.mad,
Al-Bukh
ar and Muslim on the authority of Ab
u Sacd Al-Khudriy thus: Do not trade gold
for gold except in equal quantities with no increase in one over the other; do not trade sliver
for sliver except in equal quantities with no increase in one over the other; and do not trade
either of them when one side of the transaction is absent and the other immediately delivered,
c.f. Al-H
an (, vol.5, p.190).
.
. adth
4 ibid., Al-K
as
an ((H
. anaf), vol.5, pp.369-371).
5 Ibn Al-Hum
am ((H
. anaf), vol.5, p.215).
6 Al-Zaylac
found this a H
gharb, while its meaning is derived from the H
nar. adth
. adth
rated by Muslim on the authority of Ab

u Sacd Al-Khudriy: gold for gold, silver for silver,
wheat for wheat, barley for barley, dates for dates, and salt for salt, in qual quantities, handto-hand, and whoever increases one of the two compensations would commit rib
a; the taker
and the giver equivalently, c.f. Al-H
), vol.4, p.36).
.
. adth
8.1. CONSEQUENCES OF THE MUTUAL RECEIPT CONDITION
283
conditional option drops it prior to parting, thus the two parties leave the
contract session with final receipt, the contract would revert to be valid.
This is in contrast to the opinion of Zufar who did not allow the reversion
of the contract to validity. However, it is a consensus that if the condition
were to remain after parting, then the contract is rendered defective.
However, the inspection and defect options are established, since they
do not prevent the establishment of ownership and thus do not prevent
complete receipt. Even if the two parties were to part after receipt, the
contract would be concluded for the likes of the exchanged monies and not
the exact same ones that changed hands, thus rendering the inspection and
defect options effective.7
4. A fundamental condition of the currency exchange contract is the absence
of any deferment, otherwise the contract would be defective. This follows
immediately from the requirement of mutual receipt prior to parting, as
discussed above, since deferment prevents immediate receipt, thus rendering the contract defective. However, if the party with the stipulated right
to defer delivery of his part were to void the deferment clause and deliver
his obligation prior to parting, then the contract reverts to be valid for
the H
. anafs other than Zufar.
We note that the last two conditions can be subsumed under the condition
of mutual receipt, which is in turn a requirement in exchanging goods eligible for rib
a (al=amw
al al-ribawiyyah). Note moreover, that the Maliks
and others did not permit the use of legal proxy (wak
alah) in receiving
one of the exchanged monies in this contract, or in the best supported
opinion such a receipt through a debt transfer (ih.a
lah), if such receipt
would likely take place in the absence of the original party to the contract. They ruled for the impermissibility of such legal actions due to the
potential of effective deferment of receipt if the original party were indeed
absent.8 The legal proof for the condition of non-deferment is the number of H
s of rib
a listed above, which require hand-to-hand exchange
. adth
of goods eligible for riba, as well as the H

narrated by Al-Bukhar
. adth
and Muslim on the authority of Ab

u Al-Minhal: There is no harm in
whatever is exchanged hand-to-hand , but any deferment would render it
rib
a.
8.1
Consequences of the mutual receipt condition
The condition of mutual receipt prior to parting from the contract session results
in impermissibility for exoneration, giving as gift, exchanging, or compensation
7
Al-T
aw ((H
as
an ((H
am ((H
. ah.
. anaf), p.75), Al-K
. anaf),
n ((H
vol.5, p.219), Ibn c Abid
. anaf), vol.4, p.246).
8 Al-Dard
r ((M
alik)B, vol.3, p.49 onwards), Ibn Juzayy ((M
alik), p.250).
284
for one of the traded items in a currency exchange. Those consequences are
detailed as follows:9
1. Exoneration and gift-giving: if two parties enter a currency-exchange contract of one silver coin for another, then one of them delivers his side of
the contract and exonerates the other party for his obligation, or gives it
to him as gift or charity, then:
If the recipient of exoneration, gift, or charity accepts it, his liability
is voided, and the contract is invalidated. In this case, exoneration
of his liability would result in non-realization of receipt, which is a
condition of the currency exchange contract. Thus, the contract is
invalidated since its consequences are not realized.
If the exonerated party does not accept it, the exoneration is invalidated, and the currency exchange contract remains intact. The
logical chain that results in this ruling is the following: (i) exoneration of a liability would drop it, (ii) that would make receipt of that
liability impossible, which (iii) amounts to voiding the currency exchange contract. Since voiding requires mutual consent, it cannot be
established by one side alone after the contract is concluded. Thus,
once the exoneration is invalidated, the contract remains intact, requiring mutual receipt prior to parting from the contract session.
If the exonerating, or donor of a gift or charity party refuses to receive what he exonerated the other party for or what he had given
him as gift or charity, then he should be legally forced to receive his
compensation. In this case, refusing to take receipt of his compensation would amount to voiding the contract, which is not in his power
without the consent of the other party.
2. Exchanging some goods for the specified compensations in a currency exchange contract is not permitted. For instance, if one party were to deliver
something other than silver instead of delivering an agreed-upon silver
coin, or if he were to sell or give as gift what is due to him in the currency
exchange contract prior to receiving that compensation, then his actions
are not permissible. In this case, the currency exchange contract remains
intact, requiring the receipt of the agreed-upon compensations. Thus, receiving anything in lieu of what was agreed-upon would not constitute
the receipt required by the contract, and the requirements of the contract
still require satisfaction for the contract to remain valid. In particular, if
one of the two compensations was already received, then the other part
of the currency exchange must be satisfied by delivering the agreed-upon
compensation.
It is permissible for one of the two parties of the contract were to deliver
to the other a compensation of the genus of the agreed-upon goods, and it
9 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.218).
8.1. CONSEQUENCES OF THE MUTUAL RECEIPT CONDITION
285
was of higher quality, or of lower quality with the agreement of the second
party. In this case, the delivery is not considered an exchange of another
good for the one agreed-upon, since it is of the same genus. Following
the above rule that quality is disregarded in goods eligible for rib
a, once
the recipient drops his right for high quality goods, the receipt is in fact a
satisfaction of the first partys liability and not an exchange in lieu of it.
Two practical consequences of this ruling are: (1) if a party accepts a low
quality or counterfeit silver coin in lieu of his right for a silver coin, then
the transaction is valid. (2) If a party were to trade currencies prior to
receiving them in a currency exchange, by telephone or otherwise, then
the trade is invalid.
3. Transfer of liability to a third party through a bill of exchange (h.aw
alah),
assumption of such liability by a third party (kaf
alah), or pawning to the
other party the compensation in a currency exchange contract, are all permitted. In all such cases, however, the condition of actual receipt in the
cases of transfer of liability and legal proxy, and that of assuming responsibility for potential perishing of the pawned object, must be satisfied. This
is agreed upon by all jurists.10
This is what the H
. anaf jurists meant by their ruling that if the relevant
party received his right in the currency exchange contract from the party
to whom liability was transferred, or who assumed that responsibility, or
if the pawned object were to perish in the possession of that party during
the contract session, the contract is rendered valid as it stands. However,
if the two parties were to part prior to complete receipt, or if the pawned
object were not to perish, then the contract is invalidated. In this regard,
they ruled that parting from the contract session refers only to the
trading parties, for whom all receipt rights pertain, to the exclusion of the
parties to whom liability may have been transferred.
If both parties were to commission legal proxies to perform the currency
exchange on their behalf, what is considered again in terms of staying
or parting is the session of the original trading parties, and not their
legal proxies. This follows from the ruling above that the right of receipt
pertains only to the original contracting parties.
Note that all those rulings parallel their counterparts (in terms of transfer
or assumption of liability, and pawning) that applied to the price and
object of forward sales (salam).
4. Mutual cancellation of liability for one of the two exchanges in the currency
exchange program or the price in a forward sale must be considered in
some detail. The Arabic term for mutual cancellation or compensation
(muq
a.s.sah) literally means similar or equivalent. It was defined by
some Maliks as two parties canceling out two mutual liabilities. Ibn
Juzayy ((Malik), p.292) defined it as: A deduction of one liability or
10 Ibn
Juzayy ((M
alik), p.250).
286

debt from another. There are two types of liability clearances: obligatory
(ijb
ariyyah), and optional (ikhtiy
ariyyah).
An example of obligatory clearance of liabilities is the case where each

of two parties has a liability for the other of the same genus, characteristics, and maturity term. In this case, clearance (muq
a.s.sah) between
them would be effected, thus dropping both liabilities if they are equal in
amount, or the larger of the two is reduced by the amount of the smaller.
The four conditions of obligatory compensation are:
(a) That the two parties each have a liability towards the other, known
as a correspondence of rights (tal
aq al-h.aqqayn).
(b) Correspondence of the two debts, by having the same genus, type,
and characteristics in terms of maturity term, quality, etc.
(c) That cancellation of all or parts of either debt does not cause any
loss to any parties with rights attached to the object for which the
party is liable (e.g. a pawn-brokers, debtors, creditors, etc.).
(d) That cancellation of liabilities does not have illegal effects, such as
parting prior to receipt of the price in a forward sale, dealing in
a forward-bought item prior to receipt, non-receipt in currency exchange or other goods eligible for rib
a, which must be exchanged
hand-to-hand.
The majority of jurists ruled that obligatory clearance must be implemented if its conditions are met, while the Malik jurists did not approve
of that ruling.
An example of voluntary clearance of liabilities is when one party is liable
to deliver a fungible (dayn) to the other, while the latter person is liable
to deliver a non-fungible (c ayn) to the former. In this case, both parties
may agree to drop their right to demand collection of the others liability.
The Maliks accept voluntary clearance of liabilities if the two liabilities
were of different genera only if it does not lead to a legal infraction. It is
well known that all major four schools of jurisprudence consider gold and
silver, and similar monies from different metals, to be different genera,
thus permitting voluntary clearance of liabilities in the Malik schools in
this case.11
Note that fiat monies used today, be they paper currencies or coins made
purely from gold and silver or metallic alloys, are considered of one genus
for the purposes of muq
a.s.sah. This opinion is based on convention, and
following the opinions of Ibn Ab Layla and some of the fathers of H
. anaf
jurisprudence.12
11 See Al-muq
a.ss.ah f Al-Fiqh Al-Isl
am by Professor Muh.ammad S. Madk
ur
(pp.4,13,23,51,55,77,85,97 onwards), Ibn Juzayy ((M
alik), ibid.), Marc ibn Y
. anbal), vol.2, p.82).
12 Ibn c Abed
n said with regard to voluntary liability clearance: If a depositor has a debt
towards the holder of the deposit, and if the debt is of the same genus as the deposit, the
8.2. DEBT-CLEARANCE IN S.ARF AND SALAM
8.2
287
Debt-Clearance in .sarf and salam
Consider the case of two parties who engage in a currency exchange of one gold
coin for ten silver coins. Assume that the first party gave the second the one
gold coin, but did not receive the ten silver coins. Assume further that the
second party now liable for the ten silver coins has a debt on the first for
ten silver coins. If the second party demands clearance of mutual liabilities, is
such clearance concluded? We need to consider three cases:13
1. If the debt was established prior to the currency exchange contract (via
a loan, usurping, or sale), then voluntary clearance of the debt for the
liability is permissible based on juristic approbation (istih.s
an). However,
such clearance is not permissible based on reasoning by analogy (qiy
as),
which was the choice of Zufar. All H
. anafs agree that mutual consent is
necessary for the permissibility of clearance of the two liabilities.
Reasoning by analogy proceeds as follows in this case: What is required
in a currency exchange is receipt of the monies specified in the contract.
However, clearance of liabilities is in essence an exchange of one of the
rights of the currency exchange contract (the ten silver coins) for another
(exoneration for his liability for ten silver coins); and neither such a replacement of one of the compensations, nor the exoneration for one of the
liabilities, is permissible, as we have seen.
Juristic approbation, on the other hand, considers the clearance of liability
for debt to be a voiding of the original currency exchange contract, and
its replacement with a second currency exchange contract in which the
price of the gold coin is the debt for ten silver coins. Thus, this ruling is
analogous to a case where a contract for a price of one thousand is replaced
by another contract with a price of one thousand and five hundred, where
the first sale is implicitly voided in order to allow the second sale to be
established.
2. The debt may mature after the existence of the currency exchange program
(e.g. if the owner of the gold coin receives ten borrowed silver coins from
the other party after the contract, or usurps them at that time). In this
case, obligatory clearance of the two liabilities is enforced, without need
two would not mutually cancel each other unless both parties agree. In this regard, usurped
objects would also have the same legal status as deposited objects. Similarly, clearance of
liabilities would not take place without mutual agreement if the two debts were of different
genera, different characteristics, or different maturity terms... Then, if the genera of the two
debts are different, they may agree to mutually cancel the smaller of the two debts in exchange
for canceling the equivalent of its value from the larger debt. Notice that the liability for wifesupport may not be mutually cancelled with a debt for the husband on the wife except with
mutual consent since the former liability is of lower status. This is to be contrasted with other
mutual debts. See Ibn c Abid

n ((H
. anaf), vol.4, p.250).
13 See Al-Zaylac
((H
am ((H
. anaf Jurisprudence), vol.4, p.140), Ibn Al-Hum
. anaf), vol.5,
n ((H
pp.206,218), Ibn c Abid
. anaf), vol.3, p.37), AlK
as
an ((H
s (1st edition (H
. anaf), vol.14, p.19).
288

for mutual consent. This ruling follows since both sides are ruled to have
indeed received their compensation after the initiation of the contract.
3. The debt may come into effect due to a contract that is initiated after
the currency exchange contract took place. For instance, the buyer of
the gold coin for ten silver coins may purchase from the other party a
dress for ten silver coins. In this case, jurists agree that clearance of the
liabilities requires mutual consent. If they voluntarily agree to clearance
of the liabilities (ten silver coins for ten silver coins) during the contract
session, then there are two reported opinions. The first opinion, which is
chosen by Al-Sarakhs, is that this clearance is not permissible since the
Prophet (pbuh) allowed clearance with a past liability not a subsequent

one, as narrated by Ibn c Umar.14
The other, more correct, opinion15 is based on juristic approbation, and
permits this clearance of liabilities as argued previously. In this case,
the clearance is in fact a voiding and revocation of the first contract and
an establishment of a new contract that incorporates an existing debt.
Voiding and invalidating the first currency exchange contract, they have
thus established a new contract in which clearance of the liability for an
existing debt is valid. This argument is valid since monies are not made
non-fungible by identification (l
a tatac ayyanu bi-l-tac yn), in contracts as
well as revocations.
In summary, voluntary clearance of liabilities is established in the first and third
cases, while obligatory clearance is established for the second case.
We now consider the permissibility of clearance of the price in a forward
sale and the debt the forward seller owes the forward buyer. We also need to
consider the three cases here:
1. The debt may be established on the forward seller prior to the forward
contract. For instance, the forward buyer may have previously sold the
forward seller a dress for ten silver coins, without receiving them. Then,
when subsequently they engage in the forward contract, they may agree
to mutually cancel the previous debt for ten silver coins for the price in
the new forward contract. This voluntary clearance is permissible based
on juristic approbation, while Zufar preferred reasoning by analogy that
renders it impermissible. As before, all H
. anaf jurists agree that it is
impermissible without mutual consent.
Reasoning by analogy points out that receipt of the price of a forward sale
is a legal requirement for its validity. In this regard, clearance negates
14 This Had
ab Al-Sunan on the authority of Ibn c Umar
. th
as follows: I came to the Prophet (pbuh) and told him: I sell camels in Al-Baqc , where the
price is sometimes named in gold coins and collected in silver coins, or named in silver coins
and collected in gold coins. He (pbuh) said: there is no harm in exchanging them at the
going daily exchange rate, as long as you part with no debts between you, c.f. Al-Shawk
an
(, vol.5, p.156).
15 Ibn c Abid
n ((H
. anaf), vol.5, p.381).
8.2. DEBT-CLEARANCE IN S.ARF AND SALAM
289
actual receipt of the price, thus invalidating the forward sale if the parties
part without satisfying the receipt condition.
Juristic approbation, on the other hand, points out that even though
receipt is required for the forward sale to be valid, the mutual cancellation
of the debt for the price is in fact a form of receipt of the price. This
reasoning is analogous to the case where the buyer and seller agree on
increasing the amounts of the price and object of sale, in which case the
contract is appended and the sale effected with the increases.
2. The debt may result from a loan or usurping, and mature after the forward sale contract takes place. In this case, obligatory mutual cancellation
of the debt for the price of the forward sale is effected as in the case of
currency exchange. In this case, it is ruled that the usurped or borrowed
monies have in fact been received, thus taking the place of the legal requirement of receiving the price of the forward sale, provided that the two
liabilities are equivalent.
3. The debt may come into effect through a contract that takes place after
the forward sale. For instance the initial forward seller may buy some
other item from the initial forward buyer. In this case, clearance is not
valid, even if it is mutually agreeable to the parties. This is the common
opinion of the H
. anafs with the unusual exception of one narration of an
opinion of Ab
u Y
usuf. The impermissibility is based on the requirement of
existence of two liabilities at the time of clearance. However, at the time
of the forward sale, only one liability existed, thus requiring an actual
receipt of the price, which is not satisfied by a later cancellation of the
liability for that price with another debt.
This is the opinion mentioned in Ibn Al-Humam ((H
. anaf), vol.5, p.206
onwards), where the price in a forward sale is equated to one of the exchanges in a currency exchange contract, when it comes to clearance of
16
liabilities. However, other H
. anaf jurists made significant distinctions
between the two compensations, thus ruling for the impermissibility of
mutual cancellation of a debt for the price of a forward sale in all circumstances. Their ruling is that the object of a forward sale is a liability on
the seller. Thus, if mutual cancellation of the price of the forward sale for
a debt on the seller were permitted, the trading parties would in fact be
exchanging one liability (the original debt) for another (the object of the
forward sale), which is forbidden. Note in this regard that the price of the
forward sale is not converted through a specification into a non-fungible
through such a clearance.
This reasoning is to be contrasted with the case of clearance of a prior debt
(or one that is established before but matures after the new contract) in a
currency exchange contract. In this case, the price of the previous sale that
16 Al-Suy
ut. (a, p.92), Al-Zaylac ((H
s (1st
. anaf Jurisprudence), vol.4, p.140), Al-Sarakh
edition (H
Al-muq
a.s.sah by Professor Madk
ur (p.107 onwards).
. anaf), vol.14, p.20), Bah.th
290

is exchanged for the current liability is identified and non-fungible, thus
not required to be received during the contract session. Thus, mutual
cancellation of one part of the currency exchange with the price of the
previous sale is viewed as an exchange of a fungible for a non-fungible,
which is permitted in currency exchange, but not in forwards.
8.3
Transfers based on loans
There is an incessant need for traders to find conduits through which they
can transfer money from one country to another following a currency exchange.
Examples include transfers of funds by expatriate workers to banks in their home
countries, or directly to their families, transfers parents of expatriate students
need to make to their children, as well as local and international money transfers
between banks and money exchange firms. In the cases of international transfers,
the most common practice is an exchange of money in the domestic currency
for money in a different currency to be received in the other country. In what
follows, we consider the legality of this practice from the point of view of Islamic
jurisprudence.
Note that trading of all paper currency fiat monies inherits its legal status
from classical juristic rulings on trading in the two monies: gold and silver.
This decision has been approved by many contemporary juristic councils and
councils of juristic scholars. Thus, it is forbidden to exchange one currency for
another with deferment, i.e. without mutual receipt during the contract session,
regardless of whether or not there is any increase. This prohibition is based on
the prohibition of rib
a al-nasah, which forbids deferred sales of monies in equal
or different amounts.
Thus, the currency exchange contract must in fact be conducted with a bank
or money changing firm without any deferment, and this is in effect how it is
conducted in practice. In this respect, the bank or money changer is ready to
deliver the compensation during the contract session, but the physical receipt
may be replaced by a legal receipt. Of course, this legal receipt could be replaced
by a physical receipt and immediate return to conduct the transfer, but that
only adds in form rather than the substance of the transaction. Following the
money exchange contract, a second and separate transfer of funds from one
country to another is concluded on the basis of a loan contract (c aqd al-qard.).
A deferment condition in this transfer transaction (where the time of delivery
of the resulting debt is specified) is permitted by Imam Malik, but not by the
majority of jurists, as we shall discuss in detail under the section on the loan
contract.
As we have seen in the second case of our analysis of clearance of liabilities
in a money exchange contract, it is permissible for one party to borrow from
the other an amount equal to his compensation, and receive it in fact, thus
making clearance of debts obligatory. This loan can be expressed in the form of
a receipt that proves the creditor partys right for debt repayment, where the
borrower is the bank or money change firm that guarantees repayment of the
8.4. DEBT REPAYMENT IN A DIFFERENT CURRENCY
291
debt. However, the bank or money changer also collects a fee for delivering the
money in a different country, to compensate for the costs of the transactions:
clearing checks, communications, etc.
In my analysis, the sequential use of those two contracts: (1) money exchange
(s.arf), followed by (2) loan (qard.), is the way in which we can find this common
practice of international money transfers to be legal, and Allah knows best.
On the other hand, there is no disagreement regarding the permissibility of
domestic money transfers through the post office, where:
1. The delivery of an amount of money to a postal employee is permitted no
doubt, where the postal worker only guarantees the money against loss
due theft or negligence. Once all monies thus delivered for transfer are
pooled, they are indeed guaranteed by the postal service as a whole.
2. A person may also deliver an amount of money to the postal worker as a
loan to the postal service, without a condition of delivering it to a third
party. Then, he may later requests from the postal worker to deliver it to
that third party. This sequence of actions is also permitted.
3. There is also consensus that if the person lent the money, and the borrower
was required to deliver it to a particular person at a particular location,
with the understanding that the borrower is not ensuring the money except
from own-theft or negligence, then the transfer is permitted. However, if
it is understood that the borrower also ensures the money against possible
losses due to dangers not under its control, then the majority of jurists
ruled that the transfer is invalid, while the H
. anbals find it permissible.
8.4
Debt repayment in a different currency
The H
. anbals ruled that it is permissible to repay monies in a different currency
according to the exchange rate of that day.17 In Al-Muntah
a, it was ruled that
it is permissible to repay one monetary liability or deposited amount in one
currency or another based on that days exchange rate. On the other hand, Ibn
c
Abb
as ruled otherwise. The author of Al-Muntah
a answered those objections
by appealing to the H
of Ibn c Umar: I came to the Prophet (pbuh) and
. adth
told him: I sell camels in Al-Baqc , where the price is sometimes named in gold
coins and collected in silver coins, or named in silver coins and collected in gold
coins. He (pbuh) said: there is no harm in exchanging them at the going daily
exchange rate, as long as you part with no debts between you.18 He also
ruled that: whoever was under liability to pay a gold coin, and repays it in
installments with silver coins, then each payment must be deducted from the
total according to that days exchange rate, otherwise it is not valid.
17 Al-Muc tamad
f Fiqh Al-Im
am Ah.mad, Damascus: D
ar Al-Khayr (vol.1, p.431).
is a weak tradition (H
d.acf), narrated by Ab
u D
aw
ud, Al-Tirmidh, Ah.mad,
. adth
and others.
18 This
Chapter 9
Gross-Sales (bayc al-jizaf)

This type of trading is very common in daily market practice. Therefore, it
is important to discuss its nature, conditions, and proofs of its legality, concentrating on its most important instances, such as gross-sale trading in foods,
monies, and jewelry.
9.1
Nature of the contract
The term jiz

af is an Arabized Persian term, which refers to sales of goods based
on rough estimates of the quantity following inspection, without accurate calculation of volume, weight or number. The term jiz
af linguistically refers to
taking large quantities, thus our translation gross-sale. Al-Shawkan (, vol.5,
p.160) defined it as sales of items whose amount was not known in detail.
9.2
Proof of its legality
There are two H

s that prove the legality of gross-sales:
. adth
1. Muslim and Al-Nasa narrated on the authority of J

abir that the Messenger of Allah (pbuh) forbade the sale of a pile of dates of unknown
volume (s.ubrah) in exchange for a known volume of dates.1 This H
. adth
implies that it is permissible to trade dates gross-sale if the price is of

a different genus. However, if the price is named in dates as well, then
the sale becomes a forbidden surplus rib
a, where one good is sold for an
unknown quantity of a good of the same genus. In this regard, ignorance
of the amount of one side of the trade is sufficient cause to suspect differences in quantities between the two compensations, and causes to suspect
illegality of the exchange warrant its avoidance. In this regard, it is well
known that dates are among the six goods listed in the H
of goods
. adth
eligible for rib

a.
1 Al-Shawk
an
(, vol.5, p.196).
293
294
CHAPTER 9. GROSS-SALES (BAYC AL-JIZAF)
2. The major narrators, with the exception of Ibn Majah and Al-Tirmidh
narrated on the authority of Ibn c Umar that people used to trade foods
gross-sale at the farthest point of the marketplace, and the Messenger
of Allah (pbuh) forbade them from selling it before transporting it [to
their shops]. This H
proves the Prophets (pbuh) permission for the
. adth
companions to continue gross-sale trading, but only forbade them from

selling it before being in full receipt.
9.3
Status of gross-sales
We now discuss jurists discussions of two cases of gross-sale trading: foodstuffs,

and jewelry:
The leaders of the four major juristic schools have a consensus that gross-sale
of foodstuffs is permissible, with some minor differences that we shall discuss
below. Ibn Qudamah (, vol.4, p.123) of the H
. anbal school said that: We
know of no disagreement regarding the permissibility of gross-sales of foodstuffs
provided that neither the buyer nor the seller knows the amount. This ruling
is based on the above listed traditions of the Prophet (pbuh). However, jurists
differed over some of the details as follows:
9.3.1
H
. anaf opinions
2
The H
. anaf jurists ruled that it is permissible to sell a cafiz (container-full)
from a pile of foodstuffs, a pile of clothes of unknown number, or a pile of foods
of unknown volume, in exchange for a known monetary price. Their ruling was
based on the fact that the degree of ignorance in such transactions is minimal
and not eligible for legal dispute.
Ab
uH
. anfa considered a special case where a person sells a pile of foodstuffs
(wheat, flour, barley, corn, or other grains) of unknown volume, naming for the
transaction the price per unit of volume. He ruled that the sale in this case is
valid for one unit of volume only, and suspended for the rest of the transaction.
The suspension of the rest of the sale would require removal of ignorance by
naming the number of units of volume being sold, or measuring the merchandise
during the contract session, which is considered a single unit of time. Thus, he
ruled that if the volume being sold is only known after the session expires, the
sale is rendered defective and cannot be reverted to validity.
His proof for this decision is that both the price and the object of sale are
unknown in this case, to a degree that renders the contract defective. However,
since there is no ignorance in one unit of volume, the contract becomes binding
for that part that is certain. If the ignorance is removed by determining the
number of units of volume being sold, the buyer would then have the option,
2 Ibn
Al-Hum
am ((H
as
an ((H
. anaf), vol.5, p.158), Al-K
c
c
((H
. anaf), vol.4, p.29), Al-Zayla ((H
. anaf Jurisprudence), vol.4, p.5), Abd AlGhan Al-Mayd
an ((H
anaf
),
vol.2,
p.7),
Al-Samarqand
((H
anaf
),
vol.2,
p.63),
Al-T
aw
.
.
. ah.
((H
. anaf), p.79).
c Abid
9.3. STATUS OF GROSS-SALES
295
since the contract has been partitioned for him and not for the seller who instigated the partitioning by failing to specify the volume of the merchandise.
Thus, if the buyer accepts the sale of the named number of units of volume at
the specified price per unit, the sale is concluded. This option is similar to the
case of buying merchandise that was not inspected, and then the ignorance was
removed through inspection, establishing the option for the buyer.
u Y
usuf and Muh.ammad ruled that the sale is valid
for the entire pile of foodstuffs, since the object of sale is known through identification by the seller. In this regard, knowing the amount of identified merchandise is not a condition of validity of sales. Moreover, ignorance of the price
is not harmful to the contract since counting the number of units of volume in
the pile would remove that ignorance during the contract session.
The latter opinion is the one we prefer since it simplifies transactions for
people. It was also the choice made by the author of Al-Hid
ayah, as he cited
the proofs of Ab
u Y
usuf and Muh.ammad after he listed that of Ab
uH
. anfa,
thus indicating as was his custom that the latter proof is more valid. The
leaders of other juristic schools also agree with this latter opinion, while the
author of Ibn Al-Hum
am ((H
uH
. anaf)) preferred the opinion of Ab
. anfa and
his proof.
The above ruling applies to fungibles, but it does not apply to non-fungibles
such as animals, clothes, etc. Thus, Ab
uH
. anfa ruled that the sale of a flock of
sheep for a named price per sheep is rendered defective. This decision applies
for him even if the number of sheep becomes known during the contract session,
since significant ignorance existed at the contract time. In this case, it is not
valid to sell only one sheep for the named price per sheep due to the major
heterogeneity between sheep. This is contrasted to the case of fungibles, where
one unit of volume from a pile of wheat is a sufficiently well-defined item due
to the homogeneity of wheat (as well as other fungibles). Thus, this type of
ignorance is not eligible for legal dispute in the case of fungibles, rendering the
contract valid; while it is eligible for legal dispute for non-fungibles, thus rending
the contract defective. Ab
uH
. anfa also ruled for the defectiveness of any sale
that meets the above description for heterogeneous goods (e.g. camels, etc.), or
for goods that are harmed by partitioning the sale (e.g. the sale of fabric by
units of length).
In contrast, Ab
u Y
usuf and Muh.ammad ruled that all such sales are permissible, since the ignorance can be removed once the merchandise is counted.3 In
summary, Ab
uH
. anfa allowed the sale of only one unit of volume from a pile of
foodstuffs, and did not allow the sale of any part of a set of non-fungibles, while
Ab
u Y
usuf and Muh.ammad permitted sales of such sets for both fungibles and
non-fungibles. The latter two argued that the ignorance, which Ab
u H
. anfa
argued would render the contract defective, is easily removed in the end.
3 ibid.: Al-K
c
as
an ((H
. anaf), p.90), Al-Zayla ((H
. anaf Jurisprudence), p.6),
Ghan Al-Mayd
an ((H
anaf), p.7 onwards).
.
c Abd
Al-
296
Containers of unknown measure

The H
. anaf jurists all agreed on the permissibility of a type of gross-sale that
takes the form of measurement by volume or weight, where in fact neither was
accurately measured. This sale takes the form of selling a number of measures
using a container whose volume is unknown, where they ruled that the sale
is permitted, but not binding on the buyer who has the right to measure the
contents. They also stipulate an extra condition that the container be solid (e.g.
made of wood or iron), rather than elastic (as in straw bags). An exception to
the latter restriction is Ab
u Y
usufs permission of sales of water in a water-skin,
due to its customary use in many countries. Also, the H
. anaf jurists permitted
sales by the weight of a rock of unknown weight on condition that the rock is
solid. This is in contrast to selling melons by weight, since the weight of such
fruits varies with degrees of dryness. They render such sales impermissible.4
Known volumes of food
If a buyer buys a pile of foodstuffs advertised to consist of a certain volume,
and then it was found to be of smaller volume, he has an option. Since the
object of sale is fungible, he can take the pile in exchange for the appropriate
portion of the price, but he also may void the entire transaction since the sale
is thus partitioned prior to the conclusion of the contract without his consent.
In this regard, the fact that the merchandise was less than agreed-upon in the
contract clearly constitutes a partitioning of the contract. This ruling applies to
all gross-sales of fungibles sold by volume or weight provided that partitioning
of the sale does not have harmful consequences.
On the other hand, if the buyer finds that the merchandise exceeded what
was agreed-upon in the contract, any increase must be returned to the seller.
This follows since both parties agreed on the sale of a particular quantity in
exchange for the named price. Thus, the increase over the named quantity was
not part of the contract, and thus must be returned to the seller.
For non-fungibles, if the buyer finds that the merchandise was less in amount
than what was named in the contract, he has an option either to take the merchandise for the named price, or to return it all. In this case, the partitioning
of the sale does not allow the buyer to determine a proportional amount of the
price that should be deducted. In this case, the mentioned amount is fundamental for a fungible, implicitly defining a price per unit of measurement, while
it is merely a description for the non-fungible, the violation of which may render
the entire merchandise useless to the buyer.
On the other hand, if the buyer finds that the purchased non-fungible (dress,
land, etc.) was of greater measurement than what was specified in the contract,
then the increase is the buyers to keep, and the seller has no option. In this
case, the increase belongs to the whole, and has no share in the price. This
4 ibid.: Al-K
c
as
an ((H
n ((H
anaf), vol.4, p.29).
Ghan Al-Mayd
an ((H
anaf), p.7), Ibn c Abid
.
.
c Abd
Al-
9.3. STATUS OF GROSS-SALES
297
ruling is analogous to the case where a seller sells an item stating that it was
defective, but then the buyer finds that it is free of defects.
However, if the non-fungible (e.g. a piece of land) was sold in a contract
where the price was explicitly stated on a per-unit basis (e.g. per square foot),
and it is found to be smaller than described, then the buyer has the option
of taking the sold object for a proportionately reduced price or voiding the
sale. In this case, the specification of the price per unit rendered the units a
fundamental component of the contract, and the option is established due to
the familiar ruling based on the partitioning of the sale.
In this last case, if the sold item is found to exceed the size or amount named
in the contract, the buyer has the option either to take the whole amount at
a proportionately increased price, or to void the sale. The option is allowed in
this case to avoid the loss that may ensue if the buyer is bound to accept the
larger object of sale at a higher price.5
9.3.2
M
alik opinions
Imam Malik permitted the sale of a pile of food of unknown volume on a perunit basis. Then the total value of the pile is computed by measuring the number
of units of volume in the pile and multiplying it by the named per-unit price.
The Maliks permit this sale for all types of goods: fungibles, non-fungibles,
and countables (e.g. foods, clothes, animals, etc.). This is in contrast to the
above mentioned opinion of Ab
u H
. anfa, who did not permit such sales for
non-fungibles.
9.3.3
Sh
afic opinions
The Shafics permitted the sale of one measure of volume out of a pile of food
stuffs of known total volume, to avoid gharar. The more widely accepted opinion
volume of the pile were unknown to one
also permits such a sale even if the total
or both trading parties. This ruling is based on the homogeneity of the parts of
the pile, thus rendering the ignorance with regards to the object of sale minor.
However, they do not permit the sale of an unidentified piece of a larger land
or cloth, due to the significant heterogeneity in such pieces that renders such a
sale similar to the sale of one unidentified sheep out of a flock.
They also render as valid the sale of a pile of foodstuffs of unknown volume
on a per-unit basis, as well as the sale of a non-fungible such as a house or piece
of land on a per-unit bases. In such cases, they ruled that the object of sale
is inspected visually, thus eliminating the gharar that results from ignorance of
the object of sale, while the ignorance of the price is not harmful since it can
be calculated.
Moreover, they allowed the gross-sale of a pile of foodstuffs, or a piece of
land, etc. without knowledge of its volume or area, and without specifying a
per-unit price. In this case, they also ruled that the gharar caused by ignorance
5 ibid.: Al-K
c
as
an ((H
Ghan Al-Mayd
an ((H
anaf), p.8).
.
c Abd
Al-
298
of the amount or area being sold is eliminated by visual inspection of the object
of sale. However, Al-Shafic said: I dislike the gross-sale of a pile of foodstuffs,
since its amount is truly unknown.

If the seller states the amount of the object of sale (e.g. 100 units of volume
or area) as well as an overall price (say 100 gold coins) indicated on a perunit basis (one gold coin per unit of merchandise), then if the amount of the
merchandise matched the stated amount, the sale is rendered valid since it meets
both pieces of information. However, if the quantity does not agree with the
one stated in the contract, then the sale is not valid since the two pieces of
information are in disagreement.
On the other hand, it is valid to sell a pile of foodstuffs, stated to be of
unknown volume, for a single named price. The sale is considered valid, as we
have seen above, since visual inspection negates the type of ignorance that is
considered gharar, but it is considered reprehensible since the buyer or seller
may later regret

the transaction.6
In summary, the Shafics agree with the Maliks in permitting gross-sales
of fungibles as well as non-fungibles. However, they differ with the H

. anafs by
invalidating the sale if a full price as well as a per-unit price are both specified but
do not agree, whereas the H
. anafs permit the sale but give the buyer an option.
Finally, the best accepted opinion among the Shafics, the one preferred by Al
Nawaw, renders the gross-sale of piles of foodstuffs reprehensible (makr
uh), due
to the gharar that it contains.
9.3.4
H
. anbal opinions
The H
. anbals permitted gross-sales where the buyer and seller do not know the
exact amount, whether the object of sale were fungible (e.g. foodstuffs), or
non-fungible (e.g. animals or clothes). They also render as valid the sale of
fungibles and non-fungibles alike on a per-unit basis, arguing that the object
of sale would be thus known by observation. The price in such a case is also
considered known since it is easily calculated by measuring the number of units
of the merchandise and multiplying it by the specified per-unit price. They also
permit the sale of the contents of a container with or without the container.
However, if such contents are sold on a per-unit-of-weight basis, the weight of
the container must be subtracted from the total weight when determining the
price.7
In summary, jurists agreed that it is valid for the seller to sell a pile of
foodstuffs, fungibles, and non-fungibles measured by weight, volume, or number,
on a per-unit basis, even if the total number of units were not known at the
contract time. This is the opinion of Malik, Al-Shafic, Ah.mad, Ab
u Y
usuf,
and Muh.ammad. Ab
uH
. anfa, on the other hand, ruled that the sale is only
valid for one measure of volume, and invalid for the rest. He argued thus that
6 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.16 onwards), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic),
.
vol.1, p.264 onwards), Al-Im

7 Ibn Qud
. anbal), vol.2,
pp.12,15).
9.4. GROSS-SALES OF MONEY AND JEWELRY
299
the total price is unknown, thus rendering the sale invalid in analogy to program
sales. He also differed from the other jurists by invalidating all gross-sales of
non-fungibles.
9.4
Gross-Sales of money and jewelry
Gross-Sales of money and jewelry are valid provided that the two sides of the
trade are of different genera. However, if the two genera are the same, then
gross-sale is not permitted since it would thus contain the suspicion of rib
a,
due to uncertainty about volume or weight. It is well known that suspicion of
committing a prohibited act is sufficient to warrant its avoidance, which can
be accomplished by measuring the volume or weight of the two compensations
in the trade, and ensuring equality to avoid rib
a. This ruling applies not only
to money and jewelry, but also to all other goods eligible for rib
a if sold in
exchange for goods of the same genus. Such gross-sales of goods eligible for rib
a
in exchange for goods of the same genus is rendered as invalid as a certain case
of rib
a .8
Thus, the H
. anafs stipulated the following general principle for the grosssales of money and similar goods: A commodity may be gross-sold if and only
if it may be traded in unequal quantities.9 This principle is agreed upon in all
four major schools of jurisprudence, with distinctions only being made across
the schools based on their varying classifications of goods as eligible for rib
a
(amw
al ribawiyyah) or ineligible. Thus, the Shafics do not permit the gross-sale
of foodstuffs for foodstuffs, or money for money, of the same genus, based on
the prohibition of selling an unknown amount of dates in exchange for a known
amount of dates.10
Based on this ruling, we can reach the following conclusions:
1. It is impermissible to gross-sell gold for gold or silver for silver, since
they may not be traded in unequal quantities. In this case, gross-sale
would result in lack of certainty of equality of the two compensations,
thus making it possible for rib
a to occur. This applies whether one or
both parties do not know the weight of each compensation, or if they
know one but not the other.
However, if both compensations were weighed during the contract session
and found to be of equal weight, then juristic approbation permits the
sale. In this case, knowledge of equality was satisfied during the contract
session, which is equivalent to knowledge at the inception of the contract.
On the other hand, if the buyer and seller part from the contract session
before the weighing, and then the two compensations were found to be of
equal weight, the sale is still considered defective. Zufar, alone, rendered
8 Al-K
as
an
((H
. anaf), vol.5, p.68).
((H
. anaf), vol.3, p.39).
10 Al-Khat
b Al-Shirbn ((Sh
amah (, vol.4, p.15), Ibn Juzayy
.
((M
alik), pp.247,257).
9 Al-Samarqand

300
the sale valid in both cases if the weights are equal, arguing that what
would prevent the contract from being valid is inequality, which is shown
not to be a factor.
2. It is valid to gross-sale one type of money for another of a different genus
(e.g. gold for silver), since differences in amounts are permitted in this
case. However, it is necessary to have mutual receipt during the contract
session in this case, as it is necessary if the monies were of the same genus.
This general principle also gives rise to a number of special cases:
It is not permissible for two partners to divide arbitrarily goods of a single
genus that is eligible for rib
a, while such arbitrary division is valid if the
goods are of different genera. In this case division has the legal status of
sales or exchanges, since what one partner takes is a compensation for his
share in the joint ownership, thus rendering it a sorting of goods in one
sense, and an exchange in another.
If a sword is exchanged for another in a gross-sale, or a copper-pot is
exchanged gross-sale for another of the same genus, without weighing, the
sale is valid if those items were sold by number. This follows since the
number of items that are sold by number does not enter the definition of
rib
a (which is restricted to volume and weight), thus allowing differences
in quantity without effecting rib
a. However, if those goods were sold by
weight, then gross-sale in exchange for goods of the same genus is not
permitted as seen above.11
If adulterated silver or adulterated gold are sold for another metal, then
legal consideration is given to the dominant metal. In this regard, silver
is commonly dominant for adulterated silver, and gold for adulterated
gold. Thus, adulterated silver inherits the legal status of pure silver, and
may not be sold in exchange for pure silver except hand-to-hand in equal
quantities. This ruling follows since almost all metals are adulterated to
some extent, and it is hard to detect the degree to which such metals are
adulterated. Also, adulterated silver or gold are viewed as lower-quality
versions of those metals, and we have seen that differences in quality are
not considered in exchanges of goods eligible for rib
a.
However, if the adulterated silver was in fact mostly copper, then its legal
status would be that of pure copper, and it can only be traded for copper
hand-to-hand in equal quantities.
Finally, if the adulterated metal was half silver or gold and half baser
metal, it is treated in sales and loan contracts the same as the case where
it is mainly silver or gold. Thus it is not permitted to trade it gross-sale or
by number. In contrast, it is treated as mainly base metal in the currency
exchange contract. In this case, if the half-silver half-copper coins are
11 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.185).
301
traded in exchange for pure silver, the sold object must be subdivided:
Thus, the sale is permitted if the pure silver is greater than the amount
of pure silver in the adulterated coins. In this case, the increase would be
considered compensation for the copper in those coins. However, if the
pure silver is less than the silver in the adulterated coins, or if the relative
amounts of pure silver are not known, the sale is not permitted based on
rib
a.12
If a sword adorned with gold or silver is sold for a price of gold or silver,
then:13
If the ornament is of the same genus as the price, and if the price
is greater than the amount of gold or silver in the sword, then the
sale is permitted, where the difference is considered a compensation
for the rest of the sword. This follows from the general principle in
the H
. anaf school to divide the price if part of the object of sale is
of the same genus and part of a different genus. In this case, part
of the price cancels out the amount of the same genus and the same
amount, the rest is considered a price for the rest of the object of
sale. We also agree with this opinion.
However, if the price is of equal or smaller weight than the ornament,
then the sale is not valid, since it contains surplus rib
a, since the rest
of the sword would thus be given with no compensation, which is the
very definition of rib
a.
If the price was not clearly known at the time of the contract, then if
the price is discovered during the contract session to be greater than the
weight of the ornament, the H
. anafs permit the sale. However, if they part
from the contract session and later discover that the price was sufficiently
large, the majority of H
. anafs render the sale impermissible, while Zufar
ruled that it reverts to validity, as we have seen in his ruling on gross-sales.
Thus, the general principle is this: If an object of sale contains an ornament of the same genus as the price, then the price must exceed the
amount of that metal in the object of sale. In this case, the excess weight
of the price over the ornament is considered a price for the remainder of
the object. However, if the price was not greater than the weight of the
ornament, or if the latter weight is unknown, the sale is rendered invalid.
If the price was of a different genus than the ornament, then the only
condition is mutual receipt during the contract session, and inequality of
amounts is permitted.14
As we have seen, the validity of the sale in the case where the price exceeds
the weight of the ornament requires immediate receipt of the portion of
12 Al-Zaylac
((H
. anaf Jurisprudence), vol.4, p.140 onwards).
Al-Hum
am ((H
. anaf), vol.5, p.217 onwards), Al-Samarqand ((H
. anaf), vol.3, p.41
n ((H
onwards), Ibn c Abid
14 Ibn c Abid
n ((H
. anaf), vol.4, p.48).
13 Ibn

302
the price equivalent to that amount of gold or silver during the contract
session. However, if the buyer and seller part without mutual receipt, or
if one receives his right in the transaction while the other does not, we
must consider two cases:
1. If the ornament cannot easily be removed from the object of sale
without harm, the entire sale is rendered defective. The part of the
sale relating to the ornament is rendered defective due to non-receipt,
and the part relating to the rest of the merchandise is rendered defective since it cannot be delivered without causing a loss to the seller
(in analogy to selling a ceiling beam of a house). If the gold or silver
is indeed physically separated from the merchandise, then that latter
part of the sale reverts to validity as in the next case.
2. If the ornament can indeed be removed without causing harm or
loss, the sale is rendered defective for the gold or silver component,
and valid for the rest of the object of sale. In this case, the sale
is partitioned into a currency exchange for the gold or silver, and a
regular sale for the rest of the merchandise. In this regard, mutual
receipt during the contract session is only a condition for the validity
of the currency exchange portion of the contract.
Recall, moreover, that there are two necessary conditions for the validity of
currency exchange: (1) the contract must not contain a conditional option,
and (2) neither compensation may be deferred. If an item containing gold
or silver is traded for price paid in gold or silver, then both conditions
must be met, otherwise the sale is defective. In this context, three cases
are considered:15
1. If the gold or silver in the object of sale cannot be separated without
causing harm and loss, the entire sale is rendered defective by the
conditional option or deferment. In this case, the sale is defective
both for the gold or silver and the rest of the merchandise, since
neither can be sold alone. However, if the buyer and seller receive the
price and merchandise prior to parting, thus voiding the option and
dropping the deferment, most of the H
. anafs ruled that the contract
reverts to validity, while Zufar ruled that it remains defective.
2. If the gold or silver can be separated from the rest of the merchandise
without causing harm or loss, Ab
u H
u Y
usuf render
. anfa and Ab
the contract defective, since the contract thus contains a defective
element and a valid one, where the defect pertains to the object of
sale and thus covers the entire transaction. Muh.ammad, on the other
hand ruled that the sale of the gold or silver is thus invalidated, while
the sale of the rest of the merchandise is valid. Thus, in his opinion,
the part of the contract that is defective is rendered invalid, and the
part that is valid remains valid.
15 Ibn
Al-Hum
am ((H
303
3. If two traders (i) exchange gold for gold, or silver for silver, of equal
weight, (ii) part after mutual receipt, and then (iii) one of them
gives the other an additional compensation and the other accepts it,
Ab
uH
u Y
usuf renders all
. anfa renders the entire sale defective; Ab
later additions or deductions nugatory and invalid, while maintaining
the validity of the initial sale; and Muh.ammad renders deductions
permissible as a separate gift, while he renders any addition invalid.
The source of this difference in opinion is their differing treatment of
the addition of a defective condition after the contract is concluded.16
Ab
uH
. anfa ruled that such a condition is appended to the contract,
and renders it defective. Thus, any addition or deduction after the
contract is appended to the contract, rendering it defective as though
the difference in the two compensations existed at the inception of
the contract, thus rendering it defective due to the forbidden rib
a.
Since such a defective condition thus voids the contract, it is not
permitted for one party to effect such a voiding, thus requiring that
the other party accepts that condition for the defective condition to
be appended to the contract.
u Y
usuf and Muh.ammad both ruled that
the defective condition is not appended to the contract. Ab
u Y
usuf
takes this ruling to its logical conclusion, thus ignoring the defective
condition regardless of whether it was an increase or a deduction,
thus retaining the validity of the initial contract.
Muh.ammad, on the other hand, distinguished between the two conditions of addition and deduction. In the case of addition, if it were
valid, it would be appended to the contract and render it defective,
and thus such an addition is rendered invalid. Deductions, on the
other hand, are valid even if not appended to the contract. For instance, the seller has the right to drop the entire price, and the sale
would still be valid without appending the full price deduction to the
contract. Indeed, if the full deduction of the price were appended to
the contract, it would be a sale without a price, which renders the
deduction a gift regardless of the initial sale.
The above analysis all pertained to the case of trading gold for gold
or silver for silver. However, if the contract consisted of a sale or
currency exchange of gold for silver, and then one party adds or
deducts from what he pays the other with the others consent, the
H
. anaf jurists unanimously render the addition or deduction valid.
In this case, such addition or deduction is appended to the contract,
since there is no fear of rib
a due to the difference in genus between
the two compensations.
The only condition in this case is that the addition is received during
the session in which it was offered and accepted. However, if the two
sides part after that session without receiving the increase, the sale
16 Ibn
c
n ((H
Al-Hum
am ((H
. anaf), vol.4, p.246).
304

is invalidated in proportion to the increase. In this case, the increase
is ruled to be appended to the original contract, thus rendering the
increase part of the price in a currency exchange, which must be
delivered during the appropriate session when it becomes part of the
contract.
This is in contrast to deductions, which need not be received during
that session when it was proposed and accepted. This follows since
the only effect of appending this deduction in price is the inequality
of the two compensations, which is not problematic since there is
no danger of rib
a when the exchanged items are not of the same
genus. However, the party who collected the amount that was later
deducted is obliged to return it to the other party, since appending
the deduction to the contract means that this extra amount was not
part of the price, and thus must be returned.
9.5
Conditions of gross-sale
The Malik jurists stipulated seven conditions for gross-sales,17 that are briefly
discussed here, with added references to the conditions stipulated by jurists of
other schools:
1. The object of sale must be visible at the time of the contract or before,
and the nature of the object must continue to be known to the parties during the contract. Thus, gross-sales of unseen merchandise, and gross-sale
trading of blind persons, are rendered invalid. In this regard, visibility of
a connected part of the object of sale that is similar to the rest, and visibility of the top of a pile of foodstuffs, is sufficient to satisfy this condition.
Moreover, if the object of sale would be ruined by visual inspection (e.g.
vinegar in opaque container, which would be spoiled if the containers are
opened), then it need not be visually inspected, but must be described by
the seller.
18
c
The H
afics, and H
. anbals agree with this condition. Al-Zayla
. anafs, Sh
said in this regard: One of the conditions for permission of gross-sales

is the identification of the object of sale, and the Shafics and H
. anbals
said: visual inspection of a pile of foodstuffs and similar objects of sale

is sufficient [for permission of gross-sales], since it removes the potential
for gharar caused by ignorance.
2. Both the buyer and seller must be ignorant of the exact measure of the
object of sale in terms of volume, weight, or number. Thus, if one of the
two parties discovers the exact measure and informs the other after the
17 Al-Dard
r ((M
alik)A, vol.3, p.20 onwards), Ibn Rushd Al-H
alik), vol.2, p.157),
. afd ((M
Al-H
ab (1st edition (M
alik)B, vol.3, pp.35-40), Al. at.t.
c
Gharar wa Atharuhu f Al- Uq
ud by Dr. Al-D
. arr (p.234 onwards).
18
Al-Zaylac ((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
. anaf Jurisprudence), vol.4, p.5), Ab
p.265), Ibn Qud

amah (, vol.4, p.123).
9.5. CONDITIONS OF GROSS-SALE
305
conclusion of the contract, the second party has an option. The establishment of this option proves that this condition is a condition for making
the sale binding, and not a condition for its validity. On the other hand, if
both parties knew the exact measure of the merchandise at the time of the
sale, the contract is rendered defective, since they ignored the knowledge
of its volume and weight and willingly participated in a sale containing
gharar. In the last case, the merchandise must be returned, unless it has
perished
in which case the buyer must pay its value.19
Ibn Juzayy noted the differences in opinion between the H
. anafs and
Shafics with regards to this condition, where the latter regard it as a
validity condition.20 On the other hand, Imam Ah.mad ruled that if the
seller knows the amount of foodstuffs in his possession, he is not allowed
to gross-sell them without measure. He further ruled that if the seller
in this situation does indeed gross-sell the foodstuffs without measure,
despite his knowledge of the amount, then the sale is valid and binding,
but reprehensible since it is better for the seller to inform the buyer of the
amount being sold.21
3. Gross-Sales are permitted for goods being sold in large quantities, and
not by count. Thus, gross-sales of goods measured by volume or weight
(e.g. grains and iron, respectively) or by size (e.g. land and cloth) are
permitted, while gross-sales of goods measured by count is not permitted
unless it is difficult to count them. Thus, if the number of items being
sold is sufficiently small to count with ease, it must be sold by number
rather than gross-sale. However, if the number is so large as to make
counting costly, gross-sales are permitted. Thus, we can see that the point
of this condition is to ensure that gross-sales are used only when selling
goods in such large quantities that the gain from exact measurement is
outweighed by the cost and difficulty of such measurement. Thus, grosssales of countables whose individual items are cheap (e.g. eggs, fruits, etc.)
are permitted, while sales of major items where each individual unit has
a significant price (e.g. riding animals, some clothes, etc.) must be based
on an accurate count. Moreover, the gross-sale of raw gold and silver is
permitted, while the sale of gold and silver coins and jewelry requires exact
measurement (by weight or number).
In summary, there are four cases based on whether or not counting is
difficult, and whether or not the price is low. If counting is easy, then
gross-sale without accurate counting is not permitted in either case. If
counting is hard, we consider two more cases with regards to whether or
not each individual item is sufficiently significant. If the items are not
significant, and counting is hard, then gross-sale is permitted. However,
if the items are significant, then gross-sales are permitted if each items
19 Ibn
Juzayy ((M
alik), p.246).
afic), vol.9, p.343).
Qud
20 Al-Im
am
21 Ibn

306
price is low, and not permitted if each items price is high.22

We have already seen the differences among H
. anaf jurists in this regard.
Thus, Imam Ab
u H
. anfa restricted the permissibility of gross-sales to
the first unit (of volume or weight) of fungibles (measured by volume
or weight, respectively). On the other hand, we have seen that Ab
u
Y
usuf and Muh.ammad have permitted gross-sales of all goods measured
by volume, weight, measured by size (e.g. cloth, land, etc.), number of
homogeneous items (e.g. eggs, nuts, etc.), or number of heterogeneous
items (e.g. animals). As I have argued previously, I prefer the ruling
based on the latter opinion to make transactions easier for people.23 We
have also seen that this ruling agrees with the permissibility of gross-sales
of all items measured by volume, weight, size, or number, in the Shafic
and H
. anbal schools.
4. The amount of the gross-sale must be estimable by experts at estimation.
Thus, gross-sales of goods whose amount cannot be estimated by experts
(e.g. pigeons in a dovecot, or chicks running around in a large poultry
farm) is not permitted, unless the conditions (e.g. sleep) make it easy to
estimate the amount prior to concluding the contract. In this regard, the
condition that the amount being sold must be easy to estimate by experts
should be sufficient since repeated dealings in the same goods would easily
allow the trading parties or their legal agents to acquire the necessary skill
to make such accurate estimation. The Shafics have also adopted this
condition, requiring the ability to guess the amount of foodstuffs in a sold

pile, and in the better accepted opinion of the school the sale of bees
in the hive if the flow in and out of the hive is sufficient to estimate the
total number.24
5. It is also a condition that the amount of the goods being sold by grosssale is not overwhelmingly large. In this regard, whether the goods are
measurable by volume, weight, or number, it is not permitted to gross-sale
it if the amount is too large to be reasonably well estimated. On the other
extreme, if the amount is not too large, then gross-sale is permitted only
if it is measured by volume or weight, while it is not permitted if it is
measured by number since counting would be trivially easy in this case.
6. The ground on which the merchandise is placed must be flat (or thought
to be flat). Thus, if the land is known not to be flat, the gross-sale
would be considered defective due to the excess uncertainty (gharar kathr)
caused by difficulty of estimating the amount being sold. Ifthe land was
believed by both parties to be flat, but then it is found to be otherwise, the
buyer has an option if the non-flatness favored the seller (by making the
22 Ha
shiyat
Al-Dus
uq (vol.3, p.21).
c
((H
an Al-Mayd
an ((H
. anaf), vol.5, pp.88-90), Abd Al-Gh
. anaf), vol.2, p.7
23 Al-K
as
an
onwards).
24 Al-Im
afic), vol.9, pp.
((Sh
afic), vol.1, p.265).
345,353), Ab
u-Ish.
aq Al-Shr
az
9.5. CONDITIONS OF GROSS-SALE
307
goods seem more than they were). On the other hand, the option is given
to the seller if the non-flatness favored the buyer (by making the goods
seem less than they were). The Shafics have agreed with the Maliks
on this condition for sales of piles of foodstuffs. They also added similar
conditions for sales where other circumstances may make the merchandise
seem more or less than its real amount.25 The H
. anbals also agreed with
this condition, and the resulting option to the buyer or seller depending
on whom is favored by the non-flatness of the ground.26
We can also infer that the H
. anafs implicitly required a similar condition
in their analysis. In this regard, we recall their ruling that permitted
gross-sales of goods in a container, provided that the container was not
flexible.27
7. The merchandise of a gross-sale should not consist of a portion being
sold by gross-sale, and another that is measured, whether the two parts
are of the same or different genera (e.g. mixing measured grains with
unmeasured grains or land, measured land with unmeasured grain or land,
measured with unmeasured land). In all such cases, the legal status of the
sale of the known amount is affected by the ignorance inherent in the other
part.
However, it is permissible to combine two sets of merchandise in one contract, where each is sold in the manner appropriate to it. Thus, it is
permissible to have a contract where a known volume of wheat and an unmeasured piece of land are sold, the first according to its volume and the
second by gross-sale, for one named price. In such a case, since the part
measured by volume is explicitly sold as such, and the part of unknown
quantity was explicitly sold as such, there is no legal restriction to prevent
the contract.28
25 Al-Im
afic), vol.9, pp.315,345,350), Ab
u-Ish.
aq Al-Shr
az
((Sh
afic), ibid.).
26
Ibn Qud
27 Al-Zaylac
((H
as
an ((H
. anaf Jurisprudence), vol.4, p.5), Al-K
. anaf), vol.5, p.86).
28 Al-Dard
r ((M
Chapter 10
Rib
a
This chapter will deal exclusively with the rib
a that is a categorically forbidden type of sale. The chapter will proceed in four sections:
1. Defining rib
a, and proofs of its prohibition.
2. Types of rib
a.
3. Criteria of eligibility for rib
a according to the different juristic schools.
4. The consequences of juristic differences over the causes of rib
a.
10.1
Definition and Proof of Prohibition
The lexical meaning of rib

a is increase. Allah (swt) said: But when we
pour down rain on it, it is stirred to life, and it swells (rabat) [22:5]. Thus, the
growth that comes forth from the ground is labeled as rib
a. He (swt) also said:
Lest one party would be more numerous (arb
a) than the other [16:92]. Thus,
an increase in number, amount, etc., is considered rib
a in the lexical sense of
the word.1
The legal sense of the term rib
a for the H
. anbals is restricted to increases in
specific items. The H
aiq as: An increase in
. anafs defined it in Kanz Al-Daq
one good for another in an exchange, without a compensation (c iwad.) for the
increase. This definition includes the increase in one of the goods even if that
increase is legally inferred rather than directly observed. Thus, the definition
covers both rib
a al-nasah, as well as [many] defective sales, since deferment
of one of the two compensations in an exchange results in a legal inference of
increase (since time naturally requires a compensation) even if the increase is
not tangible.2
1 Al-Khat
b
Al-Shirbn ((Sh
afic), vol.2, p.21), Al-Raml ((Sh
((H
. anaf), vol.4, p.184).
2 Ibn c Abid
309
310
CHAPTER 10. RIBA
Rib
a is forbidden in the Quran, the tradition of the Prophet (pbuh) (Sunnah), and consensus (ijm
ac ). In the Quran, the strongest prohibition is provided in the verses [2:275279]:
Those who devour usury (rib
a) will not stand except as stands one
whom the Evil One by his touch hath driven to madness. That is
because they say: trade is like rib
a, but Allah hath permitted trade
and forbidden rib
a.3
Those who after receiving direction from their Lord desist shall be
pardoned for the past; their case is for God (to judge); but those
who repeat (the offense) are companions of the fire. They will abide
therein (forever).
God will deprive usury of all blessing, and He will give increase for
deeds of charity. For He loves not creatures ungrateful and wicked.
O ye who believe! Fear God, and give up what remains of your
demand for rib
a if ye are indeed believers.
If ye do not [give up rib
a], take notice of a war from God and His
Apostle; but if ye turn back ye shall have your capital sums, without
increase or diminution.
The prohibition of rib
a began during the eighth or ninth year after the
Prophets (pbuh) emigration (hijrah) to Madnah.
There are many proofs of the prohibition of rib
a in the Sunnah of the Prophet
(pbuh). Among them is the H
ad
th
:
Avoid
the
seven grave sins..., among
.
d (mAbpwh) narrated
which he mentioned devouring rib
a.4 Also, Ibn Masc u
that the Messenger of Allah (pbuh) cursed the one who devours rib
a, the one
who pays it, the one who witnesses it, and the one who documents it.5 Also,
c
AlH
d that the Prophet (pbuh) said:
. akim narrated on the authority of Ibn Mas u
There are seventy three different types of rib
a, the least of which is equivalent
3 In the verse [2:275], All
ah debunks the statement of the Arabs before Islam that a sale
with no rib
a is identical to one with rib
a [properly adjusted]. In other words, they argued
that adding the increase to the original price at the time of inception of the sale is identical
to adding the increase at the end, when debts and liabilities are due. All
ah made it clear
that the difference is significant between the first increase, which is due to deferment of the
debt, and the second, which is part of the sale. In this regard, the increase in a sale is part
of the compensation for the object of sale, whereas rib
a is purely a compensation for time in
deferment, c.f. the exegesis of Al-Qurt.ub and Majmac Al-Bay
an by Al-T
. ubrus.
4 Narrated by Muslim on the authority of Ab
u Hurayrah, that the Prophet (pbuh) said:
Avoid the seven grave sins. The companions asked: And what are they, O Messenger
of All
ah?. He said: They are: associating others with All
ah, engaging in magic, killing
a forbidden human soul without a legal right, devouring rib
a, devouring the wealth of an
orphan, escaping on a day of religious battle, and defamation of unsuspecting believing married
women, c.f. Ibn Daqq Al-cId (, p.518).
5 Narrated by Ab
u D
aw
ud and others in that form, and narrated by Muslim on the authority of J
abir that the Messenger of All
ah cursed equally the one who devours rib
a, the
one who witnesses it, and the one who documents it, which is also similar to the narration of
Al-Bukh
ar on the authority of Ab
u Juh.ayfah. Al-Tirmidh and Ibn M
ajah narrated on the
authority of Anas a H
that contained the same curse, c.f. Al-Haytham (, vol.4, p.118),
. adth
Al-S.anc
an (, vol.5, p.154).

10.2. TYPES OF RIBA
311
to bedding ones mother, and the worst of which is equivalent to destroying the
honor of a Muslim.6 There are many other H
s in this area, some of which
. adth
will be listed in the subsection dealing with its causes.

The Islamic nation is in consensus over the prohibition of rib
a. In this
regard, Al-M
awird said: To the point that no legal system (sharc ah) has ever
permitted it, as evidenced by the verse That they took rib

a, though they were
forbidden to do so [4:161], meaning in the previous revelations.7
There are two main types of rib
a:
1. Rib
a al-nasah, which is the only type known to pre-Islamic Arabia. This
is the rib
a collected in compensation for deferring a due debt to a new
term of deferment. This definition applies regardless of the source of the
due debt: whether it resulted from a loan, or a deferred price in a sale.
2. Rib
a al-buy
uc (sales) for six goods (gold, silver, wheat, barley, salt, and
dates). This is also known as rib
a al-fad.l, which was forbidden to prevent
potential circumvention of the prohibition of rib
a al-nasah, which can
be effected by selling gold with a deferred price, which he later pays with
increase containing rib
a disguised through a payment in silver. [tr: note
that gold and silver are often used denote the two types of money used
during the prophets (pbuh) time (Roman Dinars and Persian Dirhams,
respectively).]
The first type of rib
a is the one forbidden in the Quran, and it is the rib
a
al-j
ahiliyyah. The prohibition of the second type of rib
a was established in the
Sunnah by analogy to the first kind, based on an increase without proper compensation. The Sunnah also added a prohibition of a third type of sale, called
a or deferment sales, where the two compensations are different and
bayc al-nas
one of them is deferred. In this case, deferring one of the two compensations
implies an increase, in similarity to a loan that results in some benefit, since the
deferment may be viewed as an exchange of an item for itself.8
The legal status of a rib
a contract is thus: forbidden and invalid for the
majority of jurists, defective for the H
. anafs.
10.2
Types of Riba
The majority of jurists classify rib

a in sales into two categories: rib
a al-fad.l
and rib
a al-nasah.9 The H
a al-fad.l, which is a sale,
. anaf jurists defined rib
6 Narrated in an abridged form by Ibn M
ajah, and in full by Al-H
akim, who rendered it
.
valid. There are many similar H
s, which include the mention of seventy types of rib
a,
. adth
and of seventy two types, c.f. Al-Haytham (, vol.4, p.117), Al-S.anc

an (2nd printing, vol.3,
p.37).
7 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.270), Ibn Qud

amah (, vol.4, p.1), Al-Sarakhs (1st edition (H
anaf), vol.12, p.109), Al.
K
as
an ((H
shiyat Qaly
ub and c Umayrah (vol.2, p.166).
. anaf), vol.5, p.274), H
.a
8 Ab
u-Ish.
aq Al-Sh
at.ib (1970, vol.4, p.40).
9 Ibn Al-Hum
am ((H
d Al-H
alik), vol.2, p.129),
. afd ((M
H
a
sh
iyat
Al-Dus
u
q
(vol.3, p.47), Ibn Qud

amah (, vol.4, p.1), Ibn Qayyim Al-Jawziyyah
.
312
CHAPTER 10. RIBA
as follows: It is an increase in the measure (weight or volume) of one of two

compensations of the same genus in a sales contract.10 Note that we do not
restrict the definition to the case where such an increase is stipulated as a
condition in the contract (as Al-Kasan had done). In this regard, rib
a results
from increase in a sale or loan, whether or not that increase is stipulated as a
condition.
We further note that the definition clearly identifies increases in terms of
legal measurements by weight (for items conventionally measured by weight)
and volume (for items thus measured). This intentionally excludes differences
in value, which are deemed to have no legal consequences. It also excludes
difference in size or number for non-fungibles, since they are not eligible for
rib
a. Thus, rib
a (in the sense of increase) is not forbidden in trading nonfungibles such as animals, furniture, real estate, etc. Such items may be traded
in different quantities. In this regard, rib
a (in the legal sense) is restricted only
to items measured by weight and volume. On the other hand, if one meter of
cloth is traded for six, one egg is traded for two eggs, or one sheep is traded for
two sheep, the trade is permitted provided that the exchange takes place during
the contract session. However, if either compensation in such trades is deferred,
the sale is not permitted, since unity of the genus by itself is sufficient to forbid
rib
a al-nas
a, which results from deferment.
Thus, the definition of rib
a al-fad.l may be restated thus: It is the trading
of one set of goods that are eligible for rib
a for another set of the same goods,
with an increase of one compensation over the other. Thus, in summary,
exchanging such ribaw goods requires equality of the amounts exchanged if they
are of the same genus. Ab
u Y
usuf defines equality by applying the conventional
measurement device (weight or volume) for each compensation separately, and
then determining if they are equal according to that measurement.
Note, moreover, that the prohibition of rib
a when trading in gold and silver
(as the two monies used during the Prophets (pbuh) time), and whatever other
forms of money are commonly used, does not distinguish between raw metals
and those minted into legal tender coins. Thus, jurists stated that raw silver
and silver coins are treated as equivalent. However, Ibn Al-Qayyim permitted
selling gold and silver jewelry (provided they are intended for legitimate usage,
e.g. as female jewelry or a permitted silver ring) for more than their weight in
gold or silver. Such increase is permitted as a compensation for the workmanship
used to produce the jewelry, as well as the consumers need for such trading.11
The H
a al-nasah as follows: Com. anafs define the type of sale called rib
pensation for the preference of immediate payment over deferment, and [compensation for the] preference of an identified object over one defined by its
characteristics as a liability, where the objects are measured by weight or vol((H
. anbal), vol.2, p.135).
10 Ibn Al-Qayyim called it: The hidden Rib
a, which was forbidden to guard against
circumvention of the law, as evidenced by the H
of Ab
u Sacd Al-Khudriy (mAbpwh)
. adth
that the Prophet (pbuh) said: Do not trade one Dirham for two Dirhams, for I fear that you
may fall in rib
a.
11 Ibn Qayyim Al-Jawziyyah ((Hanbal
), vol.2, p.140).
.

10.2. TYPES OF RIBA
313
ume,12 and are of different genera, or measured otherwise but are of the same
genus. Thus, trading goods of some genus for goods of the same or another
genus with an increase in the measure (by volume or weight) in compensation
for deferment fall under this definition. Examples include trading one volume of
wheat for one and a half volumes to be paid in two months, trading one volume
of wheat for two volumes of barley to be paid in three months, or (without
increase) trading one volume of dates delivered immediately for one volume of
dates to be delivered later. Examples for items not measured by volume or
weight include trading one large fruit in exchange for two large fruits to be
delivered in a month.13
In all such examples, rib
a al-nasah is established due to increase in one of
the two traded sets of goods without a compensation. The prohibition in the
case of equality of the amount, on the other hand, is caused by the differences
in value. In this regard, neither party would normally accept deferring his right
in the exchange without receiving an increase in value, which of course is
rib
a.14
Ibn c Abb
as, Usama ibn Zayd, Al-Zubayr, and Ibn Jubayr, among others,
argued that the only forbidden rib
a is that involving deferment (rib
a al-nasah).
They based it on the H
ad
th
narrated
by
Al-Bukh
a
r
and
Muslim
on the au.
thority of Usama that the Prophet (pbuh) said: There is no rib

a except with
deferment. This opinion is debunked based on the many H
s banning rib
a
. adth
as reversed his
al-fad.l. This is indeed the evidence based on which Ibn c Abb
opinion, as narrated by Jabir ibn Zayd. Later, all the followers of the Prophet
(pbuh) reached a consensus of the prohibition of both types of rib
a, and no
disagreement remains. The H
ad
th
that
had
led
to
this
difference
in
opinion is
.
interpreted as follows: The Prophet (pbuh) was asked about exchanging wheat
for barley and gold for silver with deferment, and he (pbuh) said: There is no
rib
a except with deferment, in reference only to the question posed before him
12 Ibn Al-Qayyim labeled this increase blatant rib
a (al-rib
a al-jaliyy). It was common
before Islam, where the creditor would tell the debtor when the debt matures: pay or increase
your debt. It results in compounded profits.
13 The deferred payment is in compensation for an immediate delivery of goods. The preference of immediate payment over deferment is self evident. The preference of an identified
object over its description as a liability, since the latter when delivered may not possess all
the desired characteristics, and may even fail to be delivered at all. In this regard, the object
of sale may be unidentified and defined as a liability (e.g. unidentified amounts of wheat) in
exchange for an identified amount of barley, which is an identified price. In this regard, since
an identified object is preferred to a fungible liability, even if it is to be paid instantly, the
requirement of equality of the two compensations is necessary to avoid suspicion of having an
increase that constitutes rib
a. The preference of an identified object over a fungible liability is
made clear by the fact that it is not permitted to take zak
ah on identified non-fungibles in the
form of fungibles. Moreover, the requirement of exchanging non-fungibles for non-fungibles is
established in the H
through the expression hand-to-hand, since the hand in this case
. adth
identifies the objects being traded. Similarly, the condition of equality is established through
his (pbuh) saying in equal amounts (mithlan bi-mithl). Thus, when exchanging two sets
of goods eligible for rib

a requires identifying them to ensure equality. This requirement is a
small generalization of the more basic requirement for permissibility in all sales that one of
the two exchanged goods is identified, to avoid trading one debt for another, which is rib
a.
14 Ab
u-Ish.
aq Al-Sh
at.ib (1970, vol.4, p.42).
314
CHAPTER 10. RIBA
[where deferment was postulated]. Thus, it would seem that the narrator either
did not hear the first part of the encounter, or did not make an effort to include
it in the narration.15 In this regard, it would seem that the Prophets (pbuh)
statement There is no rib
a... really means to emphasize that the more serious,
more common, and more punishable rib
a is the one caused by deferment. This
is a common expression of Arabs, who would say there is no scholar in the land
except for so-and-so, to emphasize that he is the most knowledgeable, not that
there physically are no other scholars.
a:
The Shafics define three types of rib
1. Rib
a al-fad.l, which is effected by an increase of one traded set of goods
over its compensation without any deferment. This type of rib
a comes into
effect only if the two compensations are of the same genus (e.g. wheat
for wheat, gold for gold, etc., in different quantities). The scholars are
unanimous over the prohibition of this type of rib
a and its characterization,
based on the H
narrated by Al-Bukhar and Muslim on the authority
. adth
of Ab
u Sacd Al-Khudriy: Do not trade gold for gold except in equal
amounts, with no increase of one over the other; and do not trade silver
for silver except in equal amounts, with no increase of one over the other.
2. rib
a al-yad, which is effected in a trade with deferment of receiving one
of the compensations, or without mentioning the term of deferment. In
other words, this rib
a comes into effect if two goods of different genera (e.g.
wheat and barley) are traded without mutual receipt during the contract
session. The H
a under their definition of rib
a
. anafs include this type of rib
al-nasah, where they cite preference of identified (and thus non-fungible)
goods over liabilities (which must be fungible). The ruling for this type
of rib
a follows as a special case of the condition of mutual receipt if both
traded goods are eligible for rib
a. In this case, the condition is violated
since receipt of one or both of the compensations is delayed by action (and
not via a stipulated condition). Proof of the prohibition of this type of
rib
a is offered in the H
narrated by Al-bukhar and Muslim: Gold
. adth
for gold is rib

a unless it is hand-to-hand.
3. Rib
a al-nasah, where one of the two compensations is increased because
of deferment, with no other form of compensation for that increase. This
type of rib
a comes into effect regardless of whether the traded goods are
of the same or of different genera, and whether they are traded in equal
or different amounts. Proof of the prohibition of this rib
a is provided in
c
Ub
a
dah:
And if the
the H
ad
th
narrated
by
Muslim
on
the
authority
of
.
genera are different, then sell as you wish as long as it is hand-to-hand, as

well as the H
narrated by Al-Bukhar and Muslim on the authority of
. adth
Ab
u Sacd Al-Khudriy: And do not trade when one of them is delivered
immediately and the other is deferred, and the above mentioned H

. adth
narrated by Muslim: In equal amounts, hand-to-hand.

15 Al-Sarakhs
(1st edition (H
am Al-Nawaw/Al-Subk
((Sh
afic), vol.10, p.48; continuation of Al-Subk).

10.3. CAUSES OF RIBA
315
The Shafics recognize the last two categories only if the traded goods are
of different genera. The difference between the two types in their school is that
rib
a al-yadd results from delay of physical receipt, while rib
a al-nasah results
from delay (however short) of the right to receipt through the contract. Thus,
rib
a al-nasah is restricted in their school to sales that mention deferment, while
rib
a yadd deals with the case of an immediate trade where the actual receipt is
a, which
delayed. One of the Shafics (Al-Mutwall) added a fourth type of rib
he defined as the rib

a of a loan with a stipulated condition beneficial to the
creditor. However, Al-Zarkash ruled that this last type can be subsumed under
rib
a al-fad.l.16
In summary, rib
a al-nasah is the deferment of a liability in return for an
increase (which is also called rib
a al-j
ahiliyyah), or the delay of receiving one of
two compensations when trading goods eligible for rib
a for goods of the same
genus. In contrast, rib
a al-fad.l is increasing the amount of one compensation
when trading goods eligible for rib
a with goods of the same genus immediately
with no deferment.17 Note thus, that if a trader says that the cash-price of a
good is five dollars, and the deferred price is six, then the deferred sale is indeed
permitted with no rib
a, since the two compensations are of different genera.
However, some of the Zayd jurists render it a forbidden form of rib
a.
10.2.1
Suspicions of rib
a
Ibn Kathr said that mukha

barah (financing agricultural production with agri
cultural goods), muz

abanah (exchanging fresh dates on palms for dried dates),
muh.a
qalah (exchanging grains in their spikes for separated grains), and similar
practices, were all banned to avoid the suspicion of (and possibility of effecting)
rib
a. His reasoning is that equality in such transactions cannot be ascertained
before the goods dry-out. Thus, jurists ruled that ignorance of equality has the
legal status of knowledge of inequality. Based on this ruling, they forbade many
of the methods that may be used to circumvent the prohibition of rib
a.18
10.3
Causes of rib
a
Jurists agreed on the prohibition of surplus rib

a in the seven goods listed in the
H
: gold, silver, wheat, barley, dates, raisins, and salt. Thus, trading any
. adth
of those goods for goods of the same genus in different quantities is forbidden.
However, jurists disagreed over the prohibition of trading in the same genus in
different amounts for other goods:
The Z.ahirs restricted the prohibition to the listed goods.
16 Al-Raml
((Sh
shiyat
.a
Qaly
ub wa c Umayrah (vol.2, p.167), H
shiyat Al-Sharq
aw (vol.2, p.30 onwards).
.a
17 Usu
c Al-Mamn
c ah (p.95).
l
Al-Buy
u
u
.
18 See Tafs
r Ibn Kathr (vol.1, p.327).

CHAPTER 10. RIBA
316
Al-Shafic, and one of the narrations on Imam Ah.mad, restrict the pro
hibition to the two monies (gold and silver), and foodstuffs, whether or
not they are measured by weight or volume. They define foodstuffs in this
regard as anything consumed or stored as nutrition, dessert, or medicine.
The opinion of Sacd ibn Al-Musayyibb, and one narration each for AlShafic and Ah.mad, restrict the prohibition to the two monies, and food
stuffs measured by volume or weight.
Malik restricted the prohibition to nutritious foodstuffs that can be stored
as a source of nutrition. Ibn Al-Qayyim considered this the most correct
opinion.19
In what follows, I shall discuss the most important of those opinions in some
detail:
10.3.1
H
. anaf rulings
The H
a al-fad.l (by which goods eligible for
. anafs argued that the cause for rib
rib
a are defined) is the trading of any good measured by weight or volume in
exchange for goods of the same genus. In such cases, both trading instantaneously in different amounts, or trading with deferment, are forbidden.20 Thus,
the cause for prohibition for the four goods mentioned in the H
(wheat,
. adth
barley, dates, and salt, when traded for goods of the same genus) is that they
are measured by weight. For gold and silver, the cause of prohibition of trading
in exchange for the same genus is that they are measured by weight. Thus, the
cause for rib
a al-fad.l requires the two factors: amount (in weight or volume)
and genus.21 Thus, they ruled that fungibles (measured by weight and volume)
are eligible for rib
a (if traded in different quantities or with deferment), while
non-fungibles (e.g. animals, real estates, jewelry, etc.)are not eligible for rib
a.
Thus, it is permissible to trade one sheep for two sheep, since sheep are not
measured on any uniform scale. Also, rib
a al-fad.l does not apply to fungibles
measured by size or number.22
This ruling is based on a valid (H
) narrated on the authorities of
. adth
Ab
u Sacd Al-Khudriy and c Ub
adah ibn Al-S.amit (mAbpwt) that the Prophet
19 Ibn

. anbal), vol.2, p.136).
Al-Hum
am ((H
as
an ((H
aw
. anaf), vol.5, p.183), Al-K
. anaf), vol.5, p.274), Al-T
. ah.
c
n ((H
((H
s (1st edition (H
. anaf),
. anaf), p.75), Al-Sarakh
vol.4, p.186).
21 In this regard, an object is determined to be measured by weight or volume based on convention during early Islamic history. Ab
u D
aw
ud and Al-Nas
a narrated in this regard on the
authority of Ibn c Umar (mAbpwt) that the Messenger of All
ah (pbuh) said: Measurement
by weight is determined according to practice of the people of Makkah, and measurement by
volume is determined according to the practice of the people of Madnah, c.f. Ibn Al-Athr
Al-Jazar (, vol.1, p.371), Ibn H

u Y
usuf ruled that the method of measure. ajar (, p.183). Ab
ment for goods eligible for rib
a is determined by convention in each society, and may change
across time and place, c.f. Al-Madkhal Al-Fiqh by Prof. Al-Zarq
a (p.514).
22 Al-Madkhal il
n ((H
a Naz.ariyyat Al-Iltiz
am by Prof. Al-Zarq
a (p.139), Ibn c Abid
. anaf),
vol.3, p.185).
20 Ibn

317
(pbuh) said: Gold for gold, in equal amounts, hand-to-hand, and any increase
is rib
a; silver for silver, in equal amounts, hand-to-hand, and any increase is
rib
a; wheat for wheat, in equal amounts, hand-to-hand, and any increase is
rib
a; barley for barley, in equal amounts, hand-to-hand, and any increase is
rib
a; dates for dates, in equal amounts, hand-to-hand, and any increase is rib
a;
and salt for salt, in equal amounts, hand-to-hand, and any increase is rib
a.
1. Reasons for the prohibition of surplus rib
a
Rib
a al-fad.l was prohibited to avoid injustice and financial losses. The foundation for the prohibition is to prevent the means of circumventing the prohibition
of rib
a al-nasah. For instance, trading goods of the same genus in different
quantities (e.g. one silver coin for two silver coins) would only take place if
the goods are different (e.g. purity of the metal, quality of minting, weight,
etc.). The implicit profit in such a simultaneous trade may then easily lead to
an implicit profit where one of the two goods is deferred, which is precisely the
forbidden rib
a al-nasah.
The prohibition of Rib
a al-fad.l in the case of trading goods of different genera (e.g. wheat for barley) with deferment of one of them is also to prevent
circumvention of the law. If difference in quantities were permitted in such a
trade of goods of different genera with deferment, then a person would be able to
borrow gold and repay later in silver with an implicit rib
a of the desired amount.
Thus, Islamic Law has specified simple rules of demarcation for permitted and
forbidden transactions, to avoid complicated analyses that may lead to debates
over whether small variations within one type of goods would be sufficient to
avoid the same genus rulings.
Of course, there are instances where the prohibition may be explained on
the basis of grounds other than prevention of circumventing the Law. For instance, in trading a large quantity of lower quality goods in exchange for a small
quantity of higher quality goods, the difference in amount may be an approximate compensation for the difference in quality. However, it is forbidden since
it contains major uncertainty (gharar) in such transactions, which prevents the
compensation is excessive or insufficient.23
parties from knowing whether the
Note also that rib
a is not restricted to exploitative transactions (i.e. where
a rich creditor collects rib
a from poor and needy creditors). Indeed, rib
a alj
ahiliyyah may be a form of financing investments, where the debtor is an entrepreneur who repays the investor/creditor his principal plus a pre-determined
interest rate. Moreover, the Messenger of Allah (pbuh) has equated in prohibition and guilt both the needy and the one who exploits him, when he said
(pbuh): Thus whoever increases or asks for increase would have effected rib
a;
the taker and the giver are equal [in guilt], and he (pbuh) cursed equally both
the one who pays rib
a and the one who devours it.24
23 Ab
u-Ish.
aq Al-Sh
atib (1970, vol.4, p.42), Al-Qiy
as by Ibn Al-Qayyim (p.114), Ibn
.
al
. anbal), ibid.), Al-Jazir (1986, vol.2, p.247 onwards), Al-Madkh
Al-Fiqh (ibid.).
24 Hukm Wad
aic Al-Bun
uk by Dr. c Al Al-S
al
us, (p.64).
.
318
CHAPTER 10. RIBA
2. Minimum amount to effect surplus rib

a
The minimum amount of foodstuffs for which rib
a may be effected is 1.35 kilograms, since any amount less than that is not subject to juristic analysis.25
Thus, it is permissible to trade smaller amounts with increase (e.g. two handfuls of wheat for four handfuls, or one apple for two apples, with mutual receipt
during the contract session). This follows since the quantities are too small
for a measure of equality to be applied, thus ignoring the increase for all legal
purposes. For goods eligible for rib
a that are measured by weight, the minimum
amount for which rib
a may be effected is roughly 59 grams of gold or silver.
For trades of amounts smaller than the minimum for which rib
a is effected, the
two compensations must be identified (thus made non-fungible). Thus, jurists
agree that trades in different quantities (no matter how small), where one or
both sides of the transaction are not specified, are not permitted.26
3. Types of causes
Thus, the cause for rib
a defined as trading different quantities of the same
genus applies to foodstuffs and other goods. Thus, we may infer by analogy
from wheat and barley (which are mentioned in the H
) the applicability of
. adth
this cause for all goods measured by volume (e.g. corn, rice, etc.). Similarly, one
may reason by analogy to extend the prohibition for gold and silver to all other
items measured by weight (e.g. lead, copper, etc.). However, rib
a al-fad.l does
not apply for items not measured by weight or volume (e.g. clothing measured
by size, and eggs measured by number). Thus, trading one egg for two, or one
piece of cloth for two, is permitted provided that mutual receipt takes place
during the contract session.
4. Measuring goods eligible for rib
a
Note that what is listed in legislative texts as measurable by volume (wheat,
barley, dates, and salt) and what is listed there as measurable by weight (gold
and silver), continue to be thus measured forever, even if people no longer
conventionally measure and deal in this fashion. This is the opinion of the
: The
Shafics, H
. anbals, and the majority of the H
. anafs, based on the H
. adth
volume measure is that of the people of Madnah, and the weight measure is
that of the people of Makkah.27 Thus, trading wheat for wheat with equal
weight is not permissible, and trading gold for gold or silver for silver in equal
volume is also not permitted. In this regard, the text takes precedence over
conventional usage, and the means of measurement of those goods are defined
in the above listed text.
c
((H
n ((H
. anaf), vol.4, p.188).
((H
. anaf), vol.4, pp.189,191).
27 Narrted by Ab
u D
aw
ud and Al-Nas
a on the authority of c Abdullah ibn Umar. Also
narrated by Al-Bazz
ar, and its validity is authenticated by Ibn H
an and Al-D
araqut.n,
. ibb
c.f. Al-Shawk
an (, vol.5, p.198).
25 Al-K
as
an
26 Ibn c Abid

319
I have noted previously that Ab

u Y
usuf ruled that the means of measurement for all goods, whether or not they are mentioned in the legislative texts,
is determined by convention. I find that his opinion is better supported, since
the text asserts only the need for equality in volume or weight when trading
goods eligible for rib
a with goods of the same genus. The demarcation between
the goods measured by volume and those measured by weights was determined
according to the convention in markets during the life of the Prophet (pbuh).
Thus, inferring by analogy from that text would require referring to the relevant
convention in the relevant markets. The Maliks have also supported this view,
ruling that : If peoples market conventions differ in determining the means
of measuring certain goods, their measurement is determined by the convention
used in that market. As for goods that were not mentioned in the legislative
texts, it is clear that measurement should follow the convention of the relevant
market.28
5. Irrelevance of the goods quality
As noted above, the quality of goods eligible for rib
a is not a factor when
determining whether or not rib
a is effected. The general juristic principle is that
in goods eligible for rib
a, high and low quality are treated as identical.29 Thus,
trading goods for goods of the same genus in different amounts is forbidden
rib
a al-fad.l regardless of the qualities of the two sets of goods. This ruling is
supported by the H
. adth
of Ab
u Sacd Al-Khudriy: ... and do not increase one over the other.
The reason for this ruling is to avoid the possibility of circumventing the Law
by trading low quality goods for high quality goods. In this regard, exchanges
rarely involve exactly identical goods, thus allowing increase for a difference in
quality will make it possible always to find some small difference to justify an
increase. This would clearly make rib
a al-fad.l easily implementable. Thus, the
prohibition of trading goods of the same genus in different amounts prevents this
means of circumvention of the Law.30 On the basis of this ruling, the Maliks
have forbidden exchanging an amount of one money for another amount by
weight (lit. pound-sales, bayc al-mur
a.talah), which typically referred to trading
high quality gold for low quality gold.
Moreover, workmanship in the two monies (gold and silver) does not prevent
the prohibition of increase when trading for the same genus. Thus, trading raw
gold for gold jewelry must be in equal weight, and any increase is forbidden rib
a.
28 Al-K
c
n ((H
af
as
an ((H
. anaf), vol.4, p.189), Al-Qar
((M
alik), vol.3, p.264 onwards), Ibn Juzayy ((M
alik), p.254), Al-Khat.b Al-Shirbn
((Sh
amah (, vol.4, p.17), Al-Sh
afic (, vol.3, p.70).
29
This is a later rule in the H
. anaf school, which was considered alien to the school in
the opinion of Al-Zaylac. The notion of this ruling is derived from the H
narrated on
. adth
the authority of Ab
u Sacd Al-Khudriy and Ab
u Hurayrah regarding the exchange of high
quality dates for low quality dates from Khaybar, where the Prophet (pbuh) said: Do not
do this; but rather sell the one type of dates, and use the price to buy the other type, c.f.
Al-H
), vol.4, pp.36-7).
.
. adth

), vol.2, p.143), Al-Sanh
urs Mas.a
dir Al-H
.
. aqq (vol.3,
p.206).
320
CHAPTER 10. RIBA
This is based on the above listed H

narrated by Al-Bukhar and Muslim:
. adth
Do not trade gold for gold except in equal amounts, and do not sell silver for
silver except in equal amounts. Of course, gold and silver in this H
. adth
does not distinguish between raw metals, minted coins, or jewelry.

6. The cause of rib
a al-nasah
Rib
a al-nasah, which is also called rib
a al-j
ahiliyyah, comes into effect if one
of the two causes of rib
a al-fad.l applies; i.e. if the two exchanged goods are
both measured by weight or both measured by volume, or if the two exchanged
a al-nasah is when a person
items are of the same genus.31 An instance of rib
buys one volume of wheat in the winter for one-and-one-half volumes to be paid
in the summer. In this case, the extra half volume is not compensated for in
the object of sale, and is purely a compensation for time. Thus, it is called
deferment rib
a, since it comes into effect due to the delay in one of the two
compensations. Such increase due to deferment is paid only as a compensation
for the delay in payment, and such increase for deferment is forbidden whether
or not the goods are measured in the same manner. In this regard, the preIslamic rib
a took place when one partys debt matured, and the creditor offered
him the choice of payment or increase. Such increase can lead to severe losses for
the debtor, who may be driven to bankruptcy through the repeated application
of this rule.
Thus, when trading goods measured in the same manner (e.g. wheat for
barley), or goods of the same genus (e.g. apples for apples, barley for barley,
etc.), deferment of one of the two payments is forbidden.32 Moreover, trading
goods of the same genus and same amount with deferment is also not permitted
based on being of the same genus and the logic provided above. Thus, rib
a alfad.l requires the satisfaction of both conditions (same genus, different amounts),
while rib
a al-nasah comes into effect with either one of them [together with
deferment].
Since we have seen that unity of the genus is sufficient to bring the prohibition of rib
a al-nasah to bear on a transaction, there is no minimum amount for
this rib
a. Thus, even the trade of one handful of wheat for one or two handfuls
with deferment is forbidden. This is in contrast to rib
a al-fad.l where the clause
of difference in amount applies only to trades above a minimum amount. However, for the rib
a al-nasah that comes into effect due to difference in amount
(e.g. an amount of wheat for a deferred amount of barley), the minimum amount
31 Ibn Al-Hum
am ((H
as
an ((H
aw
. anaf), vol.5, p.183), Al-K
. anaf), vol.5, p.279), Al-T
. ah.
((H
. anaf), p.75).
32 The reason trading one volume of wheat for two volumes of barley is permitted instantly
and forbidden if one of them is deferred is thus: the first sale cannot be primarily exploitative,
and forcing the trading ratio to always be unity would prevent people from having profitable
barter trade. However, when one of the goods is deferred, the transaction begins to look like
a loan, and the increase is suspected to be exploitative of the needy party. Thus, the increase
is likely to be purely based on deferment that would render the exchange forbidden to prevent
the circumvention of the prohibition of pay or defer with increase. However, trading wheat
for coins with deferment is permitted since such deferred payments meet peoples needs.

321
clauses come to bear, in analogy to rib

a al-fad.l. However, Imam Muh.ammad
was reported to have forbidden all such transactions regardless of size, arguing
that whatever is forbidden in large quantities is forbidden in small quantities.
7. Reasons for forbidding rib

a al-nasah
The general reason for the prohibition of rib
a al-nasah is that it is conducive
to exploitation of the poor by the rich, and putting undue financial burdens on
the needy. Moreover, permission of rib
a al-nasah would lead to dire economic
consequences, since the resulting commodification of money and trading it in
different quantities, would cause an imbalance by preventing money from serving
the role of a stable numeraire. Also, in the case of foodstuffs, if profits can be
made by deferment, foodstuffs may become unavailable in the markets, which
may in turn lead to serious nutritional problems in society.33
Commercial banking rib

a
As we shall see at the end of this section, one of the most common modern
rib
a contracts takes the form of lending with interest. Such interest charges
constitute illegal devouring of peoples wealth, and shares all the ills and prohibitions that apply to rib
a al-nasah.34 The proof of the equivalence of this
interest charged over and above the principal is in the verse But if you repent,
then you shall have your principals [2:279]. In common parlance, the term
rib
a has been restricted to the increase in owed sums due to deferment, which
is the rib
a al-nasah commonly used in pre-Islamic times. In this regard, the
previously mentioned H
of Indeed rib
a is effected through deferment can
. adth
be understood in terms of the relatively rarity of rib

a al-fad.l.
We note that in most Islamic countries, commercial banks are not permitted
to trade or invest directly. Thus, most legal systems restrict commercial banks
to borrowing from depositors and lending to other clients. In this regard, the
depositors receive interest payments, while the bank receives a higher interest
payments from its borrowers. The difference between the two interest payments
thus becomes the primary source of profit for banks, rendering them to be debt
traders. The secondary job of commercial banks is the creation of credit through
lending monies that they had not in fact borrowed from any person, thus lending
that which it does not own.35
33 Al-Qiy
as by Ibn Al-Qayyim (p.114), Al-Jazir (1986, vol.2, p.246), Ibn Qayyim Alc
n ((H
as
an
Jawziyyah ((H
. anaf), vol.4, p.189), Al-K
. anbal), vol.2, p.137 onwards), Ibn Abid
((H
. anaf), vol.5, pp.278,286).
34 Al-Jaz
ir (1986, vol.2, p.247), Us.u
l Al-Buy
uc Al-Mamn
uc ah by Professor c Abdul-Samc
(p.118).
35 Hukm Wad
aic Al-Bun
uk wa Shah
ad
at Al-Istithm
ar f Al-Fiqh Al-Isl
am by Dr. c Al
.
Al-S
al
us (p.40).
322
CHAPTER 10. RIBA
8. Unity and Diversity of Genera

As we have seen, trading in the same genus with increase is forbidden, while the
H
. anafs permit increase when trading goods of different genera. The exception
to this case is in trading the meat of birds, where trading their meats (e.g.
quails for pigeons) in different quantities is permitted. In this regard, the meats
of birds are not considered goods eligible for rib
a, since they are not sold by
weight or volume. On the other hand, trading the meats of chickens and geese in
different quantities is forbidden, since such meats are commonly sold by weight.
The criteria for differences in genus in the H
. anaf school are determined by
considering: (i) the different origins of the goods (e.g. date vs. grape vinegar,
beef vs. lamb meat, etc.); (ii) their different uses (e.g. goat hair vs. lamb wool,
etc.); or (iii) effected changes in the goods (e.g. wheat measured by volume
being transformed into bread that is measured by number or weight). Thus, the
meats and milks of cows, camels, and sheep are considered of different genera,
and may be traded in different quantities. Similarly, wheat, barley, and corn
are considered to be of different genera, as are flour or wheat on the one hand
and bread on the other. Also, meat and fat are considered to be two different
genera, as are oil and olives, cooked and uncooked oil, etc. due to the differences
of usage and other listed criteria.36
H
. anaf proofs
The H
a is measurement
. anafs asserted that the condition for eligibility to rib
by volume or weight. Their proof is based on the general rule that equality in
the two compensations is a condition of validity for sales. In this regard, rib
a
is forbidden based on increase in one of the two traded goods without a compensation for this increase. Such criteria for prohibition apply to goods other
than those mentioned in the H
listing the six goods eligible for rib
a (e.g.
. adth
iron, etc.). In this regard, equality between two traded goods is determined in
terms of form and content. The measured amount (by volume or weight) determines the form, while the genus of the traded goods determines the content. In
this regard, one measure of volume is similar and equal to another equivalent
measure of volume in form. Thus, if the content is the same while the measures
are different, the forbidden rib
a would be effected. This logic clearly is not restricted to foodstuffs [wheat, barley, salt and dates; as mentioned in the H
]
. adth
and monetary numeraire commodities Gold and silver, but applies equally to
trading of any goods measured by volume or weight in exchange for goods of
the same genus or kind.37
In other words, wheat is mentioned in the above mentioned H
as an
. adth
example of valued property. As the value of such property can only be ascertained through measurement by volume, it is as if we can read the H
as
. adth
36 Ibn Al-Hum
c
am ((H
n ((H
. anaf), vol.4, p.193
onwards).
37 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, p.116), Al-K
Al-Hum
am ((H
. anaf), vol.5, p.277).

323
... weighed gold for gold, wheat measured by volume for wheat, .... In this
regard, the elimination of rib
a is effected through the equalization of volume
or weight. In this regard, since a fistful of foodstuffs, or an apple, cannot be
measured exactly, they are not considered eligible for rib
a al-fad.l.38 However,
they are eligible for rib
a al-nasah, as seen above.
We finally note that all types of wheat are considered one genus, and the
same applies to all types of barley, all types of wheat flour, all types of barley
flour, all types of dates, salt, grapes, raisins, gold, silver, etc. Thus, trading
any goods measured by weight or volume for goods of the same genus is not
permitted except in equal volume, even if the traded goods are of different
characteristics.39
10.3.2
M
alik rulings
The most accepted opinion in the Malik school asserts that the demarcation
that determines the goods eligible for rib
a are: (i) use as a monetary numeraire
(gold and silver), and (ii) foodstuffs (wheat, barley, salt, and dates). For foodstuffs, they refine their demarcation criteria further:
In rib
a al-nasah, all foodstuffs that are not medicinal are eligible for
rib
a, whether or not they are perishable (lit. whether they are only for
consumption or for consumption or storage). Thus, all types of vegetables
and fruits will be eligible for this type of rib
a.
For rib
a al-fad.l, the criteria are twofold: nutrition, and storability. Foodstuffs satisfy the nutrition requirement if they are sufficient to sustain life
(e.g. grains, dates, raisins, meats, milks, and their products). Also appended to the nutritious foodstuffs are goods that make the food more
edible (e.g. salt, spices, vinegar, onions, garlic, oil, etc.). The storability
requirement is satisfied if the foodstuffs are not easily perishable, and thus
may be stored for a period of time. In this regard, the length of the period
for which the goods may be stored is not explicitly specified, as it depends
on the relevant usage. When such a period is not explicitly specified, some
jurists have argued that a period of six months to one year is implied.
Their proof for the above criteria of eligibility for rib
a is based on the understanding that rib
a is forbidden to prevent injustice and preserve property.
In this regard, the most important properties are those on which livelihood depends, sic. foodstuffs, including grains, dates, raisins, eggs, oil, various beans,
etc.40
With regards to unity or difference in the genus, we note that Imam Malik
considered wheat, barley, and rye to be one genus; corn, millet, and rice to be
38 Masa
dir
Al-H
ur.
. aqq by Al-Sanh
((H
s (1st edition (H
. anaf), vol.12, p.122).
Al-Andalus (1st edition (M

alik),
. afd ((M
vol.2, p.131), H
shiyat Al-Dus
uq (vol.3, p.47), Al-H
at.t.
ab (1st edition (M
alik), vol.4, p.346),
.a
.
Al-Jazir (1986, vol.2, p.251).

.
39 Al-K
as
an
40 Al-B
aj

CHAPTER 10. RIBA
324
one genus; and beans, lentils, and other legumes to be one genus. Thus, he
does not permit trading wheat for barley, or rice for corn in different quantities.
Moreover, he classifies all meats into three equivalence categories: (i) meats of
quadrupeds, meats of birds, and meats of fishes.41
10.3.3
Sh
afic rulings
The Shafics ruled that the criterion that renders gold and silver eligible for rib
a
is their use as monetary numeraires. In this regard, there is no differentiation

between the raw metal, minted coins, or jewelry. Thus, if a man were to trade
golden jewelry for gold coins, they must be of equal quantity (weight), and the
value of the traded items is not considered. As for coins made of other metals
(e.g. copper, bronze, nickel, etc.), they were seen to be different from gold and
silver in that they were not as commonly used to define prices.
However, since fiat paper monies and various coins have become the main
forms of money in recent years, I am of the opinion that they have thus become
eligible for rib
a. This is in accordance with the H
. anaf schools opinion.
As for the other four commodities (wheat, barley, dates, and salt) mentioned
in the H
, the Shafics find that the criterion according to which they are
. adth
eligible for rib

a is that of being foodstuffs. In this regard, they consider three
types of foodstuffs:
1. Goods used for everyday nutrition (e.g. wheat and barley), thus including
in the same category items such as beans, rice, corn, and other grains
eligible for zak
ah.
2. Goods used as dessert (e.g. dates), thus including raisins, figs, etc.
3. Goods used to preserve foods and make them more edible (e.g. salt), or
as medications (e.g. various medicinal herbs, etc.).
Thus, they have not differentiated between goods that are literal foodstuffs,
and those that are meant to restore health, since maintaining physical health
is the ultimate use of both categories. Thus, the Shafics reduce the criteria of
eligibility for rib

a to: (i) foodstuffs, and (ii) monetary numeraire commodities.
Thus, items such as iron, clothes, etc. may be traded in different weights and
volumes, since they do not meet either of the two criteria.
Their proof for this ruling is the general rule: The origin of the term used
in the ruling is its criterion. Thus, the verse As to the thief, male or female,
cut off his or her hands... [5:38] illustrates that the reason and criterion for the
imposition of the penalty is the act of theft. In this regard, a H
was nar. adth
rated on the authority of Muc ammar ibn c Abd-Allah that he said: I heard the
Messenger of Allah say: Trade foodstuffs for foodstuffs in equal amounts.42
Thus, it is clear that edibility is the reason and criterion used to determine eligibility for rib
a. This is a reasonable interpretation since this criterion covers the
41 Ibn
Juzayy ((M
alik), p.253).
by Muslim and Ah.mad on his authority, c.f. Al-H
.
(H
), vol.4, p.37), Ibn H
ajar (, p.235), Al-Shawk
an (, vol.5, p.193).
. adth
.
42 Narrated

325
four goods mentioned in the H

, thus highlighting the increased importance
. adth
of foodstuffs, upon which life depends, as well as gold and silver monies, upon
which markets are based.
As we have seen above, I depart from the traditional Shafic position by
including all modern monies, including paper currency, in the eligibility for rib
a.
c
On the other hand, we see how the Shafi logic is restricted to particularly vital
goods (foodstuffs and monies), while the generalization of the H

. anafs covers all
goods measured by weight and volume, some of which are not particularly vital.
Based on the above ruling, if foodstuffs are traded for foodstuffs of the same
genus, or if monies are traded for monies of the same genus, three conditions are
necessary to ensure validity of the transaction: (i) hand-to-hand trading (i.e.
no deferment whatsoever may be mentioned in the contract), (ii) certainty of
equality of amount (using volume for items measured that way and weight for
those measured in that manner, based on the tradition in H
. ijaz at the time of the
Prophet (pbuh), or based on convention for new goods), and (iii) mutual physical
receipt prior to parting from the contract session. Note that the requirement of
mutual receipt is added whether or not the traded goods are of the same genus.
This is in contrast to the H
afics base this addition on
. anaf opinion, and the Sh
the Prophets statement hand-to-hand in the H

.
. adth
Thus, when trading goods of a different genus (e.g. wheat for barley), they
may be of different amounts, but the Shafics still require non-deferment and
mutual receipt prior to parting. This is again based on the H

narrated
. adth
by Muslim: gold for gold, silver for silver, wheat for wheat, barley for barley,
dates for dates, and salt for salt, of the same kind in the same amount, handto-hand; but if the kinds are different, then trade as you wish as long as it is
hand-to-hand. The non-deferment condition is thus inferred from this H
.
. adth
However, when trading foodstuffs for non-foodstuffs (e.g. money, clothes,

etc.), or when trading any non-foodstuffs and non-monetary goods one for the
other (e.g. one animal for another), none of the three conditions listed above
apply, since such goods are not eligible for rib
a. The reason that animals are
not eligible for rib
a is that it is not eaten in its regular form. Further proof is
provided by the tradition that Ibn c Umar (pAbpwh) traded one camel for two
according to the orders of the Prophet (pbuh).43
Unity and difference in genus
If two goods share a common name (e.g. different types of dates, etc.) are
considered to be of a single genus. Moreover, the Shafics consider two goods
derived from goods of the same genus (e.g. two volumes of flour from two
separate volumes of wheat) to be of the same genus. In contrast, if two goods
have a different name (e.g. wheat and barley), or if they are derived from goods
of different genus (e.g. wheat flour and barley flour, different meats, different
milks, etc.) are considered to be of different genera.
43 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, pp.22-25), Al-Qaly
ub ((Sh
afic), vol.2, p.167 on .
wards), Al-Sharq
aw ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
p.272).

CHAPTER 10. RIBA
326
Thus, it is permitted to trade wheat flour for barley flour, gold for silver,
dates for raisins, date vinegar for grape vinegar, beef for lamb, etc. in different
quantities. Moreover, the liver, heart, and other organs of the same animal
are considered to be of different genera, and thus may be traded in different
quantities. Similarly, fats, bones, and meats from different parts of the animal are considered to be of different genera. In fruits and vegetables, green
and yellow watermelons are considered different genera; and different types of
cucumbers (Egyptian (qiththa
) vs. regular (khiy
ar)) are considered to be of
different genera. However, all types of sparrows are considered one genus, all
types of ducks one genus, and all types of pigeons one genus.44 Fresh and dried
fruits of the same genus (e.g. fresh dates and dried dates, grapes and raisins,
etc.) are considered to be one genus. Similarly, all derivatives of wheat (flour,
cracked wheat, bulgur, etc.) are considered to be one genus. Finally, lambs and
goat are of the same genus, cows and water-buffalo are of the same genus, etc.,
while meats and milks from the various groups are considered to be of different
genera.
10.3.4
H
. anbal rulings
There are three reported H

a,
. anbal opinions on the criteria of eligibility for rib
the most widely supported of which agrees with the H
anaf
criteria
of
measura.
bility by weight or volume, together with unity of the genus. Thus, they render
all goods (edible or not) eligible for rib
a if they are measured by weight or volume, while rendering foodstuffs that are measured by other means ineligible for
rib
a. This opinion is based on the H
narrated on the authority of Ibn
. adth
c
Umar that the Messenger of Allah (pbuh) said: Do not trade one Din
ar for
two, one Dirham for two, or one volume of food for two, for I fear that you
may fall into rib
a. A man addressed him by saying: O, Messenger of Allah,
would you allow a man to trade one horse for many, and one camel for many?,
and he (pbuh) replied: That is permitted, as long as it is hand-to-hand.45
Also, Anas narrated that the Prophet (pbuh) said: Whatever is measured by
weight must be traded for goods of the same genus only in equal quantities, and
the same applies to goods measured by volume. However, if the goods are of
different genera, there is no harm in trading in different quantities.46
The H
a al-fad.l
. anbals disagreed with the H
. anafs, however, by forbidding rib
for goods measurable by volume or weight no matter how small the quantity
(including in trading a single date, and very small amounts of gold and silver).
A second reported opinion in the H
. anbal school agrees completely with
the Shafic opinion. The third reported opinion restricts eligibility for rib
a for
44 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic),
.
vol.1, p.272).
45 Narrated by Ahmad and Al-Tabar
an in Al-Kabr. al-Haytham said that its chain of
.
.
narration contains Ab
u Jun
ab, who is trustworthy but was known to cheat; c.f. Ibn AlAthr Al-Jazar (, vol.1, p.469), Al-Haytham (, vol.4, p.113), Al-H

.
(H
), vol.4, p.56).
. adth
46 Narrated
c
by Al-D
araqut.n on the authority of Al-H
adah
. asan having heard it from Ub
and Anas ibn M
alik, c.f. Al-Shawk
an (, vol.5, p.193).

327
goods other than gold and silver to foodstuffs that are measured by weight or
volume. Thus, according to this opinion, fruits and other foodstuffs that are not
measured by weight or volume are not eligible for rib
a , and neither are nonfoodstuffs that are measured thus (e.g. iron, etc.). This is the opinion of Sacd
ibn Al-Musayyab.47 The proof for this third opinion is based on the H
:
. adth
There is no rib
a except in foodstuffs (eaten or drunk) that are measured by
volume or weight.48
Unity and difference in genus
The H
afics on this regard. Thus, they said:49 Any
. anbals agree with the Sh
two kinds that share a primary name are of the same genus (e.g. different types
of dates). Any two goods that share the same genus may not be traded in
different quantities, even if they are of different kinds. This is based on the
H
: dates for dates in equal quantities, thus considering different types of
. adth
dates equivalent due to the unity of their genus. Thus, when he (pbuh) said if
trading different kinds, then trade as you wish he (pbuh) actually referred to
differences in genus.
However, if two goods that share a common name are derived from goods
of different genera, then they too are of different genera. They thus ruled that
the origin of the goods is what matters and not their usage, in contrast to the
H
. anaf opinion. Thus, they consider all types of dates to be of the same genus,
and the same oils used for different flowers to be of the same genus (due to being
derived from the same origin).50 Thus, flour and other grain products, meats
and their products, milks and their products, etc. are considered to be of the
same or different genera based only on whether or not they come from origins
of the same or different genera.
10.3.5
Z
ahiri rulings
.
The Z.ahirs and Ab

u Bakr ibn Al-T
a and eligibility of goods
. ayyib ruled that rib
thereof cannot be determined by any reasoning, and thus is restricted only to
that which is listed in a Text (nas..s).51 This follows from their denial of reasoning
by analogy (qiy
as). Thus, they restrict rib
a to the six goods mentioned in the
H
ad
th
,
permitting
trading
any
other
goods
in different quantities and/or with
.
deferment.
47 Ibn Qud
amah (, vol.4, pp.3-5), Ibn Qayyim Al-Jawziyyah ((H
. anbal), vol.2, p.136 onwards), Marc ibn Y
. anbal), vol.2, p.54).
48 Narrated in Sunan by Al-D
araqut.n on the authority of Sacd ibn Al-Musayyab, that
ah (pbuh) said: There is no rib
a except in gold or silver, or what is
measured by weight or volume and is eaten or drunk. It is a H
mursal, also narrated
. adth
c
by Al-Bayhaq, c.f. Al-H
afiz. Al-Zayla (1st edition, (H
), vol.4, p.36).
.
. adth
49 Ibn Qud
. anbal), vol.2, p.55).
50 This is in contrast to the Hanaf
s who consider goods of the same origin of different genera
.
if their usage is different. For instance, they allow trading olive oil for olives, and cooked oil
for uncooked, etc. in different weights based on classifying them as different genera, c.f. Ibn
c Abid
n ((H
. anaf), vol.4, p.194).
51 Ibn Hazm (, vol.8, p.468).
.

CHAPTER 10. RIBA
328
In summary, the criteria of eligibility of foodstuffs for rib

a is: measurability
by volume or weight for the H
. anafs and H
. anbals, edibility and storability for
the Maliks, and edibility for the Shafics.
Thus, the M
aliks and Shafics permit trading in equal quantities for goods
other than the two monies and foodstuffs, and the H

. anafs and H
. anbals permit
such unequal trading for any goods (including foodstuffs) that are not measured
by weight or volume. Such permissions are based on varying understandings that
those goods rendered ineligible for rib
a are not essential for peoples livelihood
and economic activities. Thus, avarice and profit seeking while trading such
goods would not lead to major social or physical harm.
10.3.6
Juristic Preference (tarjh.)
Ibn Rushd of the M

alik school said:
However, if we reflect on the essence of this problem and Allah

only knows best we find that the H
. anaf reasoning is the best.
This follows since it is clear in the Law that what is intended by
the prohibition of rib
a is avoidance of the major injustice in which
it results. In this regard, equity (c adl) in transactions is attained
through approaching equality. Since it is difficult to attain equality in things of different types, gold and silver coins were made to
measure its value. Now, since varying objects that are not measured
by volume and weight (e.g. clothes) attain equality by equating the
ratios of the values of each traded item to its genus, we can see that
differences in amount can be a requirement of equity. However, for
goods measured by weight and volume, equity is indeed attained
through equating the volume or weight.52
However, this opinion clearly enlarges the scope of rib
a excessively by means of
reasoning that is not supported by logic or reference to earlier opinions.
Ibn Al-Qayyim preferred Im
am Maliks criteria based on edibility and storability for goods other than the two monies. For the two monies, he accepts the
Shafic logic based on their use as monetary numeraires. In this regard, if iron
and copper were viewed to be eligible for rib

a, their sale on a deferred basis
with an immediate cash price (in gold or silver) would not be permitted. This
follows since goods that are eligible for rib
a may be traded for other such goods
of a different genus in different quantities, but not with deferment.
Moreover, he argued, inferring from the prohibition of trading gold and
silver in different quantities or with deferment that measurement by weight is
a criterion of eligibility for rib
a is not as valid as the reasoning based on those
metals being used as monetary numeraires. In this regard, the argument based
on being used as numeraires by means of which prices are determined rests on the
need for stable prices that do not move erratically based on market conditions
52 Ibn
Rushd Al-H
alik), vol.2, p.131).
. afd ((M

10.4. BASIC TYPES OF RIBA
329
while there is no equivalent logic for the argument based on measurability by

weight.53
Professor c Abdul-Razzaq Al-Sanh
ur preferred the Shafic ruling on the cri
teria of eligibility for rib
a by considering the socio-economic underpinnings of
c
that opinion. In this regard, he finds that the Shafi inference generalizes the
H
just to the appropriate end based on the basic socio-economic conse. adth
quences of rib
a. On the other hand, the H
. anaf opinion can be seen to be
excessively logical, concerned mainly with form rather than content.54
10.4
Basic types of rib

a
Ibn Rushd enumerated five types of rib

a: (i) defer and increase, (ii) increase
in amount, (iii) deferment, (iv) reduction due to pre-payment, and (v) re-sale
of foodstuffs prior to their receipt. Since we have already discussed all but the
first and fourth types, I shall discuss those two at this point.
10.4.1
Defer and increase
This type of rib

a is effected when a man is indebted to another, and they agree
to increase the amount owed in compensation for deferring the payment date.
This is a form of pre-Islamic rib
a. All jurists agree that it is strictly forbidden
regardless of whether the debt resulted from a loan or a sale, and whether the
debt was foodstuffs or monies. A means by which this type of rib
a may be
effected to circumvent the law is where the creditor sells the debtor a good for
a deferred price higher than its cash price.
10.4.2
Reduction due to pre-payment
Accepting a smaller amount than the face value of a debt to receive it earlier, if
it is mentioned in a loan contract, is forbidden by the leaders of all four juristic
schools. In this regard, a reduction of the liability based on prepayment is very
similar to increasing it based on deferment.
Instances of this type of behavior include: a debtor making a smaller prepayment in lieu of a larger debt that had not matured, prepaying part of the
debt and deferring the rest, or accepting a prepayment that is partly monetary
and partly in-kind. Jurists agree that all such arrangements are permissible by
mutual consent ex post, including a prepayment in-kind that is of value lower
than the face value of the debt.55
53 Ibn

. anbal), vol.2, p.137).
Al-H
. aqq (vol.3, p.184).
Juzayy ((M
alik), pp.252,289), Ibn Rushd Al-H
alik), vol.2, pp.127,142),
. afd ((M
Ibn Qayyim Al-Jawziyyah ((H

a wa Al-Muc a
mal
at f Al-Isl
am
. anbal), vol.2, p.135), Al-Rib
by Sheikh Rashd Rid.
a.
54 Masa
dir
55 Ibn
330
10.5
CHAPTER 10. RIBA
Conditions for trading goods eligible for

rib
a
If goods eligible for rib

a are traded one for another, the transaction may be
permitted and maybe prohibited, depending on the context. In the case of
trading goods of the same genus (e.g. gold for gold, silver for silver, corn for
corn, etc.), the sale is permitted if three conditions are met:
1. Equality of volume, weight, or number, using the appropriate measure
for the relevant goods. Thus, trading a pound of apples for a pound of
apples, or five coconuts for five coconuts, is permissible. For goods that
vary depending on degrees of moisture and dryness, equality is determined
in the dried state. Thus, it is not permitted to trade fresh dates for fresh
dates, or fresh dates for dried dates.
2. The contract must not allow for the deferment of either traded good.
3. The traded goods must be mutually received during the contract session,
prior to parting.
The above conditions are all inferred from the above-mentioned H
s men. adth
tion of in equal amounts and hand to hand. If one or more of those three
conditions are not met, the transaction is forbidden.
In the case of trading goods of different genera that share the same criteria
of eligibility for rib
a (e.g. trading gold for silver, or wheat for barley), then two
conditions must be met:
1. The contract must not allow for the deferment of either traded good.
2. The traded goods must be mutually received during the contract session,
prior to parting.
In this case, equality of the amounts traded is not required, based on the abovementioned H
but when trading goods of different kinds, trade as you wish
. adth
as long as it is hand-to-hand. If either of the two listed conditions is violated,

the trade is forbidden.
The third category of trades are where the genera are different and the
criteria of eligibility of rib
a are different (e.g. trading gold dates, silver for
raisins, etc.), then the sale is permitted. In this case, equality of amount is not
required (e.g. 10 grams of gold for a pound of wheat). Moreover, deferment is
allowed, and the sale is concluded whether or not mutual receipt is effected. This
is based on the H
. adth
u Hurayrah that the Prophet (pbuh) sent a

of Ab
u Sacd Al-Khudriy and Ab
man to Khaybar, and he returned with high quality dates. He (pbuh) asked him:
are all of Khaybars dates this good?. The man answered: No, oh Messenger
of Allah, we trade one volume of high quality dates for two volumes of lower
quality dates, and two volumes of high quality for three of the low quality. The
CRITERIA
10.6. CONSEQUENCES OF DIFFERENCES IN RIBA
331
Prophet (pbuh) said: Do not do this. Instead, sell the lower quality dates for
money, and use the proceeds to buy the high quality dates.
If goods eligible for rib
a are traded for other types of goods (e.g. gold for
base metals, etc.), then the sale is permitted unconditionally. Thus, equality of
amount, lack of deferment, and mutual receipt are not required in such contract.
In this case, since one of the two traded goods is not eligible for rib
a, the contract
is itself not subject to rib
a (ghayr ribaw). This is in agreement also with the
case where the criteria of eligibility

for rib
a were different (e.g. gold for rice),
in which case the sale was permitted unconditionally.
We have seen previously that trading fresh dates for dried dates, or new
kernels of wheat for dried kernels, is forbidden, since they are goods eligible for
rib
a and equality of amount is not satisfied. We recall here two other special
cases that were studied by jurists:
abanah is where fresh dates on their palms (thus, of unknown
1. Bayc al-muz
quantity) are traded for cut dates, or grapes are traded for raisins.
2. Bayc al-muh.a
qalah is where grains in their kernels are traded for an
amount estimated to be equal.
We have seen previously that Isl
am permitted bayc al-c ar
ay
a, which involves
trading fresh dates on the palms for an amount of dried dates estimated to be
of equal quantity, or fresh grapes for an estimated equivalent amount of raisins,
as long as the weight was less than 653Kgs. In this regard, Al-Bukhar and
Muslim narrated on the authority of Sahl ibn Ab H

mah (mAbpwh) that
. ath
the Prophet (pbuh) forbade trading fresh dates for dried dates, but allowed for
fresh dates on the trees to be traded for an amount estimated to be equal, so
that the buyers can eat them fresh. We have seen that this is the opinion of
non-H
. anaf jurists.
10.6
Consequences of differences in rib

a criteria
The differences of opinion between the H

afics with regards to
. anafs and the Sh
the criteria of eligibility for rib

a result in a number of consequences, which we
classify with respect to rib
a al-fad.l and rib
a al-nasah.
10.6.1
Consequences relating to rib

a al-fad.l
1. Trading small unmeasured amounts of foodstuffs for foodstuffs of the same

genus (e.g. a handful of wheat for two handfuls, one walnut for two, etc.) is
permitted for the H
. anafs due to non-satisfaction of the quantity criterion,
since such small volumes (less than half a .sa
c ) or small weights (less than
56
a h.abbah) are all considered equivalent.
56 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.5, p.278
c
n ((H
onwards), Al-K
as
an ((H
. anaf), vol.4, p.188).

CHAPTER 10. RIBA
332
On the other hand, trading a fistful of grains for two is not permissible for
the Shafics, since a criterion of eligibility for rib
a (namely, edibility). In
this regard, they take as fundamental the prohibition of trading foodstuffs

in different quantities based on the H
: Foodstuffs for foodstuffs in
. adth
equal amounts. Thus, the only consideration in this case is that the goods
are foodstuffs traded in different quantities, without consideration for the
actual amounts. The H
. anafs, on the other hand, restrict the applicability
of the text of the H
: Wheat for wheat in equal amounts...,57 thus
. adth
permitting trading one fistful of grains for two.

2. The different criteria of eligibility for rib
a result in differences of opinion
over the legal status of trading measured goods for goods of the same
genus, when they are not foodstuffs (e.g. a volume of gypsum for two, or
a pound of iron for two pounds, etc.):
The H
. anafs render such trading impermissible based on their criterion of eligibility of rib
a (unity of the genus, and measurability by
volume or weight).58
On the other hand, the Shafics permit such trading, since neither
of their criteria of eligibility for rib

a (foodstuffs and monetary numeraires) is satisfied.
The H
afics agree that trading one volume of rice for
. anafs and Sh
two is not permitted. Such a trade is forbidden for the H

. anafs due to
unity of the genus and measurability by volume, and for the Shafics
based on unity of genus and edibility.

Similarly, the two schools also agree that trading a pound of saffron
for two, or one pound of sugar for two, where the H
. anaf criterion of
measurability by weight comes to bear.
Jurists differed over the satisfaction of the criterion of unity of the genus.
Among the points they discusses are the following:
1. Trading flour for flour or grains
The H
. anafs ruled that trading flour for flour of the same genus or the grain
from which it was made is forbidden. Thus trading wheat flour for wheat or
corn flour for corn is forbidden, regardless of the amount since equality of the
amount cannot be determined in such trades. However, they permitted trading
flour from one grain for a volume of a different grain (e.g. wheat flour for corn)
as long as it is performed hand-to-hand. Finally, trading flour of some grain for
flour of the same grain requires equality in volume, and fineness.
The H
. anafs also permitted trading bread for wheat or flour, and vice versa,
in equal or different amounts. In this regard, the process of turning the flour into
57 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.276).
(1st edition (H
as
an ((H
. anaf), vol.12, p.114), Al-K
c
n ((H
Al-Hum
am ((H
. anaf), vol.4, p.188).
58 Al-Sarakhs
CRITERIA
333
bread rendered it a different genus, to the point of being measured by means

other than volume. Thus, they may be traded in different quantities and/or
with deferment, and mutual receipt is not required. The only requirement in
this regard is identification of the traded goods.59
The Maliks ruled that grains may not be traded for flour of the same grain
except in equal amounts. On the other hand, trading grains for flour from
another grain is permitted in different quantities provided that mutual receipt
is concluded prior to parting from the contract session. They also permitted
trading bread for wheat, arguing that the process of making the bread rendered
it into a different genus. On the other hand, they categorically forbade trading
flour for flour of the same grain.60
The Shafics also categorically forbade trading flour for flour of the same
grain, arguing that it is impossible to ensure equality of the amount and type.
They also rendered as invalid trading grains for flour made of the same grains,
as well as bread for grains or flour of the same genus from which the bread was
made. On the other hand, they permitted trading bread for bread, or flour for
flour, if they come from grains of different genera.61
The H
. anbals categorically forbade trading flour for grains of the same genus,
as well as bread for the grains or flour from which it was made. In all such
trading, equality of amount is required, but cannot be ensured. However, they
agree with the H
. anafs in permitting trading flour for flour of the same grain as
long as they are of the same fineness and amount.62 In summary, this final type
of trade is permitted, subject to equality in quantity and quality, by the H
. anafs
c
and H
anbal
s,
while
such
trading
is
categorically
forbidden
by
the
Sh
a
fi
s and
.
Maliks.
2. Trading an animal for meat
Ab
u H
u Y
usuf ruled that an edible animal may be traded for
. anfa and Ab
meat from an animal of the same genus. They analyze such a sale as trading
goods measurable by weight for goods that are not, which is permitted subject
to the identification condition. In other words, animals are regarded as goods
a.63
The other three non-H
. anaf schools ruled that trading an edible animal for
meat from an animal of the same genus is not permitted. Thus, it is not permissible to trade a sheeps meat for another sheep intended for slaughter and
narrated on the aueating.64 This opinion is based on the narrated H
. adth
59 Al-K
as
an ((Hanaf),

am ((H
.
((H
. anaf), vol.4, p.194 onwards), Al-Jazir (1986, vol.2, p.254).
60 Ibn Rushd Al-Haf
alik), vol.2, p.136), H
shiyat Al-Dus
uq (vol.3, p.53), Al-Jazir
. d ((M
.a
(1986, vol.2, p.253).

61 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
p.23), Al-Jazir (1986, vol.2, p.255).

62 Ibn Qud
amah (, vol.4, p.24), Al-Jazir (1986, vol.2, p.255).
63 Ibn Al-Hum
c
n ((H
as
an
am ((H
. anaf), vol.4, p.192), Al-K
((H
anaf
),
vol.5,
p.189).
.
64 Ibn Rushd Al-Haf
alik), vol.2, p.136), H
shiyat Al-Dus
uq (vol.3, p.54; vol.1,
. d ((M
.a
c Abid

CHAPTER 10. RIBA
334
thority of Sacd ibn Al-Musayyib that the Prophet (pbuh) forbade trading an
animal for meat.65 Another narration states that the Prophet (pbuh) forbade
trading a live animal for a dead one.66 In this regard, meat is a good eligible
for rib
a, and in this contract, it is traded for a good of the same genus as its
origin. This is based on the juristic rule that inequality is assumed if equality
cannot be ensured.67
On the other hand, trading an animal for another, of the same or different
genera, and in the same or different number, are all allowed. In this case, animals
per se are not goods eligible for rib
a since they are not edible in their live form,
and of course, they are not monetary numeraires. Finally, trading meat for
meat is permitted for the same genus if they are of equal amount, the contract
does not allow for deferment, and mutual receipt is affected during the contract
session. Trading meats of different genera (e.g. lamb for beef) is permitted
in different quantities, under the other two conditions of non-deferment and
mutual receipt.
10.6.2
Consequences relating to rib

a al-nasah
There are two main sources of differences of opinion between the H

. anafs and
the Shafics, and we shall list various differences under those two categories:
1. Consequences of eligibility for rib

a
As we have seen previously, for goods other than monetary numeraires, the criterion of eligibility for rib
a is measurability by volume or weight for the H
. anafs,
and edibility for the Shafics. In this regard, both schools agree that if a man
sells a volume of wheat for a volume of barley with deferment, or with the price
being an identified fungible liability, then the criterion for rib
a al-nasah is satisfied for both schools, and the sale is rendered invalid. In the latter case, a
known and identified good is found to be better than a fungible liability, thus
resulting in rib
a. The H
a based on measurability by
. anafs render this trade rib
a based on edibility of wheat and barley.
volume, and the Shafics render it rib
Similarly trading a pound of sugar for a pound of saffron established as a liability on the buyer is not permitted in both schools based on the criterion of
measurability by weight for the H
afics.
. anafs and edibility for the Sh

afic), vol.2, p.29),. Marc ibn Y
. anbal),
vol.4, p.32), Ibn Qayyim Al-Jawziyyah ((H

. anbal), vol.2, p.145).
65 Narrated by M
alik in Al-Muwat..ta as a H
mursal on the authority of Sacd ibn Al. adth
Musayyib. Other narrations are available in Al-Bazz

ar on the authority of Ibn c Umar, in
Al-H
akim, Al-Bayhaq and Ibn Khuzaymah on the authority of Al-H
.
. asan and Samurah. It
is also narrated as he (pbuh) forbade trading a dead animal for a live one. Al-Shawk
an (,
vol.4, p.203), states that this H

, considering its many chains of narration, rises to the
. adth
level of citing as a text, c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.413), Al-H
.
edition, (H
), vol.4, p.39).
. adth
66 Narrated by
Al-Bayhaq on the authority of a man from Madnah, and stated that it is
aH
mursal, referring to the above listed narration, c.f. Al-H
. adth
.
(H
ad
th
),
vol.4,
p.39).
.
67 Takh
rj Al-Fur
uc c al
a Al-Us.u
l (p.71).
CRITERIA
335
The two schools differ in two cases:

1. Sales of non-foodstuffs (e.g. when trading a volume of gypsum for a volume of arsenic) with deferment (e.g. through a salam contract), or without
but with a price established as a liability on the buyer, are rendered impermissible for the H
. anafs based on measurability by volume, but they
are permitted by the Shafics since the goods are not foodstuffs or monies.
Similarly, a salam of two pounds of iron with an immediate price of one

pound is impermissible for the H
. anafs based on measurability by weight
and unity of the genus, while the Shafics render it permissible.
Mixing foodstuffs and non-foodstuffs, a salam in which the immediate

price is monetary and the (deferred) object of sale is saffron, cotton, or
iron, is permitted in both schools, since none of the criteria of eligibility
for rib
a are satisfied. To elaborate, the traded goods in such a contract
are of different genera, and they are measured in different units of weight.
On the other hand, a salam in which silver nugget is traded for a similar gold nugget, or gold dust is traded for a silver nugget, etc. is not
permitted for both schools. The H
. anafs forbid this transaction based on
measurability of gold and silver by the same units of weight. The Shafics,
on the other hand, forbid it based on both metals (in all their forms) being
considered monetary numeraires.
2. The two schools differ in certain cases of trading foodstuffs with different
methods of measurement. Thus, the H
. anafs permit salam contracts in
which wheat is traded for oil, since one is measured by weight and the
other by volume. However, the Shafics forbid such transactions since
both goods are foodstuffs.

2. Consequences of genus classification
We have previously shown that genus by itself can constitute a criterion of
eligibility for rib
a in the H
. anaf school. This follows since their criterion is unity
of the genus and measurability by weight or volume. Since both components of
this criterion are necessary for effecting rib
a, each one is considered a cornerstone
of the criterion, rather than a mere condition.68
For Al-Imam Al-Shafic, genus is merely a condition according to which
prohibition or lack thereof is determined, but is not a criterion of eligibility

by itself. This is analogous to marital status being a condition for applying
the stoning penalty to a married adulterer. However, in the case of rib
a, the
criteria of eligibility are edibility (to protect mans nourishment), and monetary
numeraires (to protect market stability). Since the genus of the goods is not
directly mentioned in those criteria, it is considered a condition, and not a
cornerstone of the Shafic criterion.
68 Ibn Al-Hum
am ((H
s (1st edition (H
. anaf), vol.5, p.276,280), Al-Sarakh
. anaf), vol.12,
p.122 onwards), Al-T

aw ((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.271
. ah.
. anaf), p.75), Ab
onwards).
336
CHAPTER 10. RIBA
This distinction between the two schools treatment of the genus aspect in
rib
a results in a number of similarities and differences in juristic rulings:
Both schools do not allow salam contracts in which walnuts are traded for
walnuts, eggs for eggs, apples for apples, a fistful of wheat for a fistful of
wheat, etc. The prohibition is based on the genus criterion for the H
. anafs
and the foodstuffs criterion for the Shafics.
On the other hand, a salam contract in which a cloth is traded for an

identical cloth is not permitted for the H
. anafs (based on unity of genus),
while it is permitted for the Shafics since their school does not allow genus
alone to effect forbidden rib

a.
Of course, both schools permit a salam contract in which one type of cloth
is traded for another, since none of the criteria of eligibility for rib
a would
be satisfied in this case.
At the other extreme, both schools forbid salam contracts in which monies
are traded for monies, based on the genus criterion for the H
. anafs and
usage as monetary numeraires for the Shafics.
The H
anaf
logic
for
making
unity
of
the
genus
alone a criterion for effecting
.
forbidden rib
a (e.g. in trading a deferred delivery of an animal for an immediate
delivery of an animal) is the need to effect equity in trading. In this regard, equity between immediate delivery and deferred delivery cannot be effected, since
a known available object is always better than a deferred liability to deliver such
an object in two respects: (i) an identified object is better than one described
as a liability, and (ii) an immediately available object is preferred to the same
object deferred. For the H
. anafs, this logic applies to many goods other than
foodstuffs and monies. Their logic is further supported by the H
s indeed,
. adth
there is no rib
a except with deferment, and indeed, rib
a is in deferment.69
This text is general, thus making no distinctions between foodstuffs and monetary numeraires on the one side and other goods on the other. Thus, they ruled
based on this H
as well as their logic that deferment together with unity
. adth
of the genus results in forbidden rib

a.70
Malik ruled that trading an animal for an animal with deferment if the two
animals have similar uses (e.g. two milk-producing sheep). However, he permits
such trading if the two animals have different usage (e.g. a male camel used
for reproduction for two camels used for transportation). In the first case, he
69 This is a valid Had
narrated by Al-Bukh
ar, Muslim and Al-Nas
a. It was narrated
. th
with different wording, including rib

a is in deferment, indeed rib
a is in deferment, and
there is no rib
a in hand-to-hand transactions. Al-Bayhaq conjectured that the narrator
may have abbreviated the H
, where the Prophet (pbuh) may have been asked about rib
a
. adth
in trading two different goods (gold for silver or dates for wheat), and replied that indeed,
rib
a is only in deferment, and the narrator may have included only the final response without
narrating the context of the question eliciting that statement, c.f. Ibn Al-Athr Al-Jazar (,
vol.1, p.469), Al-H

), vol.4, p.37).
.
. adth
70 Al-K
as
an ((H
anaf
),
vol.5,
p.187).
.

10.7. REASONS FOR PROHIBITING RIBA
337
justifies the prohibition on avoidance of potential means to circumvent the law

(saddan lil-dhar
aIc ).
c
The Shafi s, on the other hand, ruled that any goods other than gold, silver,
and foodstuffs (eaten or drunk) may be traded without mutual receipt during
the contract session. Their opinion is based on the H
narrated on the
. adth
. : I was ordered
by the Messenger
authority of c Abd-Allah ibn c Amr ibn Al-c As
of Allah (pbuh) to prepare an army. When I ran out of camels, he ordered me
to use the charitable properties,71 and I traded each one of those camels for
two.72
It is also narrated that c Ali (mAbpwh) traded one camel for twenty camels
deferred.73 Another narration states that Ibn c Umar (mAbpwh) traded one
camel for four deferred,74 and there are many other instances of similar trading
by companions of the Prophet (pbuh).75
There are four reported opinions of Im
am Ah.mad,76 the most correct of
c
them is in accordance with the Shafi opinion (i.e. permitting trading animals
for animals of the same or different genus, in equal or different numbers, and
with or without deferment). Finally, we point out that all four schools agreed
that trading animals in different numbers without deferment is permitted.
10.7
Reasons for prohibiting rib

a
There is no doubt that the pre-Islamic rib

a al-nasah is fundamentally forbidden
to prevent major injustice between the two sides of an economic transaction.
Such injustice may result based on significant price fluctuations, or any of a
number of other considerations. Moreover, there is a very real danger of exploitation of poor debtors by creditors, which Islam strives to eliminate. Rib
a
al-fad.l is forbidden, at least to ensure that the law forbidding rib
a al-nasah is
not easily circumvented. In this regard, what is fundamentally forbidden may
not be permitted except for absolute necessity (d.ar
urah), while that which is
forbidden to prevent circumvention of the law (saddan lil-dhar
aic ) may be per
mitted for need, or to effect a benefit that exceeds its harm.77 In this regard,
71 Sharh Al-Siyar Al-Kab
r (vol.3, p.223; vol.4, p.188), Al-Sarakhs (1st edition (H
.
. anaf),
vol.10, p.95).
u D
aw
ud, Al-D
araqut.n, and AlH
akim in his Al-Mustadrak. The
.
.
latter rendered it a valid H
based on the methodology of Muslim, although neither Muslim
. adth
nor Al-Bukh
ar narrated it. Some narrators rendered it weak based on having Muh.ammad ibn
Ish.
aq in its chain of narration. However, Ibn H
. ajar rendered its chain of narration strong,
and Al-Bayhaq narrated it in his Sunan on the authority of c Amr ibn Shuc ayb, his father,
and grandfather; c.f. Al-H

an (,
.
. adth
vol.5, p.304), Ibn Al-Athr Al-Jazar (, vol.1, p.473).
73 Narrated by M
alik in Al-Muwat..ta, c.f. Al-Suy
ut. (b, vol.2, p.148), Ibn Al-Athr Al
Jazar (, vol.1, p.474).
74 Narrated by M
alik and Al-Bukh
ar on the authority of c Abd-All
ah ibn c Umar (ibid.).
75 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.271).
76 Ibn Qud
77 Al-Rib
a wa Al-Muc a
mal
at Al-M
aliyyah by Rashd Rid.
a (pp.97,99, and the introduction
(p.5) by Professor Bahgat Al-Bt.

ar. See also Dr. Al-Zuhayls Naz.ariyyat Al-D
. arurah Al
Sharc iyyah for the distinction between needs and necessities.

CHAPTER 10. RIBA
338
each Muslim needs to determine for himself or herself the degree of necessity or
need that affects them.
It may also be argued that rib
a al-fad.l is indeed real rib
a, and that its
prohibition is more fundamental than a mere prevention of circumventing the
law forbidding rib
a al-nasah. This view is based on the H
wherein the
. adth
Prophet (pbuh) said to Bilal: This is precisely rib

a when he sold two volumes
of low quality dates for one volume of high quality. In this regard, rib
a al-fad.l
oftentimes relies on peoples ignorance of the various kinds of a commodity, and
other times exploits their need for a specific kind.
10.7.1
Riba in loans
We have discussed so far the type of rib

a that ensues in sales (be it rib
a al-fad.l
or rib
a al-nasah). However, rib
a may also be effected in a loan, whereby a
person lends another a sum of money with a condition that he returns it with
increase (interest), or where the convention is that loans are repaid with such
interest. This is the current practice of commercial banks and many merchants
who trade on peoples behalf. All such practices are prohibited (h.ar
am) based
on the verse: But Allah has permitted sale and forbidden rib
a [2:275], as well
as the verse: But if you repent, then you shall have your principals, without
inflicting or being a victim of injustice [2:279]. The end of the last verse refers
to inflicting injustice by taking more than the principal, and being a victim
of injustice if the creditor receives less than the principal.78 Allah has made
devouring rib
a one of the seven most egregious sins (al-sabc al-m
ubiq
at) in the
H
ad
th
narrated
by Al-Bukhar and Muslim on the authority of Ab
u Hurayrah.
.
In this regard, rib

a is forbidden in all parts of the world, be they Muslim
lands or lands of war. This follows since the prohibiting texts did not specify
any time, space, or other restrictions.
There have been accounts that Ab
uH
. anfa and Muh.ammad permitted taking the money of a non-Muslim in the land of war, even if that is effected through
a defective contract such as rib
a, as long as it is not done with any deception
or betrayal of trust. This ruling is based on the logic that an enemy of Islams
wealth is permissible to Muslims in analogy to his life. In the case of a rib
a
contract, the enemy of Islam would have given away his money with his own
free will, thus removing any restriction for a Muslim from taking that money.79
Some Muslims have wrongly deviated from the right path by depositing
their monies in non-Muslim countries, thus permitting taking interest from such
sources based on the above-mentioned opinion. However, this is a wrong
understanding of the ruling, which resulted in impermissible, invalid
78 Tr: Thus, l
a taz.lim
una wa l
a tuz.lam
un may be properly translated as without increase
or diminution. Contrast this with the faulty translation in A. Yusuf Ali (1991, p.116): But
if ye turn back, ye shall have your capital sums; Deal not unjustly and ye shall not be dealt
with unjustly, which misses the meaning that both increase and diminution are forms of
injustice.
79 Sharh Al-Siyar Al-Kab
r (vol.3, p.223; vol.4, p.188), Al-Sarakhs (1st edition (H
.
. anaf),
vol.10, p.95).
10.8. COMMERCIAL BANK INTEREST IS FORBIDDEN
339
and forbidden actions. The wrong understanding deviates from the ruling in
three respects:
1. The rib
a relevant to this ruling is the rib
a of contracts (through sales),
and not the rib
a of bank interest.
2. The opinion relates to taking the money of enemies of Islam, while in this
faulty practice, the Muslims are giving their monies to the other economies
to invest them and finance their economic growth.
3. The opinion relates to the money of enemies of Islam, which requires that
the person dwell in a country that is effectively or legally at war with the
land of Islam. This only applies to those who are occupying Muslim lands,
etc., but not to nations with which we have peace accords (e.g. through
membership in the U.N.).
In addition, it is impermissible from the point of view of Islamic law to
deposit Muslim monies in non-Muslim countries, since those monies make them
economically stronger, and the only return to Muslims is a measly portion of the
profits paid as interest. Moreover, as we have seen repeatedly, those monies can
easily be frozen in the foreign banks, which makes depositing monies in those
banks permissible only for absolute necessities to facilitate international trade.
Thus, I repeat that interest on such deposited monies are illegitimate (h.ar
am),
and should not be mixed with the monies of Muslims. However, leaving such
interest payments with those banks is not appropriate either. Thus, the correct
ruling is to collect such interest if it is necessary to deposit money with nonMuslims, and to give it away in charity or for public goods such as infrastructure
building, public schools and hospitals, etc. This is the ruling that was issued by
the Fatw
a Committee of Al-Azhar in the late 1960s.
10.8
Commercial bank interest is forbidden
Contemporary media has become a stage for many strong attacks and faulty
religious rulings by Muslims related to rib
a (or interest). Those attacks aim
to permit banking interest as an economic necessity that allows financial intermediaries to mobilize savings for agricultural, industrial, and other products.
By paying interest to depositors and charging interest to borrowers, they argue that banks serve an indispensable financial intermediation function without
which modern economies cannot function.
Among those attacks was the article of Mr. Fahm Huwaid in Al-c Arab
(no. 341, April 1987) where he reported the opinions of a religious scholar who
argued for permitting banking interest. The scholars argument was based on
questioning the maxim: Any loan that brings benefit [to the lender] is rib
a,
c
c
Abd-Al-Mun
im
which was not authenticated as a H
ad
th
.
This
scholar,
Dr.
.
Al-Nimr himself published an article that contained a religious ruling (fatw

a
permitting banking interest, c.f. Al-Ahr
am (June 1, 1989). Another religious
ruling was issued by Dr. Muh.ammad Sayyid T.ant.aw (then the Muft of Egypt)

CHAPTER 10. RIBA
340
in Al-Ahr
am (July 12, 1989) permitting the interest baring investment certificates (issued by Al-Bank Al-Ahl). The strongest calamity was then realized in
November 1989 when Dr. T.ant.aw issued another fatw
a permitting the interest
payments of investment certificates and limited banks, followed by a 1991 fat
a
permitting all banking interest in all parts of the world.
In what follows, I shall list the gradual prohibition of rib
a in the Quran, and
list the authenticated H
s that elucidate clearly the nature of the forbidden
. adth
rib
a. I shall also list the position of law in a number of Arab countries, and
finish by debunking the arguments of those who argue for the permissibility of
modern commercial banks.80
10.8.1
Gradual prohibition
It is well known that one of the characteristics of religious law is gradual prohibition of unacceptable conduct. For instance, the prohibition of wine proceeded in
four stages, culminating in the verses [5:90-91]; and the prohibition of adultery
similarly progressed in two steps, first through the incarceration of women and
punishment of men [5:15-16], and then through the punishment of flagellation
in [24:2]. Following the same gradual process, the prohibition of rib
a came in
four stages:
1. Reprehension of the actions of Jews who devour rib
a: They are fond of
listening to falsehood and devouring anything forbidden [5:42], .. in that
they hindered many from Allahs way; and that they took rib
a even though
they were forbidden, and devoured mens wealth wrongfully [4:160-161].
2. Contrasting rib
a with zak
ah in the verse: That which you lay out for
increase (yarb
u) through the property of others will have no increase with
Allah, but that which you lay out for zak
ah, seeking the countenance of
Allah, it is those who will get a compensation many-fold.
3. Condemnation of the pre-Islamic Arab behavior and prohibition of Muslims from following in their footsteps: O you who believe, devour not
rib
a doubled and multiplied [3:130]. The prohibition in this case is not
limited to multiplication many-fold, but the mention of multiplication was
mentioned since that was the actual practice. The condemned behavior
was thus: a man would extend an interest free loan to another. When
the debt matured, the creditor gave the debtor an option of repayment or
increase in the debt, thus exchanging further deferment for an increase in
the interest payment. This is in fact the practice of commercial banks,
where interest payments keep getting compounded over the years as long
as he does not pay. The accumulated compounded interest can certainly
80 Note that Majmac Al-Fiqh Al-Isl
Al-Isl
am and Majmac Alam of R
abit.at Al-c Alam
Fiqh Al-Isl
am of Munaz.ammat Al-Mutamar Al-Isl
am, as well as Majmac Al-Buh.u
th Al
Isl
amiyyah in Cairo (1965) have all concluded that banking interest is one of the forms of
the forbidden rib
a, c.f. the two books of Dr. Muh.ammad c Al Al-S
al
us where he debunks the
arguments of those who wish to permit banking interest.
341
exceed the principal many-fold. Those who look at interest rates of say
7% or 9%, and argue that they are low, are not aware of this compounding
effect that renders them more egregious than pre-Islamic rib
a.
4. Finally, a definitive prohibition of rib

a was issued in [2:275-279], describing
those who devour rib
a as being engaged in a war against All
ah and his
Messenger: Those who devour rib
a do not stand except as one whom the
devil has touched with madness. That is because they say: trade is like
rib
a, but Allah has permitted trade and forbidden rib
a. Those who after
receiving direction from their God desist shall be pardoned for the past,
and their case is for Allah [to judge]. But those who repeat the offense
are companions of the hell-fire in which they will abide forever. Allah will
deprive rib
a of all blessings, and will increase charities, for He loves not the
ungrateful and the wicked [2:275-276]. Then Allah says most definitively:
O you who believe, fear Allah and give up what remains of your demands
for rib
a if you are indeed believers. If you do not, then take notice of a
war from Allah and his Messenger. But if you repent, then you shall have
your principals, without inflicting or receiving injustice [2:278-279].
Many H
s followed to elucidate the nature and severity of this prohibi. adth
tion of rib
a. Among them is the agreed-upon H
(i.e. by Al-Bukhar and
. adth
Muslim), on the authority of Ab

u Hurayrah (mAbpwh), which lists devouring
rib
a among the seven most egregious sins. There are also the H
narrated
. adth
by Muslim on the authority of Usama ibn Zayd that Indeed, rib

a is but in
deferment, and the H
narrated by Ab
u Daw
ud and others on the author. adth
d and J
abir that the Messenger of Allah (pbuh) cursed the
ity of Ibn Masc u
one who devours rib
a, the one who pays it, the one who witnesses the contract,
and the one who documents it. We have also discussed the H
of rib
a in
. adth
sales that lists the six commodities (and extended to those that can be inferred
from the listed six) eligible for rib
a, narrated by Muslim on the authority of
c
Ub
adah ibn Al-S.amit: Gold for gold, silver for silver, wheat for wheat, barley
for barley, dates for dates, and salt for salt, in equal amounts, hand-to-hand.
When trading goods of different kinds [among those goods], trade as you wish
as long as it is hand-to-hand. Al-Jas.s.as. said in his book Ah.k
am Al-Qur
an
(vol.1, p.467): This H
ad
th
is
considered
mutaw
a
tir
due
to
its
many
narra.
tions and the consensus of jurists on its application. Finally, we recall the
c
d that the Prophet
H
narrated by Al-H
. adth
. akim on the authority of Ibn Mas u
(pbuh) said: There are seventy three types of rib

a; the least sinful of which is
equivalent in sin to a man committing incest with his mother...
Moreover, the Muslim Ummah reached a consensus on the prohibition of
rib
a. Al-Mawird said: ...to the point that it was said that no religion ever
allowed rib
a. Evidence for this statement was taken from the verse: and that
they took rib
a even though they were forbidden [4:161], meaning in previous
revealed books.

CHAPTER 10. RIBA
342
10.8.2
The forbidden rib

a
There are two types of the forbidden rib

a in Islam. The first is rib
a al-nasah,
which is effected through an increase in the debt amount in compensation for deferment of its maturity. This type of rib
a was the only one known in pre-Islamic
times, and it is forbidden in Islam regardless of whether the debt ensued from
a sale or a loan contract. The second type of rib
a forbidden in Islam is the one
adah, which lists the six commodibased in the above-mentioned H
of c Ub
. adth
ties eligible for rib

a in sales. This type is commonly called rib
a al-fad.l, and it
was prohibited to prevent means of circumventing the law (saddan lil-dhar
aic )
that forbids rib

a al-nasah. For instance, if it were not for this prohibition,
a person would be able to sell gold with a deferred price in silver with an increase containing rib
a. This constitutes rib
a al-nas
a in sales, which is effected
through deferment of the payment in sales of certain types of commodities with
certain types of prices. The goods eligible for this type of rib
a are restricted
to foodstuffs in the Shafic school, storable foodstuffs for the Maliks, monetary
numeraires for both Shafic and M

alik schools, or measurability by weight or
volume for the H

. anafs and H
. anbals. In this regard, we can differentiate between three types of rib
a: (1) rib
a al-nasah is effected through deferment and
increase, (2) rib
a al-nas
a is effected through deferment without increase, and
rib
a al-fad.l is effected through increase without deferment.
Note that trading wheat for barley in different quantities is not rib
a if the
goods are mutually received during the contract session. Also, trading foodstuffs
for a deferred monetary price is not rib
a, since the object of sale and price are
of different genera and have different units of measurement. However, trading
one pound of wheat today for one pound of wheat in one month does constitute
rib
a due to unity of the genus. Similarly, purchasing jewelry with a monetary
price (even if denominated contemporary fiat paper monies) would constitute
rib
a if all or part of the price is deferred.
In summary, not all increases are rib
a. Rib
a is effected through increases
in certain types of commodities and increases stipulated as conditions of loans,
or that are customarily expected to be paid for such loans. This constitutes
prohibited rib
a. However, if the debtor decides to pay more than he borrowed,
without the increase being stipulated as a condition or expected as conventional
behavior, then this is not rib
a. Indeed, it would be ludicrous to say that the
Prophet (pbuh) engaged in rib
a based on his statement: The best among you
are the best in repaying their debts.
10.8.3
Commercial bank rib

a
Commercial bank interest is a form of rib

a al-nasah, whether it is simple or
compounded. This follows since commercial banking operations are primarily
based on borrowing and lending, with the banks income coming primarily from
the difference between the (lower) interest rate it pays to depositors and the
(higher) rate it charges its borrowers. In this regard, it is not valid to argue
that banks are simply financial intermediaries that receive a commission for the
343
intermediation services. This argument is debunked since monetary authorities

commonly prevent commercial banks from engaging in direct investment. Moreover, the depositors do not share in the banks profits and losses, and the banks
do not share in the profits and losses of their borrowers. Instead, the return on
lent sums in both cases is fixed and predetermined as a rate of interest. Thus,
we can see that the harmful effects of rib
a are effected through banking interest, and thus is equally forbidden and h.ar
am, based on the verse: But if you
repent, then you shall have your principal [2:279]. Indeed, the modern usage
of the term rib
a is restricted to returns based on the deferment of payment of
debts, which makes it analogous to the pre-Islamic rib
a that multiplies with the
passage of time.
Thus, it is indeed the type of rib
a al-nasah effected through loans and currency exchanges that is most common in todays economies. Common examples
include exchanging one currency for another without mutual receipt, and borrowing a sum of money with a condition to repay more than the lent sum. As
for rib
a al-fad.l, it is rarely effected, but it is nonetheless forbidden to prevent
means of circumventing the law (saddan lil-dhar
aIc ).
Thus, we base the prohibition of banking interest on the Quran, the Sunnah,
and the consensus of the early Muslim community (ijm
ac ). In this regard, it is
true that the statement: Every loan that results in a benefit is rib
a is not a
H
ad
th
.
However,
it
has
been
established
that
a
number
of
the
companions
of
.
the Prophet (pbuh) prohibited such loans, based on the H

ad
th
that
states
that
.
the Prophet (pbuh) forbade a loan and a sale [in one contract]. This H
. adth
applies directly to the case of a person lending another a sum of money with a
condition that he sells him his house, or a condition that he returns more than he
borrowed. In all such cases, the increase is forbidden as long as it is stipulated
as a condition or conventionally implied in the loan contract. However, if it
was neither stipulated as a condition nor was it conventionally expected, then
such increase is permitted. Thus, Al-Karkh and other commentators interpret
every loan that results in a benefit is rib

a to refer to loan contracts in which
an increase or benefit is stipulated as a condition or conventionally expected.
In addition, depositing monies in banks, and contracting for taxes to be
paid from those monies, or contracting that the interest is collected and given
to the poor, are also forbidden activities. This follows since Allah does not
accept any impure money (as a charitable contribution). Imam Ah.mad in his
d (mAbpwh) that the Prophet
Musnad narrated on the authority of Ibn Masc u
(pbuh) said: Whenever a man earns money through forbidden means, then the
spending of this money will not be blessed, charitable payments out of it will
not be accepted, and whatever he leaves behind becomes his unholy sustenance
in the hellfire. Indeed, Allah does not cleanse impurity with impurity, but
he cleanses impurity with the pure. The impure can never be cleansed through
impurity. However, if the monies were deposited in foreign banks, and they earn
interest, then as we have seen in the fatw
a of Al-Azhars Fatw
a Committee
am the interest may be collected
in the sixties, published in Al-Wac y Al-Isl
and spent on public goods and infrastructure. In this case, taking the money is
better than leaving it to the non-Muslims to use in a manner that can potentially

CHAPTER 10. RIBA
344
harm Islam, and the lesser of the two evils is taken.
10.8.4
Legal treatments of banking interest in Arab Countries
While the various Arab country laws differ over verbal permission or prohibition of interest, they all in effect accept the conventional interest-based banking
system. Some countries laws permit interest unconditionally, e.g. the contract
laws of Tunisia and Lebanon, which stipulate the charging of interest from the
time of non-payment of the principal, with no upper-bound on interest rates.
Recently, the Turkish prime minister followed this same trend by liberalizing
the rates of interest. The Egyptian and Syrian civil laws permit interest under some conditions, which include: (i) interest payments may not exceed the
principal, (ii) interest rates may not exceed a certain level, and (iii) interest is
only accrued from the time of litigation. The Egyptian law (item #226) and
Iraqi law (item #171) listed a maximal interest rate of 4% for civil transactions,
and 5% for commercial transactions. The Moroccan law (m.870) stipulated that
contracts containing interest conditions among Muslims are invalid. Similarly,
Algerian law (item #s 455,457; 1975) stipulated that loans among individuals
must always be interest free, and are invalid otherwise. However, the latter
law permitted banks to pay interest to depositors. The same conditions were
stipulated in Libyan law (item #74/1; 1972) that permitted interest payments
by legal entities such as banks and the state, while forbidding them for private
individuals.
This latter distinction has no basis in Islamic law, which does not distinguish
in the prohibition of rib
a between private individuals and the state. In this
regard, the prohibition addressed all such entities equally. If that were not the
case, the state would be exempted from many of the other prohibitions directed
at private individuals (e.g. injustice, murder without right, and theft). In this
regard, Ab
u Y
usuf told Har
un Al-Rashd in his book Al-Khar
aj: The ruler is
not permitted to take any property from any individual without a well known
and legally established right.
The Jordanian law (based on the system of mur
abah.a under Ottoman law,
March 1903) listed a maximal interest rate of 9%. Moreover, Jordanian civil law
stipulated that any condition that brings benefit in a loan contract is invalidated,
while the contract itself remains valid. This is also the legal approach followed
in the United Arab Emirates, where the civil law of Ab
u Dhabiy equated civil
and commercial transactions. The UAE supreme court (item #14, 1979) ruled
that the two items 61 and 62 of this law were constitutional, and added that
the interest rate stipulated by the court may not exceed the rate agreed upon
or used by the parties prior to litigation. The UAE law (item #714) ruled
that a condition that results in a benefit in a loan contract is invalid, while the
contract remains valid. On the other hand, the penal code of the UAE (item
#409) dictates that: Any private party who deals with another private party
with rib
a al-nasah in any civil or commercial contract, is to be punished by
incarceration for a period of at least three months, and a fine of no less than
345
2000 Dirhams. This ruling applies to any condition that constitutes an explicit
or implicit ribaw interest payment. This ruling implicitly exempts banks and
other legal entities from this punishment.
Finally, the two civil laws of Sudan (item #s 279/1,281) and Kuwait (item
#547/1) each prohibit explicit rib
a or interest: All loans must be interest free,
and any condition that violates this ruling is deemed invalid. However, the
commercial law of Kuwait (item #102) stipulates that the creditor has the right
to collect interest in a commercial loan. This latter ruling is also consistent
with the financial conduct in Sudan, Saudi Arabia, and other countries.
10.8.5
Arguments of those who permit banking interest
1. Some of those who wish to permit conventional banking interest rely on the
argument that their interest payments are not doubled and multiplied,
but constitutes a low percentage of 4% or 9%. Thus, they argue that such
low interest rates were not familiar to the Arabs before Islam, and are
not covered in the verse and he forbade rib
a. We answer this claim by
noting that the forbidden rib
a is not only the rib
a al-j
ahiliyyah (doubled
c Imr
an alone, but includes all the
and multiplied) mentioned in surat Al
types of rib
a mentioned elsewhere in the Quran and H
. In this regard,
. adth
all rib
a al-fad.l and rib
a al-nasah, including any increase, small or large,
are forbidden in loans and sales. This is clear in the verse But if you
repent, then you shall have your principals [2:279], which is immediately
reinforced by His (swt) saying without inflicting or receiving injustice
[2:279]. Moreover, the al in and he forbade al-rib
a [2:275] refers to
the entire genus of rib
a, which was further explained in the Sunnah of the
Prophet (pbuh), with respect to the types of good eligible for rib
a, and the
contracts that it affects (sales, loans, and currency exchange). However,
jurists disagreed over the criteria for rib
a, where the H
. anafs and H
. anbals
make eligibility for rib
a generally applicable to all goods measured by
volume or weight. On the other hand, the Maliks restricted the criteria
of eligibility for rib
a to storable foodstuffs and monetary numeraires, and
the Shafics restricted to it all foodstuffs and monetary numeraires.
In this regard, it is important to reiterate that the reason for the prohibition of rib
a is not the potential for exploitation and injustice per se. In
fact, that potential is one of the explanations of the wisdom of the prohibition, but it is not attached to the legal restriction, and may not be used for
reasoning by analogy since it cannot be objectively measured. Thus, the
argument that productive loans cannot be faulted for causing exploitation,
and thus are not eligible for rib
a, is an invalid argument. Moreover, we
should keep in mind that banks use compounded interest, which certainly
does belong in the category of doubled and multiplied rib
a or increase.
In this regard, we should also note that the claim made by Al-Sanh
ur
as only forbade rib
a al-j
ahiliyyah to the exclusion of rib
a
that Ibn c Abb
al-fad.l and rib
a al-nasah is simply wrong.
346
CHAPTER 10. RIBA
2. Others have argued that the term rib

a is general in the law, some of
its connotations being known to Arabs and others unkown. They base
this opinion on the statement of c Umar (mAbpwh) the verses of rib
a
are among the very last revealed verses, and the Prophet (pbuh) died
before he fully explained it to us; thus avoid rib
a and things suspiciously
similar to it. Their argument is flawed, since Islamic law is explained by
the Quran and the valid Sunnah. In this regard, the Qur
an forbade the
genus of rib
a, and the H
explained the meaning of and forbade rib
a.
. adth
a categorically,
This is further reinforced by c Umars urging to abandon rib
including things that are suspiciously similar to it. Moreover, we have seen
that reasonably late in the Prophets life, after the conquest of Khaybar, he
identified trading one volume of dates for two volumes to be precisely the
forbidden rib
a. This indicates that such transactions were familiar to the
Arabs, who considered it a sale, but the Prophet (pbuh) explained to them
that it was a form of the forbidden rib
a rather than the permitted trade.
Thus, the statement of Rashd Rid.a and others that only the doubled and
multiplied interest (rib

a al-j
ahiliyyah) is clearly forbidden, and that the
other types of rib
a are debatable, is off the mark, since the term rib
a used
in the Quran clearly includes all of its types.
uf Al-Dawalb, argued
3. Some contemporary writers, including Dr. Mac r
that the forbidden rib
a is only that which affects consumer loans extended
to needy and poor individuals who have to repay it doubled and multiplied. Thus, they try to argue that productive loans to the rich, and that
result in significant profits, is not included under the banner of forbidden rib
a since it does not include any form of exploitation of the needy
poor. We note that this view was first articulated by speakers who were
influenced by capitalist and Jewish ideologies in 1951, at the Islamic Jurisprudence Week held in Paris. I have already replied to this claim by
noting that the legal prohibition is attached by objective legal measures,
and not by the perceived wisdom in the prohibition, which can only be
assessed subjectively in each case. In this regard, we reiterate that Islamic
law categorically forbade the genus of rib
a, without making any distinction between consumer and productive loans. Further proof is evident
from the fact that the first forbidden rib
a (as stated in the H
) was
. adth
as who was reasonably wealthy.

that of Al-c Abb
4. Some have argued that interest in productive loans provides an important
social benefit that makes it permissible even if it causes other harms. This
logic is based on an article in Al-c Arab where a legal scholar argued that
benefits that override harms should have precedence in legal rulings. In
this context, the presumed benefit is the mobilization of savings to finance
investment, growth, and employment creation, which is beneficial to the
lender and borrower, as well as the society at large. This is balanced in
their opinion against the only harm that is rib
a.
This logic is clearly erroneous, since the correct general juristic princi-
347
ple is avoidance of harm takes precedence over the pursuit of benefits.

Moreover, the pursuit of benefits is only allowed as long as it does not
contradict a legal text, thus restricted only to the cases where no clear
legal ruling exists based on a direct text, a consensus among jurists, or
a valid reasoning by analogy. Moreover, the harms of productive loans
are more significant than the imagined benefits that are claimed to be
exclusively achievable thus. In this regard, we may argue that the interest
component of production costs may produce bad distortionary effects, and
may even force an inflationary spiral that harms all economic agents in the
long run. Moreover, an interest-based system gives the owners of capital
a disproportionately large say in the direction of the economy, since they
will be more bent towards lending other rich investors to the exclusion of
the new entrepreneurial talents, thus reinforcing the unequal distribution
of wealth.
5. Some have argued that conventional banks are an absolute economic necessity in the current age. This is a short sighted view, since there have
been other economic systems that did not rely so crucially on the banking
sector. Moreover, the remarkable success of Islamic financial institutions
in recent years is proof that an economy can function without reliance on
interest-based financing. We must also note that it is not acceptable to
argue that banking interest have become customarily accepted among people, and thus may be tolerated. Even if we accept that this has become a
custom in Islamic countries, it is a defective custom that contradicts legal
texts and must be stopped.
6. Rationalizing rib
a, by arguing that interest payments are intended to compensate the lender for the loss of purchasing power of his money due to
inflation, is not acceptable. In fact, interest is primarily a compensation
for the time value of the usage of the lent money, and not a compensation
for the loss of its purchasing power. In fact, markets may run into circumstances where interest rates become a driving force for inflation, rather
than the other way around.
7. Some have displayed extremely low levels of knowledge and thought by
arguing that fiat paper monies are not measured by weight, and thus are
a. Some have thus argued that such monies should be
treated the same as non-ribaw goods, including the classical example of
copper coins, which may be treated in different quantities. This statement
displays clear ignorance of the nature of monies, which are conventional
monetary numeraires for the specification of prices. In this regard, they
may be made of metals or any other materials. In this regard, the classical
treatment of copper coins as goods rather than monies was based on the
fact that they were insignificant (thus trading one copper coin for two
was treated the same as trading one apple for two). Thus, this classical
permission was not meant to restrict monies to gold and silver, but to
facilitate trading in trivial amounts of various goods.
348
CHAPTER 10. RIBA
8. It may be said that the interest payments banks give to depositors constitute a permissible return on investment in various projects. However,
the bank interest is predetermined and fixed, which severs its links to the
actual profits or losses incurred in any given pool of investments.
Thus, we reject the previously mentioned wrong opinions published in
Al-c Arab regarding the permissibility of the profits of deposit funds
and investment certificates endorsed by various countries in the name
of encouraging savings and investment. The investment certificates that
offer gifts after a specific period are also forbidden, since they are in
fact a loan that results in a benefit to the lender. The argument that such
riyyah (simple loan of the usage
instruments may be classified legally as c a
of the goods with no compensation) is not accepted, since the principal is
guaranteed, and a c a
riyyah in monies is legally equivalent to a loan (thus
forbidding the increase). Moreover, the monies may not be considered a
deposit, with a voluntary gift given by the borrower, since deposited
goods may not be used for investment purposes, otherwise the borrower
must guarantee its safety.
Also, investment in those instruments may not be considered silent partnership (mud.a
raba), since the profit ratio is fixed, making the contract a
form of rib
a al-nasah. In this regard, the active partner in a mud.a
raba
only guarantees the principle in cases of negligence or shirking, while the
banks guarantee the principal in all cases. Moreover, in mud.a
raba, the
financier incurs all financial losses of the investment and shares in the
profits, which is a very different situation from the guaranteed principal
and profits or gifts. In this regard, jurists ruled that a fixed profit
amount may not be specified in any investment contract, based on gharar,
where the profit may and may not exist. Further proof is providedin the
H
on the authority of Rafic ibn Khudayj that the Prophet (pbuh)
. adth
forbade renting land in exchange for water on the mills, and ordered that
a known rent be paid in gold or silver. In this regard, we do not accept
statements that an investment pool can have an be almost certainly profitable, thus resulting in minor gharar. In this regard, we are considering
the amount of gharar, which is significant, and not the chances of loss
being small or large.

In this regard, when a bank incurs a loss (however
unlikely that may be initially), such losses are often quite substantial.
While discussing the issue of gharar, we note that the same article in Alc
Arab debunked here argued for the permissibility of life insurance. This
is also a wrong opinion based on the wrong reasoning that the probabilistic calculations of the insurance companies render the amount of gharar
minimal. In this regard, the probability of any particular accident is unchanged by the insurance company, and the potential for loss is just as
substantial.
In summary, we say that banking interest is the forbidden rib
a prohibited in
the Quran, the Sunnah, and the consensus of the companions of the Prophet
349
(pbuh) and later Muslim nation. The arguments for its permissibility have been
shown to contradict those clear legal proofs, and often to show ignorance of the
actual conduct of conventional banks. In this regard, we should also note that
the past Mufti of Egypt Dr. Sayyid T
. ant.aw have contradicted themselves, since
he had previously ruled for the prohibition of banking and investment certificate
interest.81
10.8.6
Rules for dealing with Islamic financial institutions
Islamic financial institutions function by collecting funds and investing them on

behalf of their participants. Their goals are rebuilding the Islamic society and
the realization of Islamic cooperation while adhering to the fundamental Islamic
laws. Those fundamental laws dictate the avoidance of dealing in rib
a and other
forbidden contracts, as well as distribution of profits according to agreed-upon
and fair ratios without doing injustice. They also aim to help assist the needy
through interest-free loans, as well as supporting the socio-economic foundations
of an Islamic society.
10.8.7
What distinguishes Islamic financial institutions?
It is imperative upon Islamic financial institutions to highlight the differences

between them and the conventional banks that rely on interest-based borrowing
and lending. They also need to show that they can adhere to Islamic legal
rules while competing successfully with the conventional banks and providing
the financial services that Muslims need to satisfy their financial and economic
needs. The success of the Islamic financial institutions is imperative to allow
Muslims to escape the arrogance of capitalist markets that reinforce unequal
income distributions through their interest-based banking sector.
The main features that distinguish Islamic financial institutions from their
conventional banking counterparts are:
1. Those institutions adhere closely to the Islamic creed (c aqdah). Since
those institutions are first and foremost Muslim institutions, they share
the fundamental Islamic drive to avoid what Allah has forbidden. In this
regard, the Quran contains clear and eternal prohibitions of all kinds of
rib
a, including the banking rib
a al-nasah as well as rib
a al-fad.l. All those
types of rib
a are forbidden in sales as well as loans, be they consumption
or production oriented.
In this regard, Allah (swt) says: But indeed Allah has permitted trade
and forbidden rib
a [2:275], which covers the entire genus of rib
a of all
kinds. He (swt) has also warned that the rib
a interest and its benefits are
wiped out: Allah will deprive rib
a of all blessings, but will give increase
for deeds of charity [2:272]. He (swt) also ordered the Muslims to abandon
81 See Dr. Al-S
al
uss books Ajraukum c Al
a Al-Fatw
a Ajraukum c Al
a Al-N
ar, and H
. ukm
Wad
aIc Al-Bun
uk wa Shad
ad
at Al-Istithm
ar f Al-Fiqh Al-Isl
am, where he clearly makes
the case for the prohibition of those types of interest.
350
CHAPTER 10. RIBA

and liquidate all remaining rib
a (regardless of how large or small): O you
who believe, fear Allah and give up what remains of rib
a, if you are indeed
believers [2:278], and declared war on those who devour it: If you do
not, take notice of a war from Allah and his Messenger; but if you turn
back then you shall have your principals without inflicting or receiving
injustice [2:279]. Indeed, the punishment mentioned in this last verse is
the severest in all of Islam, providing further proof that rib
a is one of the
most severely forbidden of transgressions to deserve such a declaration of
war from Allah (swt) and his Messenger (pbuh).
In addition to the avoidance of rib
a, Islamic financial institutions refrain
from producing, financing, manufacturing, or trading in forbidden commodities such as wine. They also avoid monopolistic practices, as well as
deception and unfair practices. This is in contrast to conventional banks
that survive on the payment and receipt of interest and endorsement of
monopolistic practices to the full extent of the man-made laws. In this
regard, the Islamic financial institution also avoids excesses of all kinds,
and attempts to target its financing and economic activities towards the
good of the Muslims and the nation.
2. Islamic financial institutions endorse the principles of mercy and forgiveness when clients face financial difficulties. This is based on Allahs (swt)
command: If the debtor is in a difficulty, grant him time till it is easy for
him to repay. But if you remit it by way of charity, that is best for you
if you only knew [2:280]. This is clearly in contrast with conventional
banks, who in their blind pursuit for profits will be quick to repossess the
properties of the debtors that were presented as collateral for their debt.
3. The primary goal of Islamic financial institutions is not profit-making, but
the endorsement of social goals of socio-economic development and the
alleviation of poverty. In this regard, such institutions provide interestfree loans to the needy families, serve in the distribution of zak
ah to the
poor and for education and religious centers. In this regard, the Islamic
financial institutions attempt to link the economic and social development
goals in a harmonized overall framework based on Islamic teachings. They
avoid excessively speculative or untruthful transactions, which can have
an adverse economic and social effect on the nation.
4. Islamic financial institutions provide more transparency in their dealings,
since the depositors monies are invested in specific projects that are known
to all. This is in contrast to the conventional banks, whose goals are simply
to charge a higher interest rate than the one it pays, without necessarily giving sufficient information about his dealings. Thus, the depositors
share in the capital of the Islamic financial institution as well as in its management, with profits and losses shared among the investors according to
agreed-upon ratios.
In most cases, the Islamic financial institutions will invest as silent partners
with entrepreneurs who provide their labor and expertise in investing the
351
financial institutions money. In this case, the financial institution bears

all financial losses (not caused by negligence or transgression), and shares
any profits with the entrepreneur according to an agreed-upon ratio.
In trading arrangements, Islamic financial institutions use the murabah.a
anah), thus
(cost-plus) contract. This is a type of trust sales (buy
uc al-am
allowing the buyer to void the sale if he discovers that the seller betrayed
him. In this case, the majority of jurists agree that the Islamic financial
institution can thus collect a reasonable profit rate for funding such sales,
whether the price is paid on the spot, with deferment, or in installments, as
long as the overall price is agreed-upon at the time of sale. This cost-plus
formula may also be used for building a house or a similar transaction,
where it is permissible for the price to increase with the term of deferment
of the price payment.
Such institutions also deal in currency transfers in a manner very similar
to conventional banks, with or without a commission. As for letters of
credit (khIt.a
b
at al-d.am
an) that allow a client to deal with a third party,
they are permissible forms of guarantee (kaf

alah). In this regard, the bank
may collect a fee for this guarantee if it is partially or totally covered by
a deposit. This follows since the contract is in fact jointly a guarantee to
the third party and a legal agency or representation (wak
alah) between
the financial institution and its client. However, if the letter of credit is
uncovered, then the institution may not collect a fee since such a fee is not
permissible for a pure guarantee (kaf
alah), which is a charitable contract.
This is the opinion articulated by the First Conference on Islamic Banks,
as well as the Sharic a Board of Faisal Islamic Bank in Sudan. The latter
board allowed the charging of a fee for uncovered guarantee provided that
the fee covers the effective costs of issuing the letter.
5. Depositors in Islamic financial institutions derive profits from the actions
of the institution and its legal agents. Thus, the capital provider is a partner in the bank either through a silent partnership (mud.arabah) or a genan). In this regard, the multiplicity of capital
eral partnership (sharikat c in
providers and of active partners is permissible in both types of partnerships. In all such cases, the principals are not guaranteed, and the profits
and losses are shared according to the ratios specified in the contract.
Most Islamic financial institutions apply unconstrained silent partnership
as a recipient of investment funds from depositors, and constrained silent
partnership (mud.a
rabah muqayyadah) for their own investments.
In all dealings involving debts, Islamic financial institutions do not deal
in interest. Therefore, all loans they extend are interest free, and may not
involve any other type of benefit to the lender. Also, Islamic financial firms
are not allowed to receive interest for pre-payment of deferred liability,
since that would constitute forbidden rib
a under the rule of prepay and
reduce the liability.
Thus, Islamic financial institutions are not allowed to collect or pay in-

CHAPTER 10. RIBA
352
terest when dealing with foreign banks. A compromise has been reached
between some Islamic and non-Islamic banks, whereby the Islamic bank
does not collect interest on its deposits, and the other bank does not charge
interest for overdrafts. In contrast, conventional banks always charge and
receive interest on credits and liabilities, and this could lead to inflationary pressures. Moreover, the institution of charging compounded interest
can quickly result in insolvency of debtors, which can have catastrophic
effects on the debtor and the economy at large.
6. Islamic financial institutions aim to provide their services to all economic
groups, while conventional banks are not accessible to the poorer classes.
This provides for greater social harmony due to the upward mobility of
those who lack resources, and can be invigorating for the economy by
giving opportunities to the young and energetic entrepreneurial classes.
7. Islamic financial institutions try their best to assess their commissions
and fees in line with the actual costs of the services they provide. In
this regard, the Dubai Islamic bank does not even collect a fee for its
interest-free loans.
10.8.8
Is dealing with Islamic financial institutions permitted?
As we have seen, Islamic financial institutions abide by the permissible transactions in Islam and avoid the forbidden transactions. Moreover, they serve a vital
economic needs of the poor in the economy, while providing a valuable service
in mobilizing savings and encouraging investment and growth in the economy.
It is well known that the original status of all economic contracts is permissibility unless ruled otherwise. Thus, since the transactions of Islamic financial
institutions are far from the forbidden rib
a, and they provide useful economic
tools to meet the economic needs of Muslims, they are permissible. In this regard, Islam does not forbid anyone from making reasonable profits (up to 20%
or 33%). While some people doubt that certain types of profits made from Islamic banks may seem similar to rib
a, we note that as long as the means used
to obtain those profits are permissible, the transactions are permissible. Thus,
while some may argue that the increase in price for deferment (say in installment
payments of an item purchased through murabah.a), we say that the Muslim jurists permitted such transactions to meet the economic needs of Muslims. Such
contracts are not exploitative, on the contrary, they help the consumer to obtain
goods that he would not otherwise be able to consume.
Similarly, commissions and fees that Islamic financial institutions charge for
their services may be thought by some to be forbidden rib
a. However, most of
the activities of those institutions take the form of rental (e.g. of a deposit box
or storage room) and hiring of labor services (e.g. in maintaining such space,
or preparing paperwork for transactions), or agency in exchange for a fee. All
such fees and commissions are permissible and should not be confused for the
forbidden rib
a.
Chapter 11
Trust Sales (mur

abah.a,
tawliya, wad.ca)
We have seen previously that sales as exchanges can be classified into five categories:
1. Sale at negotiated prices (bayc u al-mus
awama): This type of sale is concluded at the agreed upon price without reference to the original price of
the commodity. This is the most common type of sale.
abah.a): In this sale, the object is sold at the
2. Cost-plus sale (bayc u al-mur
price at which it was obtained plus a stated profit margin. The Maliks
defie this contract thus: the seller informs the buyer of the cost at which
he obtained the object of sale, and collects a profit margin either as a
lump-sum (e.g. I bought this for 10, and you pay me 2 as profit), or
he may state the profit margin as a percentage or ratio (and you pay me
20% profit).1 The H
. anafs define it thus: it is the transfer of the object
he obtained through a prior contract in exchange for the original price
plus a profit margin. The Shafics and H
. anbals define it thus: it is selling
at the principal plus a profit margin, provided that both parties know the
principal (cost of obtaining the object of sale).2
3. At-price sale (bayc u al-tawliya): In this sale, the object is resold to the
buyer for the same price at which the seller obtained it; thus its name
suggests that the seller lets the buyer takes his place (yatawall
a) in the
original sale.
ak): this is the same as at-price sale,
4. At-price partial sale (bayc u al-ishr
except that only part of the obtained object of sale is resold to the buyer.
1 Ibn
Juzayy ((M
alik), p.263).
Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.382), Ibn Qud

amah (, vol.4, p.199).
2 Al-Khat
b
353
354
CHAPTER 11. TRUST SALES (MURABAH

. A, TAWLIYA, WAD
. I A)
5. Sale at a loss (bayc u al-wad.c a): In this sale, the object is sold with a
known discount below the price at which it was obtained.3
11.1
Cost-plus sales (mur

abah.a)
Cost-plus sale is a legally permissible contract by the testimony of the majority

of jurists and companions of the Prophet (pbuh). However, the M
aliks find it
less desirable. The proof of its permissibility is derived from the following:
1. There are many verses in the Quran that explicitly permit sales in general,
e.g. And Allah has permitted trade [2:275], But let there be among
you traffic and trade by mutual good will [4:29]. In this regard, cost-plus
sales are clearly concluded by mutual consent.
2. A valid narration reports that the Prophet (pbuh) while planning for emigration to Madnah, learned that Ab
u Bakr had purchased two camels.
He asked him to sell him one at the price at which he obtained it wallin
ah.adahum
a. Ab
u Bakr said: It is yours at no price, but the Prophet
(pbuh) replied: Not without a price.4
3. It was narrated that Ibn Masc u
d (mAbpwh) ruled that there was no harm
in declared lump-sum or percentage profit margins.
4. This type of sale satisfies all the legal requirements for sale, and it provides
a valuable service in economic markets since it allows those knowledgeable
of market conditions to make a profit and those without such knowledge
to obtain the goods at a good price.
In this regard, the price in mur
abah.a is determined, and thus permitted. In
what follows, we discuss mur
abah.a in four subsections:
1. Conditions of mur
abah.a.
2. The initial price (principal), and what may or may not be appended to it.
3. What needs to be disclosed in a mur
abah.a.
4. The legal status of the sale if a breach of trust is discovered.
We note that the issues discussed in those four subsections pertain not only
to mur
abah.a, but also to tawliya, ishr
ak and wad.c a.
3 Khusr
u
(1304H (H
. anaf), vol.2, p.180).
ah (mAbpwh), and also by Im

am
by Al-Bukh
ari on the authority of c Aish
Ah.mad in his Musnad, Ibn Sac d in Al-T

at, and Ibn Ish.
aq in Al-Srah.
. abaq
4 Narrated

11.1. COST-PLUS SALES (MURABAH
. A)
11.1.1
355
Conditions of mur
abah.a
The conditions of mur

abah.a are as follows:5
1. Knowledge of the initial price: The second buyer must know the price at
which the seller obtained the object of sale, since knowledge of the price is
a fundamental condition for the validity of sale. This condition applies to
other trust sales discussed in this section, since they all depend crucially
on the original price. In this regard, the sale is considered defective if the
initial price is not known during the contract session. Thus, if the two
parties were to part without the buyers knowledge of the initial price, the
sale would be invalidated due to the establishment of that defectiveness.
2. Knowledge of the profit margin: Since the profit margin is a component of
the price at which the second buyer obtains the goods, knowledge of that
margin is essential for knowledge of the price, which is in turn a condition
of validity for the sale.
3. That the original price be fungible: Thus, the price at which the seller
obtained the goods must be measured by weight, volume, or number of
homogeneous goods. This is a condition for mur
abah.a and tawliya, regardless of whether the trade is concluded with the initial seller or another
party, and regardless of whether the profit margin is specified in goods
of the same genus as the original price. Thus, if the original price were
not fungible, the object may not be sold through mur
abah.a or tawliya by
anyone other than the owner. This follows since the price in the second
sale must be equal in tawliya and with a profit margin in mur
abah.a.
In this regard, if the original price was non-fungible (e.g. a house, clothes,
etc.), then we consider whether the seller is the owner or not:
If the seller is not the owner, the mur
abah.a or tawliya is not permitted, since the object itself is not in the sellers property, and its value
is unknown.
If the seller is the owner, we consider two cases:
(a) If the profit margin is specified as a known amount of a different
good (e.g. silver coins, a specific dress, etc.), then the sale is
permitted. In this case, the first price is known and the profit is
known (e.g. I sell you via mur
abah.a in exchange for the dress in
your hand, and a profit of 10 silver coins).
(b) If the profit is made part of the initial price (e.g. the profit
margin is 10%), then the sale is not permitted, since the profit
is made part of the object, which is not equally divisible. In
this regard, what is equally divisible is its value (determined in
money terms), but that value is not exactly known and estimates
may vary.6
5 Al-K
as
an
6 Ibn
((H
. anaf), vol.5, pp.220-222).
Al-Hum
am ((H
s (1st edition (H
. anaf), vol.13, p.91).
356

. A, TAWLIYA, WAD
. I A)
In the case of discount sales (wad.c a), the ruling is the opposite of that for
mur
abah.a. Thus, if the discount is specified in goods other than the initial
price (e.g. coins), the sale is not permitted. In this case, the deduction
needs to be made from the original price that is not known. On the other
hand, if the deduction is made of the same genus as the initial price (e.g.
at a 10% discount), the sale is valid since the deducted part is distributed
equally over a known price.7
4. When trading in goods eligible for rib
a, the validity of mur
abah.a requires
that rib
a is not effected in relation to the original price. For instance, if an
object measured by weight or volume is initially traded for goods of the
same genus in the same amount, then the purchased goods may not be
sold via mur
abah.a. In this case, the mur
abah.a would consist of trading at
the initial price plus an increase. In goods eligible for rib
a, the increase is
rib
a rather than profit. Similarly, such goods may not be sold via wad.c a.
However, they may be sold for the same amount via tawliya or ishr
ak,
where rib
a is not effected.
However, if the genera in the initial sale were different, then mur
abah.a is
permitted. For instance, if the seller originally bought a gold coin for 10
silver coins, then he may sell it via mur
abah.a with a profit as one silver
coin or a specific dress, etc.8
5. The initial contract must be valid. Thus, if the object of sale were obtained
by means of a defective sale, the ensuing mur
abah.a is not permitted. In
this regard, mur
abah.a is a sale at the initial price plus a profit margin.
However, a defective sale establishes ownership in exchange for the value
of the object of sale or its equivalent, and not in exchange for its price.
Thus, the naming of the price in the mur
abah.a is not valid if the initial
sale were defective.
11.1.2
Initial price, and what may be appended to it
We refer to the initial price for goods later sold in mur

abah.a or tawliya as the
principal, which is the amount the initial buyer owed the original seller. The
initial buyer may in fact pay the initial seller other goods as a substitute for
this price that was named in the original sale. Thus, if the initial buyer bought
a dress for 10 silver coins, and then made the payment by one gold coin (in
lieu of the named price), the principal remains the 10 silver coins named as
the original price. Similarly, the initial price may have been named as 10 good
silver coins, but what was paid were coins mixed with copper, and they may
have been accepted by the initial seller. If the same goods were not to be sold
in a mur
abah.a, the relevant principal are 10 good silver coins, and not what was
accepted as a substitute for that named price.
7 Al-K
as
an
((H
. anaf), vol.5, p.221).
(1st edition (H
. anaf), vol.13, pp.82-89).
8 Al-Sarakhs

. A)
357
In this regard, consider the case where the initial price was named as 10 silver
coins of a currency other than that of the country of the second (mur
abah.a) sale,
and the profit margin is named as 1 silver coin without specifying the currencys
country. In this case, the price in mur
abah.a would be 10 silver coins of the
original currency, while the profit would by convention be determined to be of
the local currency. However, if the profit is named as a percentage of the initial
price, then it is paid in the same genus as that price.9
All normal costs associated with the object of sale in mur
abah.a, which result
in an increase in its amount or value, may be appended to the principal. This
includes such costs as those incurred for dying, washing, sewing, intermediation
in sales, feeding of animals, etc. Such costs are appended to the principal by
convention, and as the tradition says: Whatever the Muslims view as fair, it is
fair in the eyes of Allah. Those costs are appended to the principal in mur
abah.a
and tawliya. However, the buyer in this case does not list the principal with the
appended costs as the price at which he acquired the goods, but rather lists the
total sum as his cost for the goods.
However, a number of other incurred costs may not be appended to the principal, including the wages of a doctor, cupper, shepherd, etc. In such cases, the
mur
abah.a or tawliya must name the initial price of the goods only. This applies
to all costs that are not conventionally appended to the principal, following
the principle: Whatever the Muslims find as unfair, it is unfair in the eyes of
Allah.10
11.1.3
Disclosure in mur
abah.a
Mur
abah.a and tawliya are trust sales, names as such since the buyer trusts the
seller to correctly reveal the initial price at which he acquired the goods without
need of proof or oath. In this regard, it is very important to protect the buyer
from betrayal of this trust, as Allah (swt) said: O you who believe, do not betray the trust of Allah and his Messenger, nor misappropriate knowingly things
entrusted to you [8:27]. In this regard, we also recall the H
: Whoever
. adth
cheats us is not one of us.11

Thus, if a defect were to ensue in the object of sale while it is in the possession
of the seller or buyer, and if the seller wishes to sell it via mur
abah.a, we need
to consider the following cases:
If the defect was caused by natural causes, the seller may sell it via
mur
abah.a for the entire price without disclosing the defect. This is the
opinion of the majority of H
. anafs, since they ruled that there is no part
of the price corresponding to the defect. In this case, it is as if the seller
had paid the initial price in exchange for the goods in their current status,
9 Al-K
as
an
((H
. anaf), vol.5).
c
Al-Hum
am ((H
as
an ((H
n
. anaf), vol.5, p.255), Al-K
((H
. anaf), vol.4, p.161).
11 We have previously listed the chains of narration of this Had
, c.f. Al-Haytham (, vol.4,
. th
p.78).
10 Ibn
358

. A, TAWLIYA, WAD
. I A)
and disclosure of the defect or lack thereof make no difference.12

However, Zufar and the majority of other jurists ruled that a defective
item may not be sold via mur
abah.a unless the defect is disclosed to the
buyer, to avoid suspicion of betrayal of trust. This follows since the defect
may affect the utility of the goods to various potential buyers, and is
considered a diminution of the object.13
If the defect ensues due to actions of the first buyer or a third party, then
all jurists agree that mur
abah.a requires disclosure of the defect.
If an increase ensues in the object of sale (e.g. giving birth, bearing fruit,
growing wool, creation of milk, etc.), then the object may only be sold
via mur
abah.a after disclosure of the increase. In this case, the H
. anafs
ruled that the generated increase is sellable, and it does not reduce the
price. Thus, the sale in this case requires disclosure of the increase without
changing the price.14
If the object of sale were land, and if the land was used for agriculture,
it may be sold via mur
abah.a without disclosure, since any increase that is
not generated from the object itself is not subject to sale.
If the object of sale was initially purchased with a deferred price, this
must be disclosed to the buyer in a later mur
abah.a. This follows since
deferment normally results in an increase over the cash-and-carry price.
If the object was purchased in exchange for a debt owed by the initial seller,
the buyer may resell it via mur
abah.a without disclosing this information
to the second buyer. In this case, he bought the object in exchange for the
amount of money for which the initial seller was liable, and this amount
of money is the price, since a debt does not by itself define the price.
If the object was accepted as a compensation for an unpaid loan, then it
may not be resold in a mur
abah.a with the price being the original loan.
In this regard, the arbitration resulting in this compensation is built on
the concept of forgiveness, and the second buyer must know whether or
not the seller had indeed forgiven that initial debt. This is in contrast to
the case where the object is obtained through a sale, since sales are built
on the buyers attempts to pay the lowest possible price.
If an object is bought at a certain price below its value, and then it is
listed in a catalogue at a higher price, then it may be sold in a mur
abah.a
at that catalogue price without mentioning the initial cost. However, he
should not claim that the catalogue price is the price at which he obtained
the object, since he would thus be lying. Also, this is only permissible if
12 Al-K
as
an
((H
. anaf), vol.5, p.223).
((M
alik)A, vol.3, p.164), Ab
u-Ish.
aq Al-Shr
az ((Sh

amah (, vol.4, p.182).
14
ibid.
13 Al-Dard
r

. A)
359
the buyer knows that the catalogue price need not be the same as the
price at which the good was acquired. However, if the buyer was under
that impression, then mentioning only the catalogue price in a mur
abah.a
would constitute a betrayal of his trust, and establish an option for him.
Similarly, if a person inherits or receives goods as a gift, and sells them
through mur
abah.a at a fairly estimated value plus profit margin, the sale
is valid since no deception is effected.15
11.1.4
Betrayal of trust
If the seller admits betrayal of trust in a mur

abah.a, or if a proof is provided
or he refuses to take an oath of not betraying the buyers trust, then we must
consider whether the betrayal pertains to the characteristics of the object of
sale, or to its price:
If the betrayal of trust pertains to the characteristics of the price: For
instance, if the object was initially purchased with a deferred price and
resold in a mur
abah.a or tawliya without informing the buyer of this deferment, then the H
. anafs agree that the buyer has an option. In this case,
the buyer may keep the merchandise, and he may return them, since the
mur
abah.a or tawliya is based on trust. Once this condition is betrayed,
the option is established for the betrayed party in analogy to the case
of khiy
ar al-c ayb. The same applies if the object of sale was obtained as
compensation based on arbitration in lieu of an unpaid debt. In this case,

also, the second buyer has an option to keep or return the merchandise.
The betrayal may pertain to the amount of the price in a mur
abah.a or
tawliya. For instance, the seller may claim that he bought the goods
for 10, while in fact he had purchased them for less. In this case, Ab
u
H
. anfa (mAbpwh) ruled that the second buyer has an option in the case
of mur
abah.a whether to keep the goods in exchange for the full price, or
to return it. In the case of tawliya, however, he ruled that the buyer has
no such option, but he may deduct the amount of the deception, and the
contract is binding at the true initial price. This is the opinion accepted by
most H
abah.a and tawliya in this regard
. anafs. The difference between mur
is that the actual profit in the sale is more than the buyer agreed to, which
leads to a defect in the condition of mutual consent. However, the contract
remains mur
abah.a, only with a higher profit margin than the buyer agreed
to. Thus, the buyers option is established in this case in analogy to the
case of betrayal pertaining to the characteristics of the price. However, in
the case of tawliya, once the paid price is different from the initial price, it
becomes a mur
abah.a contract, which is fundamentally different from the
original contract. Thus, establishing an option for the buyer in this case
would be a mandatory change of the contract that was agreed to by the
15 Al-K
as
an
((H
. anaf), vol.5, p.224).
360

. A, TAWLIYA, WAD
. I A)
parties, which is not acceptable. Thus, the H

. anafs preferred to deduct
the amount of the betrayal, keeping the tawliya contract binding at the
correct initial price.
According to this opinion, in the case of mur
abah.a with a betrayal of
trust, the option would be dropped if the object is consumed, perishes, or
develops a defect that prevents returning it. In this case, the buyer is still
bound to pay the full price.
Ab
u Y
usuf ruled that the buyer does not have an option in either case, and
the price should be deducted by the appropriate amount in both mur
abah.a
and tawliya. Thus, the price and profit margin would be adjusted by
replacing the wrongfully named initial price with the correct one. In this
case, the contract is binding at the appropriate price calculated based on
the initial price.
Muh.ammad, on the other hand, ruled that the buyer has an option in
this case in both mur
abah.a and tawliya. His proof is that the buyer only
accepted the contract at the named price, and should not be bound by
any other contract. He thus ruled that the buyers option is established
in analogy to khiy
ar al-bayc .16
We note that the approved opinion among the H

. anafs is that the object or
price may be returned to its owner if there is major deception resulting in a
significant difference in prices, whether the deception is effected by one of
the trading parties or by a third party. In this regard, deviation of the price
from its fair value is considered excessive if it falls outside the normal range
of professional assessments (say 30%, which is substantial). However, if
the difference is small, then it is considered minor ghubn, and no return
was no purposive
is allowed. Moreover, no return is permitted if there
misinformation.17 This ruling is intended to facilitate transactions while
protecting the rights of buyers and sellers.
In all of the above, ishr
ak inherits the same rulings as tawliya, since it is
a tawliya in part of the merchandise for a proportional part of the price. The
proportions that determine a sharikah is discussed in major works of jurispru
dence.18 As for wad.c a, we have seen that it is a sale at the initial price with a
known discount. This type of sale inherits the same conditions and rulings of
mur
abah.a.19
Mur
abah.a to-order
Contemporary Islamic banks have extensively used a contract whereby they
purchase a good upon the request of a client, and then re-sell that good to the
16 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.13, p.86), Al-K
. anaf), vol.5, pp.225 on
c
wards), Ibn Al-Hum
am ((H
n ((H
. anaf), vol.4, p.163).
17 Ibn c Abid
n ((H
. anaf), vol.4, pp.166 onwards).
18 Al-K
as
an ((H
. anaf), vol.5, p.226).
19 [ibid., p.228].

. A)
361
client in a mur
abah.a. This contract is viewed as an alternative to the lending
practices of conventional banks, and it enables Muslims to finance purchases of
major items such as cars, or business equipment.
The transaction may be decomposed into two promises: a promise by the
client to purchase the object, and a promise by the bank to sell him the good
in a mur
abah.a. The price at which the bank re-sells the object to the client
is usually deferred [or in installments] and greater than the cash price of the
good.20
This transaction is valid, as evidenced by the proof provided by Imam AlShafic in Al-Umm: If an individual shows another a good and says: buy this,
and I will give you this much profit in it; and then the second man buys it, then
the purchase is valid. If the first party said: I will give you this much profit in
it, but I retain an option, then he may conclude the sale or leave it.21 Thus, we
see from the argument of Imam Al-Shafic that the transaction is fundamentally
valid provided that the bank receives the purchased items. As for making the
promise to purchase the item once the bank acquires it binding on the ultimate
buyer, we may take a ruling by Ibn Shabramah from the Malik school that any
promise that does not result in permitting that which is forbidden or forbidding
that which is permitted is binding. The Maliks use this principle to make
promises binding, especially if the promise leads another entity to undertake a
financial obligation. We note in this regard that this synthesis (talfq) of two
rulings from two different school of jurisprudence is not the forbidden type of
talfq, since the two rulings pertain to two very different issues. In this regard,
there is no harm in following one Imam on one issue, and another Imam on
the other.
The Maliks have also explicitly permitted this type of transaction. Thus,
they say: The following are reprehensible (makr
uh): A man asks the other:
do you have such and such to sell it to me with a deferred price?, the man says
no, so the first man says: buy it, and I will buy it from you with a deferred
price including a known profit margin, then the second man buys it according
to their mutual promises.22
Two conferences on Islamic banking have accepted this practice. In the first
Conference in Dubai (1979), it was ruled that: This type of promise is legally
binding on both parties based on the Malik ruling, and religiously binding on
both parties for all the other schools. In this regard, what is religiously binding
can be made legally binding if this is beneficial and can be regulated legally.
The second Conference in Kuwait (1983) ruled thus: The conference determines that the mutual promises involved in mur
abah.a sales to the one who
orders the initial purchase is permitted after the bank owns and gains possession
of the sold object, and then sells it to the one who ordered its purchase with
the promised profit margin. This sale is valid as long as the bank is exposed
to the risk of destruction of the good prior to delivering it to the final buyer,
Al-Mur
abah.a Lil-Amir
Bi-l-Shir
a by Dr. Y
usuf Al-Qard.
aw (p.36).
(, vol.3, p.33).
22 Al-Hatt
alik), vol.4, p.404), Al-Bay
an wa Al-Tah..sl by Ibn Rushd
(vol.7, pp.86-89).
20 Bayc
21 Al-Sh
afic
362

. A, TAWLIYA, WAD
. I A)
as well as the obligation to accept the return of the goods if a concealed defect
were found. Moreover, the bank incurs all other financial responsibilities such
as insurance. In this regard, the majority of jurists agree that the sale prior to
receipt is not permitted, while the Maliks permitted the sale of foodstuffs prior
to their receipt.
As for the making the promises binding on either party or both, such ruling
is conducive to stability of the contractual obligations and protection of the
parties economic interests. Moreover, such a ruling that renders the promises
binding is legally acceptable.
Finally, this transaction does not fall in the forbidden category of two sales
in one. In this regard, Imam Al-Shafic has shown that the prohibition applies
when accepting one of two sales is unclear, unknown, or suspended. However, he

has shown that if the buyer specifies which one of the two sales he accepts, the
contract is valid. The other circumstance of two sales in one that is forbidden
is the case where one sale includes a condition of another sale (e.g. I sell you
my house on condition that you sell me your horse).
11.2
Revocation of Sale (iq

alah)
A valid and binding sale, which is void of options, may be voided by mutual consent of the buyer and seller. This process is called revocation or iq
alah. Iq
alah
is commonly listed under sales since this is its most common application, however, it applies to the process of voiding all contracts except for marriage. Thus,
we may define revocation legally as a contract by means of which a previous
contract is voided.23 We shall discuss the legality of this contract as well as its
definition and cornerstone, followed by a discussion of its true nature and legal
status, and finally a discussion of conditions of its validity.
11.2.1
Legality, definition, and the cornerstone
Revocation of sales is highly recommended in certain circumstances based on the

H
narrated by Al-Bayhaq on the authority of Ab
u Hurayrah: Whoever
. adth
revokes the sale of someone who regrets a sale, Allah will revoke his sins on the
day of judgment. Ab
u D
aw
ud narrated this H
thus: Whoever revokes
. adth
[the troubles of] a Muslim, Allah will revoke his sins.24

Revocation (iq
alah) is the legal term used for voiding of the contract, even
if only for part of the object of sale. For instance, a person may sell 100 pounds
of wheat for $50, and delivers them to the buyer, then the buyer and seller may
part. The seller may then ask the buyer to either pay him the price or to return
the wheat that was delivered to him. In this case, the buyer may return part or
23 See
Al-Madkhal Al-Fiqh by Professor Al-Zarq

a (p.290).
narrated by Ibn M
ajah who added on the day of judgment. Narrated as well by
Ibn H
an in his S.ah.h. and Al-H
akim in Al-Mustadrak. The latter stated that it is a valid
. ibb
.
H
following the methodology of Al-Bukh
ari and Muslim, but they did not narrate it;
. adth
c.f. Al-H
), vol.4, p.30), Ibn Al-Athr Al-Jazar (, vol.1,
.
. adth
p.371), Al-S.anc
24 Also

11.2. REVOCATION OF SALE (IQALAH)
363
all of the wheat that was delivered, and this would constitute a voiding of the
sale for the part that was returned.
The cornerstone of revocation is an offer from one of the two parties to the
original contract, and the acceptance of the other party. The language of the
contract must use the past tense in Arabic, thus one of the parties says: I have
revoked (aqaltu), and the other person says I accepted (qabiltu).
In Arabic usage, if one verb is imperative and the other is in the past tense,
for example one says aqeln, and the other says aqaltuka, then Ab
uH
. anfa
and Ab
u Y
usuf ruled that the revocation contract is concluded (as in the case
of the marriage contract), since there is usually no bargaining in revocation (in
contrast to sales). Thus, the acceptance verb is enough. However, Muh.ammad
ruled that both verbs must be in the past tense, in analogy to the sale contract.
The verb to revoke (iq
alah), does not need to be used. Similar verbs
such as I voided the sale, I cancel the sale, etc. may also be used. Also,
revocation may be concluded by hand-to-hand exchange, as in the case of sale.25
11.2.2
Revocation and its legal status
The Maliks and Zahirs considered revocation a second sale, since the object
of sale returns to the seller through the same venue he gave it away. Thus,
it is concluded by mutual consent, with everything permissible for sales being
permissible for revocation and vice versa.26
The Shafics and H
. anbals, on the other hand, ruled that revocation is a
voiding of the contract. In this regard, they find the return of the object of
sale was effected by means of a verb that does not conclude a sale. Thus,
it is considered a voiding of the contract, in analogy to returning defective
merchandise.27
The H
. anafs had multiple opinions:
The most accepted opinion is that of Ab
u H
. anfa who ruled that revocation is a voiding for the two contracting parties, and a third contract
for a third party. This is his opinion regardless of whether the revocation
is effected before or after receipt. In the cases where revocation cannot
be considered voiding, e.g. if the sold animal gives birth to another, it is
rendered invalid since the sale may not be voided with a separate increase
in the object of sale. His proof that revocation is essentially a voiding is
the fact that a sale is a positive statement resulting in exchange, while revocation is a negative statement resulting in reversal of such an exchange.
25 Al-K
as
an ((Hanaf),
c Abid

am ((H
.
((H
usr
u (1304H (H
. anaf), vol.4, p.151), Kh
. anaf), vol.2, p.178).
((M
alik), p.272), Ibn H
. azm (, vol.9,
26 Al-Dard
r
p.7).
27 Ibn Qud
. anbal), vol.2,
afic), vol.2, p.96). Al-Im
afic),
vol.9, p.156) said: If a sale is concluded, it may only be voided in one of seven ways: the
contract session option, the condition option, the defect option, negation (khulf) option, revo
cation, mutual oaths, and perishing of the object of sale.
364

. A, TAWLIYA, WAD
. I A)
Thus, the sale is established for a third party (the Law), while the revocation is viewed as a voiding for the two parties themselves. The third
partys significance can be shown in this example: A person buys a house
while a third party has a preemption right (shufc ah), and he did not use
this right after knowing of the sale. Then, if the buyer and seller revoke
the sale, the owner of the preemption right has a second chance to demand
the satisfaction of his right, since the revocation is a second contract for
this third party.
Ab
u Y
usuf argued that revocation is a new contract for both parties as
well as others. However, in cases where it cannot be rendered a sale,
(e.g. if the revocation is effected prior to receiving a portable object) it is
rendered a voiding. However, in other circumstances, including revocation
prior to receipt of immovable objects, the revocation is considered a sale.
His proof is that a sale is effectively the exchange of property for property,
which is satisfied in revocation. In this regard, he argued that the content
of the contract is the same as that of sale (exchange of properties), and
this takes precedence over the form of the contract and its language.
Muh.ammad argued that revocation is a voiding unless there is a legal
reason it cannot be considered thus, then it would be considered a sale.
Thus, he accepts the original argument of Ab
uH
. anfa that revocation is
fundamentally a voiding, based on its linguistic and legal implications.
Zufar, the Shafics, and many H
. anbals, argued that revocation is a voiding
with regards to all people.28

The effect of this difference in opinion among the H
. anafs becomes apparent
when we consider revocation with a larger or smaller price than in the original
sale, with a price of a different genus, or with a deferred price in the revocation
contract:
According to Ab
uH
. anfas opinion, the revocation is valid at the original
price, and the conditions of increase, diminution, deferment, or change of
genus of the price are invalidated. This is his opinion regardless of whether
the revocation is effected before or after receipt, since it is a voiding with
regards to the rights of the contracting parties. In this regard, voiding
is a removal of the initial contract, which occurred with a certain price,
and thus must be voided at the same price. Thus, any other stated price
(higher, lower, deferred, or of a different genus) would be considered a
defective condition in the revocation contract that is thus invalidated,
and the revocation is binding at the original price.
The ruling is the same according to Zufars opinion, since he considers
revocation a mere voiding with regards to the rights of all people. For the
28 Al-K
c
n
as
an ((H
am ((H
((H
aid Al. anaf), vol.4, p.154), Ibn Rajab (1st edition (H
. anbal), p.379), ibid., Al-Far
Bahiyyah f Al-Qaw
ac id Al-Fiqhiyyah by Sh. Mah.m
ud H
ut. ((Sh
afic),
. amza (p.68), Al-Suy
p.152), Ibn Qud


11.2. REVOCATION OF SALE (IQALAH)
365
Shafics and H
. anbals, on the other hand, the revocation in those cases
would be invalidated itself based on the defective condition, in analogy

to their ruling for sales with defective conditions. Thus, increases and
decreases are not permitted in revocation for the H
afics, and
. anafs, Sh
H
anbal
s,
all
of
whom
consider
it
a
voiding
of
the
initial
contract.
Thus,
.
if revocation is concluded, and then the object of sale is affected with a
separate increase (e.g. giving birth to a sheep), the revocation is no longer
possible.
However, Malik ruled that revocation is a new sale, thus permitting increase and decrease. Thus, if an item is sold for 100 gold coins, and the
seller regretted the sale, and asked the buyer to return the merchandise
in return for 110 gold coins, the revocation is permitted as a new sale.
Similar practice is common today, where the seller will not revoke a sale
based on the buyers regret unless the buyer surrenders part of his right as
compensation. However, Malik does not permit the case where the buyer
regrets having purchased an item for 100 gold coins deferred, and asks the
seller to revoke the sale in exchange for 10 gold coins in cash or deferred.
He does not permit this since it is a means by which the forbidden sale
and loan in one contract can be effected (as if the buyer bought the item
for 90 coins and lent the seller 10).29 However, if the first sale was for
a cash price, then there is no disagreement over the permissibility of the
revocation as offered.
According to the opinion of Ab
u Y
usuf, revocation at any stated price
(with increase, decrease, deferment, or a different genus) is permitted,
since he considers it a new sale.
According to the opinion of Muh.ammad, if the revocation is effected at
a different price of different genus, or for a higher price, then it is a new
sale, since it cannot be considered a voiding. In this regard, voiding would
have to take place at the original price. If the specified price in revocation
is of the same genus, and no larger the original price, then he renders it
a voiding, and invalidates the condition of diminution of price. Similarly,
a condition of deferment of the price would be invalidated, and the revocation will be binding at the original price to be delivered at the time of
revocation.
11.2.3
Conditions of validity
1. Mutual consent of the two contracting parties is necessary for validity of

revocation. For Ab
u Y
usuf, this condition is obvious since he considers
revocation a sale, which requires mutual consent as a condition of validity.
For the majority of H
. anafs, the mutual consent condition follows since
revocation is viewed by them as a voiding of the contract. Since the
29 Ibn
Rushd Al-H
alik), vol.2, p.140).
. afd ((M
366

. A, TAWLIYA, WAD
. I A)
contract was concluded by mutual consent, it can only be voided by mutual

consent. This general condition for voiding is agreed upon.
2. In the case of revoking a currency exchange contract (s.arf), the two compensations must be received during the revocation session. Again, this
is obvious for Ab
u Y
usuf since this revocation for him is itself another
currency exchange sale. For the other H
. anafs, mutual receipt during the
contract session is a right of Allah (swt). In this regard, while the revocation is a voiding with regards to the rights of the seller and buyer, it is a
sale for the third party, which is the Law. Thus, for that third party the
revocation in this case is a currency exchange sale, which requires mutual
receipt during the contract session.
3. For Ab
uH
. anfa and Zufar, the object of sale and price must be eligible for
voiding, since they consider the revocation a voiding of the initial contract.
Thus, if the object or price increased in a way that prevents voiding, the
revocation is not valid.
For Ab
u Y
usuf, this condition does not apply, since he considers the
revocation a sale, and any increase can be part of that sale.
Similarly for Muh.ammad, this condition does not apply, since he renders
the revocation a sale if it cannot be viewed as a voiding.
4. The object of the original sale must exist at the time of revocation. In
this regard, the revocation is a removal of the initial contract, which is
impossible if the object of sale perished partially or totally.
However, the existence of the price at the time of revocation is not a
condition. The difference is that the original sale is established based on
the object of sale and not the price. Thus, the continued existence of
the object of sale is necessary for the removal of the contract, while the
continued existence of the price is not.30
In all cases, if the revocation is valid, the initial contract is voided and its
legal status and effects are nullified.
30 Al-K
as
an ((H
am ((H
n ((H
wards), Ibn c Abid
. anaf), vol.4, p.157).
Part III
The loan contract (caqd

al-qard.)
367
Chapter 12
The loan contract (caqd

al-qard.)
Loans are generally similar to sales, since they involve the exchange of properties.1 It is also a form of prepayment (salaf), since one of the two compensations
is paid prior to the other.2 Some of the jurists argued that loans are a subcategory of sales. However, Al-Qar
af listed three differences between loans and
sales. Three legal violations are tolerated in loans but not in sales:
1. Loans may be made with goods eligible for rib
a (those measured by weight
or volume for the H
. anafs and most of the H
. anbals, foodstuffs and monetary numeraires for the M
aliks and Shafics. This violates the rules of
rib
a.
2. For goods not eligible for rib
a, loans may be conducted where a known
is traded in exchange for an unknown, which is a violation of the rule of
muz
abanah.
3. For fungible goods, loans may involve selling that which is not in the
sellers possession, which is not permitted in sales.
Those three rules are observed in sales but relaxed in loans. The reason
for this relaxation of the rules for loans is to facilitate charitable behavior. In
this regard, loans are permitted as a form of charity, where the lender gives up
the usage of the goods for the period of the loan. This is also why loans are
forbidden if they do not serve such a charitable cause, e.g. if the lender gets
some benefit out of extending the loan.3
In what follows, we discuss loans in terms of their definition, legality, contracting parties and contract language, the legal status of options in loans,
1 Al-K
as
an
((H
. anaf), vol.7, p.215).
Qud
amah (, vol.4, p.313), Ab
u-Ish.
aq Al-Sh
atib (1970, vol.4, p.42).
.
3 Al-Qar
af ((M
alik), vol.4, p.2 onwards).
2 Ibn
369
370
CHAPTER 12. THE LOAN CONTRACT (C AQD AL-QARD

.)
properties that may be object of the loan contract, and the legal status of a
loan that results in benefit to the lender.
12.1
Defining loans
The Arabic term for loans, qard., literally means cutting-off a portion, signifying that the person extending the loan is giving the borrower part of his property. It is also called salaf, meaning advance, to signify that the amount
of the loan is extended at some point, with the expectation of repayment at a
later time.
The H
. anafs define the contract legally as one in which a fungible property is
paid from one party to another, in exchange for a later payment of an equivalent
amount. Other schools of jurisprudence defined it as an exchange of property for
a liability on the recipient equivalent to the amount he receives from the lender,
where only the recipient of the loan is intended to benefit from the contract.
They include different types of properties in this definition: fungibles, animals,
and tradable goods.4
12.2
Legality of loans
Loans are permissible based on Sunnah (the Prophets (pbuh) tradition), as

well as consensus of the Muslim community.5 In this regard, it was narrated on
the authority of Ibn Masc u
d that the Prophet (pbuh) said: Every two loans
extended by a Muslim to another count as one charitable payment.6 It is also
narrated on the authority of Anas that the Messenger of Allah (pbuh) said: On
the day I ascended to heaven, I saw a writing on the door of paradise that read:
Eery charity is rewarded ten-fold, and every loan is rewarded eighteen-times.
I said: O Jibrl, why is a loan rewarded more than charity?. He said: Because
a person may ask for charity when he does not need it, but the borrower only
on the authority
borrows in cases of dire need.7 We shall cite below a H
. adth
of Ab
u Rafic regarding loans that bring the lender a benefit.
Thus, loans are highly recommended (mand
ub) for the lender, and permissible for the borrower, based on the above listed H
s. This ruling is also
. adth
based on the H
narrated on the authority of Ab
u Hurayrah (mAbpwh)
. adth
that the Prophet (pbuh) said: Whoever relieves the hardship of a Muslim in
4 Ibn c Abid
n ((H
shiyat Al-Dus
uq (vol.3, p.222), Al-Dardr
. anaf), vol.4, p.179), H
.a
((M
5 Ibn Qud
afic), vol.2, p.117).
6 Narrated by Ibn M
ajah and Ibn H
an in his S
. ibb
. ah.h., as well as Al-Bayhaq. In all
narrations, it is a H
marf
uc , with its chain of narrations terminating at Ibn Masc u
d.
. adth
The narration of Ibn M

ajah includes Sulayman ibn Bashr in its chain, whose narrations are
not accepted. However, the meaning of the H

is supported in many other instances in the
. adth
Quran and H
; c.f. Al-Targhb wa Al-Tarhb (vol.2, p.41), Al-Shawk
an (, vol.5, p.229).
. adth
7 Narrated by Ibn M
Al-Bayhaq on the authority of Anas ibn M
ajah and
alik, and by
Al-T
an and Al-Bayhaq in similar wording on the authority of Um
amah (mAbpwh); c.f.
. abar
Al-Haytham (, vol.4, p.126), Al-Targhb wa Al-Tarhb (ibid.).
12.3. CONTRACT PARTIES AND LANGUAGE
371
this life, Allah will relieve one of his hardships on the day of judgment; and
whoever eases a financial difficulty for a Muslim, Allah will relieve his difficulties in this life and the hereafter; and Allah always assists the believer as long
as he is assisting his brother.8
It is also narrated that Ab
u Al-Darda (mAbpwh) said: I prefer to lend
two gold coins, get them back, and lend them out again, to giving them away in
charity, and Ibn Masc u
d and Ibn c Abb
as are narrated to have said: Lending
something twice is better than giving (once and for all) it in charity.9 The
H
. anbals, on the other hand, ruled that charity is preferable to loans, and that
a person who was asked to extend a loan and refuses is not sinful.10
12.3
Contract parties and language
The lender must have the right to deal in the property (e.g. through sales),
since it involves a decision to transfer property. The contract requires an offer
and an acceptance to be concluded. This follows since it involves transferring
property from one human to another, thus requiring an offer and acceptance
in analogy to the cases of sale and gift contracts. In this regard, the verbs
used in the offer and acceptance may involve the terms qard. or salaf (loan or
advance), or anything that carries that meaning, e.g. I make this your property
on condition that you will repay me an equivalent property.11
12.4
Options or deferment in loans
While the Shafics and H

. anbals permit the contract session option in sales, they
do not permit it in loans. Moreover, all jurists agree that conditional options
are not permitted in loans. In this regard, options are meant to allow one or
both of the parties to void the contract. Since both parties in a loan contract
can void it in any case, options become meaningless in this context.12
The majority of jurists do not permit any deferment conditions in loans.
Thus, if the loan is deferred to a known term, this deferment is ignored, and the
liability remains current. This follows since a loan has the same structure as
selling one silver coin for another, thus deferment is forbidden to avoid effecting
the forbidden rib
a al-nasah. In this regard, since the loan is considered a
mere charitable contribution, the lender may demand repayment of its equal (in
fungibles, where the repayment is determined in terms of equality of amount)
8 Narrated by Muslim, Ab
u D
aw
ud, Al-Tirmidh (who rendered it h.asan), Al-Nas
a, Ibn
M
ajah (in abridged form), and Al-H
akim, who said that it satisfied the criteria of Muslim and
.
Al-Bukh
ari; c.f. Al-Targhb wa Al-Tarhb (vol.2, p.44), Al-Haytham (, vol.4, p.33).
9 Ab
az ((Sh
u-Ish.
aq Al-Shr
amah (, vol.4, p.313).
10 Marc
ibn Y
. anbal), vol.2, p.83).
11 Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.4, p.314), Ibn
c
c Abid
n ((H
. anbal), vol.2, p.84).
12 Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.4, p.315), Al-Im
am
n ((H
anaf), vol.4, pp.177-8).
afic), vol.13, p.165), Ibn c Abid
.

.)
372
at any time. This is in contrast to deferment in sales or leases, where the seller
or lessor has no right to demand payment prior to maturity of the liability.
The H
. anafs, on the other hand, disagreed by permitting bindingness of
deferment terms in loans in four cases:
1. If a person stipulates in his will that his heirs should lend a certain amount
of money for a certain period of time, the heirs may not demand repayment
of the liability prior to the passage of that period of time.
2. If the debtor denies the debt, and the creditor defers it, then the term of
deferment is binding.
3. If a judge issues a legal decision that the term of deferment of a loan is
binding, then it is, following the rulings of Malik and Ibn Ab
u Layla.
4. If the debtor transfers the debt to a third party through a bill of exchange
(h.aw
alah), and if the creditor had deferred the debt, then the deferment
is binding. In this case, the deferment is not of a loan, since the original debtor is relieved of his liability through the bill of exchange. The
deferment in this case is rather a deferment of debt (on the third party).
In summary, the H
. anafs permit deferment of loans, but consider the term of
deferment non-binding except in the four cases listed above.
Imam Malik, on the other hand, ruled that the terms of deferment of loans
are binding. He based this decision on the H
: Muslims are bound by their
. adth
conditions.13 In this regard, since the parties of this contract have the right to
revoke it or keep it in place, it is sensible to allow them to increase in its term
of deferment.14 This is the most reasonable and practical opinion of those we
have discussed.
12.5
Objects eligible for lending
Jurists differed over which objects may or may not be lent:

The H
. anafs ruled that fungibles (i.e. goods measurable by weight, volume,
size, and numbers of homogenous items) are eligible for lending. They also
ruled based on the opinion of Imam Muh.ammad that loaves of bread may
be lent by weight or number, to satisfy an obvious need. This opinion
regarding loaves of bread is shared by all schools of jurisprudence. On
the other hand, the H
. anafs ruled that non-fungibles (e.g. animals, wood,
13 Narrated
by Ab
u D
aw
ud, Ah.mad, Al-Tirmidh, and Al-D
araqut.n on the authority of
ibn c Awf Al-Muzn on the authority of his father and grandfather as a H

marf
uc .
. adth
It was also narrated as a valid H

ad
th
by
Ibn
H
ibb
a
n
on
the
authority
of
Ab
u
Hurayrah,
by
.
.
Al-H
akim on the authority of Anas, by Al-T
an on the authority of R
afic ibn Khudayj,
.
. abar
by Al-Bazz
ar on the authority of Ibn c Umar, and by Ibn Ab
u Shaybah on the authority
of c At.
a. Al-Bukh
ari said that there is no doubt regarding this H
adth, c.f. Al-S.anc
an (2nd
.
printing, vol.3, p.59), Al-Sakh

aw (, p.385).
14 Ibn Qud
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.303).
c Amr
12.6. LEGAL STATUS OF LOANS
373
real estate, and non-homogenous countables) may not be lent, since it is

difficult to find an equivalent good to repay the loan.15
. anbals ruled that loans are permissible for all
goods eligible for forward sale (salam), i.e. for all properties that can be
established as a liability on the borrower. This includes goods measured
by volume and weight (e.g. gold, silver, and foodstuffs), or non-fungibles
(e.g. animals, tradable goods, etc.). This ruling is based on the tradition
narrated by Ab
u Rafic that the Prophet (pbuh) borrowed a camel,16
which is clearly not measured by weight or volume. In this regard, any
goods eligible for forward sale are controlled by description, and thus may
be lent just like goods measured by volume or weight. Thus, the relevant
criterion is whether or not the goods for which the debtor is liable can be
sufficiently regulated.17
Thus, the majority of jurists permit lending most goods that may be sold,
with a few exceptions. For instance, while Ibn Taymiya permitted the
lending of usufruct, the majority of jurists do not permit it (e.g. one
person helps the other in reaping a crop so that the other will help him
similarly on another day; or one person allows another to live in his house
for a day so that the other would allow him to live in his house for a day,
etc.). Moreover, they render impermissible loans of any items that cannot
be established as a liability (e.g. part of a house, part of a garden, etc.).
In this case, a loan requires repayment of an equivalent good, and those
items do not have an equivalent counterpart. In this regard, the Maliks
define equivalence in terms of similarity of characteristics and amount,
while the Shafics and H
. anbals define it in terms of its form. Thus, they
all agree that rare and expensive jewels may not be lent, since it is very
likely that their equivalent cannot be found at the time of repayment.
12.6
Legal status of loans
Ab
uH
. anfa and Muh.ammad ruled that ownership of the lent goods is established through receipt. Thus, if a person borrows a volume of wheat and receives
it, he has the right to keep it, and repay an equivalent volume of wheat whenever the creditor demands repayment of the volume he lent him. In this regard,
ownership of the precise volume that was lent was transferred to the borrower,
who was liable only for its equivalent and not for the lent goods themselves, even
if they still existed in his possession. On the other hand, Ab
u Y
usuf ruled that
15 Ibn c Abid
n ((H
atb Al-Shirbn ((Sh
afic), vol.2, p.119),
. anaf), vol.4, pp.179,195), Al-Kh
.
Ibn Qud
16 The chains of narration of this Had
will be listed under the section of loans that are
. th
beneficial to the lender.

17 Al-Dard
r ((M
((Sh
u-Ish.
aq Al-Shr
az ((Sh
Qud
anbal
),
vol.2,
p.84
onwards).
.

.)
374
as long as the lent goods remained intact, the borrower never gains ownership
of those goods.18
The Maliks ruled that loans, gifts, charity, and simple loans (c a
riyyah) all
establish ownership merely through the contract, even without receipt of the
property. Thus, the borrower may return the actual borrowed items or their
equivalent, whether the lent property was fungible or non-fungible. In this
regard, returning the exact lent item is only allowed if it was not affected with
any increase or diminution. In cases where the lent object has changed thus,
repayment must be made by means of an equivalent good.19
The H
afics have ruled that ownership is estab. anbals and most of the Sh
lished in loans by means of receipt. The Shafics further ruled that if the lent
goods are fungible, then repayment must be made by means of equivalent goods.
In the case of lent non-fungibles, repayment must be made by means of goods
that take the same form. This opinion is based on the narration that the Prophet
(pbuh) borrowed a young camel and repaid a more valuable older camel, saying:
The best among you are the best in repaying their debts.20
The H
. anbals, on the other hand, ruled in agreement with all other jurists
that repayment of goods measured by weight or volume must be made by means
of equivalent goods. They have two opinions, however, with regards to repayment of non-fungibles. One opinion states that repayment must be made in
terms of the goods value on the day of origination of the loan, while the other
opinion states that repayment must be made by means of goods that have approximately equivalent characteristics.21
Jurists from all four schools agreed that repayment of a debt must take
place in the city where the loan originated. However, repayment elsewhere is
permitted if the goods are easily portable with minimal cost and danger of theft
or loss during transportation. Thus, if there is a cost or risk associated with
receipt in a different city, the creditor is not bound to receive it anywhere other
than the place where the loan originated.22
12.7
Summary of validity conditions
1. Loans must be concluded through the appropriate language of offer and

acceptance. The non-Shafics also allow loans that are concluded by mu
tual receipt (muc a
.ta
h).
2. The lender and borrower must both be of legal age and have the mental
faculties that makes him eligible to give charity. Thus, loans may not be
18 Ibn c Abid
((H
. anaf), vol.4, p.181).
Al-Dus
uq (vol.3, p.226), Al-Dardr ((M
.
20 The chains of narration of this Had
will be discussed below under the section dealing
. th
with loans that are beneficial to the lender and the H

of Ab
u R
afic .
. adth
21 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic),
.

amah (, vol.4, p.314).
22 Ibn c Abid
n ((H
alik)B, vol.3, p.296), Al-Dardr
((M
alik)A, vol.2, p.119), Ibn Qud
amah (, vol.4, p.325).
19 Ha
shiyat
12.8. VALID AND CORRUPTING CONDITIONS
375
extended by young boys, insane or mentally incompetent persons, coerced

persons, or legal guardians (except when necessary), since such individuals
are not eligible to give away property in charity.
3. The H
. anafs require that the lent goods be fungible, while the majority of
jurists permit lending of any goods that may be established as a liability
on the borrower (including non-fungibles such as homes and animals, etc.).
4. That the lent amount is known (in terms of volume, weight, number, or
size), so that repayment of its equal is possible. Also, the lent goods should
not be a mixture of two genera (e.g. wheat mixed with barley), since this
would render repayment of its equal very difficult.
12.8
Valid and corrupting conditions
Any condition that reinforces the right of the lender is permissible (e.g.
pawning, guaranty, obtaining witnesses, documentation of the loan contract, or certifying it in front of a judge).
As we have seen, the majority of jurists do not permit deferment conditions
in loans, while the Maliks permit such conditions.
Any condition that is not in accordance with the contract (e.g. stipulating
a condition of increasing the repayment, repayment of goods in better
condition than those lent, or selling a house) is rendered invalid.
In this regard, we distinguish between corrupting conditions (al-shart. al
mufsid, which includes conditions of increase in repayment or a gift to the
lender) on the one hand, and conditions that do not result in any benefit. Thus,
conditions of returning a defective item when a good one was lent, or a condition that a third party extend a loan, are not corrupting, but merely nugatory
(laghw).
12.9
Repayment timing and methods
We have seen that all jurists agree in the case of lent fungibles that an equivalent
amount of the same good must be repaid. If the lent goods were non-fungible,
the non-H
. anaf jurists ruled that an equivalent in form must be repaid (e.g. a
sheep of similar form).
The non-M
aliks ruled that repayment must be made upon the creditors
demand at any time, since they do not permit deferment in loans. The Maliks,
on the other hand, determine the repayment time to be the time of maturity of
the loan, as defined by its term of deferment.
376
12.10

.)
Loans beneficial to the lender
Most of the H
. anafs have ruled that any loan that results in a benefit to the
lender is forbidden if the benefit was stipulated as a condition. However, they
rule that if the benefit was not stipulated as a condition, and was not expected
based on convention, then there is no harm. Thus, if the creditor is in possession
of pawned items in lieu of the loan he extended, he is not permitted to use
the pawned goods if such usage was stipulated as a condition or expected by
convention. If neither of those situations apply, usage of the pawned items is
still considered reprehensible to the point of prohibition, unless the one who
pawned the goods gives his permission first. Some of the H
. anafs have ruled
that using the pawned object is forbidden, even if permission is obtained. This
final decision is indeed in agreement with the general legal approach to the
prohibition of rib
a. Similarly, a gift given to the lender is forbidden if it was
stipulated as a condition, but is permitted otherwise.23
The Maliks ruled that any loan that results in a benefit to the lender is
defective, since it constitutes rib
a. Thus, it is forbidden to benefit from any
property of the borrower (e.g. riding his animal, eating in his house because of
his indebtedness, etc.). Moreover, they render forbidden any gift given by the
debtor to defer the debt, and that cannot be explained by any other brotherly
motives or obligations. In this case, the prohibition applies both to the giver
and the receiver. Thus, the recipient of such gifts must return them if they are
intact, or pay their equivalent for fungibles and value for non-fungibles.
Repayment of debt with increase is permitted unconditionally (in amount
or quality, before or after maturity of the debt) if the debt resulted from a sale.
However, if the debt resulted from a loan, and if the increase was stipulated as a
condition, was promised, or was expected based on convention, then it is strictly
forbidden. However, the M
aliks permit increases in quality in repayment of
loans if they were not conditioned, promised, or expected. This opinion is based
on the H
that the Prophet (pbuh) borrowed a young camel, and returned
. adth
a more valuable older camel. However, if the increase is in quantity rather than
quality, the Maliks differed in opinion. In this case Malik in the Mudawwanah
ruled that it is permitted only if the increase is very small, while Ibn H
. abb
permitted such increases unconditionally.24
The Shafics and H
. anbals ruled that any loan that results in a benefit to the
lender is not permitted. Examples include lending a person an amount of money

on condition that he sells him his house, or that he returns better than what
was lent in quality or quantity. All such practices were banned in the H
. adth
where the Prophet (pbuh) forbade a sale and a loan in one contract.25 It is
23 Ibn c Abid
c
n ((H
an
at (p.109), lecture notes on pawn. anaf), vol.4, p.182), Majma Al-D
. am
ing by Professor c Al Al-Khaff (p.96).
24 Al-Dard
r ((M
alik)A, vol.3, p.224 onwards), Ibn Juzayy ((M
alik), p.288 onwards).
25 This Had
has been discussed previously. It was narrated by Ab
u D
aw
ud, Al-Tirmidh,
. th
. . There is also a narration

and Al-Nas
a on the authority of c Abdullah ibn c Amr ibn Al-c As
c
with different wording in Al-T
an in his Mu jam on the authority of H
am
. abar
. akm ibn H
. iz
as follows: The Messenger of All
ah (pbuh) forbade me from (1) combining a sale and a loan
in one contract, (2) combining two conditions in one sale, (3) selling that which I have not
12.10. LOANS BENEFICIAL TO THE LENDER
377
also narrated that Ubayy ibn Kac b, Ibn Masc u

d, and Ibn c Abb
as (mAbpwt)
all forbade any loan that results in a benefit to the lender.26 In this regard,
since the loan contract is a charitable one, any condition of benefit to the lender
takes it out of the loan context. In this case, the loan is considered valid and
the condition invalid, whether the benefit is financial or in-kind, substantial or
small.
On the other hand, if a loan is extended with no conditions, and then the
borrower repaid better than what he borrowed in quantity or quality, or purchased the lenders house, etc., then it is permitted. In such cases, it is not
reprehensible for the lender to accept such voluntary benefits, based on the
H
narrated by R
afic that the Prophet (pbuh) borrowed a young camel,
. adth
and then received a charity of camels and ordered Rafic to repay the man another young camel. Rafic said that the closest he could find was a six-year-old
camel (which is more valuable). Then the Prophet (pbuh) ordered him to give
it to the man, and added the best among you is the one who is best in repaying
abir ibn c Abdullah (mAbpwh) said that
his debts.27 In another narration, J
the Messenger of Allah (pbuh) owed him a right, and he repaid him more than
he owed him.28
In this regard, we recall that the prohibition of any loan that results in
c
a benefit to the lender is not a H
, as proved in Al-H
. adth
. afiz. Al-Zayla (1st
edition, (H
ad
th
)),
and
as
discussed
in
previous
footnotes.
Moreover,
Al-Karkh
and others have interpreted that prohibition as pertaining to the case where the
benefit was stipulated as a condition or expected based on convention. As for
lending to a party who has customarily repaid more than he borrowed, there are
two opinions. The better of the two is the Shafic opinion, which makes lending
to such party reprehensible. The other opinion is the dominant one in the
29
H
. anbal school, and it permits lending to such parties without reprehension.
30
In summary, lending is permitted subject to two conditions:
1. That it does not result in a benefit to the lender (while a benefit to the
borrower is permitted, naturally). If the loan is beneficial to both parties,
yet received, and (4) collecting returns without bearing the commensurate risk; c.f. Al-H
afiz.
.
), vol.4, p.19), Al-Haytham (, vol.4, p.85).
. adth
26 This was mentioned in Ibn

Qud
amah (, vol.4, p.319). It was also narrated by Al-Bayhaq
in Al-Sunan Al-Kubr
a as a H
mawq
uf on the authorities of Ibn Masc u
d, Ubayy ibn Kac b,
. adth
c Abdull
ah ibn Sall
am, and Ibn c Abb
as. It was narrated by Al-H
a
rith
ibn Ab Us
amah in
.
his Musnad on the authority of c Al ibn Ab T

alib that the Prophet (pbuh) forbade any
.
loan that results in a benefit [to the lender]. However, the other narration every loan that
results in a benefit [to the lender] is rib
a is not accepted since its chain of narration includes
Siw
ar ibn Mus.c ab Al-Hamadh
an (the blind Muc adhdhin). Two other unacceptable versions

were also narrated by Al-Bayhaq and c Amr ibn Badr in Al-Mughn; c.f. Ibn H
. ajar (, p.245),
c
Al-Shawk
an (, vol.5, p.232), Al-S.an
In any case, the meaning
of this H
is valid, and is supported by other legal principles.
. adth
27 Narrated
by Ah.mad, Muslim, and As.h.
ab Al-Sunan Al-Arbac a; c.f. Ibn H
. ajar (, p.245),
Al-Muwat..ta (vol.2, p.168), Al-Shawk
an (, vol.5, p.230).
ari, Muslim, and Ah.mad; c.f. Al-Shawk
an (, vol.5, p.231).
29 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic),
.
c
amah (, vol.4, p.321 onwards), Mar ibn Y
. anbal),
30 Ibn Juzayy ((M

.)
378
it is only permitted if it is needed. This need will be discussed later in the

context of letters of credit used to avoid the potential for losing goods to
criminals in travel.
2. That no other contract (e.g. sale, etc.) is appended to the loan, based
on the above mentioned H
narrated on the authority of c Abdullah
. adth
c
ibn Amr by the five major narrators, forbidding a sale and a loan in one
contract.
As for gifts from the debtor to the creditor, the Maliks prohibit the creditor from accepting such gifts based on rib
a, while the majority of jurists
permit it if it was not stipulated as a condition, and if it is a personal gift
unrelated to the loan.
We note that monies deposited in savings accounts, investment certificates,
and government bonds and treasury bills, inherit the legal status of loans. The
government pays interest that constitutes rib
a on such accounts, and uses the
funds in lending with rib
a. Thus, the interest payments collected by the depositors in such accounts are forbidden, since they are not truly deposits
(wad
aic ) as stated by some muftis. In this regard, if those monies were indeed
deposited, those who receive those funds would not be permitted to use them
in investment. Thus, by dealing in those received funds, they become in fact
a loan, whereby the principal of that loan is guaranteed by a bank or government. In this regard, any fixed interest rate on such loans is not permissible for
the depositors. Such returns would only be permissible if the funds are structured as silent partnerships (mud.a
raba), whereby the silent partners profits are
unknown, and they share in the risk of losses.
Similarly, demand deposits with banks are considered loans to the bank.
Even if the bank does not pay interest on the funds in such accounts, those
funds are used to make loans with rib
a and other forbidden transactions. Thus,
if a Muslim is forced by necessity to open such accounts to cover trade expenses
for example, then he is permitted to do so based on the principle that necessities
overrule prohibitions (al-d.ar
ur
at tubh. al-mah..zu
r
at).
12.11
Letters of credit (al-suftajah)
With regards to letters of credit, whereby one party extends a loan to another,
whose agent repays the loan to the first party or his agent in a different country,
there has been a difference in opinions:
The H
. anafs ruled that such transactions are reprehensible to the point
of prohibition (kar
aha tah.rmiyyah) if the benefit of avoidance of risk
in transportation to another country was a stipulated condition. AlMirghn
an said in this regard: Letters of credit are reprehensible since
theyare loans that give the lender the benefit of avoiding the dangers of
the road, thus rendering it as one of the types of loans that result in a
12.12. DIFFERENT TYPES OF INVESTMENT CERTIFICATES
379
benefit to the lender forbidden by the Messenger of Allah (pbuh).31

The Shafics forbade letters of credit according to the same logic of being
a loan that results in a benefit.32

The Maliks have the same opinion as the Shafics with regards to this
contract.33
The most accepted opinion among the H
. anbals is permission of this transaction if it is done without any fees. Ibn Taymiya, Ibn Al-Qayyim, and
Ibn Qud
amah ruled that letters of credit are unconditionally permitted,
since they argued that the economic benefit from this contract is more
general and not restricted to the lender alone.34
12.12
Different types of Investment Certificates
Three types of investment certificates have been issued:

Type (A) certificates pay a compounded return for the period of the investment (say 10 years) according to the advertised fixed interest rate.
Type (B) certificates give the investors the right to withdraw the profits
at specific times (e.g. every six months or one year), while the invested
principal remains for the full time period.
Both of those types are loans with a specified and fixed rate of increase that
is considered rib
a. Thus, those productive loans are rib
a and forbidden in
the same manner as bank deposits, whether the intention was to use them
simply as a deposit vehicle or as an investment.
Type (C) certificates do not guarantee any fixed profit rate for each year.
This type of investment certificates specifies a portion of the profits of the
invested funds to be distributed by means of a lottery. Some jurists made
the mistake of permitting this type of financial instrument. They argued
that investors provide all funding, and give all profits as charity to the
entrepreneur (the bank issuing those certificates). Such an arrangement
would indeed be permitted under the Malik school.
In this regard, we find in Al-Taqnn Al-M
alik (p.300) two manners in
which the interest paid by savings funds may be permitted:
1. This type of transaction did not exist in the early Islamic times when
the Law was revealed, and thus may be considered one of those issues that the Law does no address. Since the transaction was not
31 Ibn
Al-Hum
am ((H
. anaf), vol.5, p.254).
Al-Shr
az ((Sh
afic), vol.1, p.304).
.
33 Al-Kharsh
(1317H, 1st and 2nd editions (M
alik), vol.4, p.141 onwards), Ibn Juzayy
((M
alik), pp.250,288), Al-Dardr ((M
34 Mata
a (vol.3, p.246), Ibn Qud
amah (, vol.4, p.321), Ibn Qayyim Al. lib ul Al-Nuh
Jawziyyah ((H
. anbal), vol.1, p.391).
32 Ab
u-Ish
aq
380

.)
addressed by the Law, and since it provides a benefit to both parties
with no harm to either, it would be considered permissible. Moreover, since the most likely outcome is profitability of the investments,
we build the legal ruling on that most likely outcome and ignore the
unlikely possibility of incurring losses.
2. This transaction may be viewed as a form of qir
ad. (silent partnership), which is permissible by the consensus of jurists. In this regards,
we ignore the condition that the profits be a fixed proportion rather
than a fixed amount, since standard forms of qir
ad. hypothesize two
private citizens as the parties to the contract, while we are now dealing with an entrepreneur who is a major bank or government.
However, in reality, this third type of investment certificates is also forbidden, since it relies on gambling. In this regard, dividing the total amount of
rib
a into different amounts and distributing them based on a pure chance
also introduces significant and obvious injustice and inequity between the
various investors, since the rate of return is not commensurate with the
amount invested and the resulting risk exposure.
Part IV
The Lease Contract (caqd

al-j
ar)
381
383
Preliminaries
Leases, like sales, are among the contracts that are explicitly discussed in
Islamic Law, thus obeying all the general rules governing contracts, as well as
some rules specific to this particular type of contract. Leases differ from sales
due to the time limitation involved in leases, in contrast to sales where no time
limit is allowed. Due to the practical importance of the lease contract in daily
life, I shall study its characteristics and status in seven chapters:
1. Legality, cornerstones, and essence.
2. Contract conditions.
3. Characteristics and legal status.
4. Two types of leases.
5. Guarantees in leasing.
6. Disagreements between the parties.
7. Termination of the contract.
Chapter 13
Legality, Cornerstones, and

Essence
Jurists agreed that leases are permissible, with the exceptions of Ab
u Bakr AlAs.amm, Ismacl ibn c Ulayyah, Al-H
an, Al-Nahrawan,
. asan Al-Bas.r, Al-Qash
and Ibn Kayyis

an, who did not allow it. The logic of the latter group is this:
leases are a sale of usufruct. Since the usufruct is not received at the time
of the contract, but are derived over time, leases thus constitute the sale of a
nonexistent good, which is not permitted. Moreover, they could not legitimize it
by considering the sale as a sequential process, since items may not be appended
to the object of sale over time. Ibn Rushd debunked this argument by stating
that while the usufruct did not exist at the time of the contract, their future
existence is extremely likely. In this regard, the legality of the lease is derived
from the part of the usufruct that is almost surely derivable, or where it is
equally likely that the usufruct be derived or not.1
The majority of jurists based their permission of the lease contract on the
Quran, the Sunnah, and the consensus of Muslims:
The Quranic proof is derived from the verses: And if they suckle your
offspring, give them their recompense [65:6], as well as the story narrated
about one of the two daughters of Shuc ayb (pbuh): Said one of them:
O father, hire him on wages, for truly the best to employ is a strong and
trustworthy man. He said: I intend to wed one of my daughters to you,
on condition that you work for me for eight years, and if you complete
ten full years, that will be a grace from you.[28:26-27]. Using the latter
verse as proof is valid based on the principle: The Laws of those who
came before us are applicable to us as long as they were not abrogated.
The proof from the Sunnah is derived from the H
: Pay the hired
. adth
, the order
worker his wages before his sweat dries off.2 In this H
. adth
1 Ibn
Rushd Al-H
alik), vol.2, p.218).
. afd ((M
u Hurayrah (by Ab
u Yac l
a in his Musnad), and also
2 Narrated
385
386
CHAPTER 13. LEGALITY, CORNERSTONES, AND ESSENCE

to pay wages (ajr) is clearly an indication of the validity of leasing the
workers labor for a period of time. Another H
cited in this regard
. adth
is: Whoever hires a worker, he should inform him of his wage.3 A third
H
was narrated by Sacd ibn Al-Musayyib on the authority of Sac d
. adth
(mAbpwh): We used to rent lands in exchange for water and seeds, but
the prophet (pbuh) forbade us and ordered us to rent it with gold or silver
was narrated on the authority of Ibn c Abbas
[money].4 A fourth H
. adth
(mAbpwh) that the Prophet (pbuh) commissioned a man to cup for him,
and paid him his wages.5
It is also known that the Muslim nation during the time of the companions
of the Prophet (pbuh) reached a consensus on the permissibility of leasing
prior to the time of Al-As.amm, Ibn c Ulayyah, and others. In this regard,
the observable usufruct of goods is of clear benefit to the people, thus
rendering leasing such usufruct valid based on the validity of selling the
objects themselves.6
13.1
Cornerstone and essence of leasing
The H
. anafs determined that the cornerstone in leasing is offer and acceptance,
using the terms lease (ij
arah or istij
ar) or rental (iktir
a or ikr
a). The
majority of jurists, on the other hand recognize four cornerstones:7 two contracting parties (lessor and lessee), contract language (offer and acceptance),
lease payment (rent), and extraction of benefit (usufruct).
The essence of leasing is the sale of usufruct. Thus, the H
. anafs defined the
contract as: A contract pertaining to usufruct, with a compensation.8 Since
on the authorities of Ibn c Umar (by Ibn M
ajah in his Sunan), J
abir (by Al-T
an in his
. abar
Al-Muc jam Al-Saghr), and Anas (by Al-Tirmidh in Naw
adir Al-Us.u
l). However, Ibn H
. ajar
stated that all of those narrations are weak; c.f. Al-H

),
.
. adth
vol.4, p.129 onwards), Al-Haytham (, vol.4, p.97), Al-S.anc

3 Narrated by c Abdul-Razz
aq in his Mus.annaf on the authority of Ab
u Hurayrah and
a
Ab
u Sacd Al-Khudriy. Also narrated by Muh.ammad ibn Al-H
assan in Kit
ab Al-Ath
r with
.
a discontinued chain of narration. Al-Bayhaq completed that chain of narration through

Ab
uH
u Zarc ah argued that the correct chain of narration is terminated
. anfa. However, Ab
(mawq
uf) at Ab
u Sacd; c.f. Al-H
), vol.4, p.131), Al.
. adth
S.anc
an (, vol.5, p.292).
u D
aw
ud, and Al-Nas
a with the wording: The farmers during
.
the time of the Prophet (pbuh) used to pay rent for the land in water and seeds. He (pbuh)
forbade them from doing that, and ordered them to use gold and silver (money) to pay the
rent; c.f. Al-Shawk
an (, vol.5, p.179).
5 Narrated by
Ah.mad, Al-Bukh
ari, and Muslim. Al-Bukh
ari added: And if that payment
were not legitimate, he would never have made it; c.f. Al-H
.
(H
an (, vol.5, p.285), Al-S.anc
. adth
6 Al-Sarakh
s (1st edition (H
am ((H
. anaf), vol.7, p.147),
Al-K
as
an ((H
anaf
),
vol.4,
afd ((M
u-Ish.
aq
.
.
Al-Shr
az ((Sh
afic)), Ibn Qud
afic), vol.2,
p.332).
7 Ibn Juzayy ((M
afic), vol.2, p.332).
8 Ibn Al-Hum
c
am ((H
as
an ((H
. anaf), vol.7, p.145), Al-K
. anaf), vol.4, p.174), Al-Zayla
c Abid
n
((H
anaf
), vol.5, p.1).
((H
anaf
Jurisprudence),
vol.5,
p.105),
Ibn
.
.
13.1. CORNERSTONE AND ESSENCE OF LEASING
387
sales may not be suspended, similarly leases may not suspended. However, the
majority of jurists allow contracting on future leasing (where both the usufruct
and the rent are to be paid in the future), in contrast to sales where the object
of sale and price may not both be deferred. The Shafics are the exception to
this rule, since they did not permit deferment of both the price and the object
of sale, in analogy to the case in sales. However, they did permit its deferment
as an established liability, e.g. I make it a liability upon you to carry my
furniture to this country at the beginning of the month. This is permitted in
their school since debts may be deferred, in analogy to the object of a forward
sale (salam), which is established as a liability on the seller. Most Shafics also
permit extending the lease of an object prior to the termination of the prior
lease, based on the unity of the object of lease, and the contiguity of the two
lease periods.9
The Shafics defined leasing thus: It is a contract over a desirable, known,
permissible, and accessible usufruct, in exchange for a known compensation.

This definition excludes viewing the lease as a contract regarding the object
itself, since such contracts would have to be a sale or a gift. Rather, it is a
contract over the objects usufruct. The usufruct is stated as desirable, thus
costless leases of goods with trivial usufruct is excluded. Also excluded are
la over an unknown work. The restriction of accessibility is
mud.a
raba and jic a
necessary to ensure that either the whole object is leased, or none of it is leased,
since it is impossible to derive usufruct from part of the object, which is thus
not valid for leasing. Finally, the restriction of compensation excludes gifts of
usufruct, including it in a will, partnership, or simple loan.10
The Maliks defined leasing thus: it is the transfer of ownership of permitted
usufruct for a known period in exchange for a compensation.11 This is also the
12
definition adopted by the H
. anbals.
Since leasing is essentially the sale of an objects usufruct, most jurists forbid
leasing of trees and vines to use its fruits, since the fruits are themselves physical
objects eligible for sale. Similarly, leasing a sheep to use its milk, fat, wool,
an)
or offspring, is not allowed, since all such objects are physical items (ac y
that may not be derived based on a lease. Similarly, it is not permissible to
lease water in a river, channel, or spring. Also excluded from leasing are lakes
containing fish and forests containing animals, if the intended usufruct is fishing
or hunting.13 Similarly, pastures may not be leased, since the animal fodder is
also considered a physical object that can potentially be sold.
The majority of jurists also forbid leasing a male animal for reproduction,
since its semen is considered a physical good. In this regard, it has been au9 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.338). We note that the Sh
afics recognize two
.
different types of leases: (i) leasing a fixed object to derive usufruct (e.g. real estate), or (ii)
leasing a specific animal of individuals labor (e.g. to transport goods, or make a dress, etc.),
c.f. Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.333).
c
10 Al-Kh
at.b Al-Shirbn ((Sh
afi ), vol.2, p.332).
11 Al-Dard
r ((M
alik)A, vol.4, p.2), Al-Qar
af ((M
alik), vol.4, p.4).
12 Ibn Qud
. anbal), vol.2, p.190),
Al-Buh
ut (3rd printing (H
. anbal), vol.3, p.537).
13 Ibn c Abid
n ((H
388
CHAPTER 13. LEGALITY, CORNERSTONES, AND ESSENCE
thentically narrated that the Prophet (pbuh) forbade leasing a male animal for
copulation.14 Also impermissible is the rental of gold or silver coins, or any
goods measurable by weight or volume, since the only usufruct derivable from
such goods involves their consumption, while the lease is only a contract regarding the usufruct and not the object itself.15 Thus, the general rule we can
derive from all such examples is this: All goods that permit derivation of their
usufruct while the object remains intact are permissible for leasing, otherwise
the goods may not be leased. The only exception to this rule is leasing a wetnurses services due to necessity, as detailed below. Also, the Maliks permitted
leasing the services of male animals for copulation, and most jurists permitted
leasing pigeons.16
Ibn Al-Qayyims opinion on leasing
The basic rule used by jurists (that leases give permission to the lessee to the
usufruct, but not to the object itself) is a defective rule. He reasoned that this
rule was not derived from the Quran, the Sunnah, consensus, or valid inference
by analogy. On the contrary, he argued, physical goods that continuously produce other goods while remaining intact (e.g. trees producing fruits, animals
producing milk, wells producing water) are no different from physical assets that
produce usufruct (e.g. living in a home, etc.). This equation of permissibility
for physical assets and living animals is based on analogy to the permissibility of
establishing either as a religious endowment. He also equated those categories
of goods in simple loans to one who derives the usufruct and then returns the
object intact. This similarity in legal status is derived from the fact that both
categories of goods produce a benefit sequentially, be that benefit usufruct of
the object (e.g. living in a house day to day), or be it another physical product
(e.g. fruits every season, milk each day, etc.).17
14 Narrated
by Al-Bukh
ari, Ah.mad, Al-Nas
a, and Ab
u D
aw
ud on the authority of Ibn
It was also narrated by others with different wording, as we shall se below; c.f.
Al-Shawk
an (, vol.5, p.146).
15
Al-K
as
an ((H
. anaf), vol.4, p.175).
16 Ibn Juzayy ((M
alik), p.273).
), vol.2, p.15).
.
c Umar.
Chapter 14
Lease Conditions
There are four conditions for the lease contract, paralleling the four conditions
for sale: conditions of conclusion, executability, validity, and bindingness. In
what follows, we shall list some of those conditions, all other conditions can be
found in the sales chapters.
14.1
Conditions of Conclusion
There are three types of conclusion conditions, some pertaining to the contracting parties, some to the contract itself, and some to the object of the contract.
The most important condition pertaining to the contracting parties is sanity
and discernment. Thus, leases by an insane person or a young non-discerning
child are not concluded, in analogy to sales. In this regard, the H
. anafs do not
require the child to reach legal age (puberty) as a condition of conclusion or
executability. Thus, they allow a discerning child to lease his property or labor
if he is permitted, otherwise those transactions would be suspended pending the
approval of his guardian.1
The Maliks ruled that discernment is a condition of conclusion and validity
for both sales and leases, while reaching the legal age is a condition for executability. Thus, the lease of property or labor by a discerning child is valid, but
the executability is suspended pending his guardians approval.2 The Shafics
and H
. anbals, on the other hand require as a condition of conclusion that the
lessor be of legal age, and good mind. In this regard, they argue that leases
result in property transfer, which render them similar to sales.3
1 Al-K
as
an
((H
. anaf), vol.4, p.176).
((M
3 Al-Khat
b Al-Shirbn ((Sh
amah (, vol.5, p.398).
.
2 Al-Dard
r
389
390
CHAPTER 14. LEASE CONDITIONS
14.2
Conditions of executability
Ownership or guardianship is a necessary condition of executability. Thus, leases

by uncommissioned agents are not executable. The H
. anafs and Maliks follow
their rulings in the case of sales by an uncommissioned agent, thus rendering
such contracts concluded but suspended pending the approval of the owner, in
contrast to the Shafics and H
. anbals.
In this regard, a suspended lease may be appended by permission under

certain conditions, including the intactness of the object of lease. If an uncommissioned agent concludes a lease, and the owner of the property permits the
contract to be executed, we consider multiple cases:4
If the contract is permitted before the lessee extracts benefits from the
property, the lease is permissible. In this case, the lessor is considered to
be the owner. In this case, the object of the lease contract (the usufruct)
was intact at the time permission was given.
If the owner gives his permission after the benefit was derived from the
leased object, the lease is not valid. In this case, the object of the lease
(the usufruct) does not exist at the time permission is given, and thus
the contract is not valid. The paid rent now belongs to the agent who
concluded the lease, who is considered a usurper of the owners property
by delivering it to the lessee.
The H
. anafs ruled that if a usurper leases the property he thus obtained
and delivered it to the lessee, then the owner permitted such a lease, the
rent belongs to the usurper if the period of the lease had terminated.
This is based on the above analysis that shows that permission cannot
be appended to a non-existent object of a contract. However, if only
part of the lease period had passed at the time permission is given, then
Ab
u Y
usuf ruled that the entire rent belongs to the owner, since the
contract remains valid based on the remaining lease period. Muh.ammad,
on the other hand, ruled that the rent is shared between the owner and
the usurper in proportion to the periods of the lease before and after the
permission. Thus, he considers the object of the lease to be divisible by
time, part of which would have vanished at the permission time and part
of which would have remained.
This difference in opinion between Ab
u Y
usuf and Muh.ammad was conducted over the issue of a usurper of agricultural land leasing the land
for farming, and then the land-owner permits the lease. In this specific
instance, Muh.ammad added a further distinction if the usurper engaged
in a crop-sharing (muz
arac a) contract:
If the owner gave his permission at a time when the plants were
bearing green kernels, then the crop sharing is valid, and the usurper
gets no share of the crop. In this regard, he considers crop sharing a
4 Al-K
as
an
((H
. anaf), vol.4, p.177).
14.3. CONDITIONS OF VALIDITY
391
contract over a single non-divisible object (the crop), and the ruling
renders the owners permission the true beginning of the contract.
If the kernels had reached full maturity (and dried), then the crop
sharing is finished, and the permission cannot be appended to such
a contract. In this case, the crop-share goes to the usurper.
14.3
Conditions of validity
The validity conditions for leases can be divided into: ones pertaining to the
contracting parties, and ones pertaining to the object of the contract, the rent,
and the contract itself. Those conditions are:
14.3.1
Consent of the contracting parties
In analogy to sales, mutual consent is a condition of validity of the lease contract,

following the verse: O you who believe, devour not each others properties
unjustly, but let there be among you traffic and trade by consent [4:29]. This
verse clearly applies since leasing is a form of trade in which properties are
exchanged.5 This condition relates to the parties to a lease contract. Other
later conditions will relate to the object of sale.
14.3.2
Knowledge of lease object
The object of a lease contract must be known sufficiently well to prevent any potential legal dispute. The type of ignorance that may lead to legal dispute would
prevent delivery, thus negating the purpose of the contract. In this context,
knowledge of the object of lease consists of three components: (i) knowledge of
the type of benefit or usufruct to be derived from the object, (ii) knowledge of
the period of the lease, an (iii) knowledge of the nature of labor in leasing the
labor of skilled or unskilled workers.
1. Knowledge of the usufruct
This knowledge is often obtained through knowledge of the leased object. Thus,
if a person tells another: I have leased to you one of those two homes, the
contract would not be valid based on significant ignorance. If a person leases a
dried-up river to use it as a channel to bring water to his land, most H
. anafs
ruled that the lease is not valid. This is the opinion of Ab
uH
u
. anfa and Ab
Y
usuf, since they argued that the amount of water to be driven through that
dry river can be large or small. In this regard, a large amount of water driven
through can cause significant corrosion. Such destructive use of the property
is clearly disallowed, but the lease contract does not give criteria by means
of which that problem is avoided. Thus, the object of contract is rendered
unknown. On the other hand, it was reported that Muh.ammad ruled with the
5 Al-K
as
an
((H
. anaf), vol.4, p.179).
392
permissibility of such leases. His argument is that the only ignorance that can
affect this contract is ignorance of the exact piece of land being used, and that
information is indeed provided in the contract.6
2. Knowledge of the lease period
This type of knowledge is necessary for the leases of real estate and wet nurses,
since, without determining the lease period, the amount being leased would be
unknown, leading to legal disputes. In this regard, most jurists, agree that leases
are permitted for any period, short or long.7 The majority of Shafics added
that leases are permitted for any period as long as the leased object is likely to
exist based on expert estimates. They do not impose any general upper limits
on leases, since they find no legal proof for such limits.8
The H
. anafs do not require that the beginning time of the lease be specified
in the contract. If the beginning time is not mentioned, the default would be
the beginning of the month after the contract is concluded. The Shafics, on the
other hand, require explicit specification in the contract of the beginning time
of the lease, since ignorance of the beginning time results in ignorance of the
object of the contract.9
If the lease contract specifies its period in terms of the number of months or
years, it is interpreted to mean lunar months and years. If the contract specifies
fractions of a month, the month is considered to be 30 days. Similarly, if the
contact commences in the middle of a month, and its period is specified in terms
of numbers of months or years, then Ab
u H
u Y
usuf ruled that
. anfa and Ab
all months are then measured in days. However, if the contract commences on
the day of a month, and the contract specifies the period in months or years,
then lunar months are implied.
Another opinion was reported on behalf of Ab
uH
. anfa shares the opinions
of Muh.ammad and the Shafics. According to this opinion, if a man leased a
house for one year, and commenced the lease during part of a month, then he
lives in the house for the remainder of this month, and completes the days of
the first month during the last month. The middle 11 months are then assessed
based on standard lunar calendar. In this regard, they convert the period stated
in the contract into days only as necessity requires, which is only for the first
month. In contrast, the first listed opinion was based on the argument that
if the first month is measured in days, then all subsequent months must be
6 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.16,p.43), Al
Qar
af ((M
alik), vol.4, p.4), Ibn Al-Hum
am ((H
. anaf), vol.7, p.148).
7 The Hanaf
s argued for this permission to document the amount being leased. They made
.
an exception for religious endowments (awq
af), for which they did not permit long leases lest
the lessee can claim ownership. The limit they put in place to prevent this problem is three
years for real estate and one year for other properties. A similar restriction was imposed
for leasing land owned by an orphan, for similar reasons; c.f. c Abd Al-Ghan Al-Mayd
an
((H
am ((H
. anaf), vol.7, p.150).
8 Al-Khat
c
c
b Al-Shirbn ((Sh
afi ), vol.2, p.349), Ab
u-Ish.
aq Al-Shr
az ((Sh
afi ), vol.1,
.
p.396), Ibn Qud

. anbal), vol.2, p.201).
9 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), ibid.).
393
measured thus.10
Month-to-month leases
The Shafics were particularly strict in their requirement of specifying the period
of a lease. Thus, they explicitly invalidate month-to-month leases, since each

months lease in this case requires a new contract. Since a new contract is
not written in this month-to-month practice, the overall contract is rendered
invalid. In addition, there is substantial ignorance about the lease period in
such a contract, which invalidates it, as if the lessor had said: I leased you this
house for a month or a longer period.11
The majority of jurists ruled in this case that the lease is valid and binding
for the first month. The lease is considered binding for each subsequent month
once that month starts. In this regard, the legality of the lease is derived from
knowledge and agreement of both sides on the rental. Thus, the implicit contract
in each subsequent month is treated as analogous to physical exchange sales
.ta
h), where the initial drafting of the contract and subsequent indications
(muc a
of continued mutual agreement suffice.12
Knowledge of the work for which a worker is hired
When the labor of a worker is leased, knowledge of the type of work to be performed is crucial to avoid ignorance. Such ignorance can clearly be sufficiently
substantial (is the worker supposed to sew a dress or tend to the sheep) to
cause legal disputation. In this regard, when hiring a worker, the genus, type,
amount, and characteristics of the work to be performed under the contract
must be specified clearly.13
Joint specification of time period and work
We have seen that specification of the time period is necessary in leases of real
estate and other objects for their usufruct. We have also seen that the type
of work to be done must be specified in leases of labor. One may thus ask: is
it permitted and/or required to combine the two conditions and stipulate that
amount of time to be spent on a specific task?
The H
. anafs ruled that it is not necessary to specify the type of work when
renting objects for their usufruct. Thus, a man may rent a commercial property
without specifying the type of work he will conduct therein. Similarly, when
leasing a house, the person may live there alone, or sublet the whole space or
10 Ibn Al-Hum
am ((H
as
an ((H
s
. anaf), vol.7, p.178), Al-K
c
(1st edition (H
u. anaf), vol.15, p.132), Al-Zayla ((H
. anaf Jurisprudence), vol.5, p.123), Ab
c
c
n ((H
Ish.
aq Al-Shr
az ((Sh
afi ), vol.1, p.396), Ibn Abid
. anaf), vol.5, p.35).
11 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
p.340), Al-Shac ar
ans Al-Mz
an (vol.2, p.95).
12 Al-K
c
as
an ((H
. anaf Jurisprudence), vol.5, p1.22), AlDardr ((M
alik), p.275
onwards).
13 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.16, p.47).
394
a part thereof. He may also store goods there, and use it in any manner that
does not harm the property or lead to structural damage. In this regard, if
no conditions are stipulated in the lease, the contract is only constrained by
convention (thus, the lessee of a house is not supposed to rent it to a blacksmith
or a miller).
In leases of labor, they ruled that for certain tasks (e.g. tending to the
sheep), the time period must be specified, since the amount of the leased good
is unknown otherwise. However, for other tasks (e.g. leasing the labor of a
shoe-maker to make a shoe), the time period need not be specified, since the
amount of work can be known by examining the product. If the workers labor
is leased exclusively to one party alone, then the exact nature of the work need
not be specified, but only the time period for which he provides his labor to
the lessee. Similarly, only the time period needs to be specified for hiring a
wet-nurse.14
With regards to the joint specification of the time-period of the lease as well
as the exact nature of the work to be done, there are multiple opinions:
Ab
uH
. anfa ruled that if the time period is specified, then the amount of
work that needs to be done may not be simultaneously specified. Thus,
he ruled that hiring a person to sew a dress on a specific day, or hiring an
animal to go to a specific place on a specific day, are invalid.
His logic is that the object of the lease is thus unknown, since the contract
specifies two things (the work to be done, and the period of time), each
of which may by itself be the subject of a contract. In this regard, leasing
the workers time specifies his wage as a function of time without regard
to the work, and hiring him to do a task specifies his wage as a function
of the work without regard to the time. In the first case, the worker is
exclusively hired by the other party, and in the other, his time may be
shared by many other contracts. Since neither of the two implicit contracts
has priority over the other, this results in ignorance that invalidates the
contract.
Ab
u Y
usuf and Muh.ammad, on the other hand, ruled that it is permissible
to specify both simultaneously.
Their logic is that the object of lease in both cases is the work, which
is what the lessee wants. In this regard, the work is known in the contract that specifies both the work and the time period, and the latter is
mentioned only to ensure that the work is expedited. Thus, if the worker
finishes the task before the entire work period elapses, he still earns his
wages. Conversely, if he does not finish the task during the specified period, he has to finish it as soon as possible to earn his wages.15
14 tr.: Here and elsewhere, we note that the term
Ij
ar can be used simultaneously to mean
lease as well as hire, where the distinction, depending on whether the leased object related
directly to a human being (e.g. his time vs. his house).
15 Al-K
as
an ((H
. anaf), vol.4, p.184).
395
The H
. anbals ruled in the cases of leasing a workers or animals services
to build a wall, sew a shirt, or carry goods, that joint specification of the
work and the time period is permitted if the provider of the work can be
controlled. If the object of lease is an object rather than work (e.g. a
house), then only the time may be specified, since mentioning both the
time and the work to be done in the house constitutes a form of gharar. In
task is
the latter case, if a building is rented for a day to do a task, then the
done in half the period, any further usage of the building would be beyond
the contract, and if he does not use it, he would have abandoned part of
his right. Moreover, the work may not be finished during the specified
period, then if he finishes it, he would be using the space beyond the
specified period, and if he doesnt he wouldnt have finished the job upon
which the contract was written. Thus, in all such cases, an unnecessary
form of gharar is introduced.16
The Maliks and most of the Shafics ruled that it is not permitted in leases
of a workers time (e.g. to sew a shirt) to jointly specify the time period
and the work to be done. Such joint specification introduces gharar, since
They thus
the work may be done in less or more than the specified time.
make the analogy between such joint specification, and a forward buyer
specifying both the volume and weight of an amount of wheat that is the
subject of the forward contract. In this case, if the volume specification
is observed, the weight may vary, and vice versa. Thus, to avoid such
problems, and eliminate the potential gharar, they ruled that the work
should be specified, but the time periodshould not.17
14.3.3
Legal and physical availability of lease object
It is not permitted to lease an object that may not be delivered materially

(e.g. a runaway camel or the speaking services of a mute person) or legally
(e.g. leasing the services of a doctor to extract a healthy tooth). Jurists agree
that both types of non-deliverability would violate the conditions of the lease
contract.
Ab
uH
. anfa, Zufar, and the H
. anbals ruled that a jointly owned property
may not be leased by one of the owners. For instance, it would not be permitted
for a joint owner of a house to lease his share of the house independently of the
other owners, whether the share is known (e.g. one quarter) or unknown. In
this case, the usufruct of the jointly owned property requires delivery of the
entire property, and no part thereof may be delivered alone. However, it has
been reported that Ab
uH
. anfa permitted one partner leasing from the other
partner. In this case, the full usufruct of the house is divided into the part
permitted by ownership and the part permitted due to the lease, with no need
for further compensation. He also ruled that joint ownership that is effected
16 Ibn
Qud
afic), vol.2, p.302).
((M
((Sh
afic), vol.3, p.340).
17 Al-Qar
af
396
during the lease does not affect it. In the former case, joint ownership led to
the impossibility of delivering the property to the lessee. However, in the latter
case, deliverability is not a condition for the continuation of the lease contract.
In general, the conditions required at the initiation of the contract may not be
required to hold for its continuation.18
On the other hand Ab
u Y
usuf and Muh.ammad permitted leasing jointly
owned property to one of the partners or to any other. In this regard, they
ruled that the usufruct may be delivered by removing obstacles, as in the case
of a sale. In fact, the lease is indeed a sale [of usufruct].19
The varying H
. anaf deliverability condition leads to the following conclusions:
1. If a person leases a road that passes through anothers house for passage
at a specific time, Ab
uH
. anfa would render the lease impermissible, while
Ab
u Y
usuf and Muh.ammad would render it permissible.
2. If a person leases a piece of land used as a field of alfalfa for a year, the
contract is rendered defective. In this case, the land cannot be delivered
without removing the alfalfa, which is a loss for the lessor. Since the
lessor may not be forced to incur such a loss, the usufruct of the land
is legally nondeliverable, and thus its sale is not permissible. However,
if the owner were indeed to remove the alfalfa and deliver the land, the
contract becomes valid since the obstacle to deliverability is no longer
present. This is in analogy to the case where the buyer of a beam in the
ceiling of the house, if the beam is indeed extracted, where the buyer is
obliged to accept the execution of the sale. Similarly, the lessee is obliged
to accept the land once the alfalfa is removed.
3. It is not permitted for a person to lease the services of another to trade.
This follows since trading requires two parties: a buyer and a seller. Since
neither the lessor nor the lessee can perform that trading task on their
own, the usufruct cannot be delivered. This is in analogy to the case
where a persons services are leased to lift an object that he cannot carry
by himself. However, if the lease is conducted over a fixed period of time
during which the leased trades on his behalf, then the contract is valid.
In the latter case, the usufruct is the known period of time for which the
hired trader will work.
4. It is not permitted to lease the mating services of a male animal, or a
trained animal or bird for hunting. In those cases, the lessor may not be
able receive the usufruct since the animals cannot be forced to perform
those services. This is the opinion of the majority of H
afic and
. anaf Sh
18 See Ibn Al-Hum

c
am ((H
as
an ((H
. anaf), vol.7, p.180), Al-K
c
c
((H
n ((H
usuf
. anaf Jurisprudence), vol.5, p.125), Ibn Abid
(1st printing (H
. anbal), vol.2, p.197), Al-Dardr ((M
19 Ibn Rushd Al-Haf
d ((M
alik), vol.2, p.225), Al-Shac ar
an ((Sh
u.
Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.395).
397
20
H
Their opinion is based on the Prophets (pbuh) pro. anbal jurists.
hibition of leasing the mating services of a male animal.21 On the other
hand, Imam Malik permitted the contract of leasing such services for a
fixed period of time, in analogy to the above mentioned lease of various
other usufructs.22
14.3.4
Permissibility of the usufruct
Jurists are in consensus23 that it is not permitted to lease the services of an individual for Unseemly games, teaching of magic, the writing of subversive books,
sensuous singing or wailing, etc. All such cases would constitute a transgression of the Law, and such transgressions cannot be enforced through contracts.
However, the H
. anafs ruled that leasing the services of someone to write songs
is permitted, since it is the singing itself that is forbidden. The general juristic
rule may be summarized thus: It is not permissible to lease someones services
to commit a transgression.24
Similarly, it is not permitted to hire a person to kill another, incarcerate
him, or assault him, without just legal cause. The hired person in all such cases
would be committing a sin, which renders the usufruct legally undeliverable.
However, hiring an individual to execute a legal penalty of cutting a limb, etc.,
is permitted. On the other hand, Ab
uH
u Y
usuf ruled that hiring
. anfa and Ab
a person to exact a rightful legal revenge (qis.a
.s) is not permitted, since the
hired party may make a mistake in exacting the legal revenge, thus committing a transgression. On the other hand, Muh.ammad ruled that such hiring is
permitted, since the exact permitted penalty is well known.25
Also, the majority of jurists ruled that it is not permitted for a non-Muslims
to rent a Muslims property for use in non-Islamic prayers, the sale of alcoholic
drinks, gambling, etc. All such cases involve sinful usage of the property. In
the past, Ab
u H
. anfa did permit the rental of property in Iraq to Maggians
who used it for prayers, ruling that this was in an area where the majority were
Maggians, and thus the lease did not undermine the status of Muslims.26
20 Ibn Al-Hum
c
n
am ((H
as
an ((H
. anaf), vol.7, p.179), Al-K
((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
c
c
afi ), vol.2, p.335), Mar ibn Y
. anbal),
vol.2, p.197).
21 This Had
was narrate by Al-Bukh
ari, Ab
u D
aw
ud, Al-Nas
a, and Ah.mad on the
. th
authority of Ibn c Umar. There are also many narrations of the authority of other companions,
c
c
such as Anas, Ibn Abb
as, Al, and Ab
u Hurayra, c.f. Al-H
.
(H
ad
th
),
vol.4,
p.135),
Al-Sh
awk
a
n
(,
vol.5,
p.146).
.
22 Ibn
Rushd Al-H
alik), p.275).
. afd ((M
23 Ibn Al-Hum
c
am ((H
as
an ((H
. anaf), vol.7, p.180), Al-K
((H
alik)A, vol.4, p.21), Ibn Rushd Al. anaf Jurisprudence), vol.5, p.125), Al-Dardr ((M
H
u-Ish.
aq Al-Shr
az ((Sh
amah
. afd ((M
(, vol.5, p.502), Ibn Juzayy ((M

anbal
),
vol.2,
.
p.196), Al-Qar
af ((M
alik), vol.4, p.4).
24 Al-Far
ac id Al-Fiqhiyya by Sh. Mah.m
ud H
. amza (p.76).
25 Al-K
as
an ((H
. anaf), vol.4, p.189).
26 Al-K
as
an ((H
s (1st edition (H
Qud
amah (, vol.5, p.503).
398
14.3.5
Hiring for religious obligations
For instance, it is not permitted to hire a person to perform a legal obligation

that was incumbent upon him before the contract. In this regard, a person
should not receive any monetary compensation for performing an obligatory act
like paying his debts. Thus, it is not permitted to hire individuals to perform
religious acts such as calling for prayers, leading prayers, teaching Quran, etc.
Hiring individuals for such activities would alienate individuals from community
prayers and learning Qur
an and religious sciences.27 In this regard, it was
narrated that c Uthman ibn ab al-c Aas. said: The last order I received from
the Prophet (pbuh) was to get a caller for prayers who does not collect a wage
for his service. Al-Tirmidh rendered this a good H
.28
. adth
The H
. anafs summarize those rulings as follows: Whoever is hired to perform an act of obedience to Allah does not deserve a wage, and hiring an
individual to perform his obligations is not permitted. Thus, a person hiring
their spouse to perform their domestic duties is not permitted.
Later scholars ruled that it was permitted for a teacher to collect wages
for teaching the Quran to others. Imams Malik and Al-Shafic ruled in this
regard that hiring an individual to teach the Quran to others is permitted since
29
the work is known, and the wages are known. As evidence, they cite that the
Prophet (pbuh) married a woman to a man, with the Quran he had memorized
as dowry, thus proving that the Quran can be a compensation in a contract.30
It has also been narrated that the Prophet (bpuh) said: The most worthy way
for you to collect wages is teaching the Book of Allah.31 This is a valid H
.
. adth
It has also been established that Ab

u Sacd Al-Khudriy performed a healing
blessing (ruqyah) for a man with the F

atih.a (first chapter of the Quran) in
exchange for a wage, and the man was healed of his sickness. The friends of
Ab
u Sacd took the compensation to the Prophet (pbuh) to ask him if it was
legitimate. He (pbuh) said: Some people collect wages for false blessings; but
this is a valid healing blessing you collected, eat from it, and I shall eat too.32
27 Al-K
as
an ((H
amah (, vol.5, p.506 onwards), Al-Sarakhs
c
(1st edition (H
. anaf Jurisprudence), vol.5, p.124), Ibn
c Abid
n ((H
at.b Al-Shirbn ((Sh
afic), vol.2, pp.205,217), Al-Far
aid
Al-Bahiyya f Al-Qaw
ac id Al-Fiqhiyya by Sh. Mah.m
ud H
h. by Ibn
. amza (pp.75,284), Al-Ifs.a
Hubayra (p.226).
28 Narrated by the authors of the Sunan with different wording. The wording quoted here
is that of Al-Tirmidh and Ibn M
ajah, c.f. Al-H
), vol.4,
.
. adth
p.139).
29 Al-Dard
r ((M
alik), vol.1, p.221), Al. afd ((M

u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.398),
Al-Shac ar
an ((Sh
afic), vol.2, p.95), Ibn Juzayy ((M
alik), p.275).
30
Narrated by Al-Bukh
ari, Muslim, and Ah.mad that the Prophet (pbuh) said to them: I
have married you to one another with what the man knows of the Qur
an [as dowry], c.f.
Al-Shawk
an (, vol.6, p.170).
31
Narrated by Al-Bukh
ari in his medicine chapter on the authority of Ibn c Abb
as, along with
many other H
s with the same meaning, c.f. Al-H
),
. adth
.
. adth
c
vol.4, p.139), Al-Haytham (, vol.4, p.94), Al-S.an
32 Narrated by Ahmad and the narrators of the six books with the exception of Al-Nas
a
.
on the authority of that Ab
u Sacd Al-Khudriy. Another similar event was narrated on the
399
Moreover, the H
aiq said: The fatw
a (ruling) today
. anaf author of Kanz Al-Daq
is that it is permitted to hire an individual as a teacher of Quran, as ruled by
the later jurists of Balkh.
The Maliks permitted collecting wages for calling for prayers together with
leading the prayers and taking care of the mosque. However, they did not permit
collecting wages for leading the prayers alone, in analogy to the impermissibility
of collecting wages for the performance of religious obligations. The Maliks
and Shafics also permitted hiring an individual to perform pilgrimage (H
. ajj)
on anothers behalf. Their proof is the fact that the Prophet (pbuh) permitted
one of his companions to perform pilgrimage on anothers behalf. However,
the Shafics explicitly rendered impermissible the payment of wages for leading
the prayers, and the majority of the M

aliks concurred that the payment of
such wages for leading the prayers as separated from performing the adha
is
impermissible.33
There is a consensus that hiring a teacher of language, literature, mathematics, writing, jurisprudence, H
, etc. is permissible. Also, hiring individuals
. adth
to build mosques and infrastructure, etc. is permissible. All such actions are not
religious obligations, and may or may not be means of getting closer to Allah.
Hence, individuals may be hired and paid wages to perform such tasks.
The H
. anafs do not permit paying individuals wages for ritual cleansing of
the body of a deceased Muslim, since it is a religious obligation. However, they
permitted the payment of wages for digging graves and carrying the bodies of
the deceased. On the other hand, the Shafics permitted hiring individuals to
prepare and bury the bodies of Muslims. Their proof was the fact that cleansing
and preparing the deceased Muslims body is an obligation for the community
to perform (fard. kif
ayah), but not for any given individual. Thus, even if only
one person was in a position to perform this community obligation, it is still
permitted. This is in analogy to one who is obliged to feed a person who would
otherwise die of hunger. In the latter case, the obligation to feed the person
does not forbid the collection of the price of the food thus given.
It is not permitted for a man to pay compensation for his wifes suckling of
their child. Such payment would constitute hiring her to take care of the child,
which is an obligation on her in the eyes of Allah.34
14.3.6
Hired individuals benefiting from their work
Thus, it is not permitted to hire an individual to perform an act of obedience

to Allah for which he receives a reward.35 Also, it is not permitted to hire an
authority of Kh
arijah ibn Al-Salt. on behalf of his uncle, and a third event on J
abir, c.f.
Al-H
an (, vol.5, pp.289,291),
.
. adth
Al-Haytham (, vol.4, p.96).

c
33 Al-S
an (2nd printing, vol.2, pp.181,184), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2,
. an
p.344), Al-Qar
af ((M
alik), vol.3, p.2), Us.u
l Al-Fiqh Al-Isl
am by Dr. Al-Zuh.ayl (vol.1,
p.60 onwards, 139).
34 Al-K
as
an ((H
. anaf), vol.4, p.193).
35 The Sh
afics ruled that hiring an individual to recite the Qur
an near a grave, in a given
amount or a given period of time, is permitted. In such cases, the usufruct of the reading is the
400
individual to grind a certain measure of wheat into flour or squeeze a certain

measure of sesame, where the price is a share in the flour or oil, respectively.
In such cases, the hired individual benefits from his work, and is working for
himself. This follows since the Prophet (pbuh) prohibited the hiring of a male
animal for mating and the hiring of a worker to grind wheat with his wages paid
, as well as the
in flour.36 The Shafics ruled similarly based on the same H
. adth
violation of another condition of the lease contract, which the deliverability of

the price at contract time.37
The H
. anafs summarize this ruling under the heading for impermissibility
of hiring an individual with the wages being specified as part of the work
performed by the hired worker. The H
. anbals and Maliks, on the other hand,
ruled that such contracts were indeed permissible if the amount of the wages was
clearly specified, since they do not accept the validity of the above mentioned
H
.38 Thus, the H
. anbals permitted the common practice whereby farmers
. adth
pay the threshers or carriers of wheat in kind.
14.3.7
Customary use of lease contracts
Thus, renting trees to dry clothes on them,39 or to use their shade, is not
permitted since this is not a common usage of the trees.40
14.3.8
Location conditions for the leased object
If the leased object is movable, then it must be in the possession of the lessor.
This follows from the Prophets (pbuh) prohibition of selling that which is not
in the sellers possession.41 In this regard, since the lease contract is a form
mercy of All
ah that would benefit the dead as well as the living. This ruling is independent of
whether or not the recitation of the Qur
an is followed by a supplication, and whether or not
the reciter asks All
ah to give the blessings of the recitation to the deceased. In all such cases,
the deceased would still receive a benefit like a present live person who hears the recitation,
c.f. Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.341).
36 Narrated
by Al-D
araqut.n on the authority of Ab
u Sacd Al-Khudriy, c.f. Al-Shawk
an
(, vol.5, p.292), Ibn H

. ajar (, p.255).
37 Al-K
as
an ((H
atb Al-Shirbn ((Sh
afic), vol.2, p.335), Al-Far
aid
. anaf), ibid.), Al-Kh
.
Al-Bahiyya f Al-Qaw
ud H
amza (p.78).
.
38 Ibn Qud
amah (, vol.5, p.449), Al-Dardr ((M
alik),
p.274 onwards).
39 Al-Qar
af ((M
alik), vol.4, pp.3-4) listed eight types of benefits that may be derived
through leasing: (1) permissibility (to avoid singing and music), (2) the permissibility of
using the benefit in an exchange (to avoid using the contract for sexual services), (3) the
significance of the benefit (to avoid worrying about trivial items for which there is no compensation)... the rental of trees to dry clothes was debatable and forbidden by ibn Al-Q
asim,
(4) that the property be owned (to avoid renting properties designated for housing to use
as schools), (5) that no non-fungible can be taken (to avoid renting trees for their fruits or a
she-animal for her offspring; with the exception of renting a wet-nurse to meet a necessity), (6)
that the property is deliverable (to avoid hiring a handicapped person), (7) that the benefit is
derived by the lessee (to avoid hiring an individual to perform acts of worship), (8) that the
benefit be known (to avoid renting a machine whose use is unknown).
40 Al-K
as
an ((H
. anaf), ibid.).
41 There are a number of Had
s regarding this prohibition. Among them are those narrated
. th
by Ah.mad and Muslim on the authority of J

abir (mAbpwh) that the Messenger of All
ah
401
of sale (of the usufruct), it falls under this prohibition.42 If the object of sale
is real estate, the same discussion of differing opinions that we covered under
defective sales applies.
14.3.9
Conditions that pertain to wages
There are two conditions pertaining to wages:43

1. Wages must be known valued property
Jurists are in consensus regarding this condition. The effects of this condition
are well-known as previously detailed under the sale contract. The origin of the
condition of knowledge of the rental or wage payment is the H
: Whoever
. adth
hires an individual must inform him of his wages. In this regard, knowledge of
the wages or rental must be obtained through explicit specification.44
For wages or rental payments in goods that are difficult to transport, Ab
u
H
an
fa
ruled
that
the
location
of
delivery
must
be
specified
at
the
inception
of
.
the contract. Ab
u Y
usuf and Muh.ammad, on the other hand, ruled that the
location need not be explicitly specified, designating the location of the contract
session as the default delivery location.45
The H
. anaf condition that the rental or wage payment be known implies that
specification of a known portion of the wages plus an unknown portion (e.g. $100
wages plus the food of a worker or a rented animal), then the lease contract is
not permitted. In such cases, the food becomes part of the wages or rental
payment, and since its amount is unknown, the overall wages or rental payment
are unknown. The M
aliks, on the other hand, permitted specifying wages or
rental payments as food or clothing, since such contracts were commonly in
use.46
Hiring a wet-nurse
Ab
u Y
usuf and Muh.ammad, and also Al-Shafic, ruled that it is not permissible
for a person to hire a wet-nurse with her wages being specified as her food and
clothing, reasoning by analogy since those wages would be unknown. However,
Ab
uH
. anfa permitted such a contract due to juristic approbation, based on the
verse: If you decide to hire a wet-nurse for your offspring, there is no blame
on you, provided that you pay them equitable wages [2:233]. Thus, Allah has
(pbuh) said: If you buy foodstuffs, do not resell them until they are in your possession,
c.f. Al-Shawk
an (, vol.5, p.157). Also, the narrators of the six books with the exception of
ibn M
ajah narrated on the authority of ibn c Abb
as narrated as: Whosoever buys foodstuffs
should not sell them before he receives them, c.f. Ibn Al-Athr Al-Jazar (, vol.1, p.383
onwards).
42 Al-K
as
an ((H
anaf
),
vol.4,
p.193).
.
43 Al-K
as
an ((H
. anaf), ibid., pp.193-4).
44 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol.7, pp.148,178), Al-K
Qud
amah (, vol.5, p.404).
45 Al-Sarakhs
(1st edition (H
. anaf), vol.15, p.113).
46 Ibn Juzayy
((M
402
negated in this verse any restrictions on the contract of hiring a wet-nurse. This
is a special contract in which ignorance of the wages does not lead to dispute,
since it is customary to be generous and kind to wet-nurses and they tend in
turn to be generous and kind to the offspring. Thus, ignorance in this case is
analogous to ignorance of a measure taken out of a heap of food, where it is
forgiven since it rarely ever leads to dispute.47 The Maliks and H
. anbals also
ruled with the latter opinion.48
Wages that are part of the contract object
The majority of jurists ruled that hiring an individual to perform a job and
paying them wages out of their output (e.g. hiring someone to mill wheat and
paying him in flour) would render the contract invalid. In such cases, the wages
are unknown (e.g. the amount of flour may be unspecified, the quality of the
wheat may be unknown, etc.), thus rendering the contract impermissible.49 In
this regard, jurists cite the H
that forbids renting a male animal for mating
. adth
services or hiring a miller of wheat with wages specified as a measure of flour.50

However, the Maliks permitted this contract since the wages can be made
known.51 They rebutted the applicability of the H
in this case, since the
. adth
H
mentioned explicitly the measure as a qafz, which is not an accurate
. adth
measure of the quantity of flour. The H

adaws, the Zayd Imam Yah.ya, AlMuzn and the H
. anbals agreed with this latter opinion if the measure of flour
is specified accurately.
On the other hand, the Maliks rendered as defective the contract in which
a worker is hired to skin a sheep and collect his wages in skin. In this case,
the skin cannot be collected except after the skinning, and it cannot be known
whether it will be collected intact or in fragments. In general, they ruled that
hiring an individual with an unknown wages (including a grinder of wheat for
an unknown measure of flour) would be defective.
Paying a lessor or lessee to vacate the premises
In my opinion, there is no legal prohibition against the lessor-owner collecting a
lump-sum from the lessee to vacate the premises. Such a payment is considered
a pre-payment of part of the rent as stipulated in the contract. Also, it is
permitted to pay a lessee an amount of money to transfer his rights to the
usufruct of a property for the remainder of a lease to another. Indeed, the
47 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol.7, p.185), Al-K
Al-Sarakhs (1st edition (H
anaf), vol.15, p.119), Al-Zaylac ((H
.
. anaf Jurisprudence), vol.5,
p.127).
48 Al-Dard
r ((M
alik)A, vol.4, p.13), Al-Qar
af ((M
alik), vol.4, p.4), Al-Khat.b Al-Shirbn
((Sh
amah
(, vol.5, pp.450,453).
49 Ibn Qud
amah (, vol.5, p.405).
50 Narrated by Al-D
araqut.n and Al-Bayhaq on the authority of Ab
u Sacd, with a weak
chain of narration, c.f. Al-Shawk
an (, vol.5, p.292).
51 Ibn Rushd Al-Haf

alik)B, vol.4, p.18
. d ((M
onwards).
403
Shafics have ruled in a manner very similar to this in the context of sales: The
contract language may specify a transfer of access to property, and monies may
be collected to effect that transfer, in analogy to collecting a sum of money for
early retirement from a job.52 All such permissions are legally restricted to
the remaining period of a lease, and may not be extended beyond. The lessors
transfer of the right to the usufruct to another beyond that period must thus
be conditioned upon the consent of the owner.
While the H
. anafs generally find the transfers and sales of pure legal rights
(e.g. preemption in a lease contract) impermissible, many H
. anafs permitted accepting a sum of money to leave a job (such as being the Imam or muadhdhin

of a Masjid). This opinion was based on convention, and in analogy to the
right of a woman to transfer her allotment to another, since this merely involves
dropping a right. This opinion may also be reasoned by analogy to the permissibility of an overseer of a religious endowment transferring the right to another
at court. In such cases, it has been conventional for the dropping of such rights
to be compensated financially.
I have found a more recent Tunisian study labeled Jumlat Taq
arr wa Fat
aw
a
f Al-Khuluww
at wa Al-Inz
al
at by the M
alik Muft Ibrahm Al-Rayyah. (d.
1266 A.H.), Sh. Muh.ammad Bayram IV, Tunisian Mufti Al-Shadhl bin S.alih.,

and Tunisian Justice Muh.ammad Al-Sun
us. Those jurists ruled for the permissibility of collecting financial compensation for vacating premises based on
convention, as well as the view that the lessor owns the usufruct, and thus may
require a compensation as in a [sub-]lease, or without it as in a loan.53 In this
regard, Al-Banan has narrated that Al-Barzal permitted seeking compensation
to vacate a job, and a fatw
a by the F
as scholars permitting seeking compensation to vacate rented premises. In this regard, Sh. Muh.ammad Bayram argued
that vacating leased premises was similar to vacating leased agricultural lands.
Islamic Fiqh Council ruling #6, 1408 A.H./1988 C.E.
It is worthwhile listing the points made in this ruling, for which I headed the
drafting committee:
1. There is no legal restriction against the lessee paying a fixed amount above
the regular rental payments (which is called in some countries an evacuation fee or khuluww), as long as both the lessee and the owner agree to this
arrangement. In this case, the payment is considered part of the rental

payment for the agreed-upon period of time, and if the contract is later
cancelled, this payment inherits the legal status of other rental payments.
2. If the two parties agree, it is permitted during the lease period that the
owner pay the lessee an amount of money in exchange for his dropping his
established right to the usufruct for the remainder of the period. In this
case, the payment is legally permitted since the lessee is thus selling back
52 Ha
shiyat
Al-Bijrm c al
a Sharh. Al-Khat.b (vol.3, p.3).
((M
alik), vol.1, p.187).
53 Al-Qar
af
404

the usufruct to the owner with mutual consent in exchange for the named
compensation.
However, if the lease expires, without explicit or implicit renewal (e.g.
through automatic renewal implied in the contract language), then such
payments are not allowed. In this case, the owner has the primary claim
to ownership, and the lessees right has expired.
3. It is permitted for one lessee to transfer his rights to the usufruct for
the remainder of the lease to another lessee, in exchange for an amount
of money in excess of the regular rental payment. In this case, all the
stipulations in the primary lease contract between the first lessee and the
owner must be respected, along with other Legal requirements associated
with the lease contract. As in the previous point, if the first lease had
expired, then the first lessees rights would have expired at that time, and
collecting an evacuation fee would not be permitted.
Notice that in long-term leasing, some legal systems stipulate that the
lessee is not allowed to sub-lease to another, or to collect an evacuation
fee, except if the owner consents to that transaction.
2. Rent cannot be a usufruct of the same genus
For instance, it is not permitted to lease a property, with the rent paid by
allowing the owner to live on that property, etc. The H
. anafs derive this ruling
from the prohibition of rib
a. As we have seen in the chapter on rib
a, the
H
. anafs consider unity of the genus together with deferment to be sufficient for
rib
a al-nas
a. In this regard, they view the conclusion of the lease contract to
be gradual, as the usufruct is collected. Thus, at the time of collecting the
rent, the object of the sale (the usufruct) does not exist, and thus deferment is
effected.54 On the other hand, we have seen that the Shafics do not render a
contract forbidden based on rib

a simply based on unity of the genus. Therefore,
c
the Shafi s do not stipulate this condition.
14.3.10
A condition pertaining to the cornerstone of the

contract
The lease contract may not contain a condition that is not in accordance with the
nature of the contract. For instance, if a person leases his property to another
with the condition that he (the owner) lives in it for a month, or if a person
rents his riding animal to another with the condition that he (the owner) rides
it for a month, etc., the lease is rendered defective. This follows since this type
of condition is contrary to the nature of the contract, whereby an additional
benefit to one of the contracting parties is stipulated without compensation as
a condition. This renders it rib
a or similar to it, thus rendering the contract
54 Al-K
as
an
((H
. anaf), vol.4, p.194).
14.4. CONDITIONS OF BINDINGNESS
405
defective.55 On the other hand, the H

. anbals and Maliks permitted the lease
containing such conditions.
14.4
Conditions of bindingness
There are two main conditions for a lease contract to remain binding:
14.4.1
Leased item must remain free of defects
If a defect that adversely affects the usufruct of the leased object develops,56
the lessee has an option to maintain the lease and continue to pay the full
rent, or to void the contract.57 In this regard, the object of the contract is
the usufruct of the leased object, which is collected gradually over time. Thus,
when a defect develops in the leased object, the defect would thus have occurred
prior to receipt of the usufruct, thus giving the lessee (buyer of the usufruct) an
option in analogy to the sale contract.58
On the other hand, if the entire leased house were to fall, or if water stops
flowing to a water-mill or an agricultural land, then the lease may be voided,
since the object of the contract would have perished. However, the majority of
H
. anafs ruled that the contract is not automatically voided, but that an option
is established as a right for the lessee to effect the voiding. Their view is that
the object of the contract disappeared in a manner that may be reversed. Thus,
they ruled by analogy to the case where an individual buys an animal, but the
animal escapes prior to receipt. Moreover, even if the house were to fall, the
lessee may still benefit from its land by pitching a tent in place of the house.
In this regard, if the defect were removed prior to the lessees exercise of his
right to void the contract (e.g. if the animal is healed, or the house is restored
to its original condition), then the option is voided since its reason is no longer
present, and the contract continues to be binding.
To exercise his option to void the contract, the defect must be one that materially affects the usufruct of the leased object. Thus, if a wall in a house were
to fall without affecting its residents lives, no voiding option would be established. Moreover, even if the defect is one that materially affects the usufruct of
the leased object, the lessee may only void the contract in the lessees presence.
This follows since voiding of a contract requires both parties or agents thereof
to be present. An exception to this case is the falling of a house, in which case
55 Al-K
as
an
((H
includes partial or total loss of usufruct, e.g. complete destruction of an entire house,
or a destruction of the roof, c.f. item #514 of Majallah.
57 This applies equally to a rented riding animal that falls sick or gets permanently incapacitated, as well as to a house part of which falls down. This is the opinion of some H
. anafs,
which is supported in Ibn c Abid

n ((H
ih.nah endorsed
. anaf)). On the other hand, ibn Al-Sh
the apparent ruling that no part of the liability for the rent would be deducted if a house or
part thereof were to fall.
58 Al-K
c
as
an ((H
am ((H
. anaf), ibid, p.195), Ibn Al-Hum
((H
56 This
406
the lessee is allowed to leave it, whether or not the lessor is present, thus voiding
the contract.
A similar option is established for the lessee if an event takes place in a
manner that partitions the initial contract. The partitioning of the contract
in this case is determined by the examining the usufruct granted in the initial
contract. Thus, if a person leases two houses in one contract, and one of them
falls, or if only one house of the two is made available to the lessee, then the lessee
has the right to void the contract based on the partitioning of the contract.59
14.4.2
Valid excuses to void the contract
In what follows, I shall give a list of the valid excuses that permit the lessee or
lessor to void the contract in the different schools. In this regard, the H
. anafs
permitted certain types of excuses to avoid losses that may befall one party.
Therefore, they define a valid excuse (c udhr) as a condition that would result
in losses to one of the parties of the contract if the contract were to continue,
and that cannot be avoided without voiding it. Ibn c Abid

n said: Every excuse
that makes the satisfaction of the contract impossible without causing a harm
for the person or property of one of the contract parties gives that party a right
to void the contract.60
The majority of other jurists ruled that the lease is as binding as a sale.
Thus, the contract may only be voided if a defect is uncovered or if the usufruct
of the object ceases to exist. Thus, the Shafics said: A lease cannot be voided
based on an excuse such as the lessees inability to find fuel for heating bath
water, an unanticipated need for the lessee to travel, or sickness of a person
who leased a horse for travel and could not travel due to his illness. In all
cases, there is no defect in the object of the contract. Thus, voiding of the lease
contract requires absence of the usufruct that is the object of the contract (e.g.
destruction of a leased house, or death of a leased animal).
In both cases, voiding of the lease contact can only affect its future, and
cannot be exercised retroactively. An exception is the case where the leased
object (e.g. an animal) becomes defective (e.g. loses sight or develops a serious
disease), in which case the contract is voided from the time of the defect.
Another point of difference between the H
. anafs and others over causes for
voiding leases is the death of one of the two parties. In this case, the H
. anafs
ruled that the contract may be voided, while the other schools ruled that it
continues. On the other hand, there is a consensus that a lease may not be
voided based on a change of ownership of the leased object through sales or
gifts.
59 Al-K
as
an
((H
((H
. anaf), vol.5, p.55).
60 Ibn c Abid
407
H
. anafs opinions
The H
. anafs enumerated three types of excuses that may result in voiding
leases:61
1. Excuses for the lessee: Those include bankruptcy, a change of occupation, or travel to another land. In both cases, the lessee would have
to endure a significant loss if forced to continue with the lease. As a
consequence, all cases where the lessee cannot collect the usufruct of the
leased object without incurring a loss would result in voiding the contract.
This would include the case where a man hires another to perform a job,
and then finds that he decides not to have that job performed. In this
case, he cannot be forced to go through with the initial plan that he later
recognized would not be beneficial.
2. Excuses for the lessor: If prior to commencing the lease, a debt on the
lessor is established such that he needs to sell the object of the lease to
use its price in repaying the debt, then he may void the lease. In the case
where the lessor claims, after the beginning of the lease, that such a debt
had occurred prior to the lease, the H
u
. anafs have varying opinions. Ab
H
. anfa ruled that the lease may thus be voided (arguing that no person
would ever make a false claim about being in debt), while Ab
u Y
usuf
and Muh.ammad ruled that once the lease had commenced, such a claim
cannot be accepted.
The lessor may also void the lease of an object that he purchased and
leased, but then later discovered a defect therein. In this case, he is
permitted to return the object to the original seller based on that defect.
On the other hand, if the lessor needs to travel, that is not considered a
valid cause for voiding the contract, since it has no effect on the usufruct
of the leased object. Similarly, Muh.ammad ruled that if a camel-shepherd
leased his services and then fell sick, his sickness is not a valid cause
for voiding the contract, since he could send another to take his place.
However, Ab
u Y
usuf ruled differently in the latter case, since he argued
that no other person can do the same job and therefore upholding the
contract may cause the lessor (hired worker) harm.
3. Excuses pertaining to the leased object: An example of this is a case
where an individual leases a public bath for a certain period, and then all
the potential customers of that public bath desert the city. In this case,
the lessee is not required to pay the rent to the lessor. Another example
is the case where a person hires a worker to perform a job, but then the
worker is legally forbidden from performing this job. Then, the lessee is
not obliged to pay the wages for the usufruct that he never extracted.62
61 Al-K
as
an ((H
. anaf), vol.4, p.197 onwards), Indian Authors ((H
. anaf), vol.4, pp.198 onwards, 458-9,463), Ibn Al-Hum
am ((H
aw ((H
. anaf), vol.7, p.222 onwards), Al-T
. ah.
. anaf),
c
p.130), Al-Sarakhs (1st edition (H
. anaf), vol.16, p.2 onwards), Al-Zayla ((H
. anaf Jurispru
n ((H
dence), vol.5, p.145 onwards), Ibn c Abid
62 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p. 359).
.
408
Sh
afic opinions
The Shafics list conditions for the four cornerstones of the lease contract (the
two parties, the contract language, the usufruct, and the rent/wages), as detailed
below:63
1. Contracting parties eligibility
The lessor and lessee must both be of legal age, sane, and free of legal restrictions. This follows since children, insane individuals, and those legally restricted
from making financial transactions, do not have the legal right to deal in their
person or property.
2. Contract language
Leases require matching offer and acceptance, or conventional language or actions that conventionally signify such offer and acceptance. Also, there should
not be a long pause between the matching offer and acceptance, and the two
should not be interrupted by the speech of a third-party. Also, the contract
must not be suspended pending a condition (e.g. if so-and-so comes, then I
leased you my house for so-much).
The author of Al-Tawshh. said: I am not certain whether or not Al-Nawaw
would extend his acceptance of hand-to-hand transactions in the sale contract to

the case of leases. The most likely answer is that this ruling cannot be extended,
since hand-to-hand transactions are not conventionally used in leasing as they
are in sales.
3. Usufruct
The usufruct of the leased object must be legally considered a good that
can be owned, from the Legal and conventional points of view. Thus,
it is not permitted to rent gambling machines or dogs (in the majority
view). Other rulings under this category render impermissible hiring an
individual to advertise an object without undertaking any effort, even if
that advertising is effective. Also, it was rendered impermissible to lease
gold and silver coins for use as jewelry.
The usufruct must be deliverable. Thus, it is not permitted to lease a
usurped object to any party other than the usurper. Also, it is not permitted to lease agricultural land that does not have a constant source of
irrigation, and for which regular rainfall is not sufficient. Similarly, it is
not permissible to hire a mensturating or postpartum woman for cleaning
mosques.
The usufruct must benefit the lessee and not the lessor. Thus, it is not
permitted to hire an individual to perform acts of worship that cannot be
63 Al-Khat
b
Al-Shirbn ((Sh
afic), vol.2, pp.332-44).
409
performed on behalf of another (e.g. prayers and fasting). If the hired

person were indeed to perform acts of praying and fasting, the benefit
would accrue to him and not to his employer.
The usufruct must not be a physical identifiable asset (which could be
sold separately). Thus, it is not permitted to lease an orchard to collect
its fruits, or to lease sheep for their wool and milk.
The usufruct must be known by characteristics and amount, and identified explicitly by specifying the object from which such usufruct will be
extracted. The amount may be specified in units of time (e.g. renting a
house), units of work (e.g. sewing a dress), or either (e.g. rent a car by
the hour or by distance). In the last case, only one of the two possible
specifications of the leased amount may be used (time or distance), but or
both. As we have seen previously, specifying both simultaneously results
in gharar, since the specified distance may be cut in less or more than the
specified
time.
4. Rental or wage payment
The rental or wage payment must meet the same conditions as any price
in a sale. Thus, the wages or rental payment may not be specified or paid
as a dog or pig, or other impure objects.
It must be a good. Thus, insects may not be used as a wage or rental
payment due to their insignificance, vicious animals may not be used due
to their danger, and gambling machines and statues may not be used due
to their illegality.
It must be deliverable. Thus, rental and wage payment may not be specified as birds in the sky or fish in the sea. Also, they may not be specified
in terms of usurped objects unless the lessor is the usurper or one who has
the ability to take it from him.
It must be known to both parties. Thus, it is not permitted to lease
a car in exchange for the fuel in its tank, or animal in exchange for its
feed, since those amounts are unknown. Similarly, a farmer may not be
paid by part of what he sows, the collectors of charitable contributions
to Islamic centers may not be paid wages as a percentage of what they
collect, and real estate agents may not be paid a percentage of the price
they get the seller. In the case of collectors of charitable payments, they
milna c alayh
a [a category
cannot in general be correctly classified as al-c a
of individuals who are eligible for charities as per the Quranic verse 9:60].
In many cases, they are collecting monies that are not intended for them,
and they should only collect the costs of their travel.
Chapter 15
Characteristics and Legal

Status
15.1
Characteristics of leases
The H
. anafs consider the lease a binding contract, which - as we have seen may not be voided unless there is a valid excuse. This follows from the verse
[5:1] in which Allah (swt) issues the injunction fulfill your contracts, where
voiding a contract is clearly distinguished from fulfilling it.1
The majority of jurists ruled that the lease is a binding contract that can
only be voided based on the existence of an eligible defect or if the usufruct
of the leased object ceases to exist. Their ruling is based on the same verse
[5:1]. The subject of the lease contract is a usufruct, which makes it similar to
marriage, and it is a financial commutative contract, which renders it similar to
sales. Those similarities greatly limit the potential for its voiding.2
As a result of this juristic difference, the H
. anafs ruled that a lease would
be voided following the death of one of the lessor or lessee. They base this
opinion on the fact that continuation of the contract would mean that either
the usufruct or the rental becomes owned by a party other than the one who
concluded the contract, which is not permissible. In their view, the lease contract is continuously concluded for the collection of temporal usufruct. Thus,
transferring the ownership of the usufruct or the rental to an heir would constitute inheritance of that which the deceased had not [yet] owned. On the other
hand, the right to the property of the heir cannot be justified since the heir
aliks, Shafics
never signed the contract.3 On the other hand, the majority of M
1 Al-K
as
an
((H
s (1st edition (H
. anaf), vol.16,p.2).
Rushd Al-H
afd ((M
afic), vol.2,
.
p.355), Ibn Qud

amah (, vol.5, pp.409,411), Marc ibn Y
. anbal), vol.2,
p.209).
3 Ibn Al-Hum
c
am ((H
as
an ((H
. anaf), vol.7, p.220), Al-K
c Abid
n
((H
anaf
Jurisprudence),
vol.5,
p.1444),
Al-Samarqand
((H
anaf
),
p.128),
Ibn
.
.
((H
. anaf), vol.5, p.57).
2 Ibn
411
412
CHAPTER 15. CHARACTERISTICS AND LEGAL STATUS
and H
. anbals ruled that the lease contract is not voided based on the death of
one of its parties. They base their opinion on the view that lease is a binding
commutative financial contract, which is thus not voided by death in analogy
to the sales contract.4
15.1.1
Options in lease contracts
In the lease of a non-fungible identified object, the defect option is established.

Thus, if a well in leased agricultural land runs dry, or if the wheels of a leased
car do not rotate, the lessee has the option to void the contract.
On the other hand, the defect option cannot be established in the lease of
fungibles. In this case, the lessor is responsible to replace the leased object.
Moreover, the contract session and condition options cannot be established in
a lease contract. This follows since leasing is one of the gharar contracts, and
options involve gharar. In this regard, it is not permitted to add gharar on top
of gharar [thus rendering

it substantial].
15.2
Legal status of leases
A valid lease transfers ownership of the usufruct to the lessee, and ownership of
the rental to the lessor. In this regard, it is a commutative financial contract,
where the object of sale is the usufruct.5
If the lessee extracts the usufruct in a lease contract that is rendered defective
because of a defective condition, he is responsible to pay the minimum of the
named rent in the contract and the going market rental price for similar objects.
On the other hand, if the lease is defective due to ignorance of the object of
sale or due to not naming it, the lessee is obliged to pay the named rent.6 On
the other hand, Zufar, M
alik, and Al-Shafic ruled that the lessee in a defective
lease is required to pay the going market rent for similar objects, whatever that
rent maybe. They ruled thus based on the view that once a sale is rendered
defective, the buyer is required to pay the value to the seller, whatever that
value may be.7
4 Ibn Rushd Al-Haf

afic), vol.2,
. d ((M
p.356), Ibn Qud

amah (, vol.5, p.428).
5 Al-K
as
an ((H
. anaf), vol.4, p.201).
6 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.174 onwards), Alc
Zaylac ((H
n ((H
usr
u
. anaf), vol.5, p.31), Kh
(1304H (H
. anaf), vol.2, p.231). The reason for differentiating between sales and leases in
the case of a forbidden defective condition is this: the object of a sale has an independent
value, and thus the buyer is responsible to compensate the seller for that value. On the other
hand, the H
. anafs do not consider that usufruct has an inherent value, and its value is derived
from the contract. Thus, the value in this defective lease is determined by comparison to
other leases, provided that it does not exceed what the lessor and lessee agreed upon in the
defective contract, c.f. Al-K
as
an ((H
. anaf), vol.4, p.218).
7 Al-K
as
an ((H
atb Al-Shirbn ((Sh
afic), vol.2, p.358).
.
Chapter 16
Two Types of Leasing

The Arabic term ij
arah (translated here as lease) covers two types of contracts: (1) leasing an object for its usufruct, and (2) hiring workers for their
labor.
16.1
Leases for usufruct
This category includes traditional leasing of homes, stores, riding animals, clothes
and jewelry, etc. It is permissible for permissible usufruct, to the exclusion of
impermissible usufruct. Thus, there is a consensus among jurists that it is
impermissible to collect rent for leasing objects for impermissible usufruct, in
analogy to the impermissibility of collecting a price for dead animals and other
non-goods.
The H
. anafs and Maliks deem that the legal status of the lease contract
evolves gradually over time as the object of the contract - the usufruct - is
derived.1 In contrast, the Shafics and H
. anbals deem the legal status of the lease
contract to be established immediately, with the period of the lease considered

the lifetime of a specified non-fungible object.2
This difference in juristic opinion leads to a number of different juristic
details:
16.1.1
Establishment of ownership of the rent
The Shafics and H

. anbals render the lease a financial commutative contract.
Thus, the lessors ownership of the rent is established immediately at the conclusion of the contract, in analogy to a sellers ownership of the price in a sale
contract.
1 Al-K
as
an ((H
d Al-H
alik), vol.2, p.226), Al-Dardr
. afd ((M
((M
alik), p.275).
2 Ibn Qud
u-Ish.
aq
Al-Shr
az ((Sh
an ((Sh
usuf (1st
printing (H
. anbal), vol.2, p.116).
413
414
CHAPTER 16. TWO TYPES OF LEASING
In contrast, the H
. anafs and Maliks ruled that the rent is not owned by
virtue of the lease contract itself. Instead, they argue that ownership of the rent
is established gradually in relation to the derived usufruct. Hence, the lessor
does not have the right to demand the rent except day-to-day. Their logic is
that in this unconditional financial commutative contract, equity dictates that
ownership of one of the compensation (the rent) cannot be established except as
ownership of the other compensation (the usufruct) is established to the other
party.
However, the H
. anafs and Maliks allow the rent to become the property of
the lessor in one of three cases:
1. That prepayment of the rent is stipulated in the lease contract.
2. If the lessee prepays unconditionally. In this regard, paying the rent later
is a right for the lessee, but he can prepay it in the same sense he can
prepay a deferred liability.
3. As the lessee derives usufruct gradually, the rent gradually becomes the
property of the lessor. Alternatively, if the lessor gives complete access
to the leased object, the lessee may be viewed to be in possession of his
compensation, and the rent becomes property of the lessor.
The two parties may agree to defer the rental payments, in analogy to deferment of price payment in a sale. However if the parties to the lease contract
do not explicitly state when the rent is due, Ab
uH
. anfa was reported to have
ruled in two different manners. His earlier ruling, which was upheld by Zufar, is
that the rent becomes due at the end of the rental period. This opinion is based
on the idea that until all of the usufruct is extracted, none of its compensation is
due. The later and better supported opinion of Ab
uH
. anfa, which was upheld
by Ab
u Y
usuf and Muh.ammad, is that the rent is due sequentially. Thus, the
lessee should pay the lessor day-to-day as he collects the usufruct. Under this
ruling, the gradual extraction of the usufruct matches the gradual accrual of
the rent.3 Taken literally, this rule would require continuous payment of rent,
thus requiring the specification of a reasonable unit of time for rent collection
(e.g. day, week, month, etc.) was required by juristic approbation.
The Shafics and H
. anbals ruled differently regarding the time of accrual
of rent depending on whether the leased object is fungible or non-fungible. If

it is fungible (e.g. you lease me a camel with certain characteristics to carry
my luggage), they ruled that the rent (if itself fungible, e.g. money) should be
delivered during the contract session, since it is thus equivalent to the price in a
salam contract. Since the rented object is fungible and collected with deferment,
and since the rent is fungible, deferment of the rent would effect trading debts
for debts, which is forbidden rib
a.
If the leased object is non-fungible, then if the rent is also non-fungible, it
cannot be deferred. However, if the leased object is non-fungible, and the rent
3 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.152 onwards), Al-Sarakhs (1st edition (H
.
. anaf Jurisprudence),

alik), p.275), Ibn Rushd Al-H
afd ((M
alik), vol.2, p.226).
.
16.1. LEASES FOR USUFRUCT
415
is fungible (e.g. money), then both deferment and immediate payment of the
rent are permitted. This follows in analogy to the sale contract, where the price
may be paid immediately or deferred.4
16.1.2
Delivery of the leased object
The H
. anafs and Maliks ruled that the leased object must be delivered immediately following the conclusion of the contract. This follows from the lessees
established ownership of the usufruct, while the rent is not yet the property of
the lessor. Thus, the lessor may not withhold the leased object until he collects
the rent. Instead, the lessor must deliver the leased object immediately to the
lessee, and then demand the rent periodically as the lessee extracts usufruct from
the object. The difference between this case and the case of the sale contract,
where they would rule that the price should be delivered, is that the object of
this contract (the usufruct) is non-existent at the time of the contract, and thus
the rent does not accrue to the lessor until later.
16.1.3
Deferred leasing
Another interesting implication of the above mentioned juristic differences is

that the H
. anbals permit deferred leasing (where the contracts states the future date at which the lease will commence). This follows
from their consideration that the lease contract is concluded gradually as the
object of the contract comes into existence. Thus, deferment is implicit in the
contract in any case, out of necessity.5
The H
. anafs concluded from this ruling that if the lessor were to sell a
leased house, the right of the lessee remains intact, even if the sale were
to occur prior to the commencement of the deferred lease.
The H
. anbals agreed with the H
. anafs and Maliks on the permissibility of
deferred leasing based on the view that the future lease could be contracted
upon in conjunction with other things (e.g. a one-month lease starting
next month can be conjoined into a two month lease starting today).
Thus, they argued, it can be contracted upon by itself. The deliverability
condition in this case is relevant only for the time at which delivery needs
to be made, in analogy to the object of salam.
The Shafics, on the other hand, ruled that it is not permissible to sell the
future usufruct of a non-fungible in a lease contract except as part of a

lease that begins at the contract time. They argued that the contract, as a
sale of non-fungible usufruct, may not be deferred to avoid selling an item
4 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.399), Ibn Qud

amah (, vol.5, p.408).
5 Al-K
c
as
an ((H
. anaf Jurisprudence), vol.5, p.148), Ibn
c Abid
n ((H
anaf
),
vol.5,
p.4),
Ibn
Rush
d
Al-H
af
d ((M
alik), vol2., p.224), Ibn Qud
amah (,
.
.

alik), p.276).
416

that is yet to exist. This is in contrast to the case of leasing fungibles,
where the fungible usufruct may be sold with deferment through a deferred
lease.6
16.1.4
Miscellaneous other issues
There are a number of other issues related to the legal status of usufruct leasing:
Means of extracting usufruct
An individual who leases a house or store may use it as he wishes in the normal
manner of usage, use it to house others through sub-leasing or lending, or use it
to store furniture. On the other hand, any use that may harm the property in
the short or long run (e.g. through the use of heavy machinery or fire), would not
be permitted. This follows from the notion that the lease contract is primarily a
sale of the usufruct, which does not allow the buyer of the usufruct to consume
the actual leased asset by causing unusual depreciation through unconventional
usage (e.g. as a factory rather than a house). As for subleasing or lending the
usufruct, that becomes the right of the lessee based on his ownership of that
usufruct.
Leasing of land
When land is leased, the allowable uses of the land under the contract must
be specified (e.g. for agricultural use, for building, etc.). Without specification
of the uses for which the land is leased, the contract is rendered defective.
Moreover, the specification must be detailed, e.g. stating precisely what will be
planted in land leased for agricultural use, etc. This follows, since the different
uses of land (including the crop grown on it, or the type of building erected
there) affect it differently.
Leasing of riding animals
When leasing a riding animal, either the time of the lease or the distance to
be traveled must be specified, otherwise the lease is defective. Moreover, the
precise usage of the animal (transporting people vs. transporting luggage, and
characteristics of the passengers or cargo) must be specified. In this regard, the
different uses of the animal clearly affect it differently, thus requiring statement
of the use in detail to avoid later disputation.
As we have seen previously, if the lessee extracts usufruct from the object
of a defective lease, he is responsible to pay the going market rental rate for
similar leased objects. This is the ruling based on reasoning by analogy. On
the other hand, we have seen that juritic approbation would require paying the
6 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.396).
16.1. LEASES FOR USUFRUCT
417
named rent, since the potential cause for disputation is ignorance, which would
have been removed by the conclusion and execution of the contract.7
Repairs of the leased item
An important issue for leases is responsibility for regular maintenance and repairs. For instance, who would be responsible for clearing plugged drainage, or
repainting walls, etc.?
The H
. anafs ruled in general that the lessor-owner of a leased house has
the sole responsibility to make all necessary repairs to ensure that the house
is in good living condition, even if the problem (e.g. a plugged drainage) was
caused by the lessee. This ruling is based on the view that all repairs are the
responsibility of the owner of the item. However, they ruled, the owner cannot
be forced to make the necessary repairs in his own property. Thus, if there are
problems that require repair to restore the house to livable condition, the lessee
is given an option to void the contract.
On the other hand, they ruled that the lessee is responsible to clean the
house he leased before delivering it to the lessor. Also, they ruled that if the
lessor clears a blocked drainage, the lessee would be held responsible to transport
whatever blocked it, in analogy to his responsibility to cleaning the house after
himself. However, since it is customary for the one who does the clearing of
drainage to do the transportation of the blocking material, they ruled by juristic
approbation that it was reasonable to let the lessor-owner do the transportation
as well as the clearing.
If the lessee in fact performs one of those acts of maintenance and repair for
which the lessor is responsible, then we consider two cases. If he volunteers to
perform the repairs, then he would not be compensated for it. However, if the
owner or his agent were to ask him to perform the repairs, then he should be
compensated accordingly.8
Lessee responsibilities at the conclusion of a lease
There are a number of responsibilities for the lessee at the conclusion of the
lease, of which we mention the two most important:9
1. The lessee is responsible for the delivery of the keys to the leased house
or store to the lessor after the conclusion of the lease.
2. If a person leases a riding animal for transportation from a designated
place to another, he is responsible to deliver the animal back to where he
received it. This requirement is not related to providing the sustenance of
the animal through its return journey. Rather, the requirement is made
7 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol.4, pp.183,207),
c
n ((H
Al-Zaylac ((H
. anaf), vol.5,
. anaf Jurisprudence), vol.5, p.,113 onwards), Ibn Abid
pp.19,55).
8 Al-K
as
an ((H
9 Al-K
as
an ((H
. anaf), vol.4, p.209).
418

necessary by the fact that the lease contract does not end until the animal
is returned to its original location. Thus, if the lessee leaves the animal
at a different location (e.g. his house), he is responsible for it. Thus,
if the animal later becomes incapacitated, he would be required to pay
its value to the lessor, since he was required to return it to the contract
location earlier. On the other hand, if the lessor were to ask the lessee
to ride the animal from one point to another, and then to deliver it to
his (the lessors) house, the lessee is not bound to do so. In this regard,
by returning the animal to the contract location, the lessee would have
satisfied his responsibility, and the animal remains with him as a trust,
which he is not obliged to deliver to depositor.
Similarly, if the lease was constructed on the basis of time rather than
distance, the lessee is not responsible for delivering the animal to the
lessor. In this case, the usufruct defined as the time of usage was paid
for, and if the lessee keeps the animal any longer than the lease time, it is
considered a trust with him. In this case, even if the animal were to perish
prior to the lessors collection, the lessee is not required to compensate the
lessor for it. This is contrasted with the cases of a borrower (who continues
to use the animal) or a usurper (who has no right to possess the animal),
who would be responsible for compensation.
16.2
Legal status of hiring workers
A hired worker is one who is paid a known wage for a known job (e.g. building a
house, sewing a shirt, etc.). In this regard, there are two types of hired workers:
1. Exclusively hired workers work for a single individual for a known time
period. Such workers may not work at the same time for any party other
than his employer.
2. Non-exclusively hired Workers simultaneously work for multiple individuals on a per-task basis (e.g. professional cleaners, shoe repair shopkeepers,
etc.). When such an individual is hired for a task, the customer does not
have the right to forbid him from working for others at any given time.10
In this classification, a wet-nurse is considered an exclusively hired worker,
who is not allowed to nurse another infant while employed to hire the first. If
she does indeed nurse another at the same time, there are a variety of opinions.
Thus, if by doing so, she harms the infant whom she was hired to nurse, then
she is considered a sinner. However, since she would have fulfilled the general
requirement of nursing the first infant, a ruling by juristic approbation suggests
that she would deserve compensation for nursing both children [provided that
the first one is not harmed by this action?]. The ruling by analogy suggests that
even if she nurses two infants when hired to nurse only one, she only deserves
10 Al-K
c
as
an ((H
am ((H
((H
alik), p.336).
. anaf Jurisprudence), vol.5, p.133 onwards), Ibn Juzayy ((M
C I CLASSIFICATION OF LEASES
16.3. THE SHAFI
419
wages for nursing the one whom she was hired to nurse. Also, jurists ruled that
the wet-nurses duties may include taking care of the infant (e.g. changing and
cleaning it, etc.) in manners that are customary in her society.11
16.3
The Sh
afic classification of leases
The Shafics classify leases into two categories:
Lease of a non-fungible would entail derivation of usufruct from that

specific item (e.g. a particular house or car). The Shafics postulate three
conditions for his type of lease:

1. The leased object must be known and clearly specified (thus, it is not
permissible to lease one of those two houses),
2. The leased object must be observable to both the lessor and the lessee,
unless the object had been inspected shortly prior to the contract,
and
3. Such leases cannot commence at a future date (thus, it is not permissible for them to lease a specific house starting next year).
Lease of a fungible would entail the derivation of usufruct that is considered a liability on the lessor. This applies to cases such as leasing a
riding animal or car with stated characteristics (e.g. model and year) for
a specific trip or time period. It also applies to hiring an individual for
performing a specific job (e.g. sew a dress). There are two conditions
associated with this type of lease:
1. The rent or wages must be paid in full during the contract session.
This follows since the Shafics consider this contract a salam sale of
the usufruct, which requires full prepayment of the price.

2. The stated characteristics of the leased item must specify its genus,
type, and characteristics (e.g. a car of specific make, model, and
year).
11 Al-K
as
an
c
((H
Chapter 17
Guarantees In Leasing
In what follows, we discuss both the hired workers guarantee of the material
on which he works, and the guarantee of a lessee of the object he leased.
17.1
Guarantee of leased items
The lessee is legally entrusted with the leased item from which he derives
usufruct. Hence, he is only responsible for defects in the leased object that
are caused by negligence or transgression. On the other hand, his only rights
to the leased objects are tied to the usufruct mentioned in the contract or conventionally considered to be part of the lease.
17.2
Hired worker s guarantee of work materials
As we have seen in the previous chapter, we need to consider two types of hired
workers: those who are hired to work exclusively for a particular individual, and
those who can work simultaneously and non-exclusively for multiple individuals.
17.2.1
Exclusively hired worker
The four leaders of the Sunni schools of jurisprudence agreed that this type
of worker is not responsible for the object used in his work (e.g. house, shop,
or work material) unless a defect is caused by his negligence or abuse. This
ruling applies universally whether the defect were to occur while he is working
or simply while holding the assets as a trust.
17.2.2
Non-exclusively hired workers
Jurists differed over the responsibility of this type of worker for materials entrusted to him to perform a certain job. Ab
u H
. anfa, Zufar, Al-H
. asan ibn
Ziyad, Al-Shafic (in the better of his two reported opinions), and most of the
421
422
CHAPTER 17. GUARANTEES IN LEASING
H
. anbals ruled that this workers possession of the materials are possessions of
trust. Thus, the rule pertaining to his responsibility for those materials is identical to that for the exclusively hired worker, whereby he is only responsible
for what becomes defective due to his negligence or abuse. In this regard, they
ruled that this is the default ruling, whereby responsibility for compensation is
only effected through transgression: Let there be no hostility except to those
who transgress [2:193].1
u Y
usuf, Muh.ammad, and Ah.mad in another reported opinion, ruled that the possession of a non-exclusively hired worker implies guarantee of what is in his possession. Thus, even if the materials were to
perish without any transgression or negligence, he would be responsible for it.
The only exception to this rule in their opinion is if the destruction is caused
by a general disaster such as a major fire or flooding. Their proof for this opinion relied on the actions of c Umar and c Al (mAbpwt) that we shall discuss
shortly.2 Al-Baghdad said that Ab
u Y
usuf and Muh.ammad ruled thus (in
opinion of Ab
contradiction to the
uH
. anfa) due to the change of times, and to
protect peoples properties.3
The Maliks ruled that the non-exclusively hired worker guarantees the assets
that they affect through their labor. This applies to assets that are not under
the supervision or observation of their owners, regardless of whether or not the
defect was caused by negligence or transgression. Thus, the cook guarantees
any foods he spoils, the dressmaker guarantees any ruined cloth, etc.4
The Malik proof for this opinion is the H
: Every person is responsible
. adth
for what he took until he delivers it back to its owner.5 They also relied on the
narration that c Al (mAbpwh) held the one who dies clothes and leather, and
the jewelers, responsible for the properties of their customers saying: Only this
approach will keep people honest. It was also narrated that c Umar (mAbpwh)
1 Al-Tah
c
. . aw ((H
. anaf), p.129), Indian Authors ((H
. anaf
Jurisprudence), vol.5, pp.110,134), Al-K
as
an ((H
am
c
((H
s (1st edition (H
an
at
. am
(p.27), Al-Dardr ((M

afd ((M
alik), vol.4, p.28), Al.

u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.408),
n
Ibn Qud
amah (, vol.5, pp.479,487), Ibn Juzayy ((M
alik), pp.276,336), Ras
ail Ibn c Abid
9vol.2, p.178).
2 Al-K
as
an ((H
am ((H
aw
. anaf), vol.7, p.201), Al-T
. ah.
((H
s (1st edition (H
anaf), ibid.), Al-Khat.b Al-Shirbn ((Sh
afic),
. anaf), ibid.), Al-Sarakh
.
vol.2, p.351), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), ibid.), Ibn Qud
amah (, vol.5, p.487), Ibn
Juzayy ((M
alik), ibid.), Marc ibn Y
. anbal), vol.2, p.213 onwards).
3 Majmac Al-Dam
an
at (p.27).
.
4 Ibn Juzayy explained that the workers are responsible for items left with them (without
supervision or observation by the owners), regardless whether or not they collect wages for
their labor. On the other hand, if the item is under the constant observation of the owner,
then the hired worker is not responsible for it. This, he argued, was the most widely accepted
M
alik view, c.f. Al-Dardr ((M
5 Narrated by Ahmad and the authors of the four Sunan, and rendered valid by Al-H
.
. akim,
on the authority of Samurah ibn Jundub. It was also narrated by Al-T
an, Al-H
akim,
. abar
.
and Ibn Ab Shaybah, c.f. Ibn Al-Athr Al-Jazar (, vol.9, p.110), Al-H
.
edition, (H
), vol.4, p.167), Ibn H
aw (, p.290), Al-Shawk
an (,
. adth
. ajar (, p.253), Al-Sakh
vol.5, p.298), Al-S.anc

17.2. HIRED WORKER S GUARANTEE OF WORK MATERIALS
423
used to hold non-exclusively hired workers responsible for their customers properties in the interest of protecting the latter.6
The Maliks also reasoned in favor of this opinion by the fact that the joint
worker receives the customers properties to use for his benefit, thus inheriting
the legal status of the borrower of such properties.7 Similarly, Imam Malik
ruled that a hired worker who carries food that he may desire guarantees the
safety of the food, to avoid potential abuses of his access to it.
17.2.3
Converting possession from trust to guarantee
As we have seen, most jurists consider materials in the possession of a worker to

be a trust. However, we have seen that if a defect were to occur in the materials
due to the workers negligence or abuse, then he is responsible for the defect.
Different jurists treated inadvertent mistakes differently. They all agree that
exclusively hired workers are not responsible for the negative effects of inadvertent mistakes. On the other hand, Ab
uH
u Y
usuf and Muh.ammad
. anfa, Ab
ruled that the non-exclusively hired worker is responsible for inadvertent mistakes, since they are hired for constructive and not destructive effort. However,
Zufar and the Shafics ruled that the hired worker is not responsible for any
inadvertent mistakes. Their proof is that the worker was hired for his labor in
general, and inadvertent mistakes in the absence of negligence are - by definition - virtually impossible to avoid. In this regard, they argued that the worker
should not be held to very difficult and unrealistic standards.8
Apprentice mistakes
If the apprentice of a hired worker causes a mistake for which compensation
is required, then his master is considered responsible for compensation. This
applies to all out-of-the-ordinary mistakes perpetrated by the apprentice and
causing a defect. On the other hand, if the worker has a trust in his store, and
the apprentice causes a defect that is unrelated to his work and training, then
the apprentice is the one responsible for the damage.9
6 The Had
of c Umar was narrated by c Abd Al-Razz
aq with a broken chain of narration.
. th
c
The H
ad
th
of
Al
was narrated by Al-Sh
afic with a weak chain of narrations, and there were
.
other weak narrations that would not be accepted by the people of H

, c.f. Al-Bayhaqs
. adth
Sunan (vol.6, p.122), Kanz Al-c Umm

al (vol.2, p.191).
7 Ibn Rushd Al-Haf
alik), vol.2, pp.229,230), Al-Dardr ((M
. d ((M
Qud
alik), p.336), Al-Qar
af ((M
alik), vol.2, p.207;
vol.4, pp.11,27).
8 Al-K
as
an ((H
am ((H
aw
. anaf), vol.7, p.201), Al-T
. ah.
c
c
((H
n ((H
. anaf),
c
vol.5, p.46), Al-Sarakhs (1st edition (H
an
at
. anaf), vol.15, pp.104,161), Majma Al-D
. am
(pp.28 onwards, 41-49), Al-Khat.b Al-Shirbn ((Sh

afic), vol.2, p.351).
9 Majmac Al-Dam
an
at (pp.28 onwards, 41-49).
.
424
Blood-letting and circumcision

Due to the special nature of those tasks, if the person hired for those medicinal
procedures causes a loss or death, he is not considered a guarantor. This follows
from the fact that it is very difficult to guarantee complete safety in those jobs.10
17.3
Violation of lease conditions
If one or more of the explicit or implicit conventional conditions of lease or

hiring contract are violated, then the lessee guarantees the leased property.
Such violations may pertain to the genus, amount, characteristics, space, or
time of the derivation of usufruct or work of a hired person.
17.3.1
Leased riding animals
If the lessee of an animal violates the conditions of the lease by making it carry
loads different from what was stated in the contract, we consider two cases:11
1. If the animal was used to carry a load of equal or lighter weight than
what was specified, then the lessee is not responsible for the possibility
of the animals death. However, if the load was heavier than agreed, and
of different genus, then the lessee is responsible for what happens to the
animal. In this case, the lessee is responsible to compensate the lessor for
the animals value if anything were to happen to it, but does not pay the
rent. In this regard, the lessee is considered a usurper, who does not pay
rent. In general, the status of the lessee cannot be such that he guarantees
the property and pays rent at the same time.12
On the other hand, if the animal is used to carry a heavier load (for
example, and eleven pounds load instead of a ten pound load) than agreed
upon, but of the same genus, then: if the animal arrives safely, the lessee
is required to pay the rent, with no guarantee or compensation. However,
if the animal dies, then he pays the full rent plus a penalty proportional
to the increment (e.g. one-eleventh of the value of the animal in the
current example). In the latter case, the load is only partially responsible
for the animals death, and the rule is to divide the lost value into equal
parts (eleven in our example), and penalty is paid in proportion to the
unauthorized part.
2. Alternatively, if the animal is used to carry a load of the same weight,
but of different genus (e.g. a ton of iron instead of a ton of cotton), then
10 Ibn Al-Hum
am ((H
s (1st edition (H
. anaf), vol.15, p.104),
c
c
n ((H
Al-Zaylac ((H
Al-D
an
at (p.47).
. am
11 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.15,
p.170 onwards), Al-Zaylac ((H

am
. anaf Jurisprudence), vol.5, p.118 onwards), Ibn Al-Hum
c
n ((H
((H
. anaf), vol.5, p.25).
. anaf), vol.7, p.170 onwrads), Ibn Abid
12 Al-Sarakhs
(1st edition (H
. anaf), vol.15,p.147).
17.3. VIOLATION OF LEASE CONDITIONS
425
if the animal dies, the lessee must pay compensation for its value and
pays no rent. In this case, the densities of different materials may differ,
and therefore the strain on the animal may still be substantially different
for loads of equal weight. Thus, the lessee is considered a usurper, who
guarantees the animal but pays no rent. In this regard, if the animal was
leased for riding, different riders of the same weight would be considered
equivalent to loads of different genera since their riding styles may differ
substantially.13
3. If the violation of the lease pertains to location (e.g. the animal was taken
further than the agreed distance), then the lessee guarantees the full value
of the animal.14
4. If the violation is temporal (e.g. the animal was used beyond the agreedupon lease period), then the lessee is considered a usurper, and he guarantees the full value of the animal.
17.3.2
Non-exclusively hired workers
In this case, we consider violations of the lease conditions as they pertain to the
genus and characteristics of the job, or to quantity:15
If the hired worker delivers a product of different genus (e.g. a red dress
instead of a green one, or producing a dress with a different shade of green),
then the employer has the option either: (i) to demand compensation for
the value of the raw material, or (ii) to accept the delivered product and
pay the wages for producing a similar one.
The difference between the delivered product and the one on which the
contract was drawn could be more quantitative. For instance, a tailor may
produce a dress of different thickness from the one upon which the contract
was written. If the delivered product is superior to the one described in the
contract, the customer has the option of demanding compensation for the
value of the raw material, or accept the product and pays the agreed-upon
wages. On the other hand, if the product is of lower quality, there are two
reported opinions. One reported in Al-As.l suggests that the customer
should accept the product and pay properly discounted wages, while the
other opinion suggests that the customer should receive compensation for
the value of the raw material.
17.3.3
If the product perishes
As we have seen previously, the majority of jurists agree that the Non-exclusively
hired worker does not guarantee the goods left with him except against his own
13 Tr: Many details are given here by the author regarding different treatments of the animal
and different types of saddles.
14 Al-Tah
. . aw ((H
. anaf), p.128).
15 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.15,
c
p.106), Ibn Al-Hum
am ((H
an
at (p.45 onwards).
. am
426
negligence or abuse. Their argument was based on the view that the goods were
left as a trust with the worker. We have also seen that the Maliks, Ab
u Y
usuf,
and Muh.ammad ruled that the non-exclusively hired worker thus guarantees
the goods against all defects and destruction.16 Finally, we have shown that
jurists were in agreement that the lessee is considered a trustee for the leased
object, and therefore is only responsible for defects or destruction caused by his
own abuse. Their logic relies on the view that the lessee is in possession of the
leased item to derive usufruct, and the object itself is viewed as a trust.17
Given the difference in opinion in the case of the non-exclusively hired
worker, it may be asked whether the hired worker in this case would still deserve
his wages if the object of his work were to perish. The schools have differed in
this regard:
The Shafics ruled that if the hired worker works inside the property of
the customer or in his presence, then he deserves the wages, since he was
supervised by the one who hired him. In this regard, they ruled that as he
finished parts of the work, he was considered to have implicitly delivered
part of the work, for which he deserves the wages. On the other hand,
if he worked away from the customer, then he would not have delivered
the work, and he would deserve no wages.18 The H
. anbal ruled the same
way.19
The H
afics and H
. anaf ruling was similar to the Sh
. anbals, with a more
detailed distinctions within the cases of working under the supervision of

the customer or away from him:20
If the worker works away from the customer:
If the work affects the goods in an observable manner (e.g. sewing
a dress), then the wages accrue as the desired change in the goods
is delivered. However, if the object were to perish prior to delivery,
then the worker does not deserve any wages, since the compensation
for that wage (as in a sale contract) would cease to exist.
If the work does not affect the goods themselves in any observable
manner (e.g. carrying objects), then the wages accrue immediately
following the conclusion of the work, even if the goods were not yet
delivered to the owner. In this case, the wages are considered a
compensation for the work. Since the work would have been done in
this case, the wages are due to the worker whether or not the objects
perish.
16 Al-Shac ar
an
((Sh
amah (, vol.5, p.487).
(, vol.5, p.488), Al-K

as
an ((H
amic Al-Fus.u
layn
. anaf), vol.4, p.210), J
(vol.2, p.163), Ibn Juzayy ((M
alik), p.287), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.408).
18 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.409).
19 Ibn Qud
amah (, vol.5, p.487).
20 Al-K
c
as
an ((H
n ((H
p.109), Ibn c Abid
. anaf), vol.5, p.12).
17 Ibn Qud
amah
17.3. VIOLATION OF LEASE CONDITIONS
427
In the former case, the hired worker has the right to withhold the
product until he collects his wages, since the two compensations
should be exchanged simultaneously. On the other hand, the worker
does not have the right to withhold the goods in the latter case, and
if the object were to perish, he would be responsible to compensate
the owner for it.
On the other hand, if the worker works under the supervision of the owner:
The worker deserves his wages for the job or any part thereof as it is
finished. The finished part of the job in this case would be considered
already delivered to its owner, and the appropriate portion of the
wages would be the right of the worker.
On the other hand, the worker is obliged to finish the entire job.
Then, if the object (e.g. a building) were to fall , the worker would
be paid for the appropriate part of the job done that far, or the full
wage if the work was finished prior to its destruction.
As we have seen, this is in contrast to the case where the work is done
away from the owner, in which case the wages are only due after the job
is finished and delivered to the owner.
Chapter 18
Resolving Disagreements
If the lessor and lessee in a valid lease contract were to disagree over the agreedupon compensations, we have to consider the two cases where the disagreement
occurs before or after consumption of the usufruct:1
If they disagree prior to any consumption of the usufruct, then each of
them demands an oath from the other to back his claim. This ruling
is based on the H
: If a buyer and seller disagree over what they
. adth
had contracted upon, they should exchange oaths, and [then, if necessary]
clearly applies to leases, since
return each others property.2 This H
. adth
a lease is simply a sale of usufruct. In this case, if they both take oaths to
back their claims, the lease is voided, and if one of them refuses to take
an oath, then he has to accept the others claim.
If both parties can provide proof to backup their claims, then:
If the disagreement pertains to the wages or rent, then the lessors
claim is given priority, since he would normally demand a higher wage
or rent.
If the disagreement pertains to the leased object, then the lessees
claim is given priority, since he would normally demand more usufruct
and benefit.
If the lessee had already derived some usufruct (e.g. lived in the house
part of the lease period), then the lessees claim is given priority for the
1 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.218), Al
n ((H
anaf), vol.5, p.51).
Sarakhs (1st edition (H
anaf), vol.16, p.10), Ibn c Abid
.
.
2 Narrated
by the authors of the four Sunan and Al-Sh
afic in a variety of ways. One
narration states: If the buyer and seller disagree without proof, then the sellers claim is
honored, otherwise, they return each others properties. Ibn M
ajah and Ah.mad added to the
H
a clause that the object of sale were still intact. This H
adth was deemed h.asan by Al. adth
.
H
akim and Ibn Al-Sakan, c.f. Al-H
), vol.4, p.5 onwards),
.
.
. adth
Al-Shawk
an (, vol.5, p.223). Al-Shawk
an said: Since the most common narration does not
add the clause that the merchandise remain intact, this clause is not necessary. In this case,
returning each others property without the clause of remaining intact would be satisfied by
returning an equivalent good for fungibles and the appropriate value for non-fungibles.
429
430
CHAPTER 18. RESOLVING DISAGREEMENTS

used part, and the remainder is voided by mutual oath taking. This ruling
is based on the view that the sale of usufruct occurs gradually over time.
Thus, the remaining portion of a lease can be viewed as a separate lease,
and the rule of mutual oath taking applies.
On the other hand, if the entire lease period or task is finished prior to the
disagreement, then the lessees claim is accepted if he takes a supporting
oath. In this case, the lessor does not take an oath, since mutual oath
taking would result in voiding the contract. After the lease contracts
conclusion, there is no remaining object for the contract, and hence it
cannot be voided ex post.
18.1
Disagreements over the product
If the customer claims that the hired worker produced a product that is different from what they had agreed upon, then the customers claim is accepted
if he supports it with an oath. This is the accepted Shafic opinion3 based on
the argument that the commission to perform the work originated with the customer, whose claims regarding the commission and its nature are accepted. In
this case, if the customer does take the supporting oath, the hired worker guarantees compensation. In other words, the customer has the option of taking the
product and paying the wages for producing a similar one, or demand that the
hired worker produces the agreed-upon good.
The Shafics ruled that if the lessor and lessee disagree over a defect in the
product, the lessees claim is given priority if he supports it with an oath. This
follows since the lessee is entrusted with the leased item, and thus his claim is
accepted.
On the other hand, they ruled that if the lessee claims to have returned
the item to the lessor, and the lessor denies it, then the lessors claim is given
priority if he supports it with an oath. In this case, since the normal procedure
is for the lessee to keep the leased item for the duration of the lease, the claim of
the one who denies an unconventional return of the item is accepted if supported
by his oath.
18.2
Disagreement over wage entitlement
If the customer and hired worker disagree over whether or not the worker deserved wages, the H
. anafs differed in opinion:
Ab
u H
. anfa ruled that the customers claim is given priority, since he
is denying the claim that the contract required wage payment, while the
worker affirms it. He thus gave priority to the denier.4
3 Al-Khat
b
4 [tr.
Al-Shirbn ((Sh
afic), vol.2, p.354).
.
The H
upon which this general is based will be studied in later chapters.]
. adth
18.2. DISAGREEMENT OVER WAGE ENTITLEMENT
431
Ab
u Y
usuf ruled that the worker in this case is entitled to wages if there
is a repeated relation between him and the customer, and if he usually
collected wages for that task. Otherwise, the customers claim would gain
priority and wages do not accrue to the worker.
Muh.ammad ruled that if the worker usually collects wages for the given
task, then his claim is accepted and he deserves the wages. Thus, he ruled
that opening a shop to collect wages for various tasks is apparently equivalent to having an explicit statement of his wages in the lease contract.
Al-Mirghinan argued in Al-Hid
ayah (vol.3, p.201) that the ruling by
analogy would be that of Ab
u H
u Y
usuf and
. anfa. The ruling of Ab
Muh.ammad, based on juristic approbation, is thus rebuffed with the view
that the worker needs to establish that he deserves the wages, which cannot be established through apparent conventions. The establishment of
such a right to collecting wages requires a strong proof or oath.
Chapter 19
Lease Termination
In what follows, we list four courses of events that may result in terminating a
lease:
19.1
Death of one party
As we have seen, the H

. anafs ruled that if either the lessor or the lessee were
to die during the lease period, the contract is terminated. Their ruling was
based on the view that the future usufruct is non-existent at the time of death,
and hence cannot be bequeathed. Therefore, they ruled that the lease contract
needs to be renewed with the heirs in order to continue. However, they ruled
that if the lessors legal agent were to die, the lease would still continue since
the contract does not relate to his property. In the case of hiring a wet-nurse
the death of the infant or the wet-nurse would result in automatic termination
of the contract.
On the other hand, the majority of jurists ruled that a lease contract is not
terminated based on the death of one of the parties. They based this ruling on
the view that the lease contract is as binding as a sale. In other words, the lessee
is deemed to own the full usufruct specified in the contract at the inception of
the contract, and the contract is binding. Thus, the ownership of the remaining
usufruct is - in their opinion - bequeathed to the lessees heirs. However, they
do agree with the H
. anafs in the case of death of the infant or the wet-nurse,
since derivation of usufruct becomes impossible in this special case.1
19.2
Revocation
A lease contract may be terminated through revocation (iq

alah). This follows
since it is a commutative financial contract in which one partys property is
1 Ibn Rushd Al-Haf
alik)B, vol.4, p.30), Ab
u. d ((M
Ish.
aq Al-Shr
az ((Sh
alik),
p.278).
433
434
CHAPTER 19. LEASE TERMINATION
exchanged for anothers. Thus, all the conditions that make revocation possible
for sales contracts also apply for leases.
19.3
Perishing of the leased object
If the leased object (e.g. a house or riding animal) were to perish, or if the
materials used by a hired worker (e.g. cloth for making a dress) were to perish,
the lease is terminated. In all such cases, it is impossible for the contract to be
executed, and hence becomes nugatory.
However, if a contract involved leasing generally defined means of transportation, and the delivered means of transportation were to perish, the contract remains intact. In this case, the object of the lease was usufruct that is
established as a liability on the lessor, who remains obligated to provide alternative similar means of transportation. All four Sunni schools of jurisprudence
agree on this decision.2
Al-Zaylac ruled based on the opinion of Im
am Muh.ammad ibn Al-H
. asan
that the lease is never terminated based on destruction or perishing of the
leased object. Even if a leased house suffers significant damages, they argue,
the land may be used for pitching a tent. More generally, they ruled that the
usufruct may return to existence (e.g. by rebuilding the fallen part of the house),
and thus only an insurmountable obstacle to returning the usufruct (e.g. total
destruction of the house) would terminate the lease. Consent of the lessor is
not a requirement in the latter case. This seems to be the most widely accepted
c
n ((H
opinion in the H
. anaf)).
. anaf school, as supported in Ibn Abid
19.4
Expiration of the lease period
A lease is normally terminated at the end of the specified lease period, unless
there is an excuse to prevent its termination. Jurists agree on the general rule
that the lease automatically expires at the end of its period, but give examples
of extraordinary circumstances whereby the lease would have to be extended.
One such example is the case where a lease of land expires with crops still unharvested. In this case, the lease would be extended until the lessee harvests all
of his crop, and he is responsible to continue to pay rent at the going market
rate for the duration of that lease extension.3
2 Al-K
c
as
an ((H
. anaf), vol.4, pp.196,223), Al-Zayla ((H
. anaf Jurisprudence), vol.5, p.144),
c Abid
n
((H
aid
Ibn Al-Hum
am ((H
anaf
),
vol.7,p.220),
Ibn
.
. anaf), vol.5, pp.30,53), Al-Far
Al-Bahiyya f Al-Qaw
ud H
amza (p.84), Ibn Rushd Al.
H
alik)B, vol.4, p.29), Ibn Juzayy ((M
alik), p.277),
. afd ((M
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.405),
Ibn Qud
amah (, vol.5, pp.415,421,434), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.210).
3 Al-K
c
as
an ((H
anaf
),
ibid.),
Al-Kh
at
b
Al-Sh
irb
n
((Sh
a
fi
),
vol.2,
p.218).
.
.
Part V
Promise of reward (jic

alah)
435
Chapter 20
Promise of Reward (jic

alah)
In this chapter, we shall define the contract, and discuss its legality and contract
language. Then, we discuss the difference between a general promise of reward
and the contract of hiring a specific worker for a specific task. Finally, we discuss
the legal status of the contract, increase and diminution in the paid reward,
and treatment of disagreements between the worker and the one promising the
reward.
20.1
Definition
The contract of jic a

lah, sometimes named after the paid wages as juc l, is an open
promise by one party to pay whoever performs a particular task a named reward
(the juc l). This contract is binding unilaterally on the initiator who promised
the given reward, and therefore concluded unilaterally. The legal definition
given by jurists is: jic a
lah is a binding promise to pay a named compensating
for performing a difficult known or unknown task.1 The Maliks gave another
definition linking the contract with that of hiring a worker: jic a
lah is a hiring
contract for a benefit that is possible to attain.2
Rewards for excellence in schoolwork, prizes for first place in a race, etc.
also qualify under the category of jic a
lah. The most common example given
by jurists is the one where a person announces a reward for whoever finds and
returns his lost animal. However, the contract permits a variety of applications,
including declaring a given reward for any physician who can heal a sick person,
etc.
1 Al-Khat
b Al-Shirbn ((Sh
ut (3rd printing (H
. anbal), vol.4,
.
p.225), Al-Dardr ((M

2 Ibn Juzayy ((M
. afd
((M
alik), vol.2, p.232).
437
438
20.2
CHAPTER 20. PROMISE OF REWARD (JIC ALAH)
Legality of the contract
c
The H
lah impermissible based on gharar. They argue that the
. anafs render ji a
contract does not specify a particular job or time period

for hiring the worker
who collects the reward, as would be required in an ij
arah.3 However, they
permitted it based on juristic approbation in the specific case of returning a
run-away animal, specifying a minimum traveled distance and a fixed reward to
cover travel costs.
4
On the other hand, the Maliks, Shafics, and H
. anbals permit the contract.
Their proof is the following Quranic verse in the story of Joseph (pbuh): They
said: we miss the great beaker of the king; for him who produces it is the reward
of a camel load; I will be bound by it [12:72]. They also find proof in the story
u Sacd Al-Khudriy (mAbpwh) narrated by most major
narrators with the exception of Nasa. In this story, a group of companions of

the Prophet (pbuh) were traveling through a town, and its residents were not
hospitable to them. While they were there, the leader of the town was bitten by
a snake. The town-folk asked the Prophets companions, who among you can
give healing blessing (ruqyah)? The companions said: You were inhospitable
to us, so we shall not bless him unless you give us a reward. The town people
then promised them a flock of sheep. One of the companions then blessed the
man with the F
atih.ah, and he was healed. When the towns people gave them
the sheep, the companions were hesitant to accept them without the Prophets
(pbuh) permission. When they asked the Prophet (pbuh), he laughed, and said
that it was indeed a healing blessing, and ordered them to divide the sheep
among them, and to give the Prophet (pbuh) a share.5
The latter ruling is more logical than the former, since it is often necessary
to promise a reward to whoever can perform a difficult task or service. In this
regard, ignorance of the exact work required or the time it will take to perform
the task or service does not harm the contract, in contrast to the case of ij
arah.
lah is not
The difference between the two contracts stems from the fact that jic a
binding on the worker, whereas an ij
arah is binding on both parties. Moreover,
we have seen that the jic a
lah contract was explicitly permitted by the Legislator
as a special case.
20.3
Contract language
The jic a
lah contract is initiated and concluded by one party, and its conclusion
requires acceptable contract language on the part of the one promising the
3 Ibn c Abid
n ((H
as
an ((H
. anaf), vol.3, pp.243.355-9; vol.5, pp.6,32), Al-K
. anaf), vol.6,
pp.203-5), c Abd Al-Ghan Al-Mayd
an ((H
anaf), vol.2, p.217 onwards).
.
4 Ibn Rushd Al-Haf
alik), ibid.), Al-Dardr
. d ((M
((M
alik)A, ibid.), Al-Khat.b Al-Shirbn ((Sh
amah (, vol.5,
p.656), Al-Buh
ut (3rd printing (H
u-Ish.
aq Al-Shr
az ((Sh
afic),
. anbal), vol.4, p.225), Ab
vol.1, p.411).
5 Al-Shawk
an (, vol.5, p.289).
AND IJARAH
20.4. DIFFERENCES BETWEEN JIC ALAH
439
reward.6 This language requires an explicit request to perform a task, together

with a specified and customary reward that is binding upon the one making the
offer. If someone volunteers to perform that task, he deserves no reward. Also,
if the one who promised the reward gives permission to a particular person to
perform the task, but the person performs another, then he does not deserve
the reward.
It is not necessary for the person promising the reward to be the owner of
the property positively affected by the performed task. In this case, the worker
may effect the benefit to the owner, and demand the promised reward from the
one who promised it. It is also not necessary for any given worker to accept
the offer in this contract, even if the one who offers the reward were to name a
lah is binding one party alone.
specific worker, since we have seen that jic a
On the other hand, the one promising the reward may promise it to a specific
person if he performs a task, or he can make the promise generally to anyone
who performs that task. He may even specify one reward if a specific person
performs the task, and another reward if another person were to perform it.
20.4
Differences between jic alah and ij

arah
There are four main differences between promising a reward for performing
a task or service (e.g. returning a lost animal) and hiring a worker to do a
particular job (e.g. build a house):7
1. The reward seeker in a jic a
lah may not collect his reward except at the
end of the task (e.g. returning the lost animal or healing the sick person).
On the other hand, the hired worker may collect his wages in proportion
to the finished portion of the job.
2. Gharar is tolerated in jic a
lah, allowing the specific task and time period
to be unknown. On the other hand, we have seen that hiring a worker

requires specification of either the job or the time period for which he
works.
3. A hired worker may stipulate a condition of prepayment of his wages,
lah.
while prepayment of the reward is impermissible in jic a
4. Jic a
lah is permissible but not binding on the second party, and thus may
be voided unilaterally. On the other hand, the lease and employment
contracts are binding on both parties and may not be voided without a
legal reason.
6 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic),
.

amah (, vol.5, p.658), Al-Dardr ((M
alik)B, vol.4, p.81), Al-Dardr
((M
7 Ibn Juzayy ((M
alik), vol.2, p.233), Al-Khat.b
. afd ((M
Al-Shirbn ((Sh
ut (3rd printing (H
. anbal), vol.4, p.225 onwards),
Ibn Qud

440
20.5
Conditions of jic alah
There are four conditions for the validity of a jic a

lah contract:8
c
1. The Shafics and H
lah (whether or
. anbals require the promisor in a ji a
not he owns the affected property) to be sane, of legal age, and eligible
for conducting financial transactions. They also require the worker to be
eligible for work (e.g. must be sufficiently old).
The Maliks and H

. anafs relax one condition of contract conclusion by
permitting the issuer of the promise to be a discerning child. Full eligibility
(including being of legal age) is considered a condition of bindingness in
their schools.
2. The reward or wages must be known permissible properties, otherwise the
contract is deemed defective.
3. The benefit generated by the worker must be legally permissible. The
general legal rule is this:9 whatever merits compensation in a lease or employment contract, merits a compensation in the reward promise contract,
and whatever does not merit compensation in the first does not merit it
in the second. Proof of this rule is deduced from the verse: But help not
one another in sin and rancor [5:2].
On the other hand, the Maliks ruled that any task meriting compensalah merits compensation in ij
arah. However, they argued, the
tion in jic a
opposite is not true, since hiring a person for one months in exchange for
wages is permissible as an ij
arah but not as a jic a
lah. Thus, ij
arah is the
more general contract that allows the employer to derive benefits in the
interim, prior to the contracts end.
In the sphere of religious services, we have seen that no compensation may
be paid for performing acts that only benefit the performer (e.g. prayers
and fasting). However, services that benefit others as well (e.g. calling
for prayers, teaching of Qur
an and jurisprudence, etc.) may be rewarded
of Ab
u Sacd (mAbpwh).
with a juc l based on the above referenced H
. adth
The Maliks also stipulated that the payer of a compensation must be

deriving a benefit from the task. Thus, they would not permit a person
to pay a reward to anyone who climbs a mountain. The Shafics, on the
other hand, did not stipulate that condition, but required that the task
must involve some difficulty to warrant compensation.
4. The Maliks required that the jic a
lah have no time component, while other
jurists permitted combining a task and a time period in the contract.
8 Ibn Juzayy ((M
afic), vol.1, p.430 onwards),
Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, pp.656-660), Al
Buh
ut (3rd printing (H
alik)A, vol.4, p.64), Al-Dardr
. anbal), vol.4, pp.225-8), Al-Dardr ((M
((M
9 Al-Buh
ut (3rd printing (H
alik)A, vol.4, p.63 on. anbal), vol.4, p.228), Al-Dardr ((M
wards), Al-Dardr ((M
20.6. LEGAL STATUS AND ACCRUAL OF COMPENSATION
441
Thus, the non-M

aliks permit promising a defined compensation for anyone who sews a dress in one day. This is another major distinction between
ij
arah (where combining definitions of the task and the time period is not
allowed) and jic a
lah (where it is).
Some Maliks (in particular, Justice c Abd Al-Wahh
ab, in disagreement
with Ibn Rushd) added a fifth requirement that jic a
lah may only be used
to effect the completion of simple tasks (e.g. bringing back lost animals).
Finally, we have seen that the Maliks do not permit having a condition of
prepayment in juc l, since it would be considered a loan that brings a probable benefit. However, they allowed prepayment if it was not stipulated
as a condition.
20.6
Legal status and accrual of compensation
Jurists who permitted jic a

lah agreed that it is a permitted by non-binding condition.10 This distinguishes this contract from leases, and permits either party
to void the contract. However, jurists differed over the timing of permissible
voiding:
The Maliks permitted voiding the contract prior to the workers embarking on the task. Once the work begins, the one who promised the reward
is bound by the contract, while the worker remains unbound in all cases.
The Shafics and H
. anbals also ruled that both parties have the right to
void the contract prior to embarking on the task, and that the worker has
the right to void the contract at any time.
If the worker began the work, and then the other party voided the contract,
then most of the Shafics ruled that he must pay the worker the going
market wage for the work he had done. This is in analogy to a silent
partners voiding of a contract after the worker began the work.11
The Shafics also ruled along the same lines that if a worker returns the other
partys lost property part of the way, he deserves a corresponding portion of the
promised reward.12 Also, if two workers participate in performing the task or
service, the Shafics ruled that they share the reward.13
They also ruled that the worker has no right to withhold the item until
he collects his reward. They ruled thus since withholding is only allowed if
10 Ibn Rushd Al-Haf
alik)A, vol.4, pp.60,65), Al. d ((M

u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.412),
Al-Buh
ut (3rd printing (H
afic),
. anbal), vol.4, p.228), Al-Im
vol.5, p.657).
11 Ibn Juzayy ((M
alik)A, vol.4, p.61), Al-Khat.b Al-Shirbn
((Sh
u-Ish.
aq Al-Shr
az ((Sh
ut (3rd print
ing (H
amah (, vol.5, p.658).
12 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.431).
.
13 Al-Dard
r ((M
Qud
amah (, vol.5, p.658).

442
the worker is deserving of the reward, but in a jic a

lah, he only deserves the
reward after delivering the item.14 Moreover, they ruled that two conditions
are necessary for the worker to deserve the reward: (i) he must have the prior
permission of the employer, and (ii) he must deliver it.
20.7
Increase or diminution of the reward
The Shafics and H

. anbals ruled that the party making the promise to reward
a worker may increase or reduce the reward as he sees fit.15 This ruling follows
from their view that jic a
lah is a non-binding contract, thus permitting changing
the compensation in analogy to silent partnership. The Shafics permitted mak
ing such changes in the promised reward at any time prior to the completion
of the job, even if work had already started. However, if the declared reward
changes after the work had begun, the employer must pay the worker the market value of his work to date. This follows from their view that changing the
declared reward is tantamount to voiding the first contract and initiating a new
one. We have already seen that voiding the juc l requires compensation of the
worker at the going market wage. The H
afic opinion
. anbals accepted this Sh
and endorsed it.
20.8
Disagreement between the parties
We have to consider a number of different types of disagreements individually

to determine whether the worker or the employers claim is accepted if backed
by an oath:16
If they disagree about the very existence of the juc l contract, then the
claim of whoever is denying the existence of the contract is accepted if he
backs it with an oath. This ruling follows from the fact that non-existence
of the juc l is the default.
If they disagree over the nature of the task or who performed it, then
the claim of the employer is again accepted if backed by his oath. In this
case also, the default is that the work was not performed, and thus the
denying claim gets priority. Similarly, the claim of the one who promised
the reward gets priority if he claims that the worker did not perform the
service (e.g. if he claims that the lost animal returned on its own).
If the two parties disagree over the specifics of the task or promised reward
(e.g. where the lost animal should have been delivered, or the size of the
14 Al-Khat
b
irbn ((Sh
afic), vol.2, p.434).
. Al-Sh
Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.412), Al-Buh
ut (3rd printing (H
. anbal), vol.4, p.229).
16 Al-Dard
r ((M
u
Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.660 onwards), Al-Buh
ut
(3rd printing (H
. anbal), vol.4, p.229).
15 Al-Kh
atb
20.9. PROMISE OF REWARD VS. HIRES
443
reward), then the Maliks and Shafics ruled that both parties claims gain
equal priority, and they should exchange mutual oaths supporting their
respective claims. In this case, if they both back their claims with an oath,
the contract is voided, and the employer is bound to pay the worker the
going market rate for his work, in analogy to the ij
arah contract.
The H
. anbals, on the other hand, ruled that the employers claim has
priority if he backs it with an oath. This ruling is based on the view
that the employers claim always gets priority in matters pertaining to
the amount of compensation originally promised. However, mutual oath
taking is also permitted in analogy to sales and ij
arah where the two
parties differ over the price or wages, respectively. In the latter case,
mutual oath taking would result in voiding the contract and payment of
the going market wages for the performed work.
20.9
Promise of reward vs. hires
There are five differences between issuing a promise of giving a reward for whoever performs a task (jic a
lah), and hiring an individual to perform that task:
1. The promise to reward is valid, even if the worker is unknown or unspecified, but the hiring contract requires that the worker be known.
2. The promise to reward is valid, even if the task is unknown or unspecified,
but the hiring contract requires that the task be known.
3. The promise of reward contract is concluded unilaterally without a workers
acceptance, while a hiring contract is not concluded without the acceptance of the worker.
4. The promise of reward contract is permissible but not binding, whereas
the hiring contract is binding on both parties. Thus, the hiring contract
cannot be voided unilaterally.
5. The worker is only entitled to a promised reward after the task is complete,
while advance and interim payments of wages are permitted in a hiring
contract.
Part VI
Partnerships (al-sharik
at)
445
Chapter 21
Introduction to
Partnerships
Linguistically, the term for partnership (sharikah) signifies mixing of two prop
erties in a manner that makes it impossible to define the separate parts. The
majority of jurists then generalized the term to all partnership contracts, even
if the component properties can still be individually identified. In this regard,
they implied that the physical identification of the properties is overruled by
the contract that enforces mixing them.1
Jurists differed slightly in their definitions of partnerships:
The Maliks defined it as a right for all the partners to deal with any part
of the partnerships joint property.2
The H
. anbals defined partnership as sharing the rights to collect benefits
from or deal in the properties of the partnership.3
The Shafics defined it as an establishment of collective (masha
c ) rights
4
[pertaining to some property] for two or more people.
The H
. anafs defined it as a contract between a group of individuals who
share the capital and profits.5 This is the best definition, since it explicitly states the nature of partnerships as a contract, whereas the other
definitions only mention the goals and outcomes of having a partnership.
1 Ibn
c
Al-Hum
am ((H
((M
3 Ibn Qud
amah (, vol.5, p.1).
4 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.211), Al-Qaly
ub ((Sh
afic), vol.2, p.332).
.
5 Ibn c Abid
n ((H
. anaf), vol.3, p.364).
2 Al-Dard
r
447
448
CHAPTER 21. INTRODUCTION TO PARTNERSHIPS
21.1
Legality of Partnership
The legality of partnership contracts was established in the Quran, Sunnah,

and consensus of the Muslim scholars and community:
Proofs are derived from the Quranic verses: If more than two, then they
share in a third [4:12], and truly many are the partners (in business)
who wrong each other: not so do those who believe and work deeds of
righteousness ... [38:24].
Proof of legality of partnerships is found in the H
Quds6 where Allah
. adth
(swt) says: I am the third of every two partners as long as neither one
betrays the other. However, if one betrays the other, I leave their partnership. This H
Quds was narrated on the authority of Ab
u Hurayrah
. adth
(mAbpwh) by Ab
u D
aw
ud and Al-H
. akim, who validated its chain of narration.7
The Prophet (pbuh) found the people using the partnership contract and
did not question this behavior, and there are many H
s that indicate
. adth
his approval of the contract.8 One such H

ad
th
is:
All
a
h
supports the
.
partners as long as they do not betray one another.9 In general, Muslims

have approved the legality of partnerships, with differences in opinion only
existing over specific types that we shall discuss below.10
The wisdom in permitting partnerships is clear. The contract allows individuals to combine their properties in a manner that allows them to produce
more wealth than they could each produce individually.
21.2
Types of partnerships
There are two main categories of partnerships: general partnership or as capital partnership (sharikat al-aml
ak), and contractual partnership (sharikat al
c
uq
ud). The first type of contracts gives very little flexibility to the partners than
the second category, whereas the second type permits a variety of partnership
forms, as we shall see.
6 Tr: A Had
in which the Prophet (pbuh) narrates a saying with All
ah (swt) is the
. th
speaker.
7 Ibn Al-Qatt
due to his uncertainty regarding
. . an questioned the authenticity of the H
. adth
the credibility of Sacd ibn H

an. However, Ibn H
an had in fact listed this H
as
. ibb
. ibb
. adth
one of the most reliable. On the other hand, Ab

u D
aw
ud and Al-Mundhiriy did not give
an opinion on its authenticity. Ab

u Al-Q
asim Al-As.bah
an narrated a similar H
in his
. adth
chapter on Al-Targhb wa Al-Tarhb on the authority of H

am, c.f. Ibn Al-Athr
. akm ibn H
. iz
Al-Jazar (, vol.6, p.109), Al-Shawk

an (, vol.5, p.264).
8 Al-H
c
), vol.3, p.474), Ibn Al-Athr Al-Jazar (, ibid.),
. afiz. Al-Zayla (1st edition, (H
. adth
Ibn H
. ajar (, p.251).
9 Reported in Ibn Qud
10 Ibn Qud
amah (, ibid.).
21.2. TYPES OF PARTNERSHIPS
21.2.1
449
General partnership
There are two types of general partnerships that originate without a partnership
contract:11
1. Voluntary general partnerships originate by a joint purchase or a joint
receivership of gifts or bequests that they accept.
2. Involuntary general partnerships originate without any action of approval
of the partners. For instance, heirs who inherit a property are automatically general partners in this property.
In this category of partnerships, none of the partners has a right to deal in the
others share.12
21.2.2
Contract-based partnership
There are a variety of partnerships that originate through a contract between

two or more individuals to share properties (capital) and the profits derived
thereof.13 As we have seen, this type of partnership fits automatically under
the H
. anaf definition.
The H
. anbals enumerated five types of contract-based partnerships: (i)
limited (rein) partnerships (c in
an, (ii) unlimited partnership (muf
awad.ah),
(iii) physical partnership in labor (al-abd
an), (iv) credit partnerships (alwuj
uh), and (v) silent partnerships.
The H
. anafs enumerated six types: (i) capital partnership, (ii) physical
labor partnerships, and (iii) credit partnerships; where each of those three
types may be limited or unlimited.14
The Maliks and Shafics enumerated four types: (i) limited partnership,
(ii) unlimited partnership, (iii) physical labor partnership, and (iv) credit
partnership.15
Jurists agreed that limited partnerships are permitted and valid, but they
differed over the other types:
The Shafics, Z.ahirs, and Imams allow only limited (al-c in
an) and silent
partnerships (mud.a
raba), rendering all the other types invalid.
11 Al-K
c
n
as
an ((H
am ((H
c
((H
an
at (p.284).
. am
12 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.11, p.151), Al
Zaylac ((H
13 Al-Jaz
ir (1986, vol.3, p.83). Partnerships where profits are shared without sharing the
ownership of capital are silent partnerships (mud.a
raba, which will be discussed later.
14 Al-Zaylac
((H
15 Ibn Rushd Al-Haf
afic), vol.2,
. d ((M
p.212).
450
CHAPTER 21. INTRODUCTION TO PARTNERSHIPS

The H
. anbals permitted all types with the exception of unlimited partnerships.
The Maliks permitted all types with the exception of credit partnerships
and unlimited partnerships.
The H
. anafs and Zayds permitted all partnership types listed above, as
long as certain specified conditions are met for each.
In the remainder of this part, I shall follow the H

. anaf classifications in
covering contract-based partnerships. This part will consist of six chapters:
1. Origination of contract-based partnerships.
2. Conditions of contract-based partnerships.
3. Legal status of contract-based partnerships.
4. Characterization of the partnership contract, and the partners rights.
5. What invalidates a partnership contract?
6. Defective partnerships.
I devote the entire next part to silent partnerships, which will not be covered
here.
Chapter 22
Origination of Partnerships
The H
. anafs stipulate offer and acceptance as the cornerstone of the partnership contract. They recognize three types of partnerships, which I shall define
and discuss below: (i) capital partnerships, (ii) credit partnerships, and (iii)
physical labor partnerships.1 The other schools of jurisprudence stipulate three
cornerstones for the partnership contract: parties to the contract, object of the
contract, and language of the contract.
22.1
Definition of Capital partnerships
In this form of partnership, two or more individuals share their capital, stipulating that whatever profits they earn are shared among them. The contract
may either be limited (sharikat al-c in
an) or unlimited (sharikat al-muf
awad.ah).
22.1.1
Limited partnership (sharikat al-c inan)
Ibn Al-Mundhir stated that this form of partnership, where the partners share
the capital, as well as profits and losses, is approved by consensus.2 However,

some differences existed among jurists over its conditions, as well as the etymology of the term (c in
an):
According to one story, the origin of the term (c in
an = reins of horses)
suggests the equality of partners in legal rights in dealing with the joint
capital of the partnership. The metaphorical use to which this explanation
refers is one of two horsemen riding side-by-side, with the reins of their
horses also being side-to-side (hence equal).
1 Ibn
Al-Hum
am ((H
as
an ((H
c
((H
an
at (p.297).
. am
2 The Hanaf
s, Sh
afics, Zayds, and Jac fars, Z.
ahirs, and some of the H
.
. anbals, accept this
definition, specifying that the partnership is built upon using the capital in trading. However,
the M
aliks and the majority of the H
. anbals ruled that capital partnerships originate with the
contract. The latter opinion is the one upon which legal structures were built, c.f. Al-Sharik
at
f Al-Fiqh Al-Isl
am by Dr. c Al Al-Khaff (pp.23-35,48).
c Abid
451
452
CHAPTER 22. ORIGINATION OF PARTNERSHIPS

A second story suggests that the origin of the term is the verb (c anna =
to occur to someone), since the idea of partnership would occur to the two
partners, and then they decide to share their capital.
Al-Subk suggested that the best supported origin of the term derives
from the horses reins, but signifies that each of the partners holds the
proverbial reins of his partners, thus restricting their abilities to deal in
the joint property.3
This is the most common form of partnerships.4 This partners in a sharikat
in
an need not be equal in their contributions to capital, nor equal in their
legal rights for using the property. Thus, one party may contribute more than
another to the partnership, and one of the partners may have the exclusive right
to run the affairs of the partnership.
Given this potential for great variation in legal rights of dealing in the joint
property, each party is only responsible for dealings that he himself performed.
Thus, while they share the profits according to any rule they agreed upon in
the contract, they only share losses in proportion to their contributions to the
partnerships capital. The general rule is summarized thus: Profits are shared
according to the parties conditions, but losses are shared according to their
shares in the capital.
c
22.1.2
Unlimited partnership (sharikat al-mufawad.ah)
This form of partnership is built upon the concept of muf

awad.ah, whereby each
of the partners delegates to the other (yufawwid.uhu) the right to deal in his
property. This form of partnership requires full equality of the parties in terms
of their shares in the overall capital, their legal rights of controlling the affairs
of the partnership, and they must be of the same religion.5 This equality makes
each of them responsible for all the dealings of the other, as they share all rights
and obligations equally.
The partners in this contract must include all their capital belonging to the
genus of the partnership capital in the partnership. Thus, neither of them is
3 Al-Tah
s (1st edition (H
. . aw ((H
. anaf), vol.11, p.151), Ibn Al
c
n ((H
Hum
am ((H
as
an ((H
. anaf),
vol.3, p.373), Al-Dardr ((M
amah (, vol.5, p.13), Al-Khat.b
c
Al-Shirbn ((Sh
afi ), vol.2, p.212).
4
c in
The H
anaf
s
and
M
a
lik
s
have
different
rules
for
sh
arikat
ala
n.
The
H
anaf
s
ruled
that
.
.
the contract implies that each partner is a legal agent for the other, and may therefore use
his legal rights to deal in any part of the joint property. The M
aliks, on the other hand, do
not stipulate this agency, and do not allow any of the partners to deal in the joint property
without his partners permission. The H
. anafs call this more restrictive form partnership
in property (sharikat al-aml
ak), while the M
aliks would consider the less limited form an
unlimited partnership (sharikat al-muf

awad.ah), c.f. Al-Sharik
at f Al-Fiqh Al-Isl
am by Dr.
c Al
Al-Khaff.
5 Ab
u Y
usuf permitted this form of partnership between people of different religions, but
n ((H
considered using this permission reprehensible (makr
uh), c.f. Ibn c Abid
. anaf), vol.3,
p.369).
22.1. DEFINITION OF CAPITAL PARTNERSHIPS
453
allowed to withhold capital of the same genus and keep it outside the partnership, which means that neither of them can be richer than the other in the
specific form of capital. If one of them were indeed to own more capital than
the other, then the contract would be deemed a limited one (c in
an).6 Thus, the
partners share in all fungible earnings, including inheritance of money, finding
a treasure, and receipts of legal compensations and torts. This is the opinion
7
of Ab
u H
. anfa and Muh.ammad. Thus, each of the partners put all of their
fungible financial wealth into the partnership, with all the partners being equal
in ownership, rights of unilateral dealing in the partnerships capital, and profit
shares.
The H
. anafs and Zayds permitted this type of partnership based on the
H
ad
th
:
If
you engage in a muf
awad.ah, do it in the best possible way, as
.
well as the H
: Engage in muf
awad.ah (i.e. share your capital), for that
. adth
increases the blessings of the wealth.8 This contract is also legitimized by

its conventional use in different eras. In this regard, the ignorance involved in
permitting partners to trade in unknown ways is tolerated in analogy to silent
partnerships.
The Maliks, on the other hand, permitted muf
awad.ah in a manner different
from its H
. anaf form. They stipulate that the partners have equal rights for
unilateral actions in trading and all other business decisions. However, those
rights only apply to the capital designated by each of them as part of the
partnership, and they are allowed to keep some of their fungible wealth outside
the partnership. If the legal rights of partners in the partnerships capital are
an).9
made unequal, then the Maliks call it a limited partnership (sharikat c in
It is clear that the H

arikat al-muf
awad.ah has very diffi. anaf version of sh
cult conditions,10 whereas the Malik version is acceptable to other schools of

jurisprudence. In particular, the version suggested by the H
. anafs and Zayds
is not accepted by the Shafics, H
anbal
s,
and
others,
since
they find no legal
.
foundation for its conditions. In addition, they comment that the exact equality
required by the H
. anaf version is virtually impossible to occur. Finally, they
6 Note that the partners in a muf
awad.ah does not share non-fungible gifts or inheritance
that he may receive. This is the opinion of all jurists with the exception of Ibn Ab Layl
a.
7 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.11, pp.153,177,189), Ibn Al-Hum
. anaf),
c
vol.5, p.5 onwards), Al-K
as
an ((H
n ((H
vol.3, p.313), Majmac Al-D
an
at (p.294), Ibn c Abid
. anaf), vol.3, pp.369-372), Al. am
T
aw ((H
d Al-H
alik)A,
. ah.
. anaf), p.106), Ibn Rush
. afd ((M

u-Ish.
aq Al-Shr
az ((Sh
afic),

amah (, vol.5, p.26), Al-Jazir (1986, vol.3, p.89), Al-Shac ar
an
((Sh
afic), vol.1, p.82), Al-Muntazac Al-Mukht
ar (vol.3, p.354).
8
Al-H
afiz. Al-Zaylac found both H
s strange. Then he tried to find a chain of narration
.
. adth
for the H
, and found that Ibn M
ajah reported in his Sunan a H
on the authority
. adth
. adth
of S.uhayb in which the Prophet (pbuh) said: Three actions increase the blessings of wealth:
credit sales, silent partnership (muq
arad.ah), and mixing wheat and barley for home usage,
not for trading. Then, he said that some versions of Ibn M
ajah used the term muf
awad.ah
in place of muq
arad.ah, c.f. Al-H
), vol.3, p.475).
.
. adth
9 Al-Sharik
at f Al-Fiqh Al-Isl
am by Dr. c Al Al-Khaff (p.34), Ibn Hubayrah ((H
. anbal),

alik)A, vol.3, pp.351,359), Al-Kharsh

alik), vol.6, p.43).
10 Al-Sharik
at f Al-Fiqh Al-Isl
am by Dr. c Al Al-Khaff (p.61).
454
ruled that it contained significant gharar due to ignorance of what any of the
partners may do with the property.
To explain the nature of the gharar inherent in the H
. anaf version, jurists
note that the partners would be forced

under that version to accept liabilities
based on the actions of others. Some of those liabilities may even be beyond their
ability to meet. Thus, Al-Shafic said rhetorically: If [this form of] sharikat
al-muf
awad.ah is not an invalid, then I do not know of any invalid contracts.
Moreover, the H
s used to justify the H
. adth
. anaf version is: (i) unknown to
jurists and absent from the Sunan, and (ii) even if they were authentic, they do
not necessarily mean that the H
awad.ah was the one
. anaf interpretation of muf
mentioned there.11
22.2
Credit partnerships (sharikat al-wuj

uh)
In this type of partnership, two or more creditworthy individuals join in a credit

purchase, and follow it with a cash-and-carry sale, thus sharing the profits according to the conditions stipulated in the contract.
The H
. anafs, H
. anbals, and Zayds permitted this type of partnership,
whereby each partner delegates to the other trading rights. Moreover,
they argued that this type of partnership was used in different times and
places with no legal objections, hence determining that it constitutes a
type of business for which partnerships may be established.12
On the other hand, the Maliks, Shafics, Z.ahirs, Imams, Al-Layth, Ab
u
Sulayman, and Ab
u Thawr all ruled that this type of partnership is in
valid. They based this ruling on the view that partnerships must be over
property (capital) or work, neither of which exists in this case.13
Those who permit this type of partnership permit unequal ownership of the
object bought in the initial credit sale, based on the H
: Muslims are bound
. adth
by their conditions. In this case, profits and losses must be determined according to the partners shares in ownership. This follows from the fact that profits
are justified by the degree of responsibility for the object of the original credit
11 The Hanbal
s ruled that the proper muf
awad.ah involves all normal rights and responsibil.
ities associated with the business operations of the partnership, but excluding any liabilities
that one of them incurs due to causing damage to the property of another, and excluding any
gains or inheritance that is not associated with the partnership, c.f. Al-Khat.b Al-Shirbn
((Sh
amah (, vol.5, p.26). The H
arikat
. anbals also allow a it sh
al-muf
awad.ah to include a variety of partnerships, including a limited partnership, credit partnership, and physical labor partnership, since each type is valid on its own, and thus become
valid in conjunction, c.f. Ibn Qud
amah (, vol.5, p.25).
12 Marc
ibn Y
amah (, vol.5, p.12), Al. anbal), vol.2, p.180), Ibn Qud
c
K
as
an ((H
am ((H
. anaf), vol.5, p.30 onwards), Majma AlD
an
at (p.303), Al-Sarakhs (1st edition (H
anaf), vol.11, p.145). This type of partnership
. am
.
may be rendered legally valid where the partnerships capital is the object of the credit sale.
13 Ibn Rushd Al-Haf
d ((M
alik), vol.2, p.252), Al-Kharsh (1317H, 1st and 2nd editions
.
(M
u-Ish.
aq Al-Shr
az
((Sh
an ((Sh
alik), p.284).

22.3. PHYSICAL LABOR PARTNERSHIP (SHARIKAT AL-AC MAL)
455
purchase. Since this responsibility is determined in proportion to ownership, so

also must be the profits and losses.
22.3
Physical labor partnership (sharikat al-ac m

al)
In this type of partnership, two or more individuals agree to embark on a joint

labor project (e.g. building a house), sharing the wages according to their
stipulated conditions in the contract. The partners may be of similar or different
professions (e.g. a carpenter and a blacksmith). This type of partnership has
al, al-abd
an, al-s.an
aIc , etc.
many names: sharikat al-ac m
The Maliks, H
. anafs, H
. anbals, and Zayds permitted this type of partnership based on the view that its purpose is to collect profits, which may be
effected through agency (tawkl). Second, they justified the contract by its
common historical usage. Third, they argued that a partnership must be
based on property (capital) or work (as in a silent partnership), and this
partnership falls in the second category.14 Finally, they cite the H
. adth
in which Ibn Masc u

d (mAbpwh) said: c Ammar, Sac d, and I joined on
c
the day of Badr, whereby Sa d managed to captured two prisoners of war,
while c Ammar and I did not capture any, but the Prophet (pbuh) did not
deny us our share.15
The Maliks, on the other hand, restrict this type of partnership to workers
in the same profession, or workers of whom one cannot work without the
other (e.g. one who weaves the cloth and one who sews it into a dress).
However, they do not require that the workers be in the same location.
The Maliks also require that profits be shared in proportion to the work
done, allowing either to give the other more in charity. However, they
ruled that the contract would be defective if unequal distribution of the
profits is stipulated as a conditions.
The H
. anbals allowed this type of partnership even in unconventional endeavors such as hunting in public water, or spying on enemies, etc. However, they ruled out partnerships of auctioneers.
In contrast, the Shafics, Imams, and the H
. anaf jurist Zufar ruled that
this type of partnership is invalid. This follows from their view that partnerships can only be effected by sharing capital, and cannot be effected
14 Al-K
as
an ((H
am ((H
aw
. anaf), vol.6, pp.57,76), Ibn Al-Hum
. ah.
((H
s (1st edition (H
anaf), vol.11, p.154 onwards), Majmac Al. anaf), p.107), Al-Sarakh
.
n ((H
d Al-H
alik), vol.2,
D
an
at (p.303), Ibn c Abid
. afd ((M
. am
p.252), Ibn Qud

amah (, vol.5, pp.2,11), Al-Kharsh (1317H, 1st and 2nd editions (M
alik),
vol.6, pp.38,51-53), Ibn Juzayy ((M

. anbal),
vol.2, p.180), Al-Sharik
at f Al-Fiqh Al-Isl
15 Narrated by Ab
u D
aw
ud, Al-Nas
a and Ibn M
ajah on the authority of Ab
u c Ubaydah
ibn c Abd-All
ah. Ibn Taymiya said in his book Muntaqa Al-Akhb
ar c an Sayyidi Al-Akhy
ar
that this H
is proof of the validity of work or labor partnerships, c.f. Ibn Al-Athr
. adth
Al-Jazar (, vol.6, p.108), Al-Shawk

an (, vol.5, p.265).
456

by sharing labor.16 This view is in turn based on the argument that labor
cannot be measured accurately, thus leading to gharar. In this case, it
the other earned any
is difficult for each partner to know whether or not
profits, and it is difficult for each partner to make sure that his partner
does not shirk on the job. In such cases, sharing the profits would lead to
injustice. Better, they argue, to let each worker collect the fruits of his own
labor, which will be determined by his abilities and his effort. Thus, the
H
. anafs ruled that partnership in utilizing public properties (e.g. fishing
in public water) is not permitted, since partnership is based on unlimited,
and there is no agency in ownership of public property.17
16 Some civil laws also invalidated this type of partnerships based on the view that they
have no traditional capital, and the partners labor does not qualify as a permissible form of
capital.
17 Ibn Al-Hum
am ((H
atb Al-Shirbn ((Sh
afic), vol.2, p.212).
.
Chapter 23
Partnership Conditions
The H
. anafs stipulated two sets of conditions for contract based partnerships.
The first set applies to all such contracts, and the second set stipulates special
conditions for each type of partnership. In what follows, we cover both sets of
such conditions.
23.1
General conditions
The H
. anafs stipulated the following general conditions for all types of contractbased partnerships:1
1. The actions upon which the contract is written must be permissible for
delegation.2 This condition follows from the fact that profit sharing is
predicated upon benefiting from trading. The benefit from trading cannot be shared unless each partner delegates to the other the authority of
trading in part of the partnerships capital, while himself working with another part of that capital. Thus, all the partners must be eligible to act as
a legal proxy (wakl) for the other partners, and the capital of the partnership must also be eligible for delegation of legal authority. In this regard,
we have seen that the H
. anafs differ from the other schools by making the
utilization of public properties (e.g. grazing, fishing, etc.) ineligible for
delegation.
2. The ratios of profit sharing must be known precisely, otherwise the partnership is rendered defective.
1 Ibn Al-Hum
am ((H
as
an ((H
afic), vol.2, p.213), Al-Kharsh (1317H, 1st and 2nd editions
(M
2 The Hanaf
s stipulated this set of conditions to rule-out partnerships in the utilization of
.
public properties (e.g. fishing, hunting, grazing, etc.). In such cases, they ruled that whoever
utilizes the public property gains immediate and private ownership. On the other hand, the
majority of jurists, including the majority of Sh
afics, permitted delegation and partnerships
in the utilization of public properties. [tr.: we use the terms delegation and agency
interchangeably for the Arabic term wak
alah].
457
458
CHAPTER 23. PARTNERSHIP CONDITIONS
3. The profit shares must not be specified as a particular amount (e.g. $100)
since the total amount of profits are unknown.
23.2
Conditions for capital partnerships
The following conditions for capital partnerships apply both to limited as well
as unlimited partnerships:3
23.2.1
Specification of the capital
The majority of jurists agree that partnership capital must be non-fungible, i.e.
specified, and present at the time of the contract or at the time of making a
trade. This follows from the fact that the partnership is initiated to realize
profits through dealing in the property. If the capital were a liability or a nonpresent property, then dealing in it would be impossible, and the reason for
having a partnership would be nullified.
However, it is not always necessary for the capital to be present at the time
of writing the contract, but it must be present at the time of trading. Thus,
consider the case where a person gives another $1000 and asks him to match
it with another $1000, and to trade with the total capital and share the profits
with him. If the second person later brings $1000 and trades with the $2000,
the partnership is valid. In this regard, the partnership is actually realized only
when the trading begins, and that is when the capital needs to be present.
Is it necessary to mix the properties?
The H
. anbals ruled that it is not necessary to mix the properties of the partners, since the purpose of the partnership is realized through
the contract, and not through the physical mixing of properties.4 In analogy
to silent partnership, profits from the capital are shared in accordance with the
contract with mixing properties of the partners. Moreover, a partnership is
primarily a contract of agency and delegation, which may be exercised without
mixing properties.5 Therefore, the partnership is valid if the partners explicitly
mention that one of them uses some Dollars for trading, while the other uses
certain Euros.
On the other hand, the Maliks argued that there must be some form of mixing of the capital: either physically or legally. Thus, Ibn Rushd said: Legal
3 Al-K
c
as
an ((H
. anaf), vol.6, p.59 onwards), Mar ibn Y
. anbal), vol.2,
p.166).
4 Al-Tah
am ((H
as
an ((H
. . aw ((H
. anaf), p.107), Ibn Al-Hum
. anaf), ibid, p.24), Al-K
. anaf),
d Al-H
alik),
. afd ((M

alik), p.283), Ibn Qud
amah (, vol.5, p.16), Al-Kharsh (1317H,
1st and 2nd editions (M

alik), vol.6, p.14), Marc ibn Y
. anbal), vol.2,
p.162).
5 Notice that the question of mixing properties is not raised in most civil laws. In such
laws, partnerships are established as a legal personality, to which ownership of all capital is
transferred, c.f. Al-Sharik
at f Al-Fiqh Al-Isl
23.2. CONDITIONS FOR CAPITAL PARTNERSHIPS
459
understanding would point out that partnerships are made better through mixing the capital, since partners would then have equal incentives in preserving
each others wealth that they have in preserving their own.6
At the other extreme, Zufar, the Shafics, the Z.ahirs, the Zayds, and the
Imams ruled that the two properties must be mixed in a manner that makes
them indistinguishable from one another. Moreover, they ruled that the mixing
must occur prior to the conclusion of the contract. This follows since any part
of the partnerships capital that perishes must perish in the property of all
partners, thus requiring mixture lest only one of the partners incur the entire
loss. In this regard, they ruled that partnership essentially means the mixing of
capital, without which it serves no economic purpose.7
This difference in opinion results in different rulings for partnerships with
capital of different genera (e.g. gold and silver), etc. Since the majority of
jurists do not require mixture of the capital, they permit partnerships where
the partners contribute capital of different genera. On the other hand, the
Shafics and Zufar do not allow such partnerships, since they require capital
mixture to the point where the components cannot be recognized.
23.2.2
Partnership capital must be monetary
Most jurists agree that the capital of a partnership must be made of fungible
monies (e.g. gold and silver coins, or contemporary currencies).8 Thus, nonfungibles (e.g. real estate, cars, etc.) may not be used as capital in partnerships.
This follows since such non-fungibles have varying values, thus rendering the
different partners shares in capital (and thus shares in profits) unknown, leading
to potential legal disputes. Moreover, non-fungible properties are not eligible
for agency and delegation. For instance it is not permitted for someone to
tell another sell your house, and we share the price, since the house clearly
belongs to the owner. In contrast, it is permissible to say to another you buy
goods with $1000 and I buy goods with $1000, and we share whatever each of
us makes.
The H
. anbals and most of the H
. anafs take this requirement to imply that
gold and silver dust and nuggets are not permissible as contributions to the
capital of a partnership, judging that such metals are non-fungible. Some of the
H
. anafs ruled that such raw metals may be used as money, and thus the ruling
depends on convention. The Shafics went further by ruling universally that
such raw metals are fungible, and hence permissible as capital in a partnership.
The H
. anafs also differed over copper coins, which are sometimes treated as
money and at other times are not accepted as legal tender and treated as non6 Ibn
Rushd Al-H
alik), vol.2, p.250).
. afd ((M
Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
c
p.345), Al-Muntaza Al-Mukht

ar (vol.3, p.354).
8 Al-K
c
as
an ((H
am ((H
((H
aw ((H
s (1st edi. anaf Jurisprudence), vol.3, p.316), Al-T
. ah.
tion (H
atb Al-Shirbn ((Sh
. anaf), vol.11, p.159 onwards), Al-Kh
.
n
Qud
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.345), Ibn c Abid
((H
arsh (1317H, 1st and 2nd editions (M
7 Al-Khat
b
460
fungible properties. Thus, Ab

uH
u Y
usuf, the Shafics, the H
. anfa, Ab
. anbals,
and the M
alik jurist Ibn Al-Q
asim ruled that copper coins may not be used
as capital in a partnership, whereas Muh.ammad ruled that if such coins are
accepted as money, then they may be used as capital in a partnership.9
On the other hand, the Maliks ruled that a partnerships capital need not
be monetary. Thus, they allow non-fungibles of similar or different genera to
be used as contributions to a partnerships capital. In this case, the partners
shares in capital are determined based on the values of their contributions. Since
those values are known, they ruled that the contract is established in the same
manner whether or not the capital is monetary.10
Partnerships with fungible capital
Jurists differed over the validity of partnerships established with fungible but
non-monetary capital, i.e. goods measured by weight, volume or number of
homogeneous items:
The Shafics and Maliks permitted partnerships established with this form
of capital. The Shafics base this permission on the view that fungibles
measurable by number are similar to money in their fungibility, and goods

measured by weight and volume - also in similarity to money become
indistinguishable once mixed. The Maliks permitted such partnerships on
the condition that fungible capital shares are determined based on their
value at the time they are mixed, and not at the time of trading. This is in
contrast to their treatment of non-fungible capital, which is distinguishable
at trading time, and hence may be assessed at that time.11
The majority of H
. anbals did not permit partnerships the capital of which
constitutes of non-monetary fungibles, in analogy to their ruling for nonfungible capital.12
The H
. anafs, Imams and Zayds ruled that partnerships with this type
of capital are not permissible prior to mixing the capital. This ruling
follows by their view that such goods (measurable by weight, volume, or
number) become non-fungible by identification, thus become more like
non-fungibles and less like money.
The H
. anafs had different opinions among themselves over the ruling after
mixing such fungibles. They all agreed that if the fungibles were of different genera, then the partnership is not valid. However, if they were of the
same genus, Ab
uH
afics - that
. anfa and Muh.ammad ruled - like the Sh
the partnership is valid. On the other hand, Ab

u Y
usuf ruled that the
9 Al-K
as
an ((H
amah (, vol.5, p.15), Al-Sarakhs (1st edition
c
c
n ((H
usuf (1st printing
(H
(H
. anbal), vol.2, p.166).
10 Al-Dard
alik), vol.2, p.249).
r ((M
. afd ((M
11 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.213), Al-Dardr ((M
.
12 Ibn Qud
23.3. CONDITIONS FOR UNLIMITED PARTNERSHIPS
461
partnership is still invalid as a capital partnership, but may be validated as

a property partnership. This distinction can have practical implications.
Thus, if two partners contribute equal amounts of the same-genus fungible,
and stipulate that profits from trading the mixture are divided one-third
to one and two-thirds to the other, Muh.ammad allows this division, while
Ab
u Y
usuf insists that profits must be divided equally.
Thus, Ab
u Y
usuf relies on the fundamental H
. anaf reasoning that the
capital of a partnership must be monetary fungibles, whereas Muh.ammad
argued that after mixing fungibles of the same genus, the agency and delegation that is necessary for partnerships may be effected. Of course, Ab
u
Y
usuf still managed to find a legal loophole to admit a partnership by considering the mixed fungibles a joint property upon which the partnership
is established.13
23.3
Conditions for unlimited partnerships
The H
. anafs stipulated a number of specific conditions for unlimited partnerships:14
1. The partners must be eligible to delegate legal authority, serve as a guarantor, as well as serve as legal agents of one another. Thus, they must
be sane and of legal age. This follows from the joint responsibility for the
actions of any of them, which requires considering each a legal agent of
the other (wakl), as well as a guarantor of the other (kafl).
2. Partners shares in the capital must be equal from beginning to end. Thus,
the majority of H
. anafs say that inequality in wealth between the partners
means that it is not an unlimited partnership.
3. Each partner must include all of his wealth of the genus used as capital in
the partnership.15
The majority of H
. anafs did not require that the capital contributions
be of the same genus, thus one may contribute silver and the other may
contribute gold, as long as the contributions are of equal value. Also, all
but Zufar did not require physical mixture of the capital, as we have seen.
4. Profits shares must be equal, since contributions to the capital are equal.
13 Al-K
as
an ((H
am ((H
s (1st
edition (H
14 Al-K
c
n ((H
as
an ((H
. anaf), vol.6, pp.60 onwards), Ibn Abid
15 Thus, the authors of Kanz Al-Daq
aiq and Al-Durr Al-Mukht
ar ruled that an unlimited
partnership is invalidated if one of the partners receives a gift or inheritance of the genus
of the partnerships capital (which is money), since equality in capital shares would thus be
c
violated, c.f. Al-Zaylac ((H
n ((H
. anaf), vol.3,
p.372).
462
5. All permissible trading must be part of the partnership business, thus

neither partner is allowed to trade on his own, since that would negate
the mutual legal delegation and representation. This explains the condition stipulated by Ab
uH
. anfa and Muh.ammad that all partners must be
Muslims, otherwise one would be able to conclude a trade (e.g. trade in
wine or pork) that is not permitted for the other. However, as we have
seen, Ab
u Y
usuf permitted unlimited partnership between a Muslim and
non-Muslim if they are eligible for agency and guaranty.
6. The contract language must explicitly use the term muf
awad.ah to ensure
that all the conditions of this contract are understood to apply.
If any of the unlimited partnership conditions are violated, the contract is
an). In the latter contract, none
considered a limited partnership (sharikat c in
of the above conditions (eligibility for legal guaranty, equality of profit shares,
and inclusion of all trading) are required to hold.
Professor c Al Al-Khaff said that the version of unlimited partnership con
sidered by the H
. anafs and Zayds is extremely unrealistic. Even if all its conditions were satisfied at some point, it is very unlikely that they will continue
to hold, especially the condition of exact equality in wealth.16
23.4
Conditions for labor partnerships
The conditions of unlimited partnerships apply to labor partnerships that are

set thus (i.e. eligibility for legal guaranty, equality of wages, etc.). On the other
hand, if it is a limited (c in
an) partnership, then only the eligibility for legal
guaranty condition applies. Thus, Ab
uH
. anfa said: Partnership is permissible
if and only if agency is permissible.
. anafs and H
. anbals considered partnerships defective if part of the partnerships income generating work is a rental of equipment.
Thus, if a worker uses his machine in production, it becomes a permissible source
of partnership wages. However, if any income is collected through renting such
equipment, that income would belong to the owner of the equipment alone, and
not to the partnership.17
23.5
Conditions for credit partnerships
If the credit partnership is an unlimited partnership, then:

1. The partners must be eligible as guarantors for one another.
2. The partners must be responsible for equal liability shares in the price of
the purchased goods.
16 See
Al-Sharik
at f Al-Fiqh Al-Isl
((H
. anaf), vol.6, p.63 onwards), Ibn Qud
17 Al-K
as
an
23.5. CONDITIONS FOR CREDIT PARTNERSHIPS
463
3. The partners share ownership in the purchased goods equally.

4. They share profits equally.
5. The term muf
awad.ah must be used explicitly in the contract language.
an, then ownership, liability,
On the other hand, if the partnership is c in
and profits are all specified as fixed proportions for the partners. However, any
condition that would make those proportions different (e.g. for ownership and
profitability) would be invalid.18
18 Al-K
as
an
((H
. anaf), ibid, p.65).
Chapter 24
Partnership Status
The partnership may either be valid or defective. If any of the conditions of
validity listed in the previous chapter are violated, then the partnership would
be defective, and none of its legal effects would be considered.1 In this case, the
H
afics, and H
. anafs, Sh
. anbals ruled that partners in a defective partnership
would share profits in proportion to their contributions to the capital, and each
must pay the other wages for work done on his behalf.2
On the other hand, the legal status and consequences of a valid partnership
varies with the nature of the partnership, as detailed below.
24.1
Limited capital partnerships
24.1.1
Work condition
It is permitted in a c in
an partnership to stipulate a condition that both will
work or that only one will work. Thus, they may pool their capital, and either
one of them trades with the capital and they then share the profits.
24.1.2
Profit distribution
In this type of partnership, profits must be distributed in proportion to the

partners contributions to the capital of the partnership, regardless of whether
they both worked or only one did. This H
. anaf ruling follows from the view
that profits are earned either by investing capital, by working, or by assuming
liability for damages (d.am
an).3 In this first ruling, equality of capital shares
leads to equality in profit shares.
1 Al-K
as
an
((H
. anaf), vol.6, p.77).
Al-Shirbn ((Sh
amah (, vol.5, p.17), Ibn Al.
c
c
Hum
am ((H
. anaf Jurisprudence), vol.3, p.323), Mar ibn
Y
3 Profits are earned on capital as compensation for its time value, for work (as a proxy for
wages), or for assuming liability based on the H
output belongs to the one who assumed
. adth
the liability.
2 Al-Khat
b
465
466
CHAPTER 24. PARTNERSHIP STATUS
Many H
. anafs, with the notable exception of Zufar, also allowed unequal
sharing in profits with equal capital shares if both parties worked, or if the one
with the larger profit share worked alone. In this case, the higher profit share
can be justified by more work, either in terms of quantity or skill. This ruling is
validated by the H
: Profits are shared as stipulated in the contract, while
. adth
losses are shared in proportion to capital shares.4 This profit and loss sharing
5
rule was also adopted by the H
. anbals and Zayds.
However, the H
. anafs did not permit the one who worked less to collect a
larger profit share, and did not permit one of the partners to collect the entire
profit. In all of the above, notice that what matters for those legal opinions is
the condition of work, not the actual realization of work.6
In contrast, the Maliks, Shafics, Z.ahirs, and the H
. anaf jurist Zufar ruled
that both profits and losses must be shared in proportion to capital in a limited
(c in
an) partnerships. Thus, they consider all profits and losses to be related to
the capital, and hence must be shared according to the capital shares. Thus,
they say that since it is not allowed for only one party to collect all of the profit
or bear all of the losses, any proportion that deviates from capital shares would
be equally impermissible.7
24.1.3
Perishing capital
The H
afics ruled that if one or more of the contributions to a
. anafs and Sh
partnerships capital were to perish prior to mixing, then the partnership is

invalidated. This ruling follows since capital is the object of the partnership
contract, and when the object of a contract perishes, the contract is invalidated
in analogy to sales. If only one of the partners capital were to perish before
mixing, it perishes in his property, and thus the potential partners acceptance of
the contract will no longer have any benefit in the contract, thus it is invalidated.
This is contrasted with the case where part of the capital perishes after
mixing, in which case it perishes in the property of the partnership. Thus, if
one of the partners trades in his capital, and the others perishes after that
first dealing of the partnership, then they continue to share in ownership and
profits. This follows since the conclusion of the partnership implies agency of
each partner for the other.8
On the other hand, the Maliks and H
. anbals ruled that the partnership is
established as soon as the contract is concluded. Thus, if one partners capital
4 Al-H
c
, meaning that he did not find any
. afiz. Al-Zayla found this a very strange H
. adth
chain of narration for it. However, some of the Sunan did list this H
on the authority of
. adth
c Al
(mAbpwh), c.f. Al-H
), vol.3, p.475).
.
. adth
5 Ibn Qud
c
amah (, vol.5, p.27), Al-Muntaza Al-Mukht
ar (vol.3, p.359), Marc ibn Y
usuf
(1st printing (H
anbal
),
vol.2,
p.165).
.
6 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol.6, p.62 onwards), AlZaylac ((H
7 Ibn Juzayy ((M
. afd ((M
Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.346).
8
Ibn Al-Hum
am ((H
anaf
),
vol.5,
p.23),
Al-Sarakh
s
(1st
edition
(H
anaf
),
vol.11,
p.167).
.
.
24.1. LIMITED CAPITAL PARTNERSHIPS
467
were to perish before mixing or dealing in any part of the capital, it would still
perish in the property of all the partners.9
24.1.4
Dealing in the partnership s property
Each of the partners in a limited partnership (sharikat c in

an) is considered a
legal agent for all the others. Hence, the H

. anafs and most of the H
. anbals ruled
that each partner may trade with any part of the partnerships capital in any
form of trading, be it cash or credit. On the other hand, the Shafics and some of
the H
. anbals ruled that partners are not allowed to use the partnerships capital
10
in credit sales.
One exception is the case where one of the partners has no cash in possession
(i.e. all of the partnerships capital is held in non-fungibles), and engages in a
credit purchase. In this case, the credit purchase is considered a private dealing
for the buying partner alone. This follows since otherwise the partnership would
be incurring debt based on the partners actions. In general, a partner does not
have this right to put the partnership in debt, unless he gets an explicit permission to do so, in analogy to the active partners inability to assume debt in
a silent partnership (mud.a
raba). The reason for this ruling is that forcing such
debts on the partnership is tantamount to forcing the other partners to contribute more to the partnerships capital than they had agreed to. This clearly
cannot be effected without receiving the permission of those other partners.11
In what follows, I shall enumerate some of the most important forms of
dealings in which a partner may engage on behalf of the partnership:
1. The H
. anafs allow a partner to give the partnerships money to a person
to buy goods at a specified price.12 This follows since he is allowed to
hire a person to trade in the partnerships capital in exchange for a wage,
which is a more demanding contract. Also, the H
. anafs permit a partner
to deposit the partnerships money. Both types of dealings are necessary
for effective trading, and are therefore permitted by the H
. anafs.
On the other hand, the Shafics, did not permit those dealings, while the
H
. anbals were reported to have two opposing opinions with regards to
giving money to another for trading.
2. Most H
. anaf jurists agree that a partner may use the partnerships capital
in a silent partnership (mud.a
raba). This follows from his legitimate ability
to hire a worker on behalf of the partnership. In the latter case, the worker
9 Marc
ibn Y
. anbal), vol.2, p.166).
ibn Y
atb Al-Shirbn ((Sh
afic),
.
vol.2, p.214).
11 Al-K
c
n ((H
as
an ((H
. anaf), vol.3, p.377).
12 Al-Dard
r ((M
alik)A, vol.2, pp.352.521), Marc ibn Y
. anbal), vol.2,
n ((H
p.166). Ibn c Abid
. anaf), vol.3, p.377) states: this is the case where all profits accrue
to the one supplying the capital and no profits are collected by the one who buys on the
capitalists behalf. The Sh
afics made the definition more explicit by stating that the one
who trades on behalf of another in this case does it as a volunteer, c.f. Al-Khat.b Al-Shirbn
((Sh
afic), vol.2, p.312), Majmac Al-D
an
at (p.313).
. am
10 Marc
468

would deserve wages regardless of the business outcome. Thus, allowing
the partner to engage in a mud.a
raba is better for the partnership since the
active partner only collects if the business is profitable.
3. A partner may allow another to trade on the partnership as a legal agent

(wakl). This follows from the previous permission since agency to trade is
simpler than engaging in a silent partnership. It is also made necessary by
the fact that no merchant can perform all trading acts on his own, hence
requiring agency in some sales.
4. If a partner is authorized to engage in pawning activities, he may pawn
the partnerships property in a credit sale, or collect pawned objects from
credit buyers. This follows since the partner is allowed to pay the partnerships debts as well as collect its credits, and those are the roles played
by pawned objects.13
5. A partner may accept or initiate transfers of debts resulting from trading.
Such debt transfers are necessary to facilitate trade, since it provides a
means of ensuring payment of debts in a manner similar to pawned objects.
6. Each partner must fulfill all obligations and collect all rights associated
with contracts in which he engages. Thus, no partner is allowed to collect
debts owed to another partner, and the debtor is allowed to insist to pay
only to the one to whom he is indebted. Also, if one partner engages in
a trade, the other one is not liable for the price, and he is not authorized
to collect purchased items. Moreover, no partner has the right to represent another in a court of law, since legal disputes are among the rights
associated with the contract.
7. Ab
uH
aliks, and the H
. anfa, Muh.ammad, the M
. anbals permitted a partner to travel with the partnerships capital. They base this ruling on the
view that travel is part of the business, and the partnership exists irrespective of the location of the partners.
u Y
usuf and Al-Shafic ruled that a partner may
only travel with the partnerships capital if authorized by his partners.

Their ruling is based on the view that travel exposes the partnership to
risks that require prior consent of the partners.
8. No partner is allowed to give part of the partnerships property as a gift
or charity. Moreover, since loans do not have an immediate compensation, they are also considered charitable payments, and thus no partner is
allowed to lend the partnerships properties. In all such cases, no partner
has the right to contribute another partners property in charity.14
c
n ((H
Al-Hum
am ((H
. anaf), vol.3, p.378).
(1st edition (H
.

am ((H
as
an ((H
. anaf), vol.6,
n ((H
pp.68-72), Majmac Al-D
an
at (p.298 onwards), Ibn c Abid
. anaf), vol.3, p.377 on. am
alik),
wards), Al-Dardr ((M
alik)A, vol.2, p.352), Al-Kharsh (1317H, 1st and 2nd editions (M
13 Ibn
14 Al-Sarakhs
24.2. UNLIMITED CAPITAL PARTNERSHIPS
469
The Shafics summarize all of their restrictions thus: the partner may
deal in any manner acceptable for a legal agent, i.e. in any manner that
cannot harm the other partners. Thus, he may not sell with credit due to
gharar, he may not trade in different currencies, cannot engage in grossly
unfair
trades, and cannot travel with the partnerships money without
permission. This follows in their view since the partnership is first and
foremost a mutual agency of the partners for one another.
24.2
Unlimited capital partnerships
Limited partnerships (c in
an) are more general than unlimited partnerships.
Therefore all the conditions that apply to a limited partnership (sharikat al
c
in
an) apply by implication to unlimited partnerships (sharikat al-muf
awad.ah),
and the same legal status rules that apply to the first apply to the second. However, there are specific conditions that apply only to unlimited partnerships:15
1. The partner in a muf
awad.ah can undertake debt on behalf of the partnership, as well as pawn objects on its behalf. This follows from each of the
partners being a guarantor (kafl) for the other in this type of partnership.
2. Every partner is liable for all financial liabilities induced by his partners
through valid sales, loans, leases, guarantees, and pawning, as well as
guarantees for usurped objects and kept deposits and loans. All those
responsibilities also follow from each partner being a guarantor for the
others.
3. Ab
uH
. anfa ruled that each partner is responsible for any guaranty extended by any other partner, since guaranty is transitive. However, Ab
u
Y
usuf and Muh.ammad ruled that guaranties are charitable actions, for
which the partners are not responsible. They provide proof for their ruling by the facts that young children are not allowed to act as guarantors
and that a sick persons guaranty is only good up to one-third of his estate.
4. Each partner is responsible for all trade-related obligations binding on his
partner (including delivery of the goods, delivery of the price, returning
defective merchandise, etc.).
5. However, a partner is not responsible for torts levied on his partners due
to transgressing against another. A partner is not responsible for his
partners dowry, alimony, or other debts caused by personal actions that
do not relate to the partnership or its trading.
vol.6, p.43), Ibn Rushd Al-H
alik), vol.2, p.253), Marc ibn Y
usuf (1st printing
. afd ((M
(H
at.b Al-Shirbn ((Sh
afic), vol.2, p.214).
15 Al-Sarakhs
(1st edition (H
aw ((H
. ah.
. anaf), p.107),
Al-K
as
an ((H
am ((H
c
c Abid
n ((H
an
at (p.197)
. am
470

Any personal or family purchases of one of the partners (e.g. for buying a house, clothes, food, etc.) belong to him and are kept out of the
muf
awad.ah. However, the seller of such goods may demand payment of
the price from any of the partners. Thus, the ownership of those goods is
private, but liabilities are shared based on the principle of mutual guaranty. The ruling based on reasoning by analogy would in fact make all
those purchased goods part of the partnership properties.
24.3
Credit partnerships
Whether the credit partnership is limited (c in

an) or unlimited (muf
awad.ah),
the rights and obligations of the partners are the same as they are for the
corresponding capital partnerships. Thus, the default form of partnership for
them is limited partnership. However, if they stipulate that the partnership
is unlimited, then they add guaranty to unlimited delegation and agency, then
they must ensure equality of their shares, since that is required in unlimited
partnerships.16
The H
. anbals permitted credit partnerships but restricted that permission
only to limited credit partnerships. Thus, they do not permit unlimited partnership due to the inherent gharar that may result in one partner incurring a
liability that he cannot afford.
24.4
Legal status of labor partnerships
24.4.1
Unlimited labor partnerships
An unlimited labor partnership entails that two or more workers equally share
in performing a job, and equally share all profits, losses, and liabilities. If the
labor partnership is unlimited (i.e. the term muf
awad.ah or some term to that
effect is used), then all partners share the same liabilities. Thus any creditor for
any of the partners may demand repayment from any of the other partners.17
24.4.2
Limited labor partnerships
In a limited labor partnership, each partner is still responsible for performing any
job accepted by his partners. This is the ruling based on juristic approbation
(isth.s
an), which makes the limited partnership very similar to its unlimited
alternative. According to this ruling, the commissioner of a job may demand
its performance from any of the partners, and any of the partners may demand
to collect the entire wages at the end. However, the ruling based on inference
16 Al-K
c
c
as
an ((H
n ((H
. anaf), vol.3, p.382), Majma AlD
an
at (p.303).
. am
17 Al-K
c
as
an ((H
Majmac Al-D
an
at (p.302 onwards).
. am
24.4. LEGAL STATUS OF LABOR PARTNERSHIPS
471
by analogy would limit each partners rights and responsibilities in a limited

partnership.
However, juristic approbation - which is adopted by the H
. anafs and H
. anbals
is in fact a middle ground between the limited partnership and unlimited
partnership views. In this regard, the limited labor partnership does indeed
imply that each of the partners is responsible for the performance of any job
agreed upon by one of them. However, this mutual guaranty only applies to
the work aspects of the partnerships, and thus falls well short of a full-fledged
unlimited partnership. Thus, the partners are not responsible for other types of
debts incurred by one of the partners, since they did not specify that they had
an unlimited partnership. Thus, each partner is a guarantor of the others only
in aspects pertaining to work under the partnership.18 It is noteworthy in this
regard that the Zayds went further to state that a limited labor partnership
implied delegation and agency (wak
alah), but no mutual guaranty (kaf
alah) of
any kind.
24.4.3
Profit sharing
Profit shares in labor partnerships are determined according to legal liability

and not according to the actual amount of work performed by each partner.
Thus, even if only one of the partners were to perform all the work (say if the
other is sick or traveling abroad), the wages would still be shared as stated in the
contract. Thus, it is the guarantee to perform the work that earns a partner his
share in the wages, and not the actual work. Proof of this assertion is provided
by the fact that the worker may in fact hire another to do the work on his behalf
and still collect the full wages.
The partnership contract may specify unequal distribution of wages together
with unequal distribution of liability for performing the work. Again, the unequal wage shares are justified by the initial inequality in liabilities, regardless
of the actual shares in performed work.
24.4.4
Loss sharing
Losses in labor partnerships must be shared in proportion to the ratio of liabilities specified in the contract (e.g. that one of them will take two-thirds of the
work and the other will take one-third). Thus, both profits and losses must be
shared according to the same formula, which is equality to liability shares. In
this regard, if losses are caused by a transgression of one of the partners, it is
still shared by all partners according to the liability ratio, since they guarantee
the work according to that ratio.19
18 Ibn
Qud
vol.6, p.76 onwards), Al-Sarakhs (1st edition (H
.
. anaf), vol.11, p.107
c
n ((H
onwards), Ibn Al-Hum
am ((H
. anaf), vol.3,
p.381).
19 Al-K
as
an ((Hanaf),
Chapter 25
Contract Characteristics
25.1
Bindingness
The majority of jurists ruled that the partnership contract is permissible but
non-binding.1 Therefore, each partner retains the right to void the contract
provided that the other partners are informed of its voiding. This follows from
the fact that one may not terminate a agency without informing the agent,
lest he incur losses unwittingly. Since partnership involves mutual agency, its
termination requires informing the other partners.
The traditional Malik opinion, as stated in lbn-Rushd Al-Qurt.ub ((Malik))
and Ibn Rushd Al-H

. afd ((Malik)), was also that partnership contracts are non
binding. However, Al-Kharsh (1317H, 1st and 2nd editions (M
alik)) suggests
that the best accepted opinion among the Maliks renders such contracts binding, whether or not the properties of partners was in fact mixed. Ibn c Abd
Al-Salam and Sah.n
un ruled that the contract is binding even if none of the
partners had undertaken any transactions based on the partnership. On the
other hand, Ibn Al-Qasim and Ibn Al-H
. ajib and others ruled that the contract
only becomes binding once one of the partners begins dealing or work under
the partnership. In summary, most Maliks, as stated by Al-H
. at.t.ab (1st edition
(Malik)), ruled that capital partnerships are binding based on the contract,
while labor or work partnerships only become binding by the commencement of
work.
1 Al-K
as
an ((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.348), Al. anaf), vol.6, p.77), Ab

amah (, vol.5, p.21), Ibn Rushd Al-H
. afd
((M
alik)A, vol.3, p.349), Al-H
ab (1st edition (M
alik),
. at.t.
vol.5, p.122), Al-Kharsh (1317H, 1st and 2nd editions (M
alik), vol.6, p.39), Al-Sharik
at f
Al-Fiqh Al-Isl
am by Dr. c Al Al-Khaff (p.49 onwards).
473
474
25.2
CHAPTER 25. CONTRACT CHARACTERISTICS
Nature of partner possession
Jurists agree that any partnership property in the possession of one partner is
considered a trust, since he would thus hold it with his partners permission.
Thus, since the partner is not holding the partnership property to collect a price
or to guarantee some other payment as in pawning, he is not responsible for the
perishing of what is kept in his possession. Thus, the partners possession of
such property is considered holding by legal proxy on behalf of his partners,
and if the property were to perish in his possession, he is not required to pay
any compensation. In this regard, the partners claims regarding profits, losses,
and perishing of properties, are all accepted based on his oath. On the other
hand, as in all trusts, he is still responsible to compensate the other owners if
he destroys their property through negligence of transgression.2
2 Al-Sarakhs
c
(1st edition (H
c
am ((H
n ((H
. anaf), vol.3, p.379),
Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.18), Ibn Rushd
Al-H
alik), vol.2, p.253).
. afd ((M
Chapter 26
Invalid Partnerships
Certain factors or actions invalidate all types of partnerships, while others invalidate certain types only:
26.1
General invalidating conditions
We enumerate four actions or factors that invalidate any partnership:1

1. If any of the partners dissolves a partnership, it becomes invalid. This
follows from the non-bindingness of the partnership contract, as we have
seen. We have also seen that the Maliks consider the contract binding,
and thus ruled that the partnership may only be dissolved by mutual
consent. The H
. anbals allow each of the partners to terminate his partners
agency, in which case they no longer have the right to deal in his portion
of the partnership property. They also allow unilateral dissolution of the
partnership, in which case each partner is allowed access only to his own
property.
2. If a partner dies, the partnership is dissolved, whether or not the other
partners know of his death. This follows since the joint agency and delegation is terminated by death.
3. If one of the partners reverts from Islam and joins its enemies, his legal
status is equivalent to death, and the partnership is dissolved.
4. If any of the partners loses his sanity, or goes into a coma, for an extended
period of time (some H
. anafs said one month or more, while others said
six months or more), then mutual agency is violated, and the partnership
is dissolved.
1 Al-Sarakhs
c
(1st edition (H
c
p.320), Ibn Al-Hum
am ((H
n ((H
u. anaf), vol.5, p.27), Ibn Abid
. anaf), vol.3, p.379), Ab
Ish.
aq Al-Shr
az ((Sh
afd
.
((M
alik), vol.2, p.253).
475
476
CHAPTER 26. INVALID PARTNERSHIPS
26.2
Specific invalidating conditions
The following is a list of events, actions, or factors, that invalidate specific types
of partnerships:2
1. In a capital partnership, if one partners capital perishes before any trading
takes place, or if the entire capital of the partnership were to perish, the
partnership is invalidated. In such cases, the object of the contract the capital that is identified in the contract3 - would cease to exist, thus
invalidating the contract in analogy to sales.
As we have seen previously, if only one partners capital were to perish
before mixing with the rest of the capital, the contract is invalidated since
the other partners no longer gain any benefit from its existence. However,
if the partners capital were to perish after it is mixed with the rest, or if
one of the partners had already begun trading on behalf of the partnership,
then all the partners share in that loss.
However, in the case where on partner trades on behalf of the partnership
out of his own capital, and then the capital of another partner perishes,
jurists differed over ownership of the purchased item. Thus, Al-H
. asan
ibn Ziyad by ruled that the purchased items become joint property of the
partners, and hence each partner may only sell his share in it. However,
the better opinion is that of Muh.ammad, who ruled that any partner may
sell the entire goods thus purchased, since the partnership is thus ruled to
remain legally intact. Thus, he ruled that any partner may sell the goods
on behalf of the partnership as a legal agent (wakl), and give the other
partners their share of the price.
On the other hand, if one partners capital were to perish, and later another partner trades out of his own capital, then the ruling depends on
the language of their contract. Thus, if the partnership contract explicitly
stipulated mutual agency (e.g. that any trade is shared among the partners), then the contract is given priority and the bought items are shared
as joint property. However, if mutual agency (wak
alah) was not explicitly
mentioned in the contract, then the buyer is considered to have bought
on his own behalf only. In the latter case, mutual agency is ruled to have
2 ibid., Ibn Al-Hum
am ((H
s (1st edition (H
. anaf), vol.11,
c
pp.164,178), Al-T
aw ((H
. ah.
n ((H
Ibn c Abid
. anaf), vol.3, p.375).
3 The Hanaf
s ruled that money becomes non-fungible through identification in partner.
ships, agency, trusts, gifts, bequests, and usurping; but do not get thus identified in commutative contracts or silent partnerships. The difference between regular partnerships and silent
partnerships is the requirement in the former to specify the object of the contract, which is
the capital. On the other hand, capital is only made non-fungible in silent partnerships after
receipt by the entrepreneur. Thus, a silent partnership is not invalidated if the capital perishes
prior to receipt, but it is invalidated if it perishes after receipt. In contrast, partnerships do
not require receipt of the capital by partners, and hence would be invalidated as soon as the
object of the contract perishes, c.f. Al-Sharik
at f Al-Fiqh Al-Isl
am by Dr. c Al Al-Khaff
(p.113).
26.2. SPECIFIC INVALIDATING CONDITIONS
477
been invalidated by implication once the partnership was invalidated.4

2. In an unlimited partnership, the H
. anafs ruled that any effected inequality
in capital shares (e.g. if one of the partners receives a monetary inheritance) invalidates the contract. As we have seen, this follows from the
H
. anafs insistence on continued equality of capital shares in unlimited
partnerships to justify equality of all rights and obligations as well as
profit and loss shares. This rule is far-reaching: for instance, if one partner contributed capital in gold coins and the other contributed an equal
amount of capital in silver coins, and if before any trading takes place the
value of one type of coins were to increase relative to the other, then the
unlimited partnership would be invalidated.
4 Ibn
c
n ((H
Al-Hum
am ((H
. anaf), vol.3, p.376).
Chapter 27
Defective Partnerships
We have discussed the legal status of defective partnerships in previous chapters.
In this chapter, we list the different types of partnerships that the H
. anafs would
render defective.
27.1
Utilization of public property
If two or more partners form a partnership to utilize public properties (e.g.

hunting, fishing, grazing, etc.), and share their proceeds, the H
. anafs render
this a defective partnership. This ruling is based on the view that partnership
requires mutual agency, which is not allowed in the utilization of public properties. Thus, each worker is considered to be working for himself, and he keeps the
proceeds of his utilization of the public property. If the partners participated
in collective utilization of the public properties, then the proceeds are divided
equally among them.
However, if the workers utilize the public properties individually, then combine the output and sell it, then the proceeds are shared according to the weight
or volume of what they collected individually. If the output was not measurable
by weight or volume, then the proceeds are divided among them in ratio to the
values of their respective generated output. Finally, if the weight, volume, or
value is unknown, then each of them may collect an equal share or less based
on his claim. However, if anyone demands more than an equal share, then he
must have a material proof to support his claim.
If one worker did all the work but was assisted by another (e.g. one did all
the fishing and another carried the fish for him), then the worker collects all the
proceeds, and pays the helper the going market wage for what he did. In this
case, no agreed-upon ratio of the proceeds can be justified, since the output was
unknown. Thus, the worker collects the previously unknown proceeds, and pays
the helper a fixed wage based on the market conditions. However, Ab
u Y
usuf
ruled that the helper collects the market wage provided that it does not exceed
half the output or its value. Thus, he ruled that the worker and helper implicitly
479
480
CHAPTER 27. DEFECTIVE PARTNERSHIPS
agreed to share the output equally, and the helper is thus not entitled to more
than the named share, in analogy to other defective employment contracts.1
As we have seen previously, most of the non-H
. anafs, including most of the
Shafics, accept partnerships to utilize public properties as valid. This follows
from their permission of agency (tawkl) in utilizing such properties, which the
Shafics argued to be similar to agency in trade.2
27.2
Partnership in leasing
If two or more partners agree that each will lease his property, and they share
the lease payments, the H
. anafs render this partnership defective. This ruling is
based on their view that agency (wak
alah) to lease anothers property and collect
a portion of the rent is not valid. However, if the partners were to combine their
properties to perform a specific task (rather than lease the properties for a fixed
period of time), then that would become a valid partnership and they may share
the wages for performing this task. For example, if two car-owners lease their
cars and they share the collective lease payments, that is a defective partnership,
and each partner should keep the lease payment for his property. This is also
the Shafic opinion, based on the view that two separate usufructs were derived
from two different properties, and the owners of those properties should each
collect his propertys lease payment.3 However, if the two car owners jointly
lease their cars for transporting a group of people a known distance, and share
a fixed compensation, then that is a valid work partnership.4
27.3
Lease sharing
Also, if the owner of a property asks another to lease it on his behalf and they
share the lease payments, that is considered a defective partnership. In this
case the propertys owner should collect all of the rent, and the worker should
collect the going market wage for his services.
27.4
Partnership in unreceived property
If a person asks another to be partners in property that the first bought but
has not yet received, the partnership would be tantamount to selling half the
1 Al-Zaylac
((H
am ((H
. anaf Jurisprudence), vol.3, p.323), Ibn Al-Hum
. anaf), vol.5, p.3
onwards), Al-K
as
an ((H
s (1st edition (H
. anaf), vol.11,
p.216 onwards), Ibn Abid

n ((H
. anaf), vol.3, p.382).
2 Ibn Hubayrah ((Hanbal
), p.205), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, pp.216,221),
.
Rawd.at Al-T
libn (vol.4, p.291), Ibn Qud
ut (3rd printing
.a
(H
. anbal), vol.3, p.452).
3 Al-Khat
c
b Al-Shirbn ((Sh
afi ), vol.2, p.216).
.
4 Al-Samarqand
((H
s (1st edition (H
. anaf), vol.11,
n ((H
pp.170,218 onwards), Ibn c Abid
. anaf), vol.3, pp.383-385).
27.4. PARTNERSHIP IN UNRECEIVED PROPERTY
481
property to the potential partner. However, such a sale is not valid prior to
receipt, and hence the partnership contract would be rendered defective.
However, if the buyer had in fact received the property prior to the initiation
of the partnership, then the partnership contract is concluded and the new
partner owes the buyer half the price. If the partner did not know the price
prior to proposing the partnership, then he has an option once he knows the
price: he may pay half the price and assume his share, or he may void the
contract.
If a new individual joins a partnership of two or more, his default share
in ownership may be determined in one of many ways. For instance, if two
individuals jointly buy a horse, and a third wishes to join the partnership, his
default share may be either one third or one half. The ruling by analogy to
joining only one owner is that his share is one half. However, the ruling based
on juristic approbation is that equality of shares is maintained, thus making his
default share one third. On the other hand, the latter ruling still depends on
the manner in which adding the new partner is effected. For instance, if one
partner explicitly gives the new partner a share in his property and a share in
his partners property, then each of the original partners retains one-quarter
ownership, and the new partner gets one half.
In all defective partnerships, any realized profits are divided in proportion
to capital shares. Moreover, as we have seen in the legal status chapter, any
condition to distribute profits shares in unequal shares different from capital
shares is invalidated.5
5 Ibn
c
n ((H
Al-Hum
am ((H
. anaf), vol.3, p.383).
Part VII
Silent Partnership
(mud.
arabah)
483
485
Preliminaries
The two main Arabic names given to this type of partnerships are mud.a
rabah
(in the language of Iraq), and qir
ad. in the language of H
. ijaz. The first name
emphasizes that both the capitalist and the entrepreneur share in profits, while
the second name emphasizes the fact that the capitalist gives part of his capital
and part of his profit to the entrepreneur. The latter definition highlights the
similarity between qir
ad. and ij
arah, whereby the entrepreneur is entitled to a
fraction of the profits based on his work.6
We shall cover the silent partnership contract in five chapters:
1. Definition, legality, cornerstones, and characteristics.
2. Conditions of silent partnership.
3. Legal status of silent partnership.
4. Disagreements between the capitalist and the entrepreneur.
5. Factors that invalidate a silent partnership.
6 Al-Khat
b Al-Shirbn ((Sh
am ((H
. anaf), vol.7, p.57 on .
wards), Al-Sarakhs (1st edition (H

.

c
n ((H
an
at (p.303).
. am
Chapter 28
Definition and Legality

28.1
Definition
In a silent partnership contract, the owner of capital gives it to a worker to trade

on their behalf, and profits are shared according to an agreed-upon formula.1
All financial losses are borne by the provider of capital (the silent partner, or
the capitalist), while the entrepreneur can only lose his effort if no profits are
made. The author of Kanz Al-Daq
aiq defined it as a partnership with one party
providing capital and the other providing labor.
The first definition highlights two important distinctions between silent partnership (mud.a
rabah) and other contract forms:
1. It is not valid to establish a silent partnership where the provided capital
takes the form of a usufruct (e.g. the right to live in a house), or a debt on
the entrepreneur or somebody else. The silent partner must give capital
to the entrepreneur to establish the silent partnership.
2. The profit sharing arrangement establishes the different between a silent
partnership and a agency (tawkl).
In a silent partnership, the silent partner deserves his share of profits as
compensation for the use of his capital, and the entrepreneur deserves his share
as a compensation for his effort, without which no profits would be realized.
If the contract stipulated that all the profits accrue to the capitalist, then the
contract is not a silent partnership, but it is considered a mub
ad.ac a whereby
the worker volunteers to trade on the capitalist behalf. At the other extreme,
if the contract stipulates that all profits accrue to the entrepreneur, then the
contract is a loan (qard.).
1 ibid.
487
488
28.2
CHAPTER 28. DEFINITION AND LEGALITY
Legality of silent partnership
There is a consensus among jurists that silent partnership is permitted, and

based their ruling on proofs from the Quran, Sunnah, consensus of the Muslims, and ruling by analogy. The permissibility of this contract is viewed as an
exception to general rules prohibiting excessive risk and uncertainty in hiring
contracts.
Proofs are derived from the Quranic verses: Others traveling through the
land (yad.rib
una f al-ard.I) seeking of Allahs bounty [73:20], and and
when the prayer is finished, then you may disperse through the land and
seek of the bounty of Allah [62:10]. While those verses do not address
the silent partnership contract explicitly, they implicitly validate working
with others capital in exchange for part of the profits.
Proofs in the Sunnah are derived from two H
s. The first is narrated on the
. adth
as (mAbpwh): Al-c Abb

as ibn c Abd Al-Mut.t.alib
authority of Ibn c Abb
used to stipulate a condition whenever he gave his money in a mud.a
raba
that the entrepreneur will not take his money across any sea, into any valley, or buy any animal with a soft belly, and if the entrepreneur were to do
any of those actions, then he must guarantee the capital. The Messenger of
Allah (pbuh) heard of this practice and permitted it.2 The second H
. adth
was narrated by Ibn M

ajah on the authority of S.uhayb (mAbpwh) that
the Prophet (pbuh) said: There is blessing in three transactions: credit
sales, silent partnership, and mixing wheat and barley for home, not for
trading.3
Consensus on the validity of this contract (ijm
ac ) was established by the tradition that a group of companions of the Prophet (pbuh) invested an
orphans money in a silent partnership, and nobody criticized their action.4 Moreover, it is narrated that c Abd-Allah and c Ubayd-Allah, both
sons of c Umar ibn Al-Khat.t.ab (mAbpwt), while traveling with the army
of Iraq, visited Ab
u M
usa Al-Ashc ariy who worked for their father. He
welcomed them and offered to help them. His offer was to give them some
money he owed to the Muslim Treasury, they can use the money to buy
goods in Iraq and sell them in Madnah, keeping the profits, and giving
the principal to their father. They did as he suggested, and when they
came to their father, then the Commander of the Faithful, he was upset.
2 Narrated by Al-Tabar
an in Al-Awsat.. However, Al-Haytham said that its chain of
.
narration contained Ab
u Al-J
ar
ud Al-Ac m
a, who was a known liar, c.f. Al-Haytham (,
vol.4, p.161).
3 This Had
c
th
has
a
weak
chain
of
narration,
c.f.
Al-S
an
a
n
(2nd
printing,
vol.3,
p.76).
In
.
.
fact, Ibn H
atib Al-Ijm
ac : All chapters of Islamic jurisprudence
. azm in was right to say in Mar
have a foundation in Qur
an or Sunnah, except for silent partnership, for which we found no
foundation in them. The contract is - in fact - legitimized by consensus of jurists, especially
since it did exist during the Prophets (pbuh) time, and he permitted it to continue. Otherwise,
this contract would not have been permitted, c.f. Ibn H
. ajar (, p.255).
4 Al-H
c
), vol.4, p.113).
. afiz. Al-Zayla (1st edition, (H
. adth

28.3. CORNERSTONES AND TYPES OF MUD
. ARABA
489
He asked them if Ab
u M
usa had given similar capital to all other soldiers,
and they said no. He then got angry and said: You are the two sons of
the Commander of the Faithful, and thus he lent you the money to make
a profit?. Then, c Ubayd Allah said: O Commander of the Faithful, had
the money perished, we would have guaranteed it!, but c Umar (pbuh)
insisted that they not keep any of the profit. When c Ubayd Allah reiterated his argument, one of those present said: O Commander of the
Faithful, perhaps you can make it a qir
ad. (i.e. if you give them half the
profit, and put the other half in the Treasury), and c Umar consented to
that arrangement.5
Moreover, Ibn Taymiya established the legality of mud.a
raba through consensus that is based on a Legal Text. He thus argued that the contract
was commonly used by the Prophets tribe in pre-Islamic times. In this
context, the Prophet (pbuh) himself traveled to trade with other peoples
money including that of the Lady Khadjah (mAbpwh), and most of the
caravans of Ab
u Sufy
an were financed through mud.a
raba. When Islam
came, the Prophet (pbuh) continued to approve of the contract, and his
own companions continued to use it with his implicit approval. In this
regard, the Sunnah includes the Prophets (pbuh) words, actions, and all
practices that he approved. This establishes that mud.a
raba has a foundation in Sunnah.6
The contract is also established through reasoning by analogy to crop sharing.
Both contracts are allowed to permit those who possess property but lack
the time and skill needed to make profits, and those who possess the
time and skill but no property, to collude in a productive contract. In
this regard, all legal contracts were made thus by Allah (swt) to effect
economic benefits to their parties.7
28.3
Cornerstones and types of mud.araba
The H
. anafs list corresponding offer and acceptance as the cornerstone of silent
partnership. The offer language must use one of the common Arabic terms
for this contract (mud.a
raba, qir
ad., muq
arad.a, muc a
mala), or any language that
8
implies the essence of the contract. Jurists of the other schools list three
cornerstones for the contract: (i) capitalist and entrepreneur/worker, (ii) object
5 Narrated by M
alik in Al-Muwat..ta on the authority of Zayd ibn Aslam on the authority
of his father. This narration was then reiterated in Al-Sh
afics Musnad and Al-Bayhaq in
Al-Mac rifah. It was also narrated by Al-D

araqut.n in his Sunan on the authority of c Abdullah
ibn Aslam on the authority of his father and grandfather, c.f. Al-Suy
ut. (b, vol.2, p.173),
Al-H
), vol.4, p.113), Ibn H
ajar (, p.254).
.
. adth
.
6 Ibn Taymiyah ((Hanbal

), vol.19, p.195 onwards).
.
7 Al-K
as
an ((H
am ((H
s
(1st edition (H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.384), Al-Khat.b
. anaf), vol.22, p.18), Ab
Al-Shirbn ((Sh
afic), vol.2, p.309).
8
Al-K
as
an ((H
490
of the contract (capital, work, and profit), and (iii) contract language (offer and
acceptance). The Shafics counted item (ii) as three cornerstones, thus counting
five cornerstones in all.9

There are two types of silent partnerships:10
28.3.1
Unrestricted silent partnership
In this case, the capitalist gives the entrepreneur a certain amount of money,
specifying only the profit sharing rule. Thus, he leaves unspecified the work to
be done, its time and place, etc.
28.3.2
Restricted silent partnership
In this contract, the capitalist specifies a list of conditions relating to the work.
Jurists differed over the conditions or constraints that are permissible for this
type of silent partnership:
Ab
u H
. anfa and Ah.mad Ibn H
. anbal permitted the specification of a
time-framework for the work to be done, and also permitted that the
entrepreneur be restricted to dealing with a particular person in all trades.
However, Malik and Al-Shafic deemed both of those sets of restrictions
impermissible.
Ab
u H
. anfa and Ah.mad Ibn H
. anbal permitted concluding a contract
with a later starting date (e.g. take this money and begin work next
month), while Malik and Al-Shafic rendered such delays impermissible.
The H
. anbals and Zayds permitted suspending a silent partnership on a
condition (e.g. when so-and-so delivers his debt to me, take the money
and work on our behalf). However, the H
afics
. anafs, Maliks, and Sh
rendered such suspension impermissible. Their proof is that silent partnership implies ownership of a portion of the profits, and such ownership
may not be suspended pending a condition.11
The Maliks and Shafics actually require all silent partnerships to be fully
unrestricted. Thus, they do not allow the capitalist to restrict the contract to a
specific profession, working in a specific location, working with a specific person,
or working within a specified time period. If a period were indeed specified, then
if the entrepreneur fails to complete a trade within that time period, the contract
is deemed defective. On the other hand, if the entrepreneur had an opportunity
to make a profit, then the contract remains intact.
9 Al-K
as
an
((H
. anaf), vol.6, p.87).
Al-Shirbn ((Sh
as
an ((H
.
. anaf), vol.6, pp.87-98).
c
11 Al-Sh
c
a ar
an ((Sh
as
an ((H
. anaf), vol.5, pp.62-63), Al-Muntaza
Al-Mukht
ar (Zayd, vol.3, p.320), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.386), Al-Dardr
((M
alik)A, vol.3, p.521), Marc ibn Y
ut
. anbal), vol.2, p.173), Al-Buh
(3rd printing (H
anbal
),
vol.3,
p.497).
.
10 Al-Khat
b
28.4. CHARACTERISTICS OF SILENT PARTNERSHIPS
28.4
491
Characteristics of silent partnerships
Jurists agree that the silent partnership contract is non-binding prior to commencement of the work, and may thus be dissolved by either party. However, if
the worker had already begun his work, jurists differed over the characterization
of the contract:
Ab
uH
afic, and Ah.mad Ibn H
. anbal ruled that the contract
. anfa, Al-Sh
would still be non-binding. Thus either party has the right to dissolve the
contract at any time. As a consequence, they also ruled that the silent
partnership contract is not inherited if one of its parties were to die.
On the other hand, Imam Malik ruled that once the work begins, the
contract becomes binding on both parties. As a consequence, he also
ruled that the contract would be inherited by the heirs of either party if
he were to die after work had begun, but before the contracts expiration.
Malik based his opinion on the view that once work begins, dissolving the
contract would lead to losses. On the other hand, the others ruled that
silent partnership essentially involves dealing with the property of another
with his permission. Seen thus, it is not binding whether or not the work
had begun, and either party may dissolve it in analogy to the deposit
alah) contracts.12
(wadc ah) and legal representation (wak
The group of jurists who support both parties right to void the contract
maintain that the other partner must always be informed of the contracts
dissolution, as they ruled for all other contracts.
Moreover, the H
. anafs ruled that dissolution of the contract is only valid
if the partnerships capital is held in monetary form, otherwise it is invalid. On the other hand, the Shafics and H
. anbals permit dissolving the
partnership when the capital is held in non-monetary form, provided that

the two parties agree to sell it or divide it among themselves. They also
ruled that if the entrepreneur requested selling the capital, the capitalist
is forced to sell so that the entrepreneur may collect his rightful share of
profits.13
Multiple capitalists, multiple workers, and contemporary corporations
Having multiple workers in a silent partnership is permitted, where the multiple
workers implicitly form a work partnership within the silent partnership with
12 Ibn Rushd Al-Haf
. d ((M
(M
alik), vol.6, p.223), Al-K
as
an ((H
u-Ish.
aq Al-Shr
az ((Sh
afic),
. anaf), vol.6, p.109), Ab

amah (, vol.5, p.58).
13 ibid.
492
the capitalist. Thus, the Maliks ruled that the profit share earned by the workers would be distributed among them according to work, in the same manner
stipulated for labor partnerships.14
Contemporary corporations may be viewed as variations on the classical
silent partnership, which was studied in Islamic jurisprudence. Thus, in a modern joint liability company the partners share in capital ownership, while some
of them work as active partners working on behalf of the silent partners. In
limited partnerships, the partners who have limited liability are considered the
silent partners, and the companys business is viewed as work on behalf of those
silent partners. In particular partnerships, one partner is entrusted with the
capital to invest on behalf of the others, who are considered silent partners in a
mud.a
raba.
The same is true for an association of capital or a joint stock company, where
the stock holders are considered silent partners, and the company works on their
behalf. Professor c Al Al-Khaff also argued that any limited liability company
with less than fifty partners is considered a silent partnership, with the manager
being viewed as the entrepreneur.15 However, a more accurate characterization
of the manager renders him an employee who works for wages. In this regard,
there is no harm in joining a partnership and an employment contract in stock
and joint liability companies, since the prohibition of two contracts in one
does not apply if having the two contracts cannot lead to legal dispute. Since
joining those two contracts has become conventional, it does not lead to legal
dispute, and hence the joining of those two contracts does not constitute a
defective condition. We shall return to this topic shortly.
14 Al-Kharsh
15 Al-Sh
arik
at

alik), vol.6, p.217).
f Al-Fiqh Al-Isl
am (pp.92-97).
Chapter 29
Silent Partnership
Conditions
The validity conditions for silent partnership may pertain to the parties of the
contract, to its capital, or to the resulting profit.
29.1
Conditions pertaining to partners
The capitalist and the active partner (entrepreneur) must both be eligible for
initiating a agency (tawkl) and acting as a legal agent (wakl), respectively. In
this regard, it is not necessary for both partners to be Muslim. Thus, partnerships are permitted between Muslims and Christians, Jews, or any other citizen
of a Muslim country. However, the Maliks consider having a partnership with a
Christian or Jew reprehensible if he does not engage in forbidden dealings (e.g.
rib
a), [and forbidden otherwise].
29.2
Conditions pertaining to capital
29.2.1
Must capital be monetary?
Jurists are unanimous in allowing money as capital in a silent partnership.

The majority of jurists do not allow non-monetary property as capital in such
partnerships, and the H
. anafs and H
. anbals went further to reject even the use
of fungible non-monetary goods as capital. Two notable exceptions are Ibn Ab
Layla and Al-Awzac, who permitted the use of such non-monetary properties
as capital, ruling that the contract is thus concluded for the value of those
properties at contract time.
The majority of jurists ruled against the use of non-monetary capital in
silent partnerships based on gharar. Thus, they argue that the initial value of
thus rendering the amount of profit uncertain.
the capital can only be estimated,
493
494
CHAPTER 29. SILENT PARTNERSHIP CONDITIONS
This can lead to disagreements over the division of final wealth between principal
capital and profits, thus leading to legal disputation. Thus, the contract is
rendered defective, and the worker must be compensated with the going market
wage for his work.1 For the M
aliks, this ruling differs from their opinion in
limited partnerships (sharik
at al-c in
an), where they allowed the use of non
monetary capitals. The difference in their view is that silent partnership is an
exception to the general prohibition of gharar, and hence may only be used
subject to its explicit conditions, withoutresort to reasoning by analogy.
uH
. anfa, Malik, and Ibn H
. anbal permitted listing
the price of non-monetary property as the capital of a silent partnership. In this
case, the capitalist would give said property to the entrepreneur, and instruct
him to sell them and use the price as capital for their partnership. They ruled
that the capital in this case is not the property, but its monetary price. On
the other hand, Al-Shafic did not permit this contract, since the capital is thus
specified as the propertys price, which is unknown. In this regard, a partnership

may not be established with an unknown capital.
In general, jurists render a form of capital valid for silent partnerships if
they render it valid for general partnership, otherwise, they rendered it invalid.
Thus, the juristic differences over gold and silver dust or nuggets, copper coins,
etc., which discussed in the previous part apply equally to the capital of a silent
partnership.
29.2.2
Must the capital be present?
Jurists agree that the capital of a silent partnership may not be absent, and may
not be a debt on the entrepreneur. In this regard, the requirement is presence
of the money at the time the entrepreneur needs to use it, not at the contract
time. Thus, if the money or debt is delivered to the capitalist, and it is then
given to the entrepreneur in time, the partnership would remain valid.
Thus, if a creditor instructs the debtor to use the money as capital in a silent
partnership between them, the contract is rendered defective. In this case, the
money in the possession of the debtor still belongs to the creditor, and thus
receipt of the capital to initiate the partnership would have never occurred.2 In
this case, Ab
uH
afics, and the H
. anfa, the Maliks, the Sh
. anbals ruled that if
the debtor traded with the money, then all his trading would be his, including
any profit or loss, and the debt remains intact. This ruling is derivative of the
more general ruling that it is impermissible to make a debtor a legal agent in
1 Al-Sarakhs
c
(1st edition (H
p.53), Al-K
as
an ((H
d Al-H
afd ((M
u. anaf), vol.6, p.82), Ibn Rush
.
Ish.
aq Al-Shr
az ((Sh
Al-Hum
am ((H
arsh (1317H, 1st and 2nd editions (M
alik), vol.6,
pp.203-209), Al-Dardr ((M

alik)A, vol.3, p.518 onwards), Ibn Juzayy ((M
alik), p.282).
2 Al-K
c
n
as
an ((H
am ((H
((H
d Al-H
afd ((M
alik), vol.2, p.335), Al-Khat.b Al-Shirbn
.
c
((Sh
ut (3rd printing (H
. anbal),

alik), ibid.), Al-Kharsh (1317H, 1st and 2nd editions (M
alik),
vol.6, pp.202,204).
29.2. CONDITIONS PERTAINING TO CAPITAL
495
trading (with the debt money) on behalf of the creditor.

In contrast, Ab
u Y
usuf and Muh.ammad ruled that any trading the debtor
makes in this case is deemed to be on behalf of the creditor. They base this
ruling on their view that agency is permitted in this case, where the debtor is
released of the debt and trades on behalf of the creditor. However, the silent
partnership is still rendered defective in their view, since the capital in this
partnership would in fact be the non-monetary goods first bought by the debtor
on behalf of the creditor.
On the other hand, all jurists agree that a capitalist may commission an
agent to collect his debts from a third party and use them as capital in their
silent partnership. In this case, the capital is designated as the specific money
collected from the debtor, and the entrepreneur is at first a legal agent entrusted
with the money, and he is considered to be in receipt of the capital with the
capitalists permission.
Similarly, the H
afics, and H
. anbals ruled that if a person is en. anafs, Sh
trusted with a deposit, then the depositor may ask him to use the money as
capital in a silent partnership between them. The difference between this case
and that of the debtor is the view that the debtor would not be considered in
receipt of the capital unless he pays it back to the creditor and then collects
it with his consent. However, the Maliks ruled that pawned and deposited
monies were too similar to debts, and thus do not qualify as capital in a silent
partnership.
All jurists also agreed that usurped money may be used as capital in a silent
partnership. In this case, the money belonged to the capitalist, and thus he
may give the usurper permission to use it, thus implicitly delivering it to him.3
29.2.3
Capital must be delivered to the entrepreneur
The majority of jurists with the exception of the H

. anbals ruled that the capital must be delivered to the entrepreneur for two reasons: (i) to enable him to
work, and (ii) to establish the capital as a trust in his possession, which requires
delivery in analogy to deposits. Thus, the majority ruled that silent partnership
is not valid if the capitalist keeps the capital in his possession, unless the worker
himself sought the capitalists help in performing the work. This ruling is based
on the view that the entrepreneur must have full flexibility in using the capital,
which requires being in possession. However, the H
. anbals permitted the capitalist to stipulate a condition that he keeps the capital in his possession. Also,
the Maliks permitted the entrepreneur to request help from the capitalist, and
permitted the capitalist to make multiple contributions to the capital of a silent
partnership.
The condition of delivery of the capital to the entrepreneur differentiates
silent partnerships from regular capital partnerships, where each partner may
keep his capital in his possession. The difference between the two contracts is
3 Al-K
as
an ((H
amah (, vol.5, p.68 onwards), Ab
u-Ish.
aq
Al-Shr
az ((Sh
afic), vol.2, p.310).
496
that a silent partnership is built on the contribution of capital by one partner

and work by the other. In most cases, the worker may only begin to work
after receiving the capital from his partner. On the other hand, a condition of
delivering the capital in a capital partnership would be equivalent to a condition
that the capitalist work in a silent partnership. Both such conditions would be
contrary to the nature of the respective contracts, and would thus render them
defective.4
This restriction applies whether or not the owner of the capital is himself
a party in the contract. Thus, if a legal guardian invests a minors money in
a silent partnership, it is not permissible to stipulate that the minor should
participate in the work.5 Also, if one of two partners in a capital partnership
invests some of the partnerships money in a silent partnership, the contract
may not include a condition that the other partner (who is a part owner) participate in the work. In those cases, delivery of the capital to the entrepreneur
would not be effected, thus rendering the silent partnership defective.6 Another
consequence of this rule is that the entrepreneur in a silent partnership may
not use part of the capital to engage in a silent partnership in which the first
capitalist is the worker. In that case, the first silent partnership remains intact,
while the second one is rendered defective.
29.3
Conditions pertaining to profits
29.3.1
Profit ratios must be known
The entrepreneur enters into a silent partnership seeking his share of profits.
Thus, this integral part of the contract must be known, otherwise the contract
would be rendered defective.7 If a silent partnership contract is concluded without specifying the capitalist and entrepreneur ratios in profits, then the default
ruling is that they divide the profits equally between them. This ruling follows
from the view that equality is the default rule of division in partnerships, as
shown in the verse: But if more than two, they share in a third [4:12].
4 Of course, the capitalist may volunteer to work in a silent partnership, but if his work
is stipulated as a condition, the contract would be defective, c.f. Al-Sharik
at f Al-Fiqh Al
Isl
5 However, jurists agree

that it is permissible to stipulate a condition that the guardian
himself, who is not the owner, participate in the work, ibid.
6 Al-Sarakhs
c
(1st edition (H
. anaf Jurispru
dence), vol.5, p.56), Al-K
as
an ((H
am ((H
. anaf),

n ((H
at.b Al-Shirbn ((Sh
afic), vol.2,
p.310), Al-Buh
ut (3rd printing (H
alik)A, vol.3, p.502
onwards), Al-Raml ((Sh
afic), vol.4, p.163), Al-Kharsh (1317H, 1st and 2nd editions (M
alik),
vol.6, pp.210,212).
7 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.22, p.27), Al-K
. anaf), vol.6, p.85), Al
c
n ((H
Zaylac ((H
. anaf), vol.4, p.505),
. anaf Jurisprudence), vol.5, p.55 onwards), Ibn Abid
Ibn Rushd Al-H
afic), vol.2, p.313),
. afd ((M
Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.30), Al-Raml
((Sh
afic), vol.4, p.162), Al-Kharsh (1317H, 1st and 2nd editions (M
alik), vol.6, p.209).
29.3. CONDITIONS PERTAINING TO PROFITS
497
Defective conditions
The H
. anafs distinguish between two types of defective conditions in silent partnerships:8
Conditions that result in ignorance regarding profit sharing would render
the contract defective, as seen above. An example of such conditions would
be a silent partnership with a stipulated condition that the entrepreneur
should let the capitalist live in his house for a period of time. In this case,
the entrepreneurs share of profits would contain a rent portion, rendering
the profit share in compensation for his work unknown, and the contract
becomes defective.
However, if the defective condition does not affect knowledge of the profit
shares, then the condition is invalidated, and the contract remains intact.
For instance, if the contract has a condition that the entrepreneur would
share in the capitalists financial losses, that condition would be invalidated, and all financial losses would still be incurred by the capitalist.
More generally, the H
. anafs ruled that if a condition leads to violations
of a validity condition of a silent partnership, the entire contract is rendered
defective. On the other hand, any defective condition that does not affect the
validity conditions becomes nugatory, and the contract remains intact.
Extreme profit shares
Jurists agree that if the contract specifies that the capitalist gets all of the profits, and the entrepreneur works for free, then the contract is not a silent partnership (mud.a
raba), and it is considered a mub
ad.ac a (uncompensated agency
in trade). The H
anaf
s
also
permitted
the
specification
of a ceiling monetary
.
amount for one of the partners (i.e. that partner gets a profit share or $x,
whichever is larger).9
However, jurists differed over the status of silent partnerships where
The H
. anafs and H
. anbals consider silent partnerships in which the entrepreneur gets all the profits a loan (qard.). In this regard, they ruled
that the contract cannot be validated as a silent partnership, and it is in
fact equivalent to a loan, hence it should be treated thus.10 This is similar
to their ruling that if the capitalist were to collect all of the profits, the
contract would be treated as a mub
ad.ac a.11
The Shafics consider the contract in this case a defective silent partner
ship, and rule that the worker should collect only the going market wage
for his work.
8 Al-K
as
an
((H
am ((H
. anaf), vol.7, p.62).
f Al-Fiqh Al-Isl
((H
atb Al-Shirbn ((Sh
u-Ish.
aq
.
Al-Shr
az ((Sh
amah (, vol.5, p.30).
11
Al-K
as
an ((H
. anaf), vol.6, p.87).
9 Al-Sharik
at
10 Al-K
as
an
498

The Maliks permit any profit ratio, including both extremes in which the
entrepreneur or the capitalist gets all the profit. In the case where the
entrepreneur gets all the profits, they ruled that the contract is in fact a
loan, and the worker should thus guarantee the capital.12
29.3.2
Partner profits must be common shares
The profit shares of the partners must be specified as common shares (e.g.
known ratios or percentages) of the overall profits of the partnership. As we
have seen previously, this is an exception to the general prohibition of unknown
wages in hiring contracts. Thus, while wages in a hiring contract must be
specified as a fixed amount of money, profit shares in a silent partnership must
be specified as proportions of overall profits. The difference between the two
compensation schemes serves an important economic end. In this regard, the
entrepreneur in a partnership agrees that his compensation will be a part of the
accrued profits, which means that those profits cannot be fixed ex ante since
there is no guarantee that profits will be generated in fact.
This rule was summarized by Ibn Al-Mundhir, who said that all the jurists
he knew ruled that a silent partnership is invalid if either party is guaranteed

a fixed monetary compensation. An interesting special case to consider in this
regard is the fixed interest rate banks pay for deposits, which thus invalidates the
consideration of this contract as a silent partnership. Another interesting special
case that is commonly used today, but cannot qualify as silent partnership, is
the practice of paying workers a fixed wage plus a share in the profits when the
company is liquidated.
It is also not permissible to establish a silent partnership wherein the entrepreneur is entitled to a profit share from other economic activities. Moreover,
it is not permissible to promise one partner a profit share that is $x more than
the others, since the entire generated profit may not exceed $x. If any of those
conditions were stipulated, the partnership is defective and the worker is only
entitled to the going market wage for his work. On the other hand, if such
increases in profit shares were not stipulated as conditions, the Maliks ruled
that the two parties may mutually agree on any compensation scheme after the
fact.13
12 Ibn Rushd Al-Haf

. d ((M
(M
alik), vol.6, pp.203,209).
13 Al-Sarakhs
c
(1st edition (H
c
p.54), Al-K
as
an ((H
am ((H
an
at (p.303), Al-Dardr ((M
afic), vol.2,
. am

alik), vol.2, p.234), Ibn Qud
amah (, vol.5, p.34), Al-Raml
. afd ((M
((Sh
afic), vol.4, p.165).
Chapter 30
Legal Status
A silent partnership may be valid or it may be defective. I shall first discuss the
legal status of defective silent partnerships, and then discuss the legal status of
valid silent partnerships.
30.1
Defective silent partnerships
A silent partnership is rendered defective if one of its validity conditions is

violated. For instance, if a fisherman tells another: Use my net for fishing, and
we share the profits, then the contract is not a valid silent partnership, since
the net does not qualify as capital in such partnerships. Thus, the H
. anafs,
anbal
s
ruled
that
the
capitalist
and
entrepreneur
are
not
bound
Shafics, and H
.
to observe the rules of silent partnership. In this case, all profits or losses
accrue to the capitalist (owner of the net), and the worker should be paid the
going market wage for his work, in analogy to defective hiring contracts. If the
capital (net) were to perish in this case, the entrepreneurs claim is accepted
if he supports it with an oath, since the property is considered a trust in his
possession whether or not the silent partnership is valid.1
Thus, the Shafics and H
. anaf rules for defective
silent partnerships, ruling that all profits and losses accrue to the capitalist,
and the worker must be paid the going market wage. They expanded on those
rulings, first by noting that the entrepreneur is still entitled to work with the
capital he received, since the capitalists permission is still valid despite the
invalidity of the contract. Unlike sales where the buyer may not deal in the
property if the contract is invalid, such dealing is permitted in the invalid silent
partnership since the entrepreneur is authorized by the capitalists permission,
rather than by ownership of the capital. Second, they expanded on the ruling
1 Al-K
as
an ((H
atb Al-Shirbn ((Sh
.
Al-Hum
am ((H
aw ((H
s (1st edition
. ah.
c
(H
an
at (p.311), Marc ibn Y
. am
. anbal),
vol.2, p.179), Al-Far
ud H
. amza
(p.156).
499
500
CHAPTER 30. LEGAL STATUS
that the worker should be paid the going market wage, but explaining that the
going market wage is thus used as the value of the workers labor. Thus, the
entrepreneur is viewed to have worked in a defective contract, and the capitalist
would have received that labor and it can no longer be returned to the worker.
Thus, in analogy to a defective sale where one of the compensations perishes and
cannot be returned, it must be compensated for in value, which is the equivalent
of the going market wage in our case.2
M
alik rulings
On the other hand, the Maliks postulated a different approach to this problem.
Instead of always using the concept of the going market wage as compensation to the worker, they used the concept of the standard silent partnership
for compensating both parties in many cases. When the standard silent partnership solution is used, the entrepreneur gets a portion of the profits if some
are generated, and gets nothing if the work did not produce any profits.3 The
fundamental difference between the standard silent partnership solution and the
going market wage solution is due to making the compensation tied to profits
in the first case, and making it a liability on the capitalist in the second case.4
In what follows, we consider some of the most important cases in which the
standard silent partnership and going market wage solutions are used:
The Maliks ruled that he standard silent partnership solution must be
used in the following cases:
If the delivered capital was non-monetary.
If the profit ratios are unknown, with no conventional defaults available.
Time-constrained silent partnership (e.g. use this money for a year).
Deferred silent partnership (e.g. begin working with this money a
year from now).
If the contract contained a condition that the entrepreneur guarantees
the capital against all losses (including those that are not due to
negligence or transgression).
If the capitalist ordered the entrepreneur to make a credit sale, but
he made a cash sale instead, then the entrepreneur is considered to
be trading for himself and all profits and losses accrue to him. In this
case, the cash price is considered a loan extended from the capitalist
to the entrepreneur.
2 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.388), Ibn Qud

amah (, vol.5, p.65).
3 Al-Dard
r ((M
alik)A, vol.3, p.519 onwards), Ibn Rushd Al-H
alik), vol.2, p.240),
. afd ((M
Ibn Juzayy ((M

alik), p.282), Al-Kharsh (1317H, 1st and 2nd editions (M
alik), vol.6, pp.205
208).
4 Ibn Rushd Al-Haf
alik), vol.2, p.241), lbn-Rushd Al-Qurt.ub ((M
. d ((M
30.2. VALID SILENT PARTNERSHIPS
501
If the capitalist asked the entrepreneur to buy goods that are usually
unavailable.
If the two parties disagreed over profit shares after the work is done.
On the other hand, the Maliks ruled that the going market wage for the
workers labor is established as a liability on the capitalist, independent
of profitability or lack thereof, in the following cases:
If the capital is specified as a deposit or debt that the entrepreneur
owes the capitalist, and which the capitalist had not received.
If a condition is stipulated that the capitalist must participate in the
work.
If a condition is stipulated that the entrepreneur must get the capitalists approval for all transactions.
If the capitalist commissions an inspector to observe the entrepreneurs
conduct.
If the capitalist stipulates a condition specifying the exact tasks that
the entrepreneur must perform.
If the capitalist stipulates that the entrepreneur must work with another specific person.
If the capitalist stipulates that the entrepreneur must combine the
capital of another silent partnership with the capital he gives him.
If the capitalist asks the entrepreneur to use part of the partnerships
money to trade voluntarily on his behalf with no compensation.
30.2
Valid silent partnerships
There are many aspects of the legal status of valid silent partnerships. In
what follows, we discuss the legal status of the entrepreneurs possession of
the capital, the entrepreneurs actions, and compensations to the entrepreneur
and capitalist.
30.2.1
Entrepreneur possession of the capital
The major jurists of all juristic schools agreed that the entrepreneur in a silent
partnership receives the capital with the capitalists permission. Thus, his possession of the capital inherits the legal status of all deposits thus received.5
5 Al-Tah
am ((H
as
an ((H
. . aw ((H
. anaf), vol.7, [.58), Al-K
. anaf),
anaf), vol.22, p.19), Majmac Al-D
am
an
at (p.303
.
.
onwards), Al-Dardr ((M

alik), vol.2, p.234),
. afd ((M
Al-Kharsh (1317H, 1st and 2nd editions (M

alik), vol.6, pp.213,223), Al-Khat.b Al-Shirbn
c
c
((Sh
afi ), vol.2, p.322), Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5,
p.69), Al-Zaylac ((H

anaf
Jurisprudence),
vol.5,
p.53),
Ibn
Juzayy
((M
a
lik
),
p.283),
Marc
.
ibn Y
. anbal), vol.2, pp.171.178).
502
Moreover, when the entrepreneur trades in the partnerships capital, he does so

as a legal agent of the capitalist, with all the appropriate rules applying to his
trading.
Then, if the entrepreneur realizes some profits, he becomes a partner with
his share in those profits. In this regard, the entrepreneur earns his share of
profits as compensation for his work, while the capitalist earns the other share
as growth in his property. As we have seen previously, if a validity condition
of the contract is violated, then the partnership becomes defective, and the
entrepreneur is considered a hired worker who must be paid the going market
wage for his work.
If the entrepreneur deviates from the capitalists condition in a valid contract, then he is considered a usurper, and he must guarantee the capital. However, if the capital perishes for reasons other than neglect or transgression, then
the entrepreneur does not compensate the capitalist, since he is thus considered
a trustee. As we have seen, if the entrepreneur incurs losses, they are borne by
the capitalist exclusively. On the other hand, if the entrepreneur makes a profit,
he should be first to collect his share.
Jurists differed over the legal status of the contract if a condition is stipulated
that the entrepreneur must guarantee the capital against destruction not caused
by his negligence or transgression:
The H
. anafs and H
. anbals ruled that the condition would be invalid, and
the contract remains intact. This also implies that a silent partnership
with a condition of guaranteeing the capital would be a valid silent partnership, but losses would still be borne by the capitalist since the condition
is nugatory.
The Maliks and Shafics ruled that the entire partnership contract would
be rendered defective in this case, based on the presence of excessive gharar
that is not in the nature of the contract.6

On the other hand, as we have seen, there are circumstances where the entrepreneur would indeed guarantee the capital. As Ibn Qudamah (, vol.5,
p.144) put it: If the capitalist stipulates that all the profits would accrue
to the entrepreneur, then the contract is not a silent partnership; rather,
it is a loan. In such loans, the borrower would in fact guarantee the
capital. Thus, Al-Dardr ruled that it is permissible for the entrepreneur
to guarantee the capital if he is entitled to all the profits, since it is then
a loan contract, and the entrepreneurs possession of the capital is a debt
and not a trust.7
6 Al-Samarqand
((H
. afd
((M
alik), vol.2, p.236).
7 Aqrab Al-Mas
alik mac a Bulghat Al-S
alik (vol.2, p.249).
30.2.2
503
Entrepreneur actions
Different entrepreneur actions have different legal status depending on whether

the silent partnership is restricted or unrestricted.
1. Actions in unrestricted partnerships
As we have seen, the entrepreneur has full freedom in an unrestricted silent
partnership to deal with anyone, anywhere. The only restriction when buying
is the requirement that he pays a price less than or equal to the value of the
merchandise. This latter restriction is standard for all purchases performed by
a legal agent (wakl). In selling, Ab
uH
. anfa ruled that the entrepreneur may
sell cash or credit, and with prices that deviate substantially from the goods
value. However, Ab
u Y
usuf, Muh.ammad, the Shafics, and the Maliks ruled
that he is not allowed to engage in credit sales, or to sell at unreasonable prices.

Finally, the H
. anbals permitted the entrepreneur to trade cash or credit, but
restricted him to trading at reasonable market prices.
Most jurists agreed that the entrepreneur may give the capital to an uncompensated volunteer to trade on his behalf. However, the Maliks required him
first to get the capitalists permission, otherwise he must guarantee the capital.8
Another difference between the H
. anafs and Maliks pertains to the entrepreneurs right to deposit the partnerships capital. The H
. anafs permit the
entrepreneur to make such deposits, arguing that it is necessary for merchants
to act thus. However, the Maliks do not permit entrusting any other party
with the partnerships wealth, and ruled that the entrepreneur would have to
guarantee the capital if he does.
Jurists agreed on a permitting number of actions that they deemed necessary
for running a profitable business, thus they allowed entrepreneurs to:
Hire other workers or to lease properties and means of transportation.
Commission legal agents to trade on their behalf.
Engage in pawning part of the capital or receiving pawned objects in lieu
of debts owed to the partnership. This follows from his right to initiate
debts and credits, as long as the capitalist is alive and has not terminated
the entrepreneurs authorization to use the capital.
9
The Maliks, most of the H
. anafs, and some of the H
. anbals, permit
the entrepreneur to travel with the partnerships capital to seek profit.10
8 Al-Dard
r
((M
Ab
u Yac l
a said that this permissibility is inferred by analogy to the permission of
trustees to travel with a deposited item.
10 Al-K
as
an ((H
am ((H
aw
. ah.
((H
s (1st edition (H
anaf), vol.22, p.38 onwards), Al-Zaylac
.
n
((H
an
at (p.305 onwards), Ibn c Abid
. anaf Jurisprudence), vol.5, pp.57,68), Majma Al-D
. am
((H
alik)A, vol.3, pp.524,528), Al-Khat.b Al-Shirbn
((Sh
afic), vol.2, pp.315,317), Al-Buh
ut (3rd printing (H
amah
(, vol.5, pp.35-38), Al-Kharsh (1317H, 1st and 2nd editions (M

alik), vol.6, p.211).
9 Q
ad
504

However, the Shafics and other H
. anbals ruled that such travel requires
the capitalists permission.
Restrictions on the entrepreneur

There are a number of actions that the entrepreneur in an unrestricted silent
partnership is not permitted to undertake unless they are explicitly mentioned
in the contract.11 We list some of those restrictions below:
The H
afics, and H
. anafs, Sh
. anbals ruled that the entrepreneur in a silent
partnership is not permitted to incur debts in the name of the partnership,

unless he obtains a prior explicit permission from the silent partner. If the
entrepreneur undertakes such debts without the silent partners permission, the debt would be considered his alone, and the silent partner bears
no responsibility. This ruling is based on the view that such a debt is tantamount to increasing the capital of the partnership (through increased
liability) without the capitalists permission.
The H
. anafs also ruled that the entrepreneur is not permitted to lend any
part of the partnerships capital without the capitalists permission.
The Maliks ruled that the entrepreneur is not permitted to engage in
credit purchases, even if the capitalist gave permission to do so. If he does
engage in such sales, he must thus guarantee the capital, and all profits
accrue to him. The second part of the ruling follows from the Prophets
(pbuh) prohibition of a capitalists collection of profits through capital
that was guaranteed by another.
The same principle is used to rule that the entrepreneur may not buy goods
on behalf of the partnership with total cost (cash or credit) exceeding the
partnerships capital. In this case, the entrepreneur would guarantee the
excess payment or liability. If the entrepreneur does in fact make such
excess expenditures without the capitalists permission, then the two are
considered partners, with the excess expenditure being the entrepreneurs
contribution to the partnerships capital. However, if the capitalist accepts
the dealing explicitly or by dealing in the purchased items, then the trade
is considered to be part of the silent partnership.
The entrepreneur is legally forbidden to give away any significant part of
the partnerships capital as a gift.12
11 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.80), AlSarakhs (1st edition (H
anaf Jurisprudence), vol.5, p.69),
.
.
n ((H
Ibn c Abid
. anaf), vol.4, p.507).
12 Al-Buh
ut (3rd printing (H
atb Al-Shirbn ((Sh
afic), vol.2,
.

afd ((M
alik), vol.2, p.239),
.
Ibn Juzayy ((M

alik), vol.6,
pp.211.216,226).
505
It is not permitted for the entrepreneur in a silent partnership to engage

in a money transfer to fulfill a persons debt (saftajah). This forbidden
procedure would be effected as follows: the entrepreneur takes a loan from
one party to deliver the money to another creditor in a different country.
In this case, the entrepreneur would bear the risks incurred in the transfer,
and the creditors would thus benefit from this loan that the first extended
to the entrepreneur. As we have seen previously, it is well established that
loans that cause any benefit to the creditor are forbidden.
Unless the capitalist explicitly permits the entrepreneur to engage in any
partnerships he wishes, or gives him a license to use his best judgment,
the entrepreneur is not allowed to: (i) use the capital to act as a capitalist
in another silent partnership, (ii) use the capital to engage in another
partnership, or (iii) mix the capital with his own or anothers capital.
Those restrictions are explained as follows:
The second silent partnership is not permitted based on the general
principle that a contract may not be used recursively in another identical contract. For instance, a legal agent (wakl) in some transaction
is not permitted himself to commission another legal agent for the
same task.
A partnership is more general than a silent partnership, and thus the
restriction against using the capital in a silent partnership implies
that it may not be used for a regular partnership.
Mixing the silent partnership capital with other capital would give
the owner of the other capital a legal right to the initial capitalists
property, which is not permitted unless the capitalist permits it.13
Obligations of the entrepreneur
The obligations of the entrepreneurs are established by convention in his profession and location. In particular, if the entrepreneur hires a worker to perform
one of his obligatory tasks under the contract, then he should pay the hired
worker out of his own money. However, if he hires a worker to perform a job
that is not part of the obligatory tasks of the entrepreneur, then he may pay
him out of the partnership money.
Recursive silent partnership
We now turn back to the case where the entrepreneur in a silent partnership
uses the capital to act as a capitalist in another silent partnership. We have
seen that the H
. anafs do not allow the entrepreneur to act thus without the
initial capitalists permission. We now consider the H
. anaf rulings for the case
where the entrepreneur does in fact use the capital in a second silent partnership
without the first capitalists permission:
13 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.64), Alc
n ((H
Zaylac ((H
. anaf), vol.4, p.507).
506

Ab
uH
. anfa ruled that the entrepreneur guarantees the capital only if the
second entrepreneur makes a profit. This guarantee only comes into effect
after profits are made, and it is not effected before that (not even after
the second entrepreneur begins using the capital, but before profits are
made). Thus:
The mere act of delivery of the capital to the second entrepreneur is
considered a deposit, which is permitted, and thus does not require
guaranteeing the capital.
If the second entrepreneur begins using the capital, that is considered
voluntary trading on the first entrepreneurs behalf (ibd.a
c ), which is
also permitted.
However, if the second entrepreneur makes profits and earns a share
thereof, the second partnership becomes established, and thus the
first entrepreneur must guarantee the capital, in analogy to the case
of mixing the capital with another.
Under the first two sets of circumstances, the first entrepreneur is still
considered a trustee for the capital, and if it were to perish, he normally
would not be required to compensate the first capitalist.
Moreover, if the second silent partnership is defective, then the second
entrepreneur is in fact a hired worker. In this case, a second partnership
is never established, and thus the first entrepreneur is not required to
guarantee the capital.
Zufar ruled that the first entrepreneur must guarantee the capital as soon
as he delivers the capital to the second entrepreneur, whether or not the
latter uses it. He thus ruled that while the entrepreneur is permitted to
deposit the capital, he was not permitted to use it in a silent partnership.
Thus, by delivering the capital to the second entrepreneur, he would have
violated the first contract, and would have to guarantee the capital. This
is in analogy to the recipient of a deposit who re-deposits it with another,
whereby he would guarantee the deposited properties.
The best supported H
u
. anaf opinion is that which was supported by Ab
Y
usuf and Muh.ammad. They ruled that the partnership is established
as soon as the second entrepreneur begins to use the capital, whether or
not he makes any profits. Thus, that is the event in which the second
entrepreneur is considered to be using the first capitalists capital without
his permission, and thus the capital must be guaranteed.14 In this case,
the first capitalist is given the option whether the first or the second
entrepreneur should guarantee his capital. If profits are in fact made in
the second silent partnership, then the capitalist must collect his share as
14 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.70 onwards), AlSarakhs (1st edition (H
anaf Jurisprudence), vol.5, p.63),
.
.
n ((H
Ibn c Abid
. anaf), vol.4, p.509).
507
specified in the first contract, and the two entrepreneurs share the residual
share according to their agreed-upon ratio in second contract.
This majority H
. anaf opinion was also supported by the H
. anbal Judge
Ab
u Yac la.15 However, Ibn Qud
amah (, ibid.) said that this opinion is
not in accordance with the fundamentals of the H
. anbal school, and that
it disagrees with the ruling of Ah.mad ibn H
anbal.
The latter Imam ruled
.
that the entrepreneur would not be entitled to any share in profits in this
case.
The Maliks ruled that the first entrepreneur guarantees the capital as
soon as he delivers it to the second entrepreneur without the capitalists
permission, since he would have thus transgressed. In this case, the second entrepreneur and the capitalist share the profits. In this regard, they
argue, the profit share in a silent partnership is a compensation for completing the work. Since the first entrepreneur did not work, he deserves no
profit share from the first contract. The second entrepreneur must then
pay the first entrepreneur whatever share in his profits was agreed upon
in the second contract.
The majority of Shafics ruled that an entrepreneur in a silent partner
ship is not permitted to use the capital in a second silent partnership,
even if the capitalist were to approve it. They thus ruled that the first
silent partnership remains valid, but the second entrepreneur must not be
paid the going market wage for his work.16 This ruling follows from their
view that silent partnership is a special contract (a license) that would
have been invalidated based on reasoning by analogy. In this contract,
there are two sides: an owner who does not work on the one hand, and
workers on the other. In the case considered here, the first and second entrepreneurs are considered two workers. The silent partnership contract as a special license - does not allow for side-contracts between the workers,
thus invalidating the second silent partnership.
Summary
The above may be summarized by considering three types of actions of the
entrepreneur in an unrestricted silent partnership, according to the H
. anaf classification:
Actions that are conventionally undertaken by entrepreneurs (e.g. trading,
commissioning legal agents for trade, etc.). Those actions are permitted
whether or not the capitalist gives an explicit permission. In this case, the
H
. anafs agree that the entrepreneur may only buy at reasonable market
15 ibid., Al-Sharik
at f Al-Fiqh Al-Isl
am by Dr. c Al Al-Khaff (p.81), Ibn Qud
amah (,
vol.5, p.44).
16 Al-Khat
b Al-Shirbn ((Sh
.
((M
alik), vol.6, p.214).
508

prices, and most of them agree that the same restriction applies to selling
as well as buying.
Actions that require general permission from the capitalist (e.g. permission to do as he sees fit). This class of actions includes using the capital
in a second silent or regular partnership. The H
. anafs ruled that such
actions are valid if the capitalist gave the entrepreneur enough freedom to
do so.
Actions that require explicit and specific permission from the capitalist.
This class of actions includes charitable and gift giving, lending, and selling
or buying at subsidized prices. Most jurists add to this list spending money
in excess of the partnerships capital in buying merchandise on its behalf.
The Shafics, Maliks, and H
. anbals add credit purchases to the list.
2. Actions in restricted partnerships

All rulings that apply to unrestricted silent partnerships also apply to restricted
ones, with few additions effected by the stipulated restrictions. In this regard,
location or line-of-business restrictions render the entrepreneurs agency of the
capitalist a restricted representation. Those restrictions interact with the general ones pertaining to all silent partnerships. In what follows, we consider each
set of restrictions separately:
A. Location restrictions
If the capitalist in a silent partnership stipulates in the contract that the entrepreneur may only use the capital in a particular city or area, then the entrepreneur is bound by that condition. This restriction qualifies as a useful
condition in the contract, since prices vary across locations, and travel increases
the risk associated with transported capital.
In this regard, the restriction applies to the capital, and not only to the
entrepreneur. Thus, the entrepreneur who is restricted to use the capital only
within a particular city may not give it to another to trade outside of that city.
If the entrepreneur takes the capital out of the city himself, or if he commissions
another to take it out, then he must guarantee the capital, and all profits and
losses accrue to him. Ab
uH
. anfa and Muh.ammad added that profits collected
thus are not a good source of income, while Ab
u Y
usuf deemed it a good source.
If, on the other hand, the capital is transported out of the city and then
returned without using it in any trades, then the contract is restored and the
guaranty is revoked. The H
. anafs made this ruling in analogy to the case where
the recipient of a deposit violates the depositors conditions, but then reverts
to abidance without having caused any losses.17
17 Al-Sarakhs
c
(1st edition (H
. anaf), vol.22, pp.42,46), Al-Zayla ((H
vol.5, p.59), Al-K

as
an ((H
anaf
),
vol.6,p.98),
Ibn
Al-Hum
a
m
((H
anaf
), vol.7, p.64 onwards),
.
.
Al-T
aw ((H
. ah.
. anaf), p.125).
509
If the contract specified a very limited area for the entrepreneurs work (e.g.
use the capital in this specific market), and the entrepreneur went beyond
that limited area, but did not go far (e.g. remained within the city), then
there are two rulings. The ruling according to reasoning by analogy would
render the entrepreneurs behavior impermissible, while the ruling by juristic
approbation would render it permissible. The ruling by analogy stresses the
logical equivalence of conditions that restrict actions to specific area, regardless
of how small or large that area may be. On the other hand, the H
. anaf ruling
based on juristic approbation considers the potential economic benefit from the
condition. In this regard, if the contract specified a very small area, and there
was no economic benefit from that restriction, the excessive restriction would
be considered nugatory.
. anafs ruled that if the condition explicitly ruled
out working anywhere outside that limited area (e.g. do not use this capital
anywhere except in this specific market), then the condition is binding. In this
case, if the entrepreneur trades outside the specific market, he would guarantee
the capital. This case is different from the one discussed in the previous paragraph. The case discussed previously included an overly restrictive condition
with no economic benefit, and thus part of it was rendered nugatory. However,
when the capitalist explicitly forbids the entrepreneur from certain dealings, the
condition becomes binding. In this regard, jurists consider the precise language
used in the contract to determine whether or not the location restriction is a
condition that may be relaxed.
B. Restricted set of individuals
The H
. anafs and H
. anbals permit the capitalist to stipulate in the contract that
the entrepreneur has to deal with specific individuals when working with the
partnerships capital. They justify this ruling by the possibility of reducing
business risks by restricting the set of individuals with whom the entrepreneur
deals.
As we have seen previously, the Maliks and Shafics reject this type of con
tract restrictions. Their view is that silent partnerships require allowing the
entrepreneur freedom to search markets for the most profitable opportunities.
Thus, restricting the set of trading or business associates would violate this
fundamental goal of establishing a silent partnership.
C. Temporal restrictions
The H
. anafs and H
. anbals permit the capitalist to specify a limited time period
for the silent partnership, after which it becomes voided. They reasoned that
the contract is primarily one of agency, which may be temporally restricted.
In this regard, they argued that restricting the time period of the partnership
can be economically beneficial, in analogy to the other restrictions mentioned
previously, and thus the restriction is permitted.18
18 Al-K
as
an
((H
am ((H
. anaf), vol.7, p.65).
510
We have seen previously that the M

aliks and Shafics would consider a
silent partnership with temporal restrictions invalid. Their reasoning is that

the object of the contract is to make profits. In this regard, if profits are
not made within the specified time period, the purpose of the contract would
be negated. Moreover, it may be clear that waiting beyond the specified time
period would increase profits, and this condition would be contrary to the nature
of the contract.19
Ex post restrictions
The H
. anafs ruled that the capitalist is permitted to add ex post restrictions
to an otherwise unrestricted silent partnership as long as the capital is in monetary form. This includes the cases where the capital was never used by the
entrepreneur, as well as the case where it was used for trading, but is currently
in monetary form. In all such cases, any restriction that can be of economic benefit may be added ex post. However, while the capital is held in non-monetary
form (e.g. after the entrepreneur used it to buy some goods), the capitalist is
not allowed to add a condition (e.g. do not sell those goods on a credit basis),
since the entrepreneurs trade concluded the unrestricted silent partnership. After those goods are sold and the capital returns to monetary form, adding new
conditions is allowed in analogy to the capitalists ability to add such conditions
at the inception of the contract.
General rulings on restrictions
Thus, we see from the previous discussions that the H
. anafs ruled based on
the potential economic benefit served by restrictive conditions. In contrast,
they consider all restrictions that are not economically beneficial nugatory. For
instance, a condition that the entrepreneur does not trade immediately is considered invalid and nugatory.20
On the other hand, the Maliks and Shafics view the silent partnership
contract as a means for the entrepreneur to make profits through conventional

market dealings. Thus, they argue, any condition that contravene with such
conventional actions of the entrepreneur would render the silent partnership
defective.21
30.2.3
Rights of the entrepreneur
The silent partnership contract entitles the entrepreneur to two rights: spending
rights, and rights to the named portion of profits.
19 Al-Khat
b Al-Shirbn ((Sh
amah (, vol.5, p.63), Al-Dardr
.
((M
20 Ibn c Abid
n ((H
. anaf), vol.4, p.508).
21 ibid., Al-Sharik
at f Al-Fiqh Al-Isl
511
1. Expenses chargeable to the partnership

There are varying opinions regarding the entrepreneurs spending rights:
Al-Imam Al-Shafic had two opinions, the better accepted of which for
bids the entrepreneur from charging personal expenses (including travel
expenses) to the partnership, without the capitalists permission. This
ruling is based on the view that the entrepreneurs only compensation
is his stated share in profits. In this regard, personal expenditures are
viewed as an extra benefit, the monetary value of which may indeed equal
the total profits, thus the entrepreneur would have collected all the profits.
In fact, the spent amount may exceed total profits, in which case the entrepreneur would have effectively taken part of the capital. All such cases
are clear violations of the silent partnership contract rules, and thus any
stipulated condition that the entrepreneur may charge personal expenses
to the partnerships capital would render the contract defective.22
Ibr
ahm Al-Nakhc and Al-H
. asan Al-Bas.r ruled that the entrepreneur is
permitted to charge personal expenses to the partnership, be they travel

expenses or otherwise.23
The majority of jurists, including Ab
u H
. anfa, Malik, and the Zayds,
ruled that only basic travel expenses (i.e. food and clothes) may be
charged to the partnership. They ruled that such expenses may be deducted from the profits (if there are any), or from the principal capital of
the partnership.24
Al-Imam Malik ruled that such basic travel expenses may be charged to
the partnership if its capital can accommodate such expenses. However,
all personal expenses other than travel expenses must be from the entrepreneurs own money, and he may not charge them to the partnership
unless working for the partnership takes him away from his usual source
of sustenance. In the latter case, he is permitted to charge basic personal
expenses to the partnership.
The H
. anbals permitted charging personal expenses to the partnership if
and only if that was stipulated as a contract condition.25
Those who permitted charging personal expenses in certain cases based their
ruling on the view that entrepreneurs would not engage in silent partnerships
unless they could guarantee being able to meet their basic personal needs. In
this regard, those who single out travel expenses argue that the entrepreneur
22 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
p.317).
23 Ibn Rushd Al-Haf
alik), vol.2, p.238).
. d ((M
24 Ibn Rush
d Al-H
afd ((M
alik), ibid.), Al-K
as
an ((H
am
.
((H
s (1st edition (H
aw ((H
. anaf), vol.22, p.63), Al-T
. ah.
. anaf),
c
alik)A, vol.3, p.530), Al-Muntaza Al-Mukht
ar (vol.5, p.333), Ibn
Juzayy ((M
alik), vol.6, p.217).
25 Ibn Qud
ut (3rd printing (H
. anbal), vol.2, p.265).
512
would be traveling for the benefit of the partnership, and while traveling, he
would have no other source of income. The alternative, they argue, would be to
force the entrepreneur to use his own money to meet his travel expenses, which
can lead to financial losses.
As we have seen, all jurists who permit charging certain types of expenses
to the partnership restrict this permission to basic expenses. In this regard, the
H
. anafs explicitly list what they considered conventional basic needs. This list
excluded medical expenses, which they argued to be incidental expenses caused
by a temporal health condition. However, Ab
u H
. anfa ruled that expenditures on medicine may be charged to the partnership, since such expenditure
allows him to restore his physical abilities, without which he cannot perform his
work. Thus, he ruled that medical expenditure is similar to basic expenditure
on food.26
If the entrepreneur spends out of his own money to cover expenses that are
chargeable to the partnership, that amount of money is established as debt of
the partnership towards him. This ruling is in analogy to a guardian spending
his own money on a child, in which case it is considered a debt on the childs
property. In both cases, the expenditure is authorized out of another property,
and thus if he uses his own money, the amount becomes a credit owed to him.27
Amount of charged expenses
Jurists ruled that the amounts that entrepreneurs may charge to silent partnerships must be reasonable. Thus, if the entrepreneur charges excessive amounts
as personal expenses, he must guarantee the amount in excess of normal necessary expenses. This ruling is based on the rule that implicit permissions are
generally assumed to be restricted to conventional behavior.
Jurists also specified the types of expenses that may be charged to the partnership, as well as the timing of reimbursement:
The entrepreneur is entitled to reimbursement for his travel expenses, even
if he does not succeed in conducting the business transactions for which
he traveled.
If the entrepreneur returns home and finds that he has some unused clothes
or goods that he bought as travel expenses, then he must return those
goods to the partnership capital. In this case, the permission to use those
goods expires with returning home and the termination of the permission
to charge travel expenses to the partnership.
The entrepreneur may charge his basic travel expenses to the partnership
even if he carried some of his own money on the trip. If the entrepreneur
26 Al-K
c
as
an ((H
am ((H
c
c
n ((H
((H
. anaf), vol.4, p.512), Majma Al. anaf Jurisprudence), vol.5, p.70), Ibn Abid
D
an
at (p.308).
. am
27 Al-K
as
an ((H
. anaf), ibid., p.107).
513
travels with the capital of two capitalists, then he should charge his basic
travel expenses to both partnerships in the proper ratio.28
If the entrepreneur travels for partnership business, his basic personal expenses may be considered travel expenses while traveling, or while residing
away from home for fifteen days or less. The important consideration in
this regard is that the entrepreneur does not establish the dwelling away
from home as a new residence (the Maliks ruled that the criterion is not
having married there).
How expenses are deducted
If the partnership makes profits, then the entrepreneurs eligible expenses should
be charged to the profits (prior to distribution). If there were no profits, then
such expenses should be deducted from the capital of the partnership. This
ruling is based on the view that such expenses are losses to the partnership,
which should primarily be deducted against profits if they exist.
2. Entrepreneurs right to stated profit share
As we know, the entrepreneur in a valid silent partnership is entitled to his
stated share of profits according to the contract. If the partnership did not
result in any profits, then the entrepreneur is not entitled to any other financial
reward. As a partner, he is self-employed, and thus does not earn any wages.
The entrepreneur is only entitled to receive his profit share after he delivers
the capital to its owner (the silent partner). Thus, if the entrepreneur generates
profits, but the capital perishes in his possession (and thus is not delivered to the
silent partner), the stated profit sharing rule is voided. In this case, whatever
the capitalist receives counts towards his capital, and whatever was delivered
to the entrepreneur is considered a debt on the entrepreneur. If any profits
remained after the capitalist received his full principal capital, then it is shared
according to the stated rule.
Proof for this rule that the principal must be delivered to the capitalist
before profits are shared is - provided by the H
in which the Prophet
. adth
(pbuh) was reported to have said: The example of a faithful Muslim is like
that of a merchant. The latter may not receive his profits until he delivers the
principal capital, and the former is not rewarded for supererogatory deeds until
is proof that profits
he performs all obligatory acts of worship.29 This H
. adth
are an increase over the principal, which is not considered or divided until the
principal is delivered to its owner.
If the entrepreneur and capitalist disagree over whether or not the capital was delivered prior to dividing the profits between them, the H
. anafs and
H
. anbals ruled that the capitalists claim is accepted, and the entrepreneur must
28 Al-K
as
an
((H
. anaf), ibid.).
H
was reported in Al-K
as
an ((H
. adth
. anaf), vol.6, p.107), however, I have not been
able to find it in any of the major H

references.
. adth
29 This
514
deliver the principal capital he received. Then, if any money remained, the two
parties may share it in half. In this case, the entrepreneur is making a positive
claim (that the principal has been returned to its owner), while the capitalist is
denying that claim. In such cases, the claim of the denier is given legal priority.
Thus, even though the entrepreneur is considered a trustee, his claim still does
not get legal priority. In this regard, the trustees claim is accepted with regards to dropping his responsibility to guarantee the capital, but his claim with
regards to delivery to another is not given such priority.30
In this context, the H
afics and the M
aliks agree
. anafs, the majority of Sh
that the entrepreneurs entitlement to his profit share is effected by returning

the capital and dividing profits, rather than the mere realization of profits. On
. anbals and Zayds ruled that the worker is entitled to his
profit share as soon as profits are realized, even if that happens before the total
money is divided between him and the capitalist. However, all jurists agree that
the entrepreneur does not collect his profit share until he delivers the principal
capital to the capitalist. Only then can the profits be divided according to the
ratios specified in the contract.31
30.2.4
Rights of the capitalist
As we have seen, the capitalist is entitled to his portion of profits if any were
realized. As we have seen, the capitalist also has the right to collect all of
his principal before the entrepreneur gets his profit share. In this regard, the
entrepreneur must convert all the partnerships property into monetary form,
and pay the capitalist back his principal, and then they share any realized profits
as specified in the contract.32
Moreover, Ibn Rushd said: Major jurists have all agreed that the en
trepreneur may only collect his profit share in the presence of the capitalist.
In this regard, it is not sufficient that the entrepreneur provides sufficient legal
proof, and physical presence of the capitalist is required. Also, the capitalist
bears all losses in a silent partnership, whether the loss resulted from natural
causes, or any other cause other than the entrepreneurs negligence or transgression.33 Such losses include any decrease in the value of the partnerships
capital, whether caused by market conditions (e.g. if prices of held goods decline significantly), natural disasters, or theft. In all such cases, the losses are
fully borne by the capitalist as long as the entrepreneur cannot be blamed for
negligence or transgression.
30 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.22,
c
pp.20,105), Al-Zaylac ((H
n ((H
. anaf), vol.4,
p.511).
31 Al-Khat
b Al-Shirbn ((Sh
.
Y
. anbal), vol.3, p.175).
32 Al-K
as
an ((H
d Al-Qurt.ub ((M
alik), vol.3, p.8).
. anaf), ibid., p.108), lbn-Rush
33 Ibn Rushd Al-Haf

d ((M
alik), vol.2, p.238).
.
Chapter 31
Capitalist-Entrepreneur
Disagreements
The capitalist and entrepreneur in a silent partnership may disagree in matters
pertaining to: (i) the entrepreneurs actions (permitted or otherwise), (ii) capital
destruction, (iii) whether or not the capital was returned to the capitalist, (iv)
the agreed-upon profit shares, or (v) the amount of principal capital used in
the partnership. In what follows, we consider each of those potential types of
disagreements in some detail:
31.1
Disagreements over entrepreneur actions
If one party claims that the partnership was specific (e.g. to a specific line
of business, or a particular location), while the other claims its generality, the
generality claim is given legal priority. Also, if the capitalist claims that he
forbade the entrepreneur from dealing outside a restricted set of commodities
or a restricted geographic location, while the entrepreneur denies that claim, the
entrepreneurs claim is accepted over the capitalists. This ruling is based on
the opinion that silent partnership is primarily a general unconstrained contract
with the aim of generating profits. Thus, when the two claims contradict one
another, the one that is more in accordance with the nature of the contract is
given legal priority and accepted.
On the other hand, if the two parties disagree over the nature of the restriction (e.g. one claims that trading was restricted to clothes while the other
claimed that it was restricted to grains), then the capitalists claim is accepted.
In this case, both restrictions are equally close to the natural form of the contract (which is unrestricted), and thus neither can be chosen based on that
criterion. Jurists then decided that the capitalist is the one who stipulated the
restriction, and thus his claim is given priority over the entrepreneurs.1
1 Al-K
as
an
((H
am ((H
s
515
516
CHAPTER 31. CAPITALIST-ENTREPRENEUR DISAGREEMENTS
31.2
Disagreement over capital destruction
If the entrepreneur claims that the capital perished and the capitalist denies
that claim, then jurists agree that the entrepreneurs claim is accepted. The
entrepreneurs claim is also accepted if the capitalist agrees that the capital
had perished but claims that its destruction was caused by the entrepreneurs
transgression. The ruling in both cases is based on the entrepreneurs status as
a trustee. The default status of such trustees is non-transgression, hence the
capitalist is making a claim that something out of the ordinary had occurred,
while the entrepreneur is denying that claim. In such cases, the deniers claim
is accepted, as it would be in the case of a trustee who had accepted a deposit,
and then the depositor made a similar claim.
31.3
Disagreement over capital repayment
If the entrepreneur claimed that he had returned the capital to the capitalist,
while the capitalist claimed that he had not, we have seen that the H
. anafs
and H
anbal
s
accept
the
capitalists
claim.
Their
proof
is
that
the
entrepreneur
.
accepted receipt of the capital seeking benefit, and thus analogy cannot be
drawn to the case of a borrower whose claim would be accepted with regards
to repayment of debts. On the other hand, the Maliks and the majority of the
Shafics ruled that the entrepreneurs claim of repayment is accepted, in analogy
to the acceptance of claims of other trustees (e.g. a depositary).2
31.4
Disagreement over capital amount
Jurists agree that if the capitalist and entrepreneur were to disagree over the
amount of capital delivered in the beginning of the partnership, the entrepreneurs
claim is accepted.3 In such cases, the capitalist is making a claim for the extra
amount, while the entrepreneur is denying it. Since the entrepreneurs claim
will be accepted if denied having received any amount, it is certainly accepted
if he denies part thereof.
If the two parties disagree both over the initial capital, and over the profit
ratios, then the H
. anafs and H
. anbals ruled that the entrepreneurs claim is
accepted regarding the initial capital, while the capitalists claim is accepted
regarding the profit sharing rule. On the other hand, the Shafics ruled that the
entrepreneurs claim is accepted on both counts if he supports it with an oath.

c
(1st edition (H
2 Al-K
as
an ((H
amah (, vol.5, p.70), Al-Khat.b Al-Shirbn
c
((Sh
afi ), vol.2, p.322), Ab
u-Ish.
aq Al-Shr
az ((Sh
alik)A,
vol.3, p.536), Marc ibn Y

anbal
),
vol.2,
p.178).
.
3 Al-Zaylac
((H
as
an ((H
. anaf Jurisprudence), vol.5, p.74), Al-K
Al-Hum
am ((H
s (1st edition (H
d
c
Al-H
afi ), vol.2, p.321), Ab
u-Ish.
aq
. afd ((M
az ((Sh
usuf (1st printing
Al-Shr
(H
. anbal), vol.2, p.178).
31.5. DISAGREEMENT OVER PROFIT RATIOS
517
Their opinion is based on the view that the default situation is paying no more
than the original capital, and no profits.
31.5
Disagreement over profit ratios
If the two parties disagree only over the profit ratio agreed upon in the contract,
then the H
. anafs, and most of the H
. anbals ruled that the capitalists claim is
accepted. In this case, they argue that the capitalist is denying the extra profit
share that the entrepreneur claims for himself. As we have seen previously, the
claim of the one making a denial is given legal priority.4 This general rule is
based on the Prophets (pbuh) H
: The claim of the one denying a charge
. adth
is accepted.5
On the other hand, the Maliks ruled that the entrepreneurs claim is accepted in this case if supported by his oath, and if two conditions hold:
1. The profit ratio claimed by the entrepreneur must be reasonable compared
to conventional contracts.
2. At the time of the claim, the capital must continue to be in the entrepreneurs possession either physically, or legally (e.g. if it is deposited
with a third party).6
The Shafics differ from the other schools by ruling in this case that the
entrepreneur and capitalist should each take an oath to support their respective
claims. The mutual oath taking in this case is ruled in analogy to the case
where a buyer and seller disagree over the price. Thus, the contract is voided
by one of the parties, both parties, or a judge, but not automatically based
on the mutual oath taking. If the contract is voided, then the entrepreneur
must be paid the going market wage for his work. This ruling, as we have seen
previously, is based on the view that the workers work cannot be returned to
him, and therefore he must be paid its value, which is the going market wage.7
On the other hand, they rule that if entrepreneur claims that he earned no
profits, and if he supports this claim with his oath, then his claim is accepted
based on the principle that the default outcome is no profit.
4 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.22, p.89), Al-K
Qud
. anbal), vol.2, p.178).
c
ari and Muslim on the authority of Ibn Abb
as. Al-Bayhaq narrated
it in his Sunan as follows: If peoples charges against others were to be accepted, people would
claim others properties and lives. Nay, the onus of the proof is on the one making a charge,
and the deniers claim is accepted if he takes an oath [and there is no independent proof], c.f.
Al-H
), vol.4, p.96). Al-Tirmidh and Al-Daraqut.n each
.
. adth
narrated in their respective Sunan a H

on the authority of c Amr ibn Shuc ayb on the
. adth
authority of his father and grandfather that the Prophet (pbuh) said in a khut.bah: The one
leveling a charge needs to provide proof, and [if he doesnt, then] the claim of the charged one
is accepted based on his oath, c.f. Al-H
), vol.4, p.390).
.
. adth
6 Al-Dard
r ((M
alik), vol.2, p.241).
. afd ((M
7 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.389).
518
CHAPTER 31. CAPITALIST-ENTREPRENEUR DISAGREEMENTS
31.6
Disagreements over the capital
The two parties may disagree over whether the capital was given to the entrepreneur as: (i) part of a silent partnership, (ii) as a deposit, (iii) as a
mub
ad.ac ah (i.e. all profits accrue to the capitalist), (iv) or as a loan (i.e. all
profits accrue to the entrepreneur). If the capitalist claims any of the first three
cases to be true, while the entrepreneur claims the fourth case to be true, the
H
afics accept the capitalists claim. Their ruling is
. anafs, H
. anbals, and Sh
based on the fact that the capital is the capitalists property, and the claims
relate to the nature of the contract under which he gave the capital to the entrepreneur. Moreover, they argue, the entrepreneur in this case is making a
claim regarding the capitalists surrender of ownership of profits, while the capitalist denies that claim. Thus, they ruled in favor of the capitalist, in analogy
to their resolution of agreements over the nature of the capital.
In contrast, the Maliks ruled that the entrepreneurs claim is accepted in this
case if supported by his oath. Their ruling is based on analogy to disagreements
over profit ratios. Thus, they give the entrepreneurs claim priority based on his
work and effort. Moreover, they argue that their ruling can be obtained based
on the entrepreneurs status as a trustee.
On the other hand, if the capitalist claimed that he gave the money as a
loan, but the entrepreneur said that it was in fact a silent partnership, then
the majority of jurists agree that the entrepreneurs claim is accepted. In this
case, both parties would have agreed that the entrepreneur received the capital
with the capitalists permission. Then, the capitalist would be claiming that the
entrepreneur must guarantee the capital (as a borrower), while the entrepreneur
denies this claim of guaranty. Thus, the entrepreneurs claim is accepted as a
denier. In contrast, the Maliks ruled that the capitalists claim is accepted if
supported by his oath. Their proof is that the default ruling for delivery of
property is guarantee by the recipient, thus supporting the capitalists claim of
guaranty by the entrepreneur.8
8 ibid., Al-Dard
r ((M
afic), vol.2, p.321),
Al-Dardr ((M
Chapter 32
Invalid Silent Partnerships

There are five sets of actions or circumstances that would render a silent partnership invalid:1
32.1
Terminating authorization to work
All four schools of jurisprudence agree that a silent partnership may be invalidated either by direct voiding, or by withdrawing the authorization to the
entrepreneur to deal with the capital provided two conditions are met:
1. The other party is informed of the voiding or termination of authorization
to work with the partnerships capital.
2. The partnerships capital must be in monetary form at the time of terminating the authorization to work.
Thus, if one of the two conditions is not met, the voiding or termination of
authorization to work does not invalidate the contract. In such cases, the entrepreneurs actions continue to be valid under the contract. Thus, if the capital
were in non-monetary form at the time the capitalist attempted to terminate
the authorization to work, the entrepreneur continues to have the right to sell
those goods to realize the monetary profits. In this case, the capitalist cannot
deny him the right to sell and realize the profits in which he has an established
share.
The Maliks further require mutual consent for voiding the contract, since
they render the contract binding on both parties once work had begun. As we
have seen previously, the other schools consider the contract non-binding at all
times.
1 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.74 onc
wards), Al-Zaylac ((H
an
at
. anaf Jurisprudence), vol.5, p.66 onwards), Majma Al-D
. am
c
(p.308), Ibn Abid

n ((H
at.b Al-Shirbn ((Sh
afic), vol.2, p.319
onwards), Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.58), Al
Buh
ut (3rd printing (H
519
520
32.2
CHAPTER 32. INVALID SILENT PARTNERSHIPS
Death of one of the parties
The majority of jurists ruled that a silent partnership is invalidated by the

death of either party. This ruling is based on the contracts status as a agency,
which is invalidated by the death of either the represented (muwakkil) or the one
representing him (wakl), whether or not the other party knows of the death.
On the other hand, the Maliks ruled that the silent partnership is not
automatically invalidated by one partys death. In this case, a deceased entrepreneurs heirs take his place if they are eligible for trust, otherwise, they
may hire a trustee to undertake the work.2
32.3
Insanity
The non-Shafics ruled that an incidence of insanity of one of the contracting
parties invalidates a silent partnership, while the Shafics required that such
insanity be long term or irreversible for the contract to be invalidated. In this

case, insanity invalidates eligibility for either side of a agency contract, thus
invalidating the silent partnership. This ruling is also applicable if one party
were to suffer long-term coma.
The rule also applies if the capitalist is put under legal guardianship due to
mental incapacity. However, the H
. anafs ruled that the contract is not voided
if the entrepreneur is put under legal guardianship due to mental incapacity. In
the latter case, they argue that he would still be allowed to commission another
as a legal agent, in analogy to the case of a discerning child.
32.4
Apostasy
If the capitalist abandons Islam, and dies or is killed in a state of apostasy,

or if he migrates to the land of war, then Ab
u H
. anfa ruled that the silent
partnership is rendered invalid effective the day of apostasy. The case of joining
the land of war is deemed equivalent to death, thus invalidating the capitalists
eligibility to deal in his property, and it is distributed according to the rules of
inheritance.
On the other hand, if the entrepreneur were to commit apostasy, the silent
partnership remains intact. Thus, profits continue to be shared according to
the contract even if the entrepreneur were to die in a state of apostasy or join
the land of war.
Note that in three of the four cases already studied: (i) voiding or termination of authorization, (ii) death of one of the parties, and (iv) apostasy, the
entrepreneur may continue to trade in order to put the partnerships capital in
monetary form.3
2 Ibn
Juzayy ((M
alik), p.283).
(1st edition (H
am ((H
. anaf), vol.19, p.104; vol.22, p.86), Ibn Al-Hum
. anaf),
vol.7, p.76), Al-K

as
an ((H
. anaf), ibid.).
3 Al-Sarakhs
32.5. DESTRUCTION OF THE CAPITAL
32.5
521
Destruction of the capital
If the partnership capital perishes in the possession of the entrepreneur prior to

any dealings, the contract is invalidated. In this case, the entrepreneur received
the capital to deal in it, and thus if the capital perishes, the contract is voided
in analogy to the case of a deposit contract.
Similarly, if the entrepreneur consumed all of the capital, or gave it to another who consumed it all, there is no longer any capital for the partnership to
exist, and it is voided. However, in the second case, if the entrepreneur were to
collect compensation from the other consuming party, then he may continue to
use that capital as property of the partnership.
32.6
Capital as credit
If the silent partnership is voided in one of the manners discussed above and
the capital of the partnership is in the form of accounts receivable, or debts
on others, then we consider different cases:
If the entrepreneur refuses to collect the debts, and if profits had been
realized, the judge may force him to collect the debts. In this case, he
would be considered a hired worker, with his portion of the profits as his
wage. As we know, the hired worker must perform those tasks that he
made binding upon himself through the contract.
However, if no profits were realized, the entrepreneur may not be forced to
collect the debts. In this case, he is considered a legal agent who does not
receive any compensation for the representation. Such a volunteer may
not be forced to conclude what he volunteered to do.
The entrepreneur must thus transfer the accounts receivable to the capitalist so that he may collect. This transfer is necessary, otherwise the
capitalist will not have the right to collect his capital through the entrepreneurs accounts receivables.
In this case, any losses are first deducted against realized profits. Then,
if the losses exceed realized profits, the difference is deducted from the
capital. In all cases, as we have seen, the entrepreneur does not guarantee
the capital against such losses, as long as they were not caused by his own
negligence or transgression.
Part VIII
Contemporary Partnerships
523
Chapter 33
Juristic Analysis
The religion of Islam is very responsive to the economic needs of mankind.
In general, every good source of income is permitted in Jurisprudence, while
every questionable business practice that may lead to animosity and dispute
is restricted. The Islamic Jurisprudence of partnerships and corporations is
no exception to this general rule. Thus, the partnership system in Islam is
based on mutual agreement, justice, and meeting mankinds economic needs in
accordance with permissible conventions. This follows since the default status
of contracts is permissibility, and prohibition is the exception. In this regard,
one should reflect on the famous juristic saying: Partnerships are established
according to the customary behavior of merchants.
The three major sources of income are trade, industry, and agriculture. It is
rare for any individual to be able to conduct business in one of those economic
areas by himself. Cooperation with others helps economic agents to pool their
human and financial abilities, technical expertise, etc. The net result of such
cooperation is the ability to earn more income at a lower level of risk exposure.
This cooperation is the Legal foundation for the partnership contract. Partnerships were mentioned in the Quran in a number of contexts. The behavior of
partners is discussed in the verse Truly, many are the partners (in business)
who wrong each other: not so do those who believe and work deeds of righteousness, and how few are they? [38:24]. Also, partnership in inheritance was
explicitly addressed in the verse: But if more than two, they share in a third
[4:12].
The legality of partnerships was clearly established in the Prophets (pbuh)
Sunnah. We have already quoted the H
Quds: I am the third of every two
. adth
partners as long as neither one betrays the other. However, if one betrays the
other, I leave their partnership. Moreover, there are many H
s in which
. adth
the Prophet(pbuh) implicitly or explicitly approved of partnerships. In one such

H
, he (pbuh) said: All
ah helps and protects partners as long as they do
. adth
not betray one another. There are also valid narrations by Ab

u D
aw
ud and
Ibn M
ajah that Al-S
aib ibn Ab Al-Saib said to the Prophet (pbuh) after he
(pbuh) was sent to mankind: You were my business partner before Islam, and
525
526
CHAPTER 33. JURISTIC ANALYSIS
you were the best of business partners. You never argued with me to withhold
what was duly mine. It is also narrated that when the Prophet (pbuh) reentered Makkah victorious, he (pbuh) said to him: Welcome to my brother
and partner, who never argued with me to withhold my rights.
As we have seen in our study of the H
. anaf opinions on partnerships, a
partnership is a contract whose objects are the capital and profits. In this
regard, there have been many traditional and modern types of partnerships,
with varying types of capital and work contributions, and varying degrees of
legal responsibility and guaranty. Thus, capital partnerships are built upon
capital, work partnerships are built upon labor and guarantee of work, and
credit partnerships are built upon the creditworthiness of the partners.
We have also seen that the H
. anafs and Zayds have permitted both involuntary ownership partnerships, as well as voluntary contract partnerships.
Of those different types of partnerships, we have seen that silent partnership
(mud.a
raba) is one of the most useful. In this contract, one partner provides the
capital while the other provides his effort. We have seen how this contract was
permitted due to the economic benefits from allowing each partner to benefit
from combining their respective financial endowments and abilities to generate
profits. Such profits are then distributed according to agreed-upon ratios. However, if financial losses are incurred in a silent partnership, the capitalist incurs
all such losses, while the entrepreneur implicitly loses his labor by not receiving
any compensation thereof.
There are many new contracts that have emerged in contemporary times.
Some of those partnerships are regulated in civil laws (e.g. joint liability companies or sharik
at al-tad.a
mun, simple partnerships or sharik
at al-taws.iyah al
bast.ah), joint stock companies or sharik

at mus
ahamah, etc.), while others types
(e.g. particular partnerships or sharik

at muh.a
.s.sah), etc.) are not regulated. It
is important to study those modern partnership forms in light of Islamic jurisprudence, since they are commonly used, and some of them may in fact be
Islamically invalid.
In this regard, the Jordanian civil law - which was derived from Islamic
Law - concentrated on the legal status of general partnerships in items 582-610.
The only specific rulings pertaining to a specific types of partnerships were adal),
dressed in items 711-635 and covered work partnerships (sharik
at al-ac m
credit partnerships (sharik

at al-wuj
uh), and silent partnerships (sharik
at al
mud.a
raba). The laws governing the first two types of partnerships were derived
from the H
. anaf and H
. anbal schools, while the laws governing silent partnerships was derived exclusively from the H
. anaf school.
The Syrian and Egyptian man-made civil laws divided partnerships into two
categories: associations of individuals (sharik
at ashkha
s) and associations of
.
capital (sharik
at amw
al). The first type highlights the role of individuals and
the mutual trust they put in one another, irrespective of their capital contributions. This category covers joint liability companies, limited partnerships, and
particular partnerships. In contrast, associations of capital are fundamentally
built on the contributions of capital, with the identities of partners playing a
minor role. This latter type of partnerships covers joint stock companies, and
33.1. LEGAL STATUS OF CONTEMPORARY PARTNERSHIP FORMS527

limited liability corporations.
33.1
Legal status of contemporary partnership

forms
It is important to study each of the contemporary partnership forms individually, to determine the legal status of each from an Islamic viewpoint.
33.1.1
Joint liability companies (sharik

at al-tad.amun)
This type of partnership may have two or more individuals. The company may
be restricted to one particular economic sector, or it may be unrestricted. In
either case, the partners assume mutual responsibility for all of the companys
obligations. Such responsibility extends beyond the amount of capital they
contribute to the company, and the partners may indeed be forced to draw on
their own personal property to meet the companys obligations.
We note that the mutual guaranty (kaf
alah) characteristic of this type of
company is very similar to the unlimited partnership (muf
awad.ah) we discussed
previously. The reader may recall that this type of partnership was permitted
only by the H
. anafs and Zayds, subject to equality of the partners in rights
to use the companys capital, their respective capital shares, and religion. This
equality of rights was required by those jurists to compensate for the equality
of responsibility implied by the mutual guaranty condition. We have argued
that this equality condition is very difficult to satisfy, and thus this form of the
partnership is rarely of relevance.
The Islamic alternative to this form of partnership was limited (rein) partan), which did not require equality in capital contribution, rights to
nerships (c in
use the capital, or religion. However, this type of partnership normally would
not include mutual guaranty. Thus, the majority of jurists agree that each
partner would normally be responsible only for his own transactions, and that
profits will be divided according to the ratios stipulated in the contract, while
losses must be shared in proportion to capital shares. This opinion was based
on the H
: Profits are divided according to agreed-upon ratios, but losses
. adth
must be shared in proportion to capital shares. (On the other hand, Al-Shafic
ruled that profit shares must also be proportional to capital shares.)

The H
. anaf jurist Al-Kamal ibn Al-Humam ruled that adding mutual guaranty to a rein partnership was not permitted. However, I find no harm in adding
a condition of mutual guaranty in this case, based on the view that guaranty
is a charitable contract. In fact, mutual guaranty was permissible by mutual
consent, even without the partnership contract. Thus, it is more appropriate to
permit it for individuals who share a partnership contract. In this regard, the
mutual guaranty condition is in compliance with Islamic Law, and it becomes
binding on the partners.
528
33.2
Simple partnerships (sharik

at al-taws.iyah al
bas.tah)
In this type of partnership, some of the capital-providing partners run the company and share liability and mutual guaranty for its obligations, while others
only provide capital, and have limited liability. This type of partnership is also
permitted, since jurists allow a rein partnership contract to include a condition
that one of the partners must work. In this case, the partner who is given the
extra responsibility to work for the company and bear responsibility for its actions may thus be given either a higher profit share, or a wage. In this regard,
the number of partners responsible for running the company, and the number
of those with limited liability, may be one or more. As we have seen in the
previous section, it is permissible to divide the partners into two groups, one
bearing liability for the companys actions and the other bearing only limited
liability.
Moreover, this type of partnership may be validated as a form of silent partnership (mud.a
raba). Under this interpretation, the working partners who bear
the higher liability are considered the entrepreneurs, while the other partners
are considered the capitalists. In this case, the entrepreneurs are not responsible
for any losses incurred from action that were approved by the capitalists, and
they are generally permitted to undertake any conventional actions undertaken
by similar entrepreneurs. Finally, as a silent partnership, profit shares may be
determined by mutual consent of all the partners, and stipulated in the contract.
Thus, those partnerships differ from silent partnerships in few insignificant
details. On the other hand, we need not dwell on those details since joint stock
companies have all but made simple partnerships extinct. The former style of
partnerships has more freedom in raising capital and branching into different
economic sectors. This higher freedom made joint stock companies a more
popular vehicle for investors seeking a limited liability investment vehicle.
33.3
Particular partnerships (sharik

at muh.a.s.sah)
This type of partnership is usually temporary, and thus the partnership never
gets defined as a juristic personality. Two or more partners contribute to this
temporary partnership with capital, labor, or both, and they share profits and
losses according to agreed-upon rules. Its temporary nature is usually dictated
by the circumstances. For instance, such a partnership may only survive for
the duration of an auction, or to perform one major transaction, whereby only
one of the partners may act, seemingly on his own, but in reality on behalf
of the partnership. Soon thereafter, profits or losses are distributed, and the
partnership is dissolved without the public knowing of its existence.
an),
In general terms, this is a permissible form of limited partnerships (c in
without any requirements of equality or mutual guaranty. This partnership is
usually restricted to a specific business sector, but as with all limited partnerships, profits may be distributed as agreed in the contract, while losses must be
MUSAHAMAH)
33.4. JOINT STOCK COMPANIES (SHARIKAT
529
distributed in proportion to capital shares.

To be more specific, the company is considered a general limited partnership if all partners shares are held in common property, and it is considered a
combination of limited and silent partnerships if each partner retains ownership
of his capital share. In the latter case, the silent partners are considered to
retain ownership of the capital, and to have delivered it to the entrepreneurs
in the silent partnership component to invest with the rest of the capital, for
the benefit of all the partners. The active partners in this case act simultaneously as entrepreneurs in the silent partnership component, as well as acting as
a limited partner for their own share of the capital. This combination of two
types of partnerships (a silent partnership and a limited partnership) in one is
permissible, in analogy to the permissibility of unlimited partnerships that are
combinations of three types in one (a limited partnership, a credit partnership,
and a labor partnership). In this regard, if each of the component partnerships
is permissible on its own, they are permissible in conjunction within a single
partnership.
33.4
Joint stock companies (sharik

at musahamah)
This is perhaps the most important contemporary form of capital partnerships.

In this form, the companys capital is divided into many small indivisible tradable portions that are equal in value, each called a common stock or share.
Each investors liability is limited to the nominal value of the shares that he
holds. The managers and workers of the company are considered employees of
the shareholders, thus receiving wages for their efforts whether or not they are
themselves shareholders. In this type of company, the manager may not make
the company indebted by an amount exceeding its capital. If he does in fact
cause the company to incur such an excessive debt, he must guarantee it himself,
and the shareholders continue to be liable only up to the value of their shares.
Profits in such a company are distributed in proportion to capital shares.
This type of company is often called an anonymous partnership, since the
identities of shareholders are irrelevant, and they may not know one another.
Moreover, the shareholders knowledge about the companys actions and financial positions usually relies on periodic reports provided by the companys management. Man-made legal systems tend to restrict this type of partnerships
to large-scale companies (e.g. in textiles, steel, etc.) that require raising large
amounts of capital through sales of common stock to many small investors.
This type of partnership is also permissible in Islam as a limited partnership
built upon mutual consent of the shareholders. The board of directors of such a
partnership is considered a legal agent of the shareholders. In this regard, there
is no legal requirement that prohibits the multiplicity of the shareholders, or the
limited liability of each to the value of his shares. The latter limited liability
is identical to that in the permissible silent partnership contract, where each
capitalist can lose no more than the capital he contributed to such a partnership.
The continuation of a joint stock company is also permissible as long as all the
530
shareholders agree to it, since such a condition is not at odds with Islamic
law. On the other hand, while issuing common shares is permissible for such
companies, the common practice of issuing interest-paying bonds is forbidden
due to the prohibition of rib
a.
33.5
Hybrid limited partnerships or sharik

at al
taws.iyah bi-l-ashum)
This type of partnership consists of two sets of partners, many of whom hold
tradable common shares and have limited liability (al-mus
ahim
un), while a few
others provide full guaranty for one another, thus bearing unlimited liability (alan)
m
u.su
n). This type of partnership is permissible as a special case of rein (c in
partnerships, whereby some of the partners provide full mutual guaranty for one
another. In this regard, the unlimited liability partners addition of voluntary
guaranty (kaf
alah) is permissible, and their actions on behalf of the partnership
are permissible by shareholder consent. Thus, the unlimited liability partners
would be considered entrepreneurs in a silent partnership, and they are governed
by all the rules of such partnerships. As we have seen previously, combining the
rein and silent partnership forms in one partnership is permissible.
33.6
Limited liability companies
The Arabic name for such companies is literally sharik

at dha
t mas
uliyyah
mah.d
udah. Civil laws qualify this common form of anonymous capital partnerships by limiting the number of partners to fifty or less. Each partners
liability is limited to his capital share, and if a partner dies, his capital share is
bequeathed to his heirs. The companys management may consist of partners
or others, and they receive an increased share in profits or fixed wages as entrepreneurs in a silent partnership or hired workers, respectively. In this regard,
the company is very similar to associations of capital. On the other hand, the
company is also similar to associations of individuals since each partner is a
full owner of a capital share rather than a holder of tradable common shares.
Thus, raising capital for this type of company requires individual partners to
directly contribute to the companys capital, in contrast to public offerings of
tradable shares through which capital is raised for joint stock companies. This
type of company is also permissible as a special form of rein partnerships, with
the possibility of adding a silent partnership component. In this regard, each
partners limited liability to his capital share is very similar to the capitalists
limited liability to his invested capital in a silent partnership.
33.7. SUMMARY OF COMMON MODERN PARTNERSHIPS
33.7
531
Summary of common modern partnerships
Thus, we see that the modern partnership forms regulated in civil laws are easily
understood in terms of the basic forms studied in Islamic Jurisprudence. In this
regard, the basic forms of those partnerships agree with the forms studied by
classical jurists, with a few developments that are necessitated by modern needs
and conventions. In general, we may say that associations of individuals are
more similar to silent partnerships in Islamic jurisprudence, with a few variations
dictated by the nature of modern economies. On the other hand, associations
of capital are in general similar to limited partnerships, with possible added
features of unlimited partnerships and silent partnerships (for limited liability
partners). In all such partnerships, management is in general a form of agency,
for which the managers may receive wages as hired workers, or the wages may
be paid in the form of an increased profit share if the managers are themselves
partners.
33.8
Transportation vehicle partnerships
It is a common practice nowadays for a number of individuals to own a transportation vehicle jointly. Usually, one of the partners would also operate the
vehicle and collect a wage for his labor. In certain instances, a driver who was
not initially a partner may be included in the partnership, and in this case he
may pay for his share in the vehicle from his future profit shares.
All such practices are permissible, since partnerships are generally permissible based on convention. Moreover, partners may contribute to the partnership
in many ways, including liability, credit, work, or capital. Partners actions can
then be validated as forms of legal representation and/or guaranty. Allowing for
all the different combinations, the vehicle operator may collect a fixed wage as
well as a profit share, or the wages may themselves be specified as a profit share.
All such practices can be related to traditional contract forms to show that they
are indeed permissible, as we have shown for payment schemes of managers of
unlimited and joint stock companies. We have also shown that combining two
partnership forms, or a partnership and a hiring, in one contract is permissible. In fact, the Shafics and Maliks explicitly permitted such joining of two
contracts in one by analogy to crop sharing. In fact, the general prohibition of

two contracts in one or two conditions in one contract may be overruled if the
purpose behind the prohibition (avoidance of enmity of dispute) does not apply
to the case at hand. The practices we discussed here are conventional means of
attaining valid economic benefits, and there is no danger of causing dispute or
enmity. Hence, the contracts thus described are permissible.
33.9
Partnerships in livestock
It is common nowadays to establish partnerships in raising cattle and sheep,

whereby some partners provide the capital and others provide the labor (feed-
532
ing, cleaning, etc.). Such partnership forms are permissible provided that no
excessive ignorance is present in the contract, lest enmity result from such practices. However, tolerable minor uncertainty that is expected in practice does not
render the contract impermissible. In what follows we list a few consequences
of this general rule:
1. If one partner pays the full price for buying the livestock, and the other
partner is responsible for keeping the animals and feeding them at his own
expense, the partnership is not valid. In this case, the amount of food that
the second partner must buy is subject to excessive uncertainty that may
lead to dispute. Thus, the contract is rendered defective.
2. If the contract stipulates that the animal feed is to be bought out of the
proceeds from selling their milk, and that the rest of milk proceeds is to
be distributed among the partners, the partnership is not valid. In this
case, the proceeds from selling the milk may and may not be sufficient
to feed the animals. On the other hand, if the capitalist also bears the
responsibility for covering the remaining cost of feeding the animals, then
the contract is valid.
3. The partnership is valid if the capitalist bears all costs, including the
financial costs of upkeep and feeding the animals, while the entrepreneur
only bears responsibility for the labor associated with keeping the animals
and feeding them. In this case, the contract is a valid silent partnership.
In this regard, some of the H
. anafs argued that the worker should not
deserve compensation (profit share) in this contract since they ruled that
feeding the animals is not real work, based on the view that animals eat
by themselves. However, this opinion is not valid, since the workers labor
is still essential for providing the animals with the appropriate food at the
appropriate time, as well as cleaning and taking care of the animals. This
type of labor clearly contributes to the well-being and productivity of the
animals, and thus the worker in this case deserves his share of profits.
4. If two individuals share in all costs of buying, keeping, and feeding the
animals, and then if one of them volunteers his labor in keeping the animals, the partnership is valid. In this case, the partnership is established
purely on the basis of capital sharing, and the voluntary labor is excluded
from the formula.
5. The most common practice today is this: two partners share in the price
of buying the animals. Then, the one who provides his labor collects all
of the animals milk and butter as compensation for his labor, while wool
is divided equally between the two. The fatw
a committee of Al-Azhar
ruled in 1948 C.E. that this partnership form is valid, based on economic
need as well as conventional usage. In this regard, there is no explicit
Legal Text in the Quran, Sunnah, or Ijmac forbidding this contract, and
the practice is very unlikely to result in disputes and enmity between the
33.9. PARTNERSHIPS IN LIVESTOCK
533
partners. Thus, they ruled that the uncertainty in this common practice
is minor, and the contract is rendered valid.
In summary, we have seen that Islam is a religion of ease, and Islamic Law
does not introduce unnecessary hardships. Therefore, common economic practices that do not disagree with Islamic Law are mostly permitted in Islam. The
fact that those common practices change over time is indeed necessary for the
health of the economy, and Islamic jurists are required to study those practices
to ensure that they do not disagree with the Law.
Part IX
The Gift Contract (al-hibah)
535
537
Preliminaries
The gift contract will be studied in six chapters:
1. Definition and legality of gifts.
2. Cornerstones of the gift contract.
3. Conditions of the gift contract.
4. Legal status of the contract.
5. Factors that preempt recalling gifts.
6. Gifts to children.
Chapter 34

There are two categories of gifts: presents given to please the recipient, and
charities given to please Allah (swt). Jurists define the gift contract as: A
voluntary contract that results in uncompensated ownership transfer between
living individuals.1 The H
. anbals gave it the following more specific definition:
It is a contract initiated by an eligible party to transfer ownership of existent
and deliverable properties to another without compensation. The properties
may be known or unknown, but they must be conventionally given as gifts, and
the contract language must specify that it is a gift or a property transfer, etc..2
The use of property transfer in those definitions is stipulated to exclude loans,
as well as the transfer of non-valued properties (e.g. animals that may not be
owned). Other conditions exclude gifts in undeliverable objects (such as an
unborn animal in its mothers womb), and considering legal obligations such as
alimony and spousal expenses to be gifts. Also, the donor is required to be alive
to exclude inheritance from this contract. Finally, the condition of having no
compensation for the gift is required to exclude commutative contracts.
There are Quranic verses that permit and recommend gift-giving. For instance, we may cite the verse: But if they, of their own good pleasure, remit
any part of it to you, take it and enjoy it with right good cheer [4:4]. Another
verse that enjoins Muslims to give charitable gifts urges the Muslims to be like
the one who spends of the wealth that he cherishes, to his kinfolk, orphans,
the needy, the wayfarer, ... [2:177].
There are also many H
s that urge Muslims to give gifts. In one H
,
. adth
. adth
the Prophet (pbuh) is narrated to have said: Exchange gifts so that you may
love one another.3 The Prophet (pbuh) was also narrated to have said: Do
1 Al-Khat
b Al-Shirbn ((Sh
amah (, vol.5, p.591), Ibn Al .
n ((H
Hum
am ((H
anaf
),
vol.7,
p.113),
Ibn c Abid
. anaf), vol.4, p.530).
.
2 Marc
ibn Y
ut (3rd printing (H
. anbal),
vol.4, p.329).
3 Narrated in all major books of Had
u Hurayrah, c Abdull
ah
. th
ah (mAbpwt). It was also narrated elsewhere
ibn c Amr, c Abdull
ah ibn c Umar, and c Aish
with an incomplete chain of narration. Thus, Al-Bukh

ar in Al-Adab Al-Mufrad, Ab
u Yac l
a,
Al-Bayhaq, and Ibn c Adiyy narrated on the authority of Ab

u Hurayrah. Ibn H
. ajar ruled
539
540
not underestimate the significance of a neighbors gift to her neighbor, even if it

is only a sheeps foot.4 He (pbuh) also admonished those who recall their gifts
by saying: The one who recalls his gift is like the dog, who eats his vomit.5
Moreover, it was the Sunnah of the Prophet (pbuh) to reward a gift with another
as soon as the donee has a chance to give the donor. This is documented in Al
a (mAbpwh) that the Prophet
Bukhari based on the H
narrated by c Aish
. adth
(pbuh) used to accept gifts, and reward the donor.

There is a consensus that all forms of gifts are commendable. In this regard,
jurists cite the verse help one another in righteousness and piety [5:2]. It is
also established that gifts to relatives are better than gifts to others,6 based
on the verse: Fear Allah through whom you demand your mutual rights, and
reverence the womb-relationships [4:1]. Moreover, Al-Bukhari and Muslim
narrated a H
in which the Prophet (pbuh) was narrated to have said:
. adth
Whoever wishes Allah to increase his wealth and prolong his life, let him do
acts of kindness towards his womb-relatives.
The major jurists of all juristic schools have agreed that the gift contract
becomes valid through three components: offer, acceptance, and receipt. They
also agreed that fulfilling the promise to give a gift is highly desirable. Finally,
they all agreed that it is reprehensible for a parent to show unequal treatment
of ones children, e.g. by giving gifts to some to the exclusion of others.7
that its chain of narration is good (isn

aduhu h.asan) due to its multiple narrating witnesses,
despite the fact that every line of narration includes questionable links. Al-H
akim narrted
.
the H
on the authority of Ibn c Amr, and Ibn Al-Q
asim Al-As.bah
an narrated it in Al. adth
a was narrated by Al-T

an
Targhb wa Al-Tarhb. The narration on the authority of c Aish
. abar
in Al-Awsat
alik
. . The narration with an incomplete chain (mursal) was documented by M
c
c
in Al-Muwat..ta on the authority of At.
a Al-Khur
as
an. See Al-H
afiz. Al-Zayla (1st edition,
.
(H
), vol.4, p.120), Al-S.anc
an (, vol.5, p.347),
. adth
Ibn H
. ajar (, p.259).
ari, Muslim, and Al-Tirmidh on the authority of Ab
u Hurayrah
c an
(mAbpwh), c.f. Ibn Al-Athr Al-Jazar (, vol.12, p.262), Ibn H
. ajar (, p.259), Al-S.an

5 Narrated in the major six books of Had
as as follows:
. th
We [Muslims] should not be similar to bad examples. The example of one who recalls his
gift is like the dog who eats his vomit, c.f. Ibn Al-Athr Al-Jazar (, vol.12, p.265), Al-H
afiz.
.

), vol.4, p.126).
. adth
6 Al-Sarakhs
(1st edition (H
. anaf), vol.12, p.47 onwards), as well as earlier references.
7 Al-Shac ar
an ((Sh
am ((H
. anaf), ibid.).
Chapter 35
Cornerstones
The H
. anafs use reasoning by analogy to sales contracts to rule that the two
cornerstones of the gift contract are offer and acceptance. Al-Sarakhs (1st
edition (H
. anaf)) ruled by juristic approbation to add receipt of the gift as a
third cornerstones, since it is a necessary condition to establish ownership in
a gift contract but not in sales. On the other hand, Al-Kasan ((H
. anaf)) and
some other H
. anafs excluded acceptance from the list of cornerstones of the gift
contract. This ruling is based on the view that the offer by itself effects the gift
contract, while acceptance is only necessary to effect its consequences in terms
of transferring ownership to the recipient.
This juristic difference over the list of cornerstones of the contract can be
illustrated through the following example. If an individual swears that he will
not give an item as a gift to another, and then he proceeds to offer him that
same item as a gift: juristic approbation would suggest rescinding the gift offer,
while reasoning by analogy would not. The majority of H
. anaf jurists resolve
this difference by arguing that the gift contract is concluded through offer as
far as the donor is concerned, but requires both offer and acceptance as far as
the donee is concerned.1 This reasoning is based on the view that gift-giving is
a charitable contract, which is effected for the donor through offer (in analogy
to bequests), but ownership is only effected for the donee through acceptance.
On the other hand, item #837 of Al-Majallah stated that a gift contract is
concluded through offer and acceptance; and it is effected with receipt.
The non-H
. anaf jurists enumerate four cornerstones for the gift contract:
donor, donee, object, and contract language:2
The donor is the owner of the object of the gift, provided that he is eligible
to give a gift. Thus, if a sick person were to offer a gift and then die, the
majority of jurists ruled that his gift must be within the discretionary
one-third of his estate.
1 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, p.57), Al-K
. anaf), vol.6, p.115), Ibn Al
c
c
n ((H
n ((H
Hum
am ((H
. anaf),
continuation vol.2, p.329).
2 Ibn Juzayy ((M
alik), p.366), H
shiyat Al-Dus
.a
541
542
CHAPTER 35. CORNERSTONES

The donee maybe any human being. Thus, jurists agree that it is permissible for someone to give all of his property to a stranger (i.e. someone
who is not a family member). On the other hand, while the majority of
jurists render permissible giving all of ones property to some children to
the exclusion of others, or distributing gifts unequally to the offspring,
they consider it reprehensible.
Any owned property is eligible for being the object of a gift.
The gift contract language may consist of any words or actions that indicate offer and acceptance.
35.1
Unrestricted gift offers
The donor may use explicit language for the offer (e.g. I give you this item as
a gift), or it may be implicit in language commonly used for giving gifts (e.g.
this is yours), provided that the donor had the proper intention of giving the
item as a gift. In either case, transfer of property without compensation is a
gift, regardless of the precise language used in the offer.
However, offers need not be unrestricted. Indeed, there are three types of
restrictions that may be attached to a gift offer resulting in three types of offers:
(i) temporal gift offers, (ii) conditional gift offers, and (iii) usufruct gift offers.
We discuss each of those offer types in greater details in the remainder of this
chapter.3
35.2
Temporal gift offers (c Umr

a)
It is conceivable that a person would extend the following offer to another: I

have given you this house for the duration of life, or for the duration of my
life. This was a common practice in pre-Islamic times, called a lifetime-gift
a), and its temporal condition was invalidated in Islamic Law. Under this
(c umr
practice, if the gift was given for the duration of the recipients life, then it
would be returned to the donor or his heirs upon the recipients death. On the
other hand, if the gift was given for the duration of the donors life, then it must
be returned to the donors heirs upon his death. The Prophet (pbuh) invalidated the temporal component of those gifts by saying: Keep your properties
rather than giving them as temporal gifts. If you give something as a temporal
gift, it becomes the recipients property permanently.4 Thus, the transfer of
3 Al-K
as
an
((H
by Al-Bukh
ari, Muslim in Al-Muwat..ta, Ah.mad and the four authors of the
Sunan. The narrations were all made on the authority of J

abir ibn c Abdill
ah, but they vary
in their language. The language used in Al-Bukh
ari and Muslim is temporal gifts are the
permanent property of the donee. Another narration in Muslim, which is also found in
Ah.mad is thus: Keep your properties instead of spoiling them [through temporal gifts].
Indeed, whoever gives a temporal gift, the gift belongs to the donee if he is alive, and then
it becomes the property of the donees heirs, c.f. Ibn Al-Athr Al-Jazar (, vol.9, p.112),
Al-Shawk
4 Narrated
35.3. PROVISIONAL GIFT OFFERS
543
property from the donor to the donee is effected, but the temporal condition is
voided. In this regard, the temporal restriction is considered a defective condition. However, unlike the case of commutative financial contracts (e.g. sales,
where combining a sale and a condition in one contract was forbidden in the
H
), a defective condition does not affect the gift contract itself.
. adth
35.3
Provisional gift offers
A common pre-Islamic example of conditional gift offers is the one whereby the
donor stipulates that if he dies first, the gift becomes the permanent property
of the donee. On the other hand, he stipulates that if the donee dies first, the
gift must be returned to the donor. Jurists differed over the legal effects of such
an offer:
Ab
uH
. anfa and Muh.ammad ruled that if the potential donor makes such
a conditional gift offer, the object of the gift is considered lent to him, and
the donee may demand it at any time. As proof, they cited a H
that
. adth
stated that the Prophet (pbuh) permitted temporal gifts but invalidated
such death anticipation conditions (ruqb
a).5 In this regard, the condition
under which the gift may be returned makes the donees ownership imperfect, since it is dependent on a random event. Since such random elements
are not permissible in a transfer of ownership, the gift delivery is rendered
a simple loan, under which the donee/borrower may derive usufruct from
the object.
Ab
u Y
usuf, the Shafics and the H
. anbals ruled that if the donee gains
possession of the gift object, then it is considered a permanent gift, thus

invalidating any temporal or conditional constraints on the gift.6 They
derive proof from the H
that the Prophet (pbuh) permitted receipt
. adth
of temporal and conditional gifts.7

5 Al-H
c
), vol.4, p.128) classified this H
as a ques. afiz. Al-Zayla (1st edition, (H
. adth
. adth
tionable and strange one (gharb).

6 Ibn Qud
c
amah (, vol.5, p.624), Al-Sharq

aw ((Sh
afi ), p.172).
7 This Had
is established based on the previously cited narration on the authority of
. th
J
abir, which said that Temporal gifts are permissible for their recipients. This H
was
. adth
narrated by Al-Tirmidh and Ibn M

ajah, and there are many other H
s that carry a similar
. adth
meaning. One such H

was narrated by Al-Nas
a and Ibn M
ajah with a full chain of
. adth
narrators (H
marf
uc )ending with Ibn c Umar, that the Prophet (pbuh) said: There are
. adth
no temporal or conditional gifts, thus the recipient of such gifts become their owners, alive or
dead. Another similar H
was narrated by Ab
u D
aw
ud, Al-Nas
a, Ibn M
ajah, Ah.mad
. adth
in his Musnad, and Ibn H

an in his S
abit that the

. ibb
. ah.h., on the authority of Zayd ibn Th
Prophet (pbuh) said: Whoever gives a temporal gift, it becomes the permanent property of
its donee through life or death. Also, do not give ruqb
a, for if you do, then the object becomes
property of the donee. There are many other narrations including one narrated by Al-Nas
a
as, one narrated by Al-Tirmdh on the authority of Samurah
ibn Jundub, and others, c.f. Ibn Al-Athr Al-Jazar (, vol.9, pp.111-115), Al-H
afiz. Al-Zaylac
.
c an
(1st edition, (H
ad
th
),
vol.4,
p.128),
Al-Sh
awk
a
n
(,
vol.6,
p.12
onwards),
Al-S
(2nd
.
. an
printing, vol.3, p.91), Ibn H

. ajar (, p.260).
544
CHAPTER 35. CORNERSTONES

The Maliks agreed with the H
. anaf permission of temporal gifts and invalidated conditional gifts.8 They defined temporal gifts as an uncompensated gift of usufruct of real estate or another object for the duration of
the donees life, after which the object of the gift is returned to the donor
or his heirs. They defined conditional gifts as we defined it above.
Thus, in summary, most jurists permitted both temporal and conditional
gifts as special types of gifts that require offer, acceptance, receipt, etc.
However, the H
. anafs and Maliks permitted temporal gifts but forbade
conditional gifts.
35.4
Usufruct gift offers
The H
. anafs agree that if a person gives the usufruct of an object (e.g. a
house) as a gift to another, then the house is considered to be loaned to the
usufruct donee. On the other hand, if the object from which the usufruct is to
be derived can only be used by consumption (e.g. food), then a gift of usufruct
is tantamount to a full gift. Thus, depending on whether or not the object itself
survives after the donee collects its usufruct, the contract may be considered a
loan or a gift. They stated this classification as follows: loans of non-fungibles
imply a transfer of ownership of the usufruct, while loans of fungibles (including
money and goods measured by weight or volume) imply ownership of the lent
goods.9 Thus, a loan in the first case would be a loan of the usufruct of the lent
items, and a loan in the second case would be a loan of the items themselves.
Thus, the H
. anafs argued that if the donor specified that he gave a house
a), one must understand that the contract is in fact a
as a lifetime gift (c umr
loan. In this regard, the donee derives usufruct from the house until his death.
This is similar to the case where the donor specifies the gift as residence in
the house, whereby the house itself would be considered a loan. In all such
circumstances, the offered gift is in fact the usufruct of property.10
On the other hand, if the donor were to say this house is yours as charity,
so that you may live in it, or this house is yours for the rest of your lifetime,
so that you may live in it, then it is in fact treated as the charity or gift he
specified, without paying attention to his statement of how it must be used. In
such cases, once the usufruct of the property is given to the donee of the charity
or gift, the donor no longer owns that usufruct, and he cannot specify how it
must be used. Thus, this is rendered to be a defective contract, but the gift
remains valid, since it is not affected by defective conditions, as we have seen
previously.11
8 Al-Dard
r
((M
alik)A, vol.4, p.97 onwards).
((H
. anaf), vol.6, p.215).
10 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.120).
11 Al-K
c
n ((H
as
an ((H
. anaf), vol.4, p.532).
. anaf), vol.6, p.117-118), Ibn Abid
9 Al-K
as
an
Chapter 36
Contract Conditions
The gift contract conditions pertain either to the donor, or to the object of
1
the gift. The H
. anbals enumerated eleven conditions for the gift contract: (i)
the donor must be eligible, (ii) he must be giving the gift voluntarily and (iii)
seriously, (iv) the given property must be eligible for sale, (v) the gift must
be uncompensated, (vi) the donee must be eligible to own the property, (vii)
the donee or his legal guardian must consent to receiving the gift, (viii) the
acceptance must follow the offer without any interruptions, (ix) the gift must
be delivered as specified, (x) it must not be temporal, and (xi) the object of the
gift must be property from which benefits may be derived.
The Shafics stressed the importance of having no legal interruption between
the offer and acceptance. They also stipulated that the gift contract should not
be restricted by any conditions, since a gift is a transfer of property that does
not allow uncertainty based on the condition satisfaction or lack thereof. They
also stipulated that the gift contract must not be temporally limited (e.g. a
gift for one year), since a gift is a transfers of property (like sales), and such
property transfers must be permanent.
In what follows, we discuss each set of gift contract conditions in greater
detail.
36.1
Conditions for donors
The donor must be eligible to give his property voluntarily to another for the
gift contract to be concluded. Hence, he must be sane, and of legal age. In this
regard, voluntary giving away of property is a pure financial loss, and requires
eligibility of the owner. Hence, jurists agree that a father may not give away
his young childs property as an uncompensated gift. The legal guardianship in
this case is restricted to beneficial dealings in the childs property.
1 Marc
ibn Y
ut (3rd printing (H
. anbal),
vol.4, p.329).
545
546
CHAPTER 36. CONTRACT CONDITIONS
If the father gives a gift out of his young childs property, with a stipulated
condition of compensation, then we have a difference of opinions among the
H
uH
u Y
usuf still consider the contract imper. anafs. Thus, Ab
. anfa and Ab
missible. Their logic is that the contract thus consists of a voluntary gift that
is later converted to a sale. Since they ruled that the father does not have
the right to conclude the first voluntary gift component, the entire contract
becomes impermissible. In contrast, Muh.ammad ruled that the essence of the
gift contract with compensation in fact renders it a sale, and thus permits it by
concentrating on the essence of the contract rather than its form.2
36.2
Conditions for the gift object
There are many conditions pertaining to the object of a gift contract. In what
follows, we study those conditions in some detail.
36.2.1
Existence at gift time
The H
. anafs ruled that the object of a gift must exist at the time the gift is
made, otherwise the contract is not concluded.3 Thus, they consider gifts of
whatever fruits he will get this year, or the offspring of his sheep, as invalid
contracts that transfer the property of non-existent objects.4
The H
. anafs give many examples of probable or non-existent items that are
not eligible for gift giving, including an unborn calf, flour in the form of wheat,
butter within milk, etc., even if the donor stipulates that the donee may take the
object once it exists. In such cases the object of the gift did not exist at the time
of the contract, and hence they ruled that the contract was never concluded. In
all such cases, they render the contract invalid.
On the other hand, they render the contract defective in some cases, whereby
the gift object may be separated rendering the gift permissible. Examples of
such gift objects include milk in the udder, wool on the backs of sheep, plants in
the ground, and dates on a palm tree. In such cases, they ruled that the object
of the gift in fact exists at the time of the contract, and its ownership is in fact
transferred to the donee upon conclusion of the contract. However, the contract
was considered defective due to non-executability caused by the joining of the
gift object with other objects. Thus, once the gift object is separated, the gift
is rendered valid.5
2 Al-K
as
an
((H
. anaf), ibid.).
(1st edition (H
am ((H
. anaf), vol.7, p.124),
c
c
n ((H
an AlAl-K
as
an ((H
. anaf), vol.4, p.534), Abd Al-Gh
c
Mayd
an ((H
n ((H
. anaf), vol.2, p.329).
4 On the other hand, the M
aliks argued that gharar does not affect the validity of a gift
contract. Thus, they permitted gifts of unknown
objects, non-existent objects, and probable
objects, e.g. runaway animals, un-ripened fruits, etc. In general, all goods that cannot be
sold due to gharar are deemed eligible for gift-giving by the M
aliks, c.f. Ibn Rushd Al-H
. afd
((M
alik), vol.2,
alik), p.367).
5 Al-K
as
an ((H
aw
. anaf), vol.6, p.119). We note however, that the H
. anaf references Al-T
. ah.
((H
as
an ((H
. anaf)) and Al-K
. anaf)) render gifts of milk in the udder and wool on the backs
3 Al-Sarakhs
36.2. CONDITIONS FOR THE GIFT OBJECT
547
The Shafics and H

. anafs on the general rule that
whatever can be sold can be given as a gift. The Maliks also permitted giving
certain non-sellable items as gifts, including runaway animals, unknown items,
un-ripened fruits, and usurped objects.
36.2.2
Gift must be valued property
Thus, it is not permissible to give as gift an item that is not a property, e.g.
free people, etc. Also, non-valued properties such as wine may not be given as
gifts.6 Thus, the sale of a non-property or a non-valued property would not be
considered a concluded contract due to the impermissibility.
36.2.3
Gift must be a private property
Thus, it is not permissible for a person to give a public property as a gift to

another. If one does, it is not considered a concluded contract.7
36.2.4
Donor must be the owner
If a person gives another persons property as a gift, the H

. anafs ruled that
contract is not executable, unless the owner permits it. This follows from the
inability of the non-owning donor to transfer ownership of what he does not
own.8 On the other hand, the H
. anafs permit giving any item as a gift, even
if it is a liability on another. Thus, it is permissible in their school to give a
debtor his debt as a gift, based on the deliverability of the liability. As we shall
see later, it is also permissible to give the debt as a gift to a third party if the
gift-recipient is explicitly authorized to collect the debt.
36.2.5
Gift object must be separate
Thus, the H
. anafs ruled that it is not valid to give a share in a divisible common property (e.g. an apartment building) as a gift. They consider such a gift
contract defective. This ruling is based on the view that gifts, in analogy to
pawning, require delivery of the gift or pawned object. In this regard, unidentified shares in common property cannot be delivered, since the owner of such a
share cannot deal in that share without dealing in the whole. Since the contract
over the share does not extend to the whole property, and without dividing the
property to deliver the given share, receipt would not be effected.9 However, if
the common property were in fact divided between the owners, and the donor
n ((H
of sheep invalid. However, the better opinion is that reported in Ibn c Abid
. anaf)),
rendering the gift defective only rather than invalid.
6 Al-K
as
an ((H
. anaf), ibid.).
7 Al-K
as
an ((H
. anaf), ibid.).
8 Al-K
as
an ((H
. anaf), ibid.).
9 Divisibility of a property is determined by whether or not the object would be negatively
c
n ((H
impacted by division, c.f. Ibn Al-Hum
am ((H
. anaf),
vol.4, p.533).
548
delivered an appropriate part thereof to the donee, then the contract becomes
valid.
On the other hand, they ruled that it is permissible to give a share in nondivisible common property (e.g. a car) as a gift. This permission was ruled due
to the potential need to give such a share as a gift, and giving access to the
property is considered delivery of the gift in this case.10
In contrast, the Maliks, Shafics and H
. anbals ruled that giving an unidenti
fied share in a common property is permissible, in analogy to the permissibility
of selling such a share. In this regard, they ruled that receipt in the case of
such a share given as a gift is effected in the same manner as its delivery in a
sale. In both cases, delivery of the share is effected through delivery of the entire property, whereby the donee collects his right, and the rest of the property
is considered a deposit or trust in his possession.11 As proof for this opinion,
they cite the narration that the delegation from Hawazin came to the Prophet
(pbuh) demanding that he returns the spoils of war he had won from them,
and the Prophet (pbuh) said: Whatever belongs to me or the entire family of
c
Abdul-Mut.t.alib is yours.12 In fact, what the Prophet (pbuh) gave as a gift in
this H
is his unidentified share in the common property of his family, and
. adth
he gave that gift as unidentified shares to two or more people.

This difference in opinion between the H
. anafs and the other schools leads
to different conclusions with regards to giving unidentified shares in common
property as charity to a rich person. Charity to such a person is in fact a gift
or present, and thus the H
. anafs would render it impermissible. On the other
hand, all jurists agree that giving unidentified shares in common property as
charity to multiple poor individuals is permissible, since the recipient of the
charity - as far as the donor is concerned - is in fact Allah (swt), and there are
no shares to consider. In what follows, we consider in some detail the juristic
13
consequences of the H
. anaf ruling on shares in indivisible common property.
Multiple donors or donees

Ab
uH
. anfa ruled that the contract is invalid if common ownership of the gift
object is present at the time of receipt. On the other hand, Ab
u Y
usuf and
Muh.ammad ruled that a gift contract is rendered invalid only if common ownership was established both at contract time and at delivery time.
10 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, pp.64,74), Al-K
. anaf), ibid.), Ibn Al
c
Hum
am ((H
n ((H
. anaf), vol.7, pp.121-128), Ibn Abid
. anaf), vol.4, p.534).
11 Ibn Juzayy ((M
alik), [.367), Ibn Rushd Al-H
alik), vol.2, p.323), H
shiyat Al. afd ((M
.a
Dus
uq (vol.4, p.97), Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5,
p.596).
12 Al-Shawk
an (, vol.8, p.3). This is also supported by the H
narrated by Al-Bukh
ari
. adth
and Muslim o the authority of Ab

u Qat
adah that he caught a wild donkey, and gave it to
his friends as common property, so that they each had an unidentified share, and the Prophet
(pbuh) approved the practice.
13 Al-K
as
an ((H
. anaf), vol.7, pp.121,122).
549
1. Multiple donees
This leads to disagreements among the three over the case where one donor
gives a gift (e.g. a house) to two donees:
Ab
uH
. anfa ruled that if one person gives a gift to two, the two will share
in the property at the time of receipt, and therefore, the gift is rendered
invalid in his opinion. On the other hand, Ab
u Y
usuf and Muh.ammad
rendered the gift valid, since common ownership did not exist at the contract time.
However, if the owner of a house stated the gift offer as follows: I give
half of the house to you, and the other half to the the other, then Ab
u
Y
usuf and Muh.ammad would render the gift invalid. In this case, not only
would common ownership exist at the time of receipt, but it is effected at
the contract time.
The last case should be distinguished from an offer I give this house to
the two of you; half to you, and half to the other. In this case, Ab
u Y
usuf
and Muh.ammad would consider the contract valid, since it is concluded
as soon as he said I give the house to the two of you. The second part
of his statement is viewed as a post-contract recommendation of how to
divide the property. Thus, common ownership was not present during the
contract time.
On the other hand, if the donor made the statement: I give this house
to the two of you; a third for you and a two-thirds for him, Muh.ammad
continues to consider the gift valid, while Ab
u Y
usuf changed his ruling
because of the unequal sharing rule. This change of opinion was caused
by Ab
u Y
usufs view that the gift was established at contract time to
be for both of them, and thus must be shared equally. In this regard, he
argued, unequal shares can only be established if common property was
established at the contract time through two separate contracts. Such
common ownership is also established at receipt, and hence, he ruled that
the gift in this case is invalid.
Of course, Ab
u H
. anfa invalidated the contract in all four cases, since
he rendered common ownership at delivery time a sufficient reason for
invalidating the gift.
2. Multiple donors
On the other hand, all three jurists agreed that if two individuals have common
ownership of an object, and then give it as a gift to a third person, the gift is
valid. This follows, since there is no common ownership at the time of receipt.
We have already seen that this condition is sufficient for all three jurists to
render the gift a valid contract.
550
36.2.6
Object of gift must be separate
The H
. anafs ruled that the gift is not valid if its object is physically or contractually connected to another in an inseparable manner. This ruling follows from
the gift receipt requirement, which is not possible if such connections exist.14
For instance, if a person owns agricultural land in which a crop is growing, then
it is not permissible for him to give the land alone or the crop alone as a gift.
Even if the donee of such a gift were to receive it, the contract would still be
considered defective due to the donors ownership of the connected component.
However, if the two are separated (e.g. the land was given as a gift, and the
owner removed the crop and delivered the land by itself), then the contract
becomes valid since the ownership that prevented execution of the contract is
thus removed.
There are many other similar cases, e.g. give a house as a gift while maintaining ownership of furniture therein, giving trees as a gift to the exclusion of
fruits growing thereupon, etc. In all such cases, the donors ownership is not
transferred to the donee. This ruling follows from the consideration of a gift of
part of a connected whole as an instance of effecting common property through
a gift, which renders the contract defective. In all those examples, separation
of the gift component was possible, and thus giving the partial gift was not
permitted.15 Then, if the two components are separated, the contract becomes
permissible.
Unborn animals
Based on the previous discussion, jurists may rule by analogy that giving a
pregnant animal as a gift, but retaining ownership of her unborn offspring, is
impermissible. However, they ruled based on juristic approbation that if such
a gift is given, the donee is considered the owner of both the mother and her
offspring, thus invalidating the stipulated exception. In general, we can divide
the class of contracts with similar conditions into three categories:16
1. For sales, leases and worker hires, and pawning, including such an exception would render the contract defective.17 Thus, if the pregnant mother
is an object of any of those three contracts, and the unborn offspring is excluded, the exclusion is considered an invalid condition, and the contract
14 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.7,
c
n ((H
pp.124,127), Al-K
as
an ((H
Majmac Al-D
an
at (p.336).
. am
15 Al-Far
ud H
. amza (p.204).
16 Al-Sarakhs
(1st edition (H
anaf), vol.12, p72; vol.13, p.19), Ibn Al-Hum
am ((H
.
. anaf),
c
n ((H
vol.7, p.139 onwards), Al-K
as
an ((H
. anaf), vol.4, p.113),
c
c
Majma Al-D
an
at (p.337), Al-Far
a id Al-Fiqhiyya by Shaykh
. am
Mah.m
ud H
. amza (p.206).
17 In this classification, we are following the view stipulated in Al-K
as
an ((H
. anaf)) that
a defective condition renders a pawning contract defective, in analogy to sales. However,
the more correct view is that expressed in Al-Ziy
ad
at, which classifies pawning with gifts as
voluntary non-commutative contracts for which a defective condition is invalidated, but does
not affect the contract itself.
551
is rendered defective. In this regard, the unborn animal in the womb is

derivative of its mother, and excluding it from the contract is a violation of
the contract, thus rendering it defective. This ruling is predicated on the
general rule that commutative financial contracts that contain a defective
condition are rendered defective.18
2. In marriage, divorce in exchange for a financial compensation (khulc ), for
giveness of a killer, and gifts, the contract containing such an exclusion
condition would be rendered valid, and the exclusion condition is invalidated. In all such contracts, the effect of the contract is not affected by
the exclusion condition, which is rendered defective. The general rule from
which this ruling is derived is the nugatory and invalid nature of defective
conditions in voluntary non-commutative contracts, and the maintained
validity of the contract itself. In the case of gifts, this rule is predicated
upon the Prophets (pbuh) permission of temporal gifts as general gifts,
with the temporal restriction being validated.19 In this regard, gifts are
different from sales, where the Prophet (pbuh) forbade having a sale and
a condition in one contract.20
3. Only in the bequest contract would the contract and the exclusion both
be permissible. Thus, if a man bequeaths a pregnant mare to another, but
excludes her offspring from the bequest, then the offspring would belong to
his heirs, while the mare itself would belong to the recipient of the bequest.
This contract is special since the transfer of property in bequest contracts
is necessarily postponed to the future until the time of death. Thus, the
establishment of ownership is postponed until such a time, allowing for
the exclusion condition to take effect.
36.2.7
Gift receipt
This is perhaps the most important condition for the gift contract, and we have
left it towards the end to allow us to discuss its many consequences. Its importance stems from the fact that ownership of the gift object is not transferred
except through receipt. Thus, a gift is in fact effected through receipt. Jurists
differed over the nature of this condition, whereby some of the H
. anafs and the
c
Aq
l
considered
it
a
cornerstone,
while
many
considered it
H
anbal
jurist
Ibn
.
18 Al-Amw
al

usuf M
us
a (p. 423).
This is based on the H
discussed above on the authority of J
abir. In fact,
. adth
some of the narrations in Ab

u D
aw
ud, Al-Nas
a, and Al-Tirmidh (who rendered it a valid
H
), the text of the H
states: If a man gives a gift and specifies that it is temporally
. adth
. adth
restricted to the life of the donee and his offspring, then ownership of the item is transferred
to the donee, since the donor has thus made a property transfer that follows the inheritance
rules. Al-Nas
a also narrated a similar H
on the authority of c Abdull
ah ibn Al-Zubayr.
. adth
an in his Al-muc jam Al-Wasat. on the authority of c Amr ibn
.
c
Shu ayb on the authority of his father and grandfather thus: The Prophet(pbuh) forbade
having a sale and a condition in one contract, thus ruling that the sale is invalid and the
condition is invalid, c.f. Al-H
), vol.4, p.17).
.
. adth
19 ibid.
552
a condition of conclusion and bindingness, but not a condition of validity. In

what follows, we shall discuss the nature of the receipt condition in some detail:
The H
afics ruled that receipt is a bindingness condition for
. anafs and Sh
the gift contract, since new ownership is not established without such
receipt.21 They provide proof for this position based on the narration
by c Aish
a (mAbpwh) that her father gave her a gift out of his property
during his lifetime. Then, while on his death bed, he said: O daughter,
after myself, you are my most beloved person, and you are the person
whose poverty I am most intent on avoiding. Now, I gave you a gift out
of my property, and had you already collected the gift, then it is yours.
However, this property today belongs to all of my heirs, including your
two brothers and two sisters. Therefore, divide the property according to
the rules of inheritance detailed in the Book of Allah....22
This text establishes that a gift becomes binding upon receipt, and not
before. Another proof is provided by the tradition that c Umar (mAbpwh)
said: I wonder why some men give gifts to their children, but keep them
in their possession. Then if their child were to die, he would say: my
property is in my possession, and I have not given it to anyone. But,
then if he himself is about to die, he says this property belongs to my
son, for I have given it to him as a gift. This practice is not allowed.
Thus, if a person gives a gift but the gift is not received by the intended
party, intending that they will only get it if he dies, then the gift is invalid.23 There are similar traditions on the authority of c Uthman and
c
Al (mAbpwt).24 Thus, we have seen that the four Guided Khalifs and
other major companions of the Prophet (pbuh) have agreed that gifts are
not effected except through receipt.25
21 Ibn c Abid
n ((H
atb Al-Shirbn ((Sh
afic), vol.2,
. anaf), vol.4, p.533; vol.5, p.341), Al-Kh
.
p.400).
22 This Had
a (mAbpwh),
was narrated by M
alik in Al-Muwat..ta on the authority of c Aish
. th
c Abdul-Razz
and narrated later by Muh.ammad ibn Al-H
asan,
a
q,
and
Al-Bayhaq
, c.f. Ibn
.
Al-Athr Al-Jazar (, vol.212, p.269), Al-Suy
ut. (b, vol.2, p.223), Al-H

.
edition, (H
), vol.4, p.122), Ibn H
awk
an (, vol.5, p.349).
. adth
. ajar (, p.260), Al-Sh
23 Al-Suy
ut. (b, ibid.).
24 In this regard, charity given to a poor person is similar to gifts, in the sense that the contract is not effected except through receipt. Also, in analogy to the voluntary uncompensated
gift contract, it is not valid for a share in divisible common property. On the other hand, if
a divisible property is given as a gift to two poor people, then the contract is valid since the
charitys recipient is in fact All
ah (swt) and not the two poor individuals. Another difference
between charities and gifts, based on juristic approbation, is the invalidity of rescinding charity after it is received, even if the recipient were rich. This ruling follows from the fact that
charities are given with the intention of gaining divine rewards, which are given at the time
of the charity.
25 Those traditions are related to the actions of the Prophets (pbuh) companions. AlZaylac disagreed with those who treated such traditions as H
s. On narration of this
. adth
general principle is given in c Abdul-Razz

aqs narration on the authority of Al-Nakhc thus:
The gift is not permissible as a contract until its receipt, but charities are permissible as a
contract even before receipt, c.f. Al-H
), vol.4, p.121), Al.
. adth

am ((H
c
Al-K
as
an ((H
anaf
),
vol.6,
p.123),
Ab
u
-Ish
a
q
Al-Sh
r
a
z
((Sh
a
fi
),
vol.1,
p.447), Al-Khat.b
.
.
553
In this regard, there are two reported opinions for Imam Ah.mad. The
one favored by the H
. anbals is the view that receipt is a validity condition
for goods measured by weight and volume. This opinion was based on the
consensus of the Prophets (pbuh) companions. The H
. anbals language
suggests that classifying receipt as a validity condition means that it is in
fact a bindingness condition. This can be inferred from the statement by
Ibn Qud
amah: Most of the jurists agree that gifts and charities in goods
measurable by weight and volume do not become binding except through
except through receipt. On the other hand, for items not measured by
weight or volume, they ruled that the gift becomes binding immediately
following the conclusion of the contract. In such cases, ownership of the
gift is established prior to receipt, based on the narration that c Al and
Ibn Masc u
d (mAbpwt) said: A gift contract is permissible if the gift is
known, whether or not it is actually received.26
The Maliks ruled that receipt is neither a validity condition, nor a bindingness condition. They ruled that receipt is in fact a condition for the
full effects of the contract to be achieved. Thus, the most common opinion
in the Maliks school renders the gift object owned by the donee immediately following the conclusion of the contract. Thus, the donor is obliged
to deliver the object to the donee, so that the contracts effects can be
achieved through receipt. Their ruling is based on analogy of the gift contract to sales and other contracts that result in ownership transfer. They
d
also used the above referenced narration on behalf of c Al and Ibn Masc u
(mAbpwt).27
In summary, the Maliks ruled that the object of a gift is owned by the
stated donee based on the contract, while the other jurists ruled that ownership is only established through receipt (and not through the contract
alone).28
36.2.8
Donor s permission
The majority of non-H

. anaf jurists ruled that receipt of the object of a gift is
not valid if effected without the donors permission. Thus, if the donee gains
possession of the object without the donors permission, he is not considered its
owner, and he must guarantee it for the owner. In such cases, delivery of the
gift is not a liability on the donor, and thus may not be effected without his
permission. Moreover, consent of the seller is a permission of validity in sales,
Al-Shirbn ((Sh
afic), vol.2, p.400).
26
Ibn Qud
27 Ibn Rushd Al-Haf
alik), vol.2, p.324), H
shiyat Al-Dus
uq (vol.4, p.101).
. d ((M
.a
28 The latter
view is based on the narration in Al-H
akims S
.
. ah.h. that the Prophet (pbuh)
gave thirty ounces of musk as a gift to Al-Naj
ash, and then told Umm Salamah: I learned
that Al-Najash died, and expect that the gift I sent him will be returned. If it is returned,
then it is yours. In this regard, the gift contract is a voluntary uncompensated contract
similar to loans, and in both cases ownership is only established through receipt.
554
and such a requirement is more appropriate in the gift contract, which is special
due to stipulating receipt itself as a condition of contract validity.29
The H
. anafs agreed that the ruling according to reasoning by analogy would
make receipt valid only if effected with the donors permission, either at the
contract session or after parting. This ruling is based on the view that receipt
amounts to dealing in the donors property without his permission, which is not
valid. However, they ruled based on juristic approbation that receipt without
the donors permission is permissible during the contract session. This ruling is
based on the view that receipt of a gift is a form of acceptance of the donors
offer. Thus, the offer can be viewed as an implicit permission from the donor
for collecting the gift. This permission, however, is restricted to the contract
session during which such an implicit permission is established immediately
following the offer. Thus, during the contract session, acceptance and all actions
associated with it (including receipt) are rendered permissible. However, if the
two parties part without receipt, then receiving the gift later is separate from
acceptance of the gift, and thus it requires the permission of the donor.
An example can illustrate those two means of inference in the H
. anaf school.
If a person gives a gift to another, without giving his explicit permission to
the donee to collect the gift, then their ruling based on juristic approbation
indicates that receipt during the contract session is still permitted. However,
the ruling by analogy remains in effect for receipt after the contract session,
whereby receipt is not permitted without the explicit permission of the donor.
Zufar supported this opinion based on his view that receipt is a cornerstone of
the gift contract, since it is the essence of acceptance of a gift, without which the
legal status of the contract cannot be established positively. Thus, he ruled that
receipt after parting from the contract session is not permitted, since acceptance
after parting from the contract session is not.
In contrast, the Maliks ruled that receipt without the donors permission is
valid at all times. In the view of most jurists in their school, ownership of the
gift object is established by the mere offer. Thus, the offer donee may collect
his property at any time, and if necessary, the donor may be forced to allow the
donee to collect the gift.30
Third-party debts as gifts
If a person gives another a debt owed to him by another as a gift, then an
explicit permission to collect the debt must be issued. In contrast to other gifts
owned by the donor, implicit permissions is not sufficient for the gift of debts.
In normal gifts, the offer is an implicit permission to the donee to collect the
object and establish his ownership. In contrast, the right to assume ownership of
a debt requires an explicit statement to this effect, which is in fact a permission
to collect the debt. In the latter case, the donee is deemed first to collect the
debt on behalf of the donor, thus establishing it as property of the donor. Then,
29 Al-K
as
an ((H
am ((H
atb
.
Al-Shirbn ((Sh
amah (, vol.5, p.592).
30
H
shiyat Al-Dus
uq (vol.4, p.101).
.a
36.3. TWO TYPES OF RECEIPT
555
he is deemed to implicitly receive it from the donor and take it into his own
property.
The permissibility of giving such a debt as a gift to a third party was established based on juristic approbation. However, Zufar maintained the ruling
based on reasoning by analogy, which renders such gifts impermissible. This
reasoning by analogy is based on the fact that H
. anafs do not consider credits with others as property (they ruled that one can swear correctly that he is
penniless, even though others may owe him money). Thus, this ruling is based
on the view that a gift contract is permitted to transfer property, and thus the
object of a gift must be property owned by the donor.31
The H
afics add more conditions for the validity of gift receipts:
. anafs and Sh
1. The H
afics require
. anafs require the gift recipient to be sane, and the Sh
such a recipient to be sane and of legal age. Those conditions follow from
the legal view that receipt of property is a form of guardianship with
respect to the property, thus inheriting its conditions.
2. The H
afics also require that the object of gift contract must
. anafs and Sh
not be physically connected to other objects in a manner that prevents

receipt of the gift.
3. The H
. anafs also required that the gift not be legally connected to other
objects (e.g. as an unidentified share in common property), since that
would prevent receipt of the gift.
36.3
Two types of receipt
The H
. anafs distinguished in their rulings between two types of gift receipt,
depending on whether the receipt is made by the donee himself, or on behalf of
one.32
36.3.1
Receipt on behalf of oneself
In the case of receipt on behalf of oneself, the only condition they stipulated
was sanity and discernment. Thus, they exclude undiscerning children and
insane individuals from receiving gifts. On the other hand, they ruled by juristic
approbation that being of legal age is not necessary provided that the child is
discerning. They ruled thus based on the fact that receiving gift is a purely
beneficial contract, and hence may be effected by a discerning child. This is in
contrast to the non-H
. anaf ruling analogy, which would require legal age to be
consistent with the legal guardianship conditions in sales and other contracts.
31 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, p.70), Al-K
. anaf), vol.5, pp.119,124),
Ibn c Abid
n ((H
. anaf), vol.5, p.544).
32 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.125 onc
n ((H
an Al-Mayd
an ((H
wards), Ibn c Abid
. anaf), vol.2,
p.173).
556
36.3.2
Receipt on behalf of another
There are two types of receipts of gifts on behalf of another. One type pertains
to the representation (niy
abah) of the recipient, and another pertains to the
representation of the act of receipt.
Representation of the recipient
This type of representation is required for young children, who do not have
the legal right to take receipt on their own. The recipient on behalf of such a
young child must be the legal guardian of that child. In this regard, the H
. anafs
give the following prioritized list of potential legal guardians to receive gifts on
behalf of a young child: the father, then a legal guardian commissioned by the
father, then the grandfather, then a legal guardian commissioned by him, etc.
In the absence of the closest direct legal guardians, the list progresses to further
relatives, instead of postponing receipt of the gift and possibly depriving the
young child from a benefit he could have received. If any of the four stated
guardians are present, it is not permissible for any other party to receive on
behalf of the child (including brothers, mothers, or uncles), since those other
parties would not have the right to deal in the childs property. However, if
none of the four were present, then juristic approbation dictates that whoever
is taking care of the child may receive the gift on his behalf, to ensure that the
child does not lose this pure benefit. This is in contrast to the ruling by analogy,
which will dictate that such receipt is impermissible since those parties do not
have legal guardianship over the child.
As a consequence of this ruling, if one of the eligible legal guardians gives
a gift to the young child, and keeps it in his own possession, the gift is valid,
and they are considered recipients on behalf of the child. Also, if a man sells
something to his young son, and the goods perished after the conclusion of
the sale, they perish in the property of the child, since the fathers possession
constitutes receipt by the child.
As we have seen previously, juristic approbation dictates that a discerning
child may receive gifts given to him by one of the four categories of guardians
enumerated above. This is in contrast to the ruling by analogy, which is the
same in this situation as the previously discussed ruling for receiving gifts on
behalf of oneself.
Representation of the act of receipt
The second type of representation in receipt is effected when the actual receipt
is effected through another type of receipt, which may be stronger or weaker.
In what follows, we discuss specific examples of such representation:
1. The gift object may be in the possession of the gift recipient as a loan
or deposit. In this case, juristic approbation dictates that if the object is
given as a gift, there is need to have a separate receipt to effect the gift.
This ruling is based on the view that receipt of loaned or deposited items
36.3. TWO TYPES OF RECEIPT
557
are just as strong as receipt of a gift. In this regard, all three contracts are
voluntary uncompensated contracts in which the holder of the item does
not guarantee it. Thus, the two types of receipt were sufficiently similar
for one type to represent the other.
However, reasoning by analogy dictates that the possessor of the gift is
not in receipt of the item as a gift unless receipt is renewed, by returning
the item to the donor and then receiving it again. This ruling is based
on the view that the first possession is only a possession in form, but the
depositor remains the true possessor of the good, until a new delivery is
effected to establish gift receipt.
2. The object of the gift may be held by the donee with guarantee, e.g. if it
is usurped, if it was received in a defective sale, or if it is being held for
inspection to determine whether or not to purchase the item at an agreedupon price.33 In such cases, the gift is valid, and the holder of the item is
absolved of his guarantee of the object. In those cases, the existing receipt
with guarantee is stronger than trust receipts, and thus it can replace the
weaker receipt required by the gift contract.
3. The object of the gift contract may be already in the possession of the
donee, while being guaranteed by something else. Examples of this type
of possession are pawned objects that are guaranteed by a debt, or a sold
object that is guaranteed by the price. In those cases, Al-Karkh ruled that
if the object is given as a gift, receipt must be renewed to effect receipt of

the gift. This ruling follows from the fact that the possessor in those cases
cannot be absolved from the guarantee, and hence the existing possession
may not be turned into a trust receipt. Thus, neither receipt can be
established as stronger than the other, requiring renewing the receipt to
effect the transfer of ownership.
However, the better opinion was specified in Al-J
amic Al-S.aghr and Al
Bad
aic . According to this opinion, the gift in those cases is considered
to
be in receipt. This ruling is based on the view that a possession with any
type of guarantee is stronger than any type of trust receipt. Thus, the
existing receipt is sufficient for the transfer of ownership under the gift
contract.
33 The last case involves guaranteeing the value of the goods held while deciding whether or
not to buy them at a specified price. This must be distinguished from the case where the item
is simply held to inspect the item without having discussed the price. In the latter case, the
items are not guaranteed. See, e.g. Majmac Al-D

n ((H
an
at (pp.213,217), Ibn c Abid
. anaf),
. am
vol.4, p.52), H
shiyat Al-Sharq
aw (vol.2, p.150), c Aqd Al-Bayc for Professor Al-Zarq
a (p.96).
.a
Chapter 37
Legal Status of Gifts

The general legal effect of a gift contract is the establishment of donee ownership
of the gift object, without any compensation to the donor. The characterization
of this general status of the contract varies across schools of jurisprudence, as
detailed below:
The H
. anafs ruled that the establishment of ownership for the donee is
not binding, thus permitting recalling the gift and voiding the contract.
This ruling is based on the H
: The donor is more worthy of his gift
. adth
as long as he received no compensation for it.1 This Text clearly implies

that the donor is allowed to recall the gift, even after its receipt, provided
that he had not received compensation for it. Of course, recalling gifts is
still considered to be lowliness (dan
aah), and the donee has the right
to refuse to return the gift. Thus, returning the gift may only be effected
through mutual consent, or by a judges order. This follows from the fact
that returning a gift is a voiding of the gift contract after its conclusion. In
this regard, it is analogous to voiding a sales contract after receipt, based
on a defect.2 Hence, returning a gift with mutual consent is considered a
revocation contract.
As we have already seen, the Maliks ruled that ownership of the gift
object is established through the contract. Moreover, they ruled that the
contract becomes binding through receipt, and thus it is generally not
permissible for the donor to rescind the gift. The only exception to this
rule is the case whereby a father may give a gift to his son, and then
rescind the gift provided that this does not affect the rights of a third
1 Narrated by Ibn M
ajah and Al-D
u Hurayrah with a
weak link in its chain of narration. It was also narrated by Al-T
an in his Muc jam and
. abar
by Al-D
araqut.n in his Sunan, both on the authority of Ibn c Abb
as. A third narration was
c
validated by Al-H
akim, Al-Bayhaq, and Ibn H
.
. azm on the authority of Ibn Umar, c.f. AlH
), vol.4, p.125), Ibn H
ajar (, p.260 onwards), Al-S.anc
an
.
. adth
.

2 Al-K
c
as
an ((H
am ((H
an
at (p.338).
. am
559
560
CHAPTER 37. LEGAL STATUS OF GIFTS

party (e.g. through marriage or a new debt).3 In what follows, we list
the five conditions stipulated by the Maliks to permit a father to rescind
a gift he previously gave to his son (provided it was not charity given for
religious reasons):
The son must not have married after the gift was given.
The son must not have initiated a deferred debt in the meantime.
The object of the gift must have remained unchanged.
The donee must not have affected the gift.
Neither the donor nor the donee should have fallen sick.
If any of those five conditions is violated, then the gift may not be rescinded.
On the other hand, any gift given as charity seeking the pleasure of Allah
(swt) can never be rescinded. In such cases, if the donor wants to get the
object back, he would have to buy it back. In the meantime, he may not
use the item (e.g. eating the fruits of trees given in charity, or riding an
animal given in charity).
Note that the Maliks permit giving gifts with a stipulated condition that
the donee must give the donor a compensation. In such cases, the donee
has the right to accept or reject it. If he accepts the gift, he is required to
compensate the donor with the value of his gift. In this case, the donee
is not required to pay more than the gifts value, and the donor is not
required to accept any less than the gifts value (and may thus rescind the
offer if he does not receive the appropriate compensation).
The Shafics and H
. anbals also ruled that a donor is generally disallowed
from rescinding the gift, with the exception of a father rescinding a gift he
gave to his child. The general restriction against rescinding gifts is based
on the H
: The one who rescinds his gift is like a dog who eats his
. adth
vomit.4
Both the general rule as well as the exception are established by the H
:
. adth
Nobody is allowed to give a gift and then rescind it, except for the fathers
right to rescind gifts given to his child.5 The Shafics extended this
3 Ha
iyat Al-Dus
alik), vol.2, pp.324,327), Al. sh
. afd ((M
B
alik), vol.6, pp.113,116), Ibn Juzayy ((M
alik), p.367).
4 The various narrations of this Had
were discussed above, c.f. Al-S.anc
an (2nd printing,
. th
vol.3, p.90).
5 Narrated by the four authors of Sunan on the authority of Ibn c Umar and Ibn c Abbas.
Al-Tirmidh classified this H
as a good and valid one (h.asan .sah.h.). It was also narrated
. adth
and validated by Ibn H

an and Al-H
akim on the authority of Ibn c Abbas. More narrations
. ibb
.
are available in Ah.mad, Al-T
an, Al-D
araqut.n and c Abdul-Razz
aq on the authority of
. abar
T
aw
us. A different line of narration was used by Al-Nas
a and Ibn M
ajah on the authority
.
c
c
of Amr ibn Shu ayb, his father and his grandfather, c.f. Ibn Al-Athr Al-Jazar (, vol.12,
p.266), Al-H
), vol.4, p.124), Al-S.anc
an (2nd printing,
.
. adth
vol.3, p.90), Ibn H

. ajar (, p.260).
561
permission from the father to all of the childs paternal lineage.6
In summary, the H
. anafs render the legal status of the gift contract nonbinding, while the other jurists consider it binding except for a father
giving a gift to his child. In the latter case, the Maliks permit rescinding
the gift before receipt only, while the Shafics and H
. anbals permit rescind
ing it before or after receipt. The Shafics also extended this exception to
grandfathers, great grandfathers, etc.
6 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.447), Ibn Qud

amah (, vol.5, p.621).
Chapter 37
Legal Status of Gifts

The general legal effect of a gift contract is the establishment of donee ownership
of the gift object, without any compensation to the donor. The characterization
of this general status of the contract varies across schools of jurisprudence, as
detailed below:
The H
. anafs ruled that the establishment of ownership for the donee is
not binding, thus permitting recalling the gift and voiding the contract.
This ruling is based on the H
: The donor is more worthy of his gift
. adth
as long as he received no compensation for it.1 This Text clearly implies

that the donor is allowed to recall the gift, even after its receipt, provided
that he had not received compensation for it. Of course, recalling gifts is
still considered to be lowliness (dan
aah), and the donee has the right
to refuse to return the gift. Thus, returning the gift may only be effected
through mutual consent, or by a judges order. This follows from the fact
that returning a gift is a voiding of the gift contract after its conclusion. In
this regard, it is analogous to voiding a sales contract after receipt, based
on a defect.2 Hence, returning a gift with mutual consent is considered a
revocation contract.
As we have already seen, the Maliks ruled that ownership of the gift
object is established through the contract. Moreover, they ruled that the
contract becomes binding through receipt, and thus it is generally not
permissible for the donor to rescind the gift. The only exception to this
rule is the case whereby a father may give a gift to his son, and then
rescind the gift provided that this does not affect the rights of a third
1 Narrated by Ibn M
ajah and Al-D
u Hurayrah with a
weak link in its chain of narration. It was also narrated by Al-T
an in his Muc jam and
. abar
by Al-D
araqut.n in his Sunan, both on the authority of Ibn c Abb
as. A third narration was
c
validated by Al-H
akim, Al-Bayhaq, and Ibn H
.
. azm on the authority of Ibn Umar, c.f. AlH
), vol.4, p.125), Ibn H
ajar (, p.260 onwards), Al-S.anc
an
.
. adth
.

2 Al-K
c
as
an ((H
am ((H
an
at (p.338).
. am
559
560
CHAPTER 37. LEGAL STATUS OF GIFTS

party (e.g. through marriage or a new debt).3 In what follows, we list
the five conditions stipulated by the Maliks to permit a father to rescind
a gift he previously gave to his son (provided it was not charity given for
religious reasons):
The son must not have married after the gift was given.
The son must not have initiated a deferred debt in the meantime.
The object of the gift must have remained unchanged.
The donee must not have affected the gift.
Neither the donor nor the donee should have fallen sick.
If any of those five conditions is violated, then the gift may not be rescinded.
On the other hand, any gift given as charity seeking the pleasure of Allah
(swt) can never be rescinded. In such cases, if the donor wants to get the
object back, he would have to buy it back. In the meantime, he may not
use the item (e.g. eating the fruits of trees given in charity, or riding an
animal given in charity).
Note that the Maliks permit giving gifts with a stipulated condition that
the donee must give the donor a compensation. In such cases, the donee
has the right to accept or reject it. If he accepts the gift, he is required to
compensate the donor with the value of his gift. In this case, the donee
is not required to pay more than the gifts value, and the donor is not
required to accept any less than the gifts value (and may thus rescind the
offer if he does not receive the appropriate compensation).
The Shafics and H
. anbals also ruled that a donor is generally disallowed
from rescinding the gift, with the exception of a father rescinding a gift he
gave to his child. The general restriction against rescinding gifts is based
on the H
: The one who rescinds his gift is like a dog who eats his
. adth
vomit.4
Both the general rule as well as the exception are established by the H
:
. adth
Nobody is allowed to give a gift and then rescind it, except for the fathers
right to rescind gifts given to his child.5 The Shafics extended this
3 Ha
iyat Al-Dus
alik), vol.2, pp.324,327), Al. sh
. afd ((M
B
alik), vol.6, pp.113,116), Ibn Juzayy ((M
alik), p.367).
4 The various narrations of this Had
were discussed above, c.f. Al-S.anc
an (2nd printing,
. th
vol.3, p.90).
5 Narrated by the four authors of Sunan on the authority of Ibn c Umar and Ibn c Abbas.
Al-Tirmidh classified this H
as a good and valid one (h.asan .sah.h.). It was also narrated
. adth
and validated by Ibn H

an and Al-H
akim on the authority of Ibn c Abbas. More narrations
. ibb
.
are available in Ah.mad, Al-T
an, Al-D
araqut.n and c Abdul-Razz
aq on the authority of
. abar
T
aw
us. A different line of narration was used by Al-Nas
a and Ibn M
ajah on the authority
.
c
c
of Amr ibn Shu ayb, his father and his grandfather, c.f. Ibn Al-Athr Al-Jazar (, vol.12,
p.266), Al-H
), vol.4, p.124), Al-S.anc
an (2nd printing,
.
. adth
vol.3, p.90), Ibn H

. ajar (, p.260).
561
permission from the father to all of the childs paternal lineage.6
In summary, the H
. anafs render the legal status of the gift contract nonbinding, while the other jurists consider it binding except for a father
giving a gift to his child. In the latter case, the Maliks permit rescinding
the gift before receipt only, while the Shafics and H
. anbals permit rescind
ing it before or after receipt. The Shafics also extended this exception to
grandfathers, great grandfathers, etc.
6 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.447), Ibn Qud

amah (, vol.5, p.621).
Chapter 38
Prevention of Gift
Rescinding
There are seven factors that prevent the donor from rescinding his gift: (i) if the
gift was compensated materially, (ii) if the compensation was not material (e.g.
in charities), (iii) if an increase ensued in the gift object, (iv) if the gift is no
longer owned by the recipient, (v) if either party died, (vi) if the gift object was
consumed or if it perished, and (vii) if the gift recipient married. The seventh
factor is obvious, and we have discussed it previously under Malik rules for a
father rescinding a gift he gave to his son. In the remainder of this chapter, we
discuss the first six factors in some degree of detail.
38.1
Material compensation
If the donor received a material compensation from the donor, then he is prevented from rescinding his gift. This ruling follows from the Prophets (pbuh)
H
: The donor is more worthy of keeping his property, as long as he was
. adth
not compensated for it. In this case, receiving a compensation is proof that it
was the reason he gave the gift. On the other hand, if the donee never indicated
that he had given something as a compensation for the gift, then the donor may
rescind it.
We need to distinguish between two cases, depending on whether or not the
compensation was stipulated as a condition in the contract:1
1. The major scholars of all four schools of jurisprudence ruled that a gift
contract containing a condition of compensation (e.g. I give you this pen
as a gift, but you have to give me this T-shirt as a gift in compensation)
is valid, and that the condition itself is also valid. On the other hand,
1 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.6,
c
n ((H
p.130), Ibn Al-Hum
am ((H
. anaf), vol.4, p.539).
563
564
CHAPTER 38. PREVENTION OF GIFT RESCINDING

they differed over their characterization of that valid contract, as detailed
below:
With the exception of Zufar, the H
. anafs ruled that the contract is
considered a gift initially, but a sale at the end. Thus, the legal rulings for gift contracts apply prior to receipt (e.g. it cannot be effected
for unidentified shares in common property, receipt is required, etc.).
Thus, both the gift and its compensation may be kept prior to the
exchange. However, following the exchange, the contract is considered a sale, and thus returning them to their owners must be effected
only in cases where the items were not inspected and a defect was
found. In such cases, the contract can be revoked in most cases, but
preemption (shufc ah) is required if one of the compensations was real
estate.
On the other hand, Zufar rendered this contract a sale from beginning
to end. Thus, it is subject to all the conditions of sales, including
the fact that it is not rendered defective if it contains a component of
common ownership. Moreover, conclusion of the contract thus establishes ownership of the compensations even before receipt. Thus, he
viewed the contract primarily as one of exchanging one property for
another, which is a sale. However, the majority of H
. anafs continued
to view the contract as a hybrid, since it contained the contract language of a gift, and the essence of a sale. Thus, they ruled that the
contract would inherit some properties from each of those contracts.2
The Maliks ruled that this contract would be considered a sale in
most circumstances, but occasionally considered a gift. The occasional differentiation between this contract and sales is the permissibility of giving a gift with an unknown compensation, or compensation with an unknown deferment period. In the first case, the donor
must accept the compensation and he would not be allowed to return the compensation based on finding a defect. The only exceptions
where returning a defective compensation is allowed are cases with
extremely harmful defects (e.g. infectious disease in an animal), in
which case the donor is not required to accept it as compensation,
even if the other party pays him the difference in value.3
Most of the Shafics and H
. anbals ruled that the contract is con
sidered a sale. Thus, the donee is required to pay the stipulated
compensation, and all the rules of sales apply (e.g. preemption, options, guaranty of rights associated with sold properties, etc.).4 Their
ruling was based on the view that the condition of compensation is
2 Al-K
as
an
((H
. anaf), vol.6, p.132).
Rushd Al-H
alik), vol.2, p.326), H
shiyat Al-Dus
uq (vol.4, p.114), Ibn
. afd ((M
.a
Juzayy ((M
alik), p.352).
4 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
p.404), c Aqd Al-Bayc for Professor Al-Zarq

a (p.97).
3 Ibn
38.2. NON-MATERIAL COMPENSATION
565
not in accordance with the nature of gifts. Thus, the gift contract is
rendered defective, and the contract must be validated as a sale.
2. The recipient of a gift may voluntarily give the donor a compensation
later. We must then consider two cases, depending on whether or not the
recipient of the first gift specifies his later action as compensation for the
first gift:
If he does not explicitly state that this is a compensation for the
earlier gift, then he is considered to be giving a separate gift. In this
case, either gift, or both, may be rescinded.
If the recipient of the first gift explicitly said that what he is giving
is a compensation for that gift, then jurists still view it as a separate
gift, but the ruling for the first gift is now different. In this case, the
first gift is considered to be compensated, and thus the first donor is
prevented from rescinding it.5
Compensating a donor
Jurists differed in opinion over whether or not the recipient of an unconditional
gift must still compensate it voluntarily:
The H
afics ruled that the recipient
. anafs, H
. anbals, and most of the Sh
of an unconditional gift is not required to compensate it, regardless of

whether he is richer or poorer than the donor.6
On the other hand, the Maliks ruled that the gift recipient should compensate the donor if there is any indication that the donor may be expecting
a compensation. They ruled that this was particularly important in the
case where a poor person gives a gift to a rich one, which very often indicates that he is expecting compensation. A proof of this opinion is based
on c Umars (mAbpwh) statement: If a person gives a gift seeking compensation, then he may rescind it, unless he receives a compensation that
meets his expectations.7
38.2
Non-material compensation
There are three types of non-material compensations that a donor may receive:8
5 Al-K
as
an
((H
s (1st edition (H
. anaf), vol.12, pp.76,82).
((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.447), Al. anaf), vol.6, p.132), Ab

amah (, vol.5, p.623).
7
Ibn Rushd Al-H

alik), vol.2, p.326), H
shiyat Al-Dus
uq (vol.4, p.114), Al-B
aj
. afd ((M
.a
Al-Andalus (1st edition (M

alik), vol.6, p.111).
8 Al-K
c
n
as
an ((H
am ((H
((H
. anaf), vol.4, p.541).
6 Al-K
as
an
566
1. The donor may receive reward from Allah (swt). Thus, a gift to a poor
person is considered charity seeking the pleasure of Allah (swt), and rewards from Him. In this case, the gift or charity donor is not allowed to
rescind it.
2. The donor may receive a moral and social reward by giving gifts to immediate family members. Such rewards are more significant than financial
ones, and they can also translate into rewards from Allah (swt) for obeying the command of kindness to ones kinfolk. Thus, gifts to immediate
family members may not be rescinded.
3. Spousal relations are considered to be as strong as ties to immediate family
members, and hence gifts to spouses may not be rescinded.
38.3
Growth in the gift
If the object of the gift incurs some attached growth (e.g. planting trees in
land, building extensions to houses, the animal grows in size, etc.), then the
gift may not be rescinded. This applies whether or not the growth was effected
by the donee, and whether or not it was derivative of the gift object. The
impermissibility of rescinding the gift in this case follows from the fact that
returning the gift object would require returning the attached growth, which is
not part of the gift.
On the other hand, if the growth were disconnected, then the gift may be
rescinded. This applies whether or not the growth was derivative of the gift
itself. In all such cases, the initial gift contract may be voided, and the object
would thus be returned without the increase. This is in contrast to the ruling
in sales, where the disconnected increase would still prevent returning the sold
item based on finding a defect, to avoid the possibility of effecting rib
a. In the
case of a sale, the buyer would keep the increase, thus effecting the essence of
rib
a. However, there is no danger of rib
a in the gift contract, since it is not a
commutative contract.
In contrast to increases, reductions in the gift object do not prevent rescinding the gift. The donors right to recall the remaining part of the gift follows
immediately from his right to recall the entire gift had it remained intact. In
this case, the donee does not guarantee the object or compensate the donor for
the reduction in its object, since the gift receipt is not a guaranteed receipt.9
38.4
Transfer of property
If ownership of the gift object was transferred to another (e.g. through a sale,
or a gift, etc.), the donor of the first gift is prevented from rescinding it. In
this case, the donor caused the gift recipients ownership of the object, but once
9 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.12, pp.83,88), Al-K
. anaf), vol.6, p.129),
c
n ((H
Ibn Al-Hum
am ((H
. anaf), vol.4, p.538).
38.5. DEATH OF EITHER PARTY
567
the ownership is changed, he has no right to void it. This is in analogy to the
impermissibility of giving one item as a gift, and then recalling another item.
In this case, the change of item prevents recalling the object, and similarly, the
change of ownership prevents recalling the gift.10
38.5
Death of either party
If the recipient of a gift dies, ownership of the gift is transferred to his heirs.
Thus, as we have seen, this change in ownership will prevent the donor from
rescinding his gift. Similarly, death of the donor would transfer all of his properties to his heirs, who did not initiate the first gift contract, and thus they
cannot rescind it.11
38.6
If the gift perishes
If the gift object were to perish or if it was consumed, then returning it to

the donor becomes impossible. Therefore, recalling the object of the gift is
prevented. Moreover, the donor may not ask the donee to return the value of
the gift, since that is not what was given as a gift. In this regard, we have
already seen that gift receipt is not a receipt of guarantee.12
38.7
Characterization of gift returns
All jurists agreed that if a gift is returned by court order, the return is considered
an annulment of the gift contract. However, they differed in their characterization of gift returns by mutual agreement:
Zufar ruled that such returns are new gifts. In this case, the donee would
be giving his newly acquired property to the donor, with mutual consent.
This makes the return similar to returning defective items in a sale, thus
rendering it a new contract in which a third party is involved
The majority of H
. anafs ruled that such returns are also considered an
annulment of the gift contract. Thus, such returns are permissible for
shares in common properties, and receipt is not a condition for conclusion
of the return.
In contrast to Zufars opinion, the majority of H
. anafs ruled that the
donor is collecting his own right by recalling it, and collecting ones own
right does not require the intervention of a third party (e.g. a judge).
This distinguishes the gift return from court-ordered returns of defective
10 Al-K
c
n ((H
am
as
an ((H
((H
s (1st edition (H
anaf), vol.12, p.84).
.
11 Ibn Al-Hum
c
n ((H
am ((H
. anaf), vol.4, p.539).
12 Al-K
c
n ((H
as
an ((H
. anaf), vol.4, p.542).
568

items after receipt. It is in the latter case that the return must be viewed
as a new contract involving a third party, since the buyer in that case
only has the right to receive merchandise that is free of defects, but does
not have the right to annul the contract. However, they ruled that those
considerations are not applicable to gift returns by mutual consent.13
13 Al-K
as
an
((H
. anaf), vol.6, p.134).
Chapter 39
Gifts to Immediate Family

39.1
Gifts to offspring
The majority of jurists ruled that equality among children in gift-giving is recommended, and thus viewed unequal treatment in such practice is reprehensible.
On the other hand, they had varying explanations of the nature of this recommendation of equal treatment in gift-giving:
The H
u Y
usuf, the M
aliks, and Shafics shared the major. anaf jurist Ab
ity opinion that equality should be effected in gift-giving for all children,
be they male or female. This ruling, that female offspring should be given
equal gifts to male offspring, is based on the H
: When giving gifts,
. adth
give all your children equal amounts. In fact, if I were to give unequal
was narrated
amounts, I would give more to the women.1 This H
. adth
by Sacd ibn Mans.u

r in his Sunan, and also by Al-Bayhaq, with a good
chain of narrators. A version of this H
in Al-Bukhari was narrated
. adth
thus: Be wary of Allah, and be fair to your children.2 In addition to

this Text, which they interpreted as a recommendation (nadb) of fairness,
such fairness in dealing with people and distributing ones wealth among
ones children is clearly a desirable practice.3
an in Al-Awsat. on the authority of Ibn c Abb
as. However, this
.
chain of narration contains Sacd ibn Y
usuf, whose narrations are considered weak. As a
c
matter of fact, Ibn Udayy said in Al-K
amil that of all his narrations, this one was the most
questionable, c.f. Ibn H
am (, vol.4,p.153).
. ajar (, p.260), Al-Hayth
ari, Muslim, Ab
u D
aw
a, and M
alik in Al
Muwat..ta on the authority of Al-Nuc m

an ibn Bashr that he said: My father gave me some
of his wealth as a charity, but my mother said that she will not agree to this gift unless you
let the Prophet (pbuh) witnesses it. So, my father went to the Prophet (pbuh) to make him
witness his charity. The Prophet (pbuh) asked him: Did you give the same to all of your
children?, and my father said no. Then the Prophet (pbuh) said: Have wariness of All
ah and
observe fairness with your children. Then, my father returned and took back the charity.
There are other narrations as well, c.f. Ibn Al-Athr Al-Jazar (, vol.12, p.266), Ibn H
. ajar
(, p.260), Al-S.anc
3 Al-Samarqand
((H
ac ar
an ((Sh
u-Ish.
aq
. anaf), vol.3, p.274), Al-Sh
569
570
CHAPTER 39. GIFTS TO IMMEDIATE FAMILY

It must be noted that this majority of jurists did not rule that equality in
distribution of gifts is a requirement (w
ajib). They thus maintain that a
person has the right to use his property as he sees fit, including giving it
to inheritors or others. They thus interpreted the above listed H
s as
. adth
a strong recommendation (nadb) of equality in the shares of all children

in gifts. They further interpreted as a recommendation the narration of
the H
in Muslim, where the Prophet (pbuh) said: Would you like
. adth
them to be equally good to you?, and the father said yes, then the
Prophet(pbuh) said, then do not distribute the gifts unequally.
On the other hand, a few jurists, including Ah.mad, Al-Thawr, T
us,
. aw
and Ish.aq, ruled that equality in gift distribution among children was
a requirement (w
ajib). Thus, they rendered invalid any gift distribution
that does not observe such equality. Their proof was based on the above
4
that included the admonition be wary of Allah and
referenced H
. adth
the injunction be fair among your children. Also, they used as proof
the above referenced evidence that the Prophet (pbuh) said then do not
distribute the gifts unequally, and the narration that added I shall not
be a witness for injustice.
However, this group of jurists differed over their definition of equality.
Some followed the view that equality entails equal shares for males and
females alike, based on the language of the H
in Al-Nasa, in which
. adth
the Prophet (pbuh) was narrated to have said: Then why dont you
distribute it equally among them, as well as the H
in Ibn H
. adth
. ibban
c
Abb
a
s,
all
of
which
indicate
equal
and the above referenced H
ad
th
of
Ibn
.
shares.
However, as we shall soon see, the H
. anbals interpreted equality to mean
following the rules of inheritance by giving each male twice the share of
each female.
Moreover, it was narrated that Ah.mad ruled that unequal distribution
is permissible if dictated by some reason. For instance, he allowed it
if one of the children had a greater need for assistance due to chronic
illness, indebtedness, the size of his family, or occupation with his religious
studies.5
Al-Shr
az ((Sh
afic), vol.2, p.401).
4
Narrated by Al-Bukh
ari and Muslim on the authority of Al-Nuc m
an ibn Bashr, c.f. Al
Shawk
an (, vol.6, p.6).
5
The fatw
a committee of Al-Azhar issued an answer to the question whether or not it is
permissible to give unequal gifts to inheritors. We list part of the answer below:
First: parents should be fair by giving equal shares to children in gifts and expenditures,
to the best of their abilities. The general rule of equal division follows from the above listed
H
s. Deviation from this rule is only permissible for one of the reasons listed below.
. adth
Second: If a father spends a significant amount on one of his children (e.g. by paying
his dowry in marriage, or paying for his education to enable him to get a better job, or if he
buys furniture for his marrying daughter, etc.), he must compensate the rest of his children
by giving them an equal amount.
Third: It is permissible to give more to one of the children if there is a legal reason.
39.2. GIFTS TO ONE S PARENTS
571
The H
. anaf jurist Muh.ammad and the H
. anbals ruled that a father may
distribute his wealth among his children according to the rules of inheritance, thus giving each male twice the share of each female. They ruled
thus since this is the division dictated by Allah (swt), and thus it is the
most worthy division rule to follow. In this regard, there is no reason
to distinguish between dividing this wealth among his children after his
death and distributing it before, since distributing his wealth during his
life is simply a hastening of that inevitable distribution after his death.
Thus, they ruled that the rules of division should be the same in both
cases.6
39.2
Gifts to one s parents
It is also preferable to observe equality when giving gifts to ones parents, although it is permissible at times to give more to, and show more generosity
towards, the mother. This ruling is based on the H
narrated by Al-Bukhari
. adth
and Muslim on the authority of Ab

u Hurayrah (mAbpwh) that a man came
to the Prophet (pbuh) and asked him: Who is the person most worthy of my
generosity? He (pbuh) said: Your mother. The man asked: Followed by
whom?. He (pbuh) said: Then, your mother. The man asked: Followed by
whom?. He (pbuh) said: Then, your mother. The man asked [a third time]:
Followed by whom?, and the Prophet (pbuh) said: Then, your father.
39.3
Gifts to siblings
Finally, equality is also recommended for gift giving to ones siblings at special
occasions and otherwise, provided that they are equally well-off or in need.
However, it is permissible to give more to the oldest sibling, based on the H
:
. adth
The rights of the oldest siblings on the younger ones are equal to the fathers
rights on his children. Another narration of the H
states: The oldest
. adth
brother has the same status as the father.7
Legal reasons for such unequal distribution include having a handicap that affects the childs
earning ability, blindness, paralysis, other impediments to earning a living, and occupation
with religious studies.
Reference: Majallat Al-Azhar, year 14, issue #3.
6 Ibn Qud
((Sh
afic), vol.2, p.335).
7
. with a
The first H
was narrated by Al-Bayhaq on the authority of Sacd ibn Al-c As
. adth
weak chain of narration. The second also has a weak chain of narration, and it was narrated
by Al-Bayhaq, Al-T
an, and Ibn c Udayy, on the authority of Kulayb Al-Juhan.
. abar
Chapter 40

The term deposit (d
ac ) is used in English to describe both the deposited
object, as well as the contract of depositing an object with another, i.e. giving
an object to another for safekeeping. We shall use the terms depositor for the
one who makes the deposit, and depositary for the one who keeps the deposit.
The following are definitions of the deposit contract as provided by the different
schools of Islamic jurisprudence:
Some H
. anafs defined the contract as an implicit or explicit empowerment
of another for safekeeping ones property.1 The contract is thus concluded
explicitly if one person says to another: I leave this item with you for
safekeeping, and the other says: I accept. If the latter party never
responded, the contract would still be concluded with implicit acceptance.
The Shafics and Maliks defined the contract as giving another person a
agency (tawkl) for safekeeping ones property or legal possession.2 Thus,

deposited items may include legally possessed wine (e.g. if the person
owned it prior to converting to Islam), leather that can be purified by
tanning, and hunting dogs. On the other hand, deposits are not permitted
items that cannot be legally possessed, e.g. dogs with no permissible use,
and lost properties.
The deposit contract is permissible, and recommended, with proofs based
on Quran, H
, and consensus:
. adth
Proof in the Qur

an can be found in the verses: Allah commands you
to return trusts to those to whom they are due [4:58], and and if one
deposits a thing or trust with another, let the trustee discharge his trust
[2:283].
c
1 Ibn Al-Hum
c
n ((H
am ((H
Al-D
an
at (p.68).
. am
2 Al-Khat
b Al-Shirbn ((Sh
shiyat Qaly
ub wa c Umayrah (vol.3,
.a
.
p.180), Sharh. Al-Tah.rr (p.167), Al-Raml ((Sh

a
iyat Al-Sharq
aw (vol.2,
. sh
p.96 onwards), H
shiyat Al-Dus
uq (vol.3, p.419).
.a
577
578

Proof of legality is also provided by the H
according to which the
. adth
Prophet (pbuh) said: Return trusts to the one who entrusted you, but
do not betray the one who betrayed you.3
Finally, jurists throughout the history of Islam have agreed that the deposit contract is permissible, based on the need (nay, necessity) of asking
others to hold ones property for safekeeping.4
3 Narrated by Ab
u D
aw
ud and Al-Tirmidh, who rendered it a good narration (H
. adth
h.asan). It was also narrated and validated by Al-H

akim. On the other hand, Ab
uH
atim Al.
.
R
az questioned its authenticity, and a number of its narrations in Al-Bayhaq, Al-D
araqut.n,
M
alik, Ah.mad and Ab
u Nuc aym, were based on questionable chains of narration. Narrations
exist for H
s to the same effect exist in Ibn Al-Jawz, and Al-D
araqut.n on the authority
. adth
of Ubayy ibn Kac b. Other versions in Al-Bayhaq and Al-D

u
Um
amah are based on weak chains of narration. There are also narrations on the authority
of an unknown companion of the Prophet (pbuh), with another missing link in the chain of
narration, in Ah.mad, Ab
u D
aw
ud, and Al-Bayhaq. Moreover, Al-Im
am Al-Sh
afic argued
that this is not an established H

. However, Al-Shawk
an () argued that the H
may
. adth
. adth
be used as a legal proof, based on the fact that two of the major narrators of H
considered
. adth
it valid, and one considered it valid, c.f. Ibn H

awk
an (, vol.5, p.297),
. ajar (, p.270), Al-Sh
Al-S.anc
4 ibid., Ibn Qud
amah (, vol.6, p.382), Al-Sarakhs (1st edition (H
. anaf), vol.11, p.109).
Chapter 41
Deposit Cornerstones and

Conditions
The H
. anafs stipulated only two cornerstones for the deposit contract: offer
and acceptance.1 The majority of jurists enumerated four cornerstones: (i-ii)
depositor and depositary, (iii) deposited object, and (iv) contract language (offer
and acceptance).2 In this regard, the acceptance may be verbal (e.g. I accept
your deposit), or it may be implied through physical receipt and silence. The
latter behavior is deemed acceptance in analogy to the direct exchange sale
contract (muc a
.ta
h), where verbal acceptance is not necessary.
The H
anaf
s
stipulated that the depositor and depositary must be sane and
.
discerning, thus restricting the insane and young children from making or receiving deposits. However, they did not stipulate a condition that the depositor
or depositary must be of legal age. Thus, the discerning child who has trading
privileges may make or accept deposits, since eligibility to trade makes him eligible to accept others property for safekeeping. On the other hand, if the child
is under legal restrictions not to trade, then he is not eligible for deposits.3 On
the other hand, the majority of jurists posited the same conditions in depositors
and depositary that they posited for parties in a agency: sanity, discernment,
and being of legal age.
The object of deposit must be a form of property that can be possessed physically. Thus, deposits of runaway animals or birds in the sky are not guaranteed
by the depositary.4
1 Al-K
as
an
c
((H
an
at (p.68).
. am
((M
afic), vol.3, p.80), Al c
Buh
ut (3rd printing (H
anbal
),
vol.4,
p.186),
Mar
ibn
Y
u
suf
(1st
printing
(H
.
. anbal), vol.2,
p.269). The Sh
afics ruled that it is not necessary for the depositary to accept the deposit
verbally. Thus, they consider receipt of the deposited item (movable or immovable) to be
tantamount to acceptance of the deposit, in analogy to the agency contract.
3 Al-K
as
an ((H
. anaf), ibid.).
4 Ibn c Abid
n ((H
. anaf), vol.4, p.516).
2 Al-Dard
r
579
Chapter 42
Status, and Methods of

Safekeeping
The deposit contract makes it binding on the depositary to safekeep the owners
property. In this regard, the depositors initiation of this contract is a form of entrusting of the depositary, and acceptance of a deposit is a form of accepting the
trust for safekeeping the deposited items. Thus, safekeeping the deposit becomes
binding on the depositary following the Prophets (pbuh) H
: Muslims are
. adth
bound by their conditions.1
42.1
Joint depositors
If two depositors make a joint deposit, and then one of the two comes alone to
demand returning the deposit, then Ab
u H
. anfa ruled that the depositary is
not allowed to give it to him in the absence of the other depositor. His ruling
is based on the view that the deposit is considered a common property of the
two depositors, and each depositors right can only be separated by dividing
the deposit. In this regard, the depositary is only considered a legal agent for
safekeeping, and he is not permitted to divide the property to give one depositor
his right. This is contrasted with the case of demanding ones share of a joint
debt, in which case one of the two creditors may demand his share of the debt,
since debts can be paid with their equivalents. Thus, while the repayment of a
1 This is part of a longer Had
narrated on the authority of Ab
u Hurayrah and c Amr
. th
ibn c Awf. Ab
u D
aw
ud, Ibn H
an, and Al-H
akim narrated tha H
on the authority
. ibb
.
. adth
of Ab
u Hurayrah. Also, Ibn M
ajah and Al-Tirmidh narrated it on the authority of c Amr
c
ibn Awf, with the latter validating it, with the text: Arrangements among Muslims are
permissible, provided that the pacts do not forbid anything permissible, or permit anything
that is forbidden. Al-Tirmidhs version, which he validated, contained the continuation:
And Muslims are bound by their conditions, except for conditions that forbid something
permissible, or permit something forbidden. The full H
with the continuation was also
. adth
narrated by Al-H
akim, who did not discuss its validity, c.f. Al-H
.
.
(H
), vol.4, p.112), Al-S.anc
. adth
581
582
CHAPTER 42. STATUS, AND METHODS OF SAFEKEEPING
part of the debt does not involve dealing in the property of another, returning
one depositors share of a joint deposit does require such dealing in the property
of another, and hence it is not permissible.
In contrast, Ab
u Y
usuf and Muh.ammad argued that the depositary is indeed
permitted to divide the deposit and give one of the depositors his share if he
demands it. However, they ruled that this division is not considered a division
with respect to the rights of the absent depositor. Thus, if the remaining half
of the deposit were to perish in the possession of the depositary, the absent
depositor would then share half of the first depositors collected half. Their
proof in this case diverges from the logic of Ab
u H
. anfa by arguing that the
case is indeed analogous to collecting ones share of a joint debt.2
42.2
Joint depositaries
If one depositor makes a deposit to two depositaries, and if the deposit is divisible, then each of them may take half for safekeeping. In this case, the depositor
authorized both of them to keep his property, without specifying any particular
one of them for the physical safekeeping. Thus, the three major H
. anaf jurists
agreed that if the deposit is not divisible, then one of the depositaries must
keep it, and neither one would guarantee the deposit. However, they differed in
opinion over the case where one of the depositaries keeps the full deposit, when
the latter is divisible:3
Ab
uH
. anfa ruled that if one of the depositaries keeps the entire deposit,
the other depositary still guarantees half. This follows from the general
principle that any two individuals responsibility for a divisible property is
divided in half. Thus, if one of them delegates to the other safekeeping all
of the deposit, he must still guarantee his half of the responsibility, unless
the depositor agrees to make the deposit exclusively the responsibility of
the other depositary.
In contrast, Ab
u Y
usuf and Muh.ammad ruled that the depositary who
delegates to the other is absolved from guaranty. This ruling is based
on the view that the depositor thus entrusted both depositaries with the
deposit, and this implies empowerment for either depositary to delegate
the safekeeping to the other. Thus, they ruled that the deposit is not
guaranteed by either, in analogy to the case of indivisible deposits.
42.3
Methods of safekeeping
Jurists expressed varying opinions on how the depositary must keep the deposit.
In what follows, we give a summary of the varying opinions:
2 Ibn Al-Hum
am ((H
s (1st edition (H
. anaf), vol.11,
p.123), Majmac Al-D

an
at (p.78).
. am
3 Ibn Al-Hum
c
am ((H
an
at (p.78), c Abd Al-Ghan Al. anaf), vol.7, p.96), Majma Al-D
. am
Mayd
an ((H
. anaf), vol.2, p.199).
42.3. METHODS OF SAFEKEEPING
583
The H
. anafs and H
. anbals ruled that the depositary should keep a deposit
in the same manner he keeps his own property. Thus, they ruled that
he may keep it himself, or he may leave it in the possession of any of his
dependents, e.g. his wife, children, servants, etc.
The H
. anafs also allowed a depositary to keep a deposit with anyone who
keeps his property, even if that person is not his dependant. Thus, they
ruled that he may keep a deposit with his partner in a limited or unlimited
partnership. However, they excluded temporary employees from keeping
deposits left in his safekeeping.4
If the depositary were to keep a deposit with any party other than the
ones mentioned above, the H
. anafs and H
. anbals ruled that he must thus
guarantee the deposit under general circumstances. This ruling follows
from the fact that the depositor entrusted the deposit to be kept in his
possession, and not in the possession of others. Exceptions to this general
rule were stipulated for unusual circumstances. For instance, if the depositarys house was threatened by fire, or if his ship were threatened by
wind, then he may give the deposit to someone in a safer house or ship.
However, in such cases, the depositarys claim that he had to give the
deposit to someone who does not normally keep his own property must
be supported by a proof. This follows since guaranty is automatically established by the depositary behavior, and he needs to provide a proof to
drop the guaranty.
The Maliks ruled that the depositary may keep a deposit with his trustworthy long-term dependants, as well as trust worthy long-term employees
with whom he customarily keep his own property. Thus, they would not
allow a depositary to keep a deposit with a wife he had just married or a
new lessee.5
The Shafics ruled that the depositary must keep the deposit himself, and
did not allowed him to leave it with anyone, including his wife and children
without excuse, except by permission from the depositor. This ruling is
based on the view that the depositor entrusts the deposit only to the
depositary, to the exclusion of all others. Thus, if the depositary violates
that trust without an excuse, then he must guarantee the deposit. Valid
excuses that allow the depositary to violate this general rule, without
assuming guaranty, include sickness and travel.
4 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.7, p.89),
Majmac Al-D
an
at (p.77), Al-K
as
an ((H
amah (, vol.6, p.385),
. am
c Abd Al-Ghan
Al-Mayd
an ((H
. anaf), vol.2, p.197).
5 Ha
iyat Al-Dus
alik), vol.2, p.307).
. sh
. afd ((M
Chapter 43
Status of Deposit
Possession
Jurists of all schools agree that safekeeping of deposits is recommended, and
that the depositary receives religious credit for his safekeeping efforts. Moreover,
they all agree that the possession of a deposit is a trust possession, and that
the depositary only assumes guaranty if the deposit is adversely affected due to
his negligence or transgression. This ruling is based on the H
: The non. adth
transgressing depositary does not guarantee the deposit,1 as well as the more
general H
: A trustee does not guarantee.2 In this regard, the H
. adth
. anafs
ruled that any condition of guarantee in a trust contract is considered invalid.

Given the nature of the depositarys possession, it follows that the depositary
must return the deposit to the depositor at the latters request, if that is at all
possible. This follows directly from the verse: Allah commands you to return
trusts to those to whom they are due [4:58]. Moreover, both parties have the
right to void the deposit contract without the permission of the other. This
follows from the fact that the contract is permissible but non-binding. Thus,
the depositor may demand his deposit at any time, and the depositary may
return the deposit at any time.
The above referenced verse also implies that the deposit must be given back
to the depositary himself. Thus, if he were to return the deposit to the depositors house in his absence, or if he gives it to one of the depositors dependants,
1 Narrated by Al-D
araqut.n and Al-Bayhaq in their Sunan on the authority of c Amr ibn
Shuc ayb, his father, and his grandfather, that the Prophet (pbuh): The non-transgressing
depositary does not guarantee the deposit, and the non-transgressing borrower does not guarantee the loan. However, Ibn H
contains
. ajar said that the chain of narration of this H
. adth
two weak links. Al-D

araqut.n also said that the chain of narration does not go up to the
Prophet (pubh), and he narrated other weak versions that state: A trustee does not guarantee, c.f. Al-H
), vol.4, p.115), Ibn H
.
. adth
. ajar (, p.270),
Al-Shawk
an (, vol.5, p.296).
2
c
c
Narrated by Al-D
araqut.n on the authority of Amr ibn Shu ayb, his father, and his
grandfather. However, its chain of narration contained weak links, c.f. Al-Shawk
an (, vol.5,
p.296).
585
586
CHAPTER 43. STATUS OF DEPOSIT POSSESSION
the depositary must guarantee the deposit. This follows from the fact that the
depositor never accepted his dependants possession when he accepted the depositarys possession. This ruling differs from the case of borrowed items and
leases, where returning the items to the owners house or giving them to one of
his dependants would drop his guaranty. The latter behavior is customary in
normal leases and loans. However, if the owner had lent out a valuable object
(e.g. jewelry), the borrower would have to guarantee the object if he did not
return it to the owner. In this regard, it is not customary for deposits to be
delivered to anyone other than the depositor, and hence the depositary would
guarantee the deposit against damages and losses if he delivers it to anyone else.
43.1
Disputes
If the depositor demands the return of his deposit, and the depositary first
says: You never deposited anything with me, then later said: The deposit
perished, then he clearly would have violated the depositors trust. Therefore,
he would guarantee the deposit in this case. However, if the depositary had said:
You have no right to demand this from me, and then explained: The deposit
perished, then his claim is accepted if supported by his oath. Moreover, the
depositarys claims regarding perishing or returns of the deposits are generally
accepted in a similar manner, as detailed below:3
If the depositary claims that the deposited items perished in his possession, or if he claims that he had returned the deposit, but the depositor
denies his claim, the depositarys claim is accepted. This follows from the
preceding characterization of the depositary as a trustee.
The depositary guarantees the deposit in two cases:
If the depositor can provide material proof of his claim, the depositary
must guarantee the deposit.
In the absence of a material proof, if the depositary is requested to
take an oath, and he refuses, then he must guarantee the deposit.
On the other hand, if the depositor provides material proof that the deposit was adversely affected by the depositarys transgression and the depositary provided material proof that the negative effect occurred on its
own, the depositors proof is given priority. In this case, the depositors
proof is stronger since it establishes both that the deposited items became
defective, as well as the depositarys transgression.
However, if the depositary were to provide material proof that the depositor had previously admitted that the deposit was adversely affected
3 Al-K
c
as
an ((H
am ((H
. anaf), vol.7, p.89), Abd Al
Ghan Al-Mayd
an ((H
anaf), vol.2, p.196), Majmac Al-D
am
an
at (pp.68,87,89), Ibn c Abid
n
.
.
((H
at.b Al-Shirbn ((Sh
a
shiyat Qaly
ub wa
.
c Umayrah (vol.3, p.182), Ibn Qud

amah (, vol.6, p.382).
43.1. DISPUTES
587
without his transgression, this new proof will be accepted, thus negating
the depositors proof.
Chapter 44
Deposit Guarantee
The possession of a deposit is converted from a trust to a guaranty in a number
of cases. In what follows, we consider the causes for such conversion in some
detail.1
44.1
Abandon of safekeeping
If the depositary were to abandon his obligation for safekeeping the deposit, he
must guarantee the deposit. This follows from the fact that the deposit contract
is binding on the depositary, who is responsible for its safekeeping. Thus, if the
depositary were to see a thief stealing the deposit, and if he can stop him but
does not, he would have violated the contracts requirements, and thus must
guarantee the deposit.
44.2
Re-deposit with ineligible parties
If the depositary re-deposits the deposit, without a valid excuse, with someone
who does not qualify as a trust-worthy dependent, or someone with whom he
commonly keeps his own property, he would be obliged to guarantee the deposit. This follows from the fact that the depositor entrusted the depositary for
safekeeping the deposit, to the exclusion of others. However, if a valid excuse
prompted the re-deposit (e.g. threat of fire or drowning), then the depositary
need not guarantee the deposit. In the latter cases, the re-deposit was a means
of better safekeeping, and the depositor is deemed to have given implicit permission for taking such measures to ensure the safety of the deposit.2
Jurists differed over the case where a depositary re-deposits items without a
1 Al-K
as
an ((H
am ((H
. anaf), vol.7, p.91), Alc
an
at (p.68).
. am
2 Al-K
as
an ((H
am ((H
s
c
n ((H
(1st edition (H
. anaf), vol.4, p.516).
589
590
CHAPTER 44. DEPOSIT GUARANTEE
valid excuse, and then the items perish in the possession of the second depositary:
The H
. anafs and H
. anbals ruled in this case that guaranty is established
only for the first depositary and not for the second.3 This ruling is based
on the view that the second depositary was done as a favor to the initial
depositor by safekeeping his property. In this regard, they quoted the
verse: There is no ground for complaint against those who do good
[9:91]. However, the first depositary is excluded from this Text since he
violated a condition of the deposit contract.
Ab
u Y
usuf and Muh.ammad ruled that the original depositor has an option in this case whether guaranty is established for the first or the second
depositary. If he chooses to deem the first depositary a guarantor, the
guaranty clause renders him an owner of the deposit, and thus the second
depositary is exempted from guaranty towards the first depositor. On the
other hand, if the first depositor demands compensation from the second
depositary, the latter may demand compensation from the first depositary,
who gulled him through the re-deposit.
The reasoning behind giving the first depositor this option is based on the
fact that both depositaries qualified as guarantors. The first depositary
qualified as a guarantor by giving a persons property to another without permission, while the second qualifies thus for accepting receipt of
anothers property without his permission.
If the second depositary consumed the object, all jurists agree that the
first depositor has the option of rendering the first or the second depositary as the deposits guarantor. In this case, if the first depositor chooses
to demand guarantee from the first depositary, the latter may demand
guarantee from the second depositary. This follows from the fact that
the second depositary established his responsibility for guarantee by consuming the deposit. On the other hand, if the first depositor demands
guarantee from the second depositary, the latter does not have the right
to demand compensation from the first depositary. This follows from the
fact that the first depositary gave the deposit to the second for safekeeping, but he consumed it instead, thus absolving the first depositary of
responsibility for his action.
Jurists also differed in their rulings in the case where the reason for establishing guaranty is removed:
The general rule among the majority of H
. anafs is that removal of the
cause for guaranty absolves the guarantor of his responsibility. For instance, if the first depositary were to recollect the deposit from the second
depositary, and proceeds to keep it in accordance with the first contract,
he is no longer deemed a guarantor for the deposit. Thus, by removing
3 Ibn
Rajab (1st edition (H

. anbal), p.217).
44.3. UTILIZATION OF THE DEPOSIT
591
the reason for guaranty, the depositary is again considered a trustee, and
thus he does not guarantee the deposit, except against losses due to his
negligence or transgression.4 This ruling is in contrast to the corresponding rulings for lessors and borrowers. In the latter cases, a violation of the
contract establishes guarantee irrevocably, even if the cause of guaranty
were removed.
Zufar, Al-Shafic, and other major scholars established the general rule
that if a deposit becomes guaranteed for any reason, the guarantee remains in place, even if its initial cause were removed. In this case, they
ruled that the establishment of guaranty changes the nature of the contract irrevocably. Thus, the contract can only return to its original status
through renewal, as if it had ceased to exist in its original form. This
ruling is made in analogy to the case where the depositary denies having
received a deposit, and then admits that he had indeed received it.5
44.3
Utilization of the deposit
All jurists agree that the depositary assumes guaranty of the deposit if he utilizes
it (e.g. wearing a deposited dress, or riding a deposited riding animal). However,
jurists differed in their rulings if the depositary ceases to utilize the deposit:
As we have already seen, the majority of H
. anafs ruled in this case that the
reason for establishing guaranty had ceased to exist, and the depositaries
possession continues to be in effect with the depositors permission. Thus,
they ruled that the guaranty is dropped, in analogy to the status of the
contract prior to his utilization of the deposit.6
the Maliks, Shafics, and H
. anbals ruled that the depositary guarantees
the deposit after its use, even against the effects of natural causes. Thus,
their ruling is based on the view that once the depositary utilized the
deposit, his possession ceased to be a possession of trust. As we have
seen, they view his actions in this case to be analogous to denying having
received a deposit and then admitting it. Therefore, the depositary may
only be absolved of the guaranty in this case by returning the deposit to
its owner.7
4 Al-K
c
as
an ((H
am ((H
am
a
n
a
t
(pp.73,76
onwards).
.
5 Al-Khat
b Al-Shirbn ((Sh
afic), p.90).
.
6 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.11, p.123).
7 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.362), H
a
sh
iyat
Al-Dus
u
q
(vol.4,
pp.420,427),
Ibn
Juzayy
((M
a
lik
),
p.374),
Ibn
Qud
amah
.
(, vol.6, p.401).
592
44.4
Traveling with the deposit
Jurists differed in their rulings regarding the depositarys right to travel with
the deposit, and the resulting rulings if he does. In what follows, we present the
different opinion in some detail:
Ab
uH
. anfa ruled that a depositary has the right to travel with the deposit, provided that the depositor did not explicitly forbid him from doing
so, and as long as the travel route is safe. Thus, he ruled that the deposit
contract was unrestricted by any geographic area, and such restrictions
require explicit proof. Thus, if the depositary travels with the deposit,
and it is adversely affected by a natural cause, he does not guarantee it.
Ab
u Y
usuf and Muh.ammad ruled that the depositary is not allowed to
travel with the deposit if its transportation is difficult or costly. In this
regard, they ruled that the depositor may be exposed to an additional
cost of retrieving his property if the depositary were to die while traveling
with the deposit. However, if the deposit can be transported with minimal
effort and cost, the depositary is permitted to take it in travel.8
The Maliks ruled categorically that a depositary may not travel with a
deposit, unless he receives it while traveling. Thus, they ruled that under
normal circumstances, the depositary must keep the deposit in the same
city. In this case, he is permitted to re-deposit it with a trustworthy
resident of that city, and he bears no guaranty for the object, whether or
not he has the ability to deliver it to legal authorities.9
The Shafics and H
. anbals also ruled categorically that a depositary is not
allowed to travel with a deposit. However, they ruled that if needs to

travel, then he must return it to its owner, his legal agent, or legal authorities, in that order. The ruling is based on the view that the depositary
holds the deposit as a voluntary uncompensated act, and thus he is not
bound to keep it. In this regard, if he cannot deliver the deposit to its
owner or his legal agents, legal authorities can play the role of de facto
legal agents of the owner. If the depositary were to travel with the deposit,
they ruled that he would thus guarantee it, since travel adds a risk factor to his possession, whether or not the travel route is considered safe.10
The fact that all types of travel involve additional risk is supported by the
H
: The traveler and his property are exposed to risk of perishing,
. adth
except to the extent that Allah protects them.11

8 Al-K
c
n
as
an ((H
am ((H
c Al-Dam
((H
anaf
),
vol.4,
p.521),
Al-Sarakh
s
(1st
edition
(H
anaf
),
vol.11,
p.122),
Majma
an
at
.
.
.
(p.69).
9 Ibn Rushd Al-Haf
alik), vol.2, p.307), H
shiyat Al-Dus
uq (vol.3, pp.421,423).
. d ((M
.a
10 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.361), Al-Q
am
us Al-Muh.t. (vol.1, p.183).
11 Narrated in Akhb
ar Ab Al-c Al
a Al-Mac arr on the authority of Ab
u Hurayrah: If
only people knew the extent of All

ahs mercy for travelers, all people would be in constant
44.5. DENIAL OF DELIVERY
44.5
593
Denial of delivery
If the depositor demands return of his deposit, but the depositary denies having
received it, or refuses to deliver it despite his ability to do so, he is thus considered a usurper. Thus, by demanding the return of his deposit, the depositor
denied the depositarys right to possess the item, and the depositary becomes
a usurper if the depositors claim is accepted. Thus, the depositary guarantees
the item in one of three cases: (i) if the depositor supports his claim with an
oath, (ii) if the depositary admits that the depositors claim is valid, or (iii) if
the depositary refuses to take an oath supporting his own claim. In this regard,
even if the depositary first denies having received a deposit, and then he admits
having received it, the initial contract is no longer in effect, and the depositarys
guaranty remains in place.
On the other hand, if the depositary first denies that he had ever received
the deposit, and then he proves that he had received it but that it perished, we
need to consider three cases:
1. If his proof shows that the deposit perished after he had denied receiving
it, his proof is ignored. In this case, the initial contract ceased to exist at
the moment of his denial, and thus his guaranty remains in place.
2. If his proof shows that the deposit had perished before his denial, then
the proof is accepted, and he is not responsible to guarantee the object.
3. If he claims that it had perished before his denial, but fails to produce a
proof, then ha may demand that the depositor take an oath. In this case,
the judge has to demand an oath from the depositor that the deposit
perished after the depositarys denial. Then, the depositary becomes a
guarantor of the deposit if and only if the depositor takes that oath.12
44.6
Mixing deposits with other properties
If the depositary mixes the depositors property with his own in a manner that
allows him to identify them separately, he should continue to keep them identified, and bears no other responsibility. On the other hand, jurists ruled differently in the case where the mixture makes it impossible to identify the deposit
separately:
travel. Indeed, the traveler and his possessions are in danger of perishing, except to the extent
that All
ah protects them. Ibn H
. ajar said that a different line of narration was provided by
Ab
u Mans.u
r Al-Daylam in Musnad Al-Firdaws. It was also narrated with an incomplete
chain of narration by Al-Q
ad. Al-Nahraw
an in Kit
ab Al-Jals wa Al-Ans. On the other
hand, Al-Nawaw questioned this H
in Al-Majm
uc , ruling that it was someone else . adth
perhaps c Al ibn Ab T
alib, and not the Prophet (pbuh) who made the statement, c.f. Ibn
.
c
H
un (, p.255).
. ajar (, p.271), Al- Ajl
12 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.6,
c
p.212), Ibn Al-Hum
am ((H
an
at (p.84 onwards).
. am
594

Ab
uH
. anfa ruled that mixing a deposit with his own property, or mixing
two deposits, in a manner that makes it impossible to identify the deposit
separately, then he must guarantee it with its equivalent. This lack of
identification clearly applies to fungibles (e.g. money, grains, and other
goods measured by weight and volume). In all such cases, Ab
u H
. anfa
ruled that mixture is equivalent to causing a defect in the deposit, thus
he must guarantee it with its equivalent. This ruling applies to mixing
items of different genera (e.g. wheat with barley), or the same genus (e.g.
barley with barley).
Ab
u Y
usuf and Muh.ammad ruled that the depositor has an option to
do one of three things in those cases: (i) he may enforce the depositarys
guaranty to return an equivalent amount, (ii) he may take half of the
mixture, or (iii) he may force a sale of the mixture and share the price.
This ruling was based on their view that the deposit in fact continued to
exist intact, but the mixture only prevented him from collecting it.13
In all those cases, if the depositary were to die without identifying the
deposit in the mixture, then, if the deposit is known, it must be returned
to the depositor. This follows from the H
: Whoever knows the
. adth
identity of his property, he should collect it.14 However, if the deposit

cannot be identified, then it is guaranteed and established as a liability on
the depositarys estate. In this case, the depositary would have died with
the deposit unknown, which is legally equivalent to causing a defect.
In general, there are three cases where death of a person, together with
non-identification of anothers property, would render trusts guaranteed:
1. If the manager of an Islamic Trust (waqf) dies with the income of the
waqf not identified.
2. If a judge dies without identifying properties of orphans deposited
with him or with others.
3. If a governor dies without identifying with whom he had deposited
public properties such as spoils of war.15
The major scholars of other juristic schools agreed with Ab
uH
. anfa that
the depositary guarantees the deposit in the case of mixture that prevents
13 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.7, p.92),
c
c
n ((H
an
at
Al-K
as
an ((H
. am
(pp.83 onwards, 87).
u D
aw
ud, and Al-Nas
a on the authority of Al-H
.
. asan ibn Samurah thus: Whoever finds his property in the possession of another, he should take it, and the
buyer should deliver the price to the seller. Another version was narrated thus in Ah.mad
and Ibn M
ajah: If a man steals anothers property, or if the latter lost his property, then if
the owner finds his property in the possession of another, he should collect it. [If the possessor
of the stolen or lost property obtained it through a valid sale, then the owner still collects
his property, and] the buyer should demand reimbursement of the price form the seller, c.f.
Al-Shawk
an (, vol.5, p.240).
15
Ibn Nujaym (1290H (H
am ((H
. anaf), vol.5, p.27).
44.7. VIOLATING DEPOSITOR CONDITIONS
595
identification. This ruling is also based on the view that the depositor did
not permit such mixture.
However, the Maliks ruled that if the deposit was mixed with property of
the same genus (e.g. wheat with wheat, or gold coins with gold coins), then
the depositary does not guarantee the deposit if he mixed such properties
to simplify their storage. Otherwise, they agree with the other schools
that he would guarantee it.
If mixture did not prevent the deposit from being identified, and the deposit did not lose value because of the mixture, all the jurists agree that
the depositary does not guarantee the deposit. On the other hand, if the
mixture caused a loss of value for the deposit, the Shafics and H
. anbals
ruled that the depositary guarantees the deposit in this case.16
44.7
Violating depositor conditions
This section deals with the case where a depositor makes it a condition that
the depositary holds the deposit in a specific place (e.g. a particular house, or
a particular box). Then, if the depositary places the deposit in a different place
without the depositors permission, most jurists agree that he guarantees it if
he placed it in a less secure place, and does not guarantee it if he placed in a
place that is equally or more secure.
On the other hand, jurists differed in their assessments if the depositor explicitly forbade the depositary from placing the deposit anywhere other than
the one stated in the condition:
The H
afics ruled in this case that the restriction
. anafs, Maliks, and Sh
to a specific place does not serve any purpose. Thus, they ruled in this
case as well that the depositary guarantees the deposit if he places it in
a less secure place, but does not guarantee it if he places it in an equally
secure or more secure place.
The Maliks added that the depositary guarantees the deposit if he moved
it from one city to another.17
The H
. anafs explicitly stated that the depositary does not guarantee the
deposit if he violates a depositor condition not to move the object and not
to give it to his wife. They argued that the depositary has no option but
to leave the object with his wife if he needs to leave the house. Thus, even
if the condition can be beneficial to the depositor, it cannot be met by the
depositary, and hence he does not guarantee the deposit in this case.18
16 Ha
iyat Al-Dus
uq (vol.3, p.420), Al-Khat.b Al-Shirbn ((Sh
u. sh
Ish.
aq Al-Shr
az ((Sh
amah (, vol.6, pp.383,387).
17 Al-Sarakh
s (1st edition (H
am ((H
. anaf), vol.7, p.97),
Majmac Al-D
an
at (p.69 onwards), Al-K
as
an ((H
shiyat Al-Dus
uq
. am
. anaf), vol.6, p.210), H
.a
(vol.3, p.423), H
shiyat Al-Sharq
aw (vol.2, p.99), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.a
p.359 onwards), Al-Khat.b Al-Shirbn ((Sh

afic), vol.3, pp.84-86).
18c Abd Al-Ghan

Al-Mayd
an ((H
anaf), vol.2, p.200).
.
596

Most of the H
. anbals ruled that the depositary in this case guarantees
the deposit regardless of where he moved it, and regardless of how secure
the new place may be. Thus, they argued that the depositary in this
case would have violated the depositors condition without any benefit in
so doing. In this regard, violating the depositors condition without any
reason is not permissible.
However, if he felt that he needed to move the deposit to a safer place for
fear that it may perish, then they ruled that he should move it. Indeed,
they ruled in this latter case that if he does not move it and his fear of
perishing is realized, he would then guarantee it. Thus, they render the
depositors condition not to move the object to be concerned primarily
with its safety. If that safety can best be secured by moving the deposit,
then the depositary should do so, and the condition is disregarded.19
44.8
Summary of Non-H
. anaf conditions
We covered the cases whereby the depositary must guarantee the deposit according to the H
. anaf classification. We have seen from the detailed discussions
that there are many similarities, and few differences, between the schools of jurisprudence. In what follows, we list the cases where the depositary guarantees
the deposit according to the classifications of those other schools:
The Maliks enumerated six reasons for guaranteeing a deposit:20
1. The deposit is guaranteed if the first depositary re-deposits it without
a legal excuse, even if the deposit is only lost after it is returned to
the original depositary.
2. Transporting the deposit from one city to another makes it guaranteed. However, transporting it from one house to another within a
city does not.
3. Mixing the deposit with goods of a different genus (e.g. wheat with
barley), in a manner that makes it unidentifiable, makes the deposit
guaranteed. However, if the mixture is separable, no guarantee is
effected.
4. If the deposit perishes while being utilized by the depositary, he must
guarantee it. He must also guarantee any borrowed monies or fungibles measured by weight and volume if they perish while he is using
them.
5. Negligence or transgression (e.g. putting the deposit in a dangerous
place, or showing a thief where it is) would result in a guarantee.
6. A violation of an explicit condition stipulating how the deposit must
be kept, e.g. if the depositor said that the items should not be locked
19 Ibn
20 Ibn
Qud
Juzayy ((M
alik), p.374).
44.9. SOME SUBSIDIARY RULINGS
597
into a container, but the depositary did that, would result in a guaranty.
The Shafic list of six reasons for guaranty is very similar to the Malik
list. Thus, they ruled that the following actions would result in guaranty
of the deposit:21
1. Re-deposit with another without permission or a valid excuse.
2. Placing the deposit in a less secure place than what is stipulated by
the depositor.
3. Moving the deposit to a less secure place.
4. Not taking the necessary steps for safekeeping (e.g. not feeding a
deposited animal).
5. Violating a condition of how to keep the deposit, resulting in a defect.
6. Utilization of the deposit, which they consider to be a form of transgression. Even if the depositary discontinues utilizing the deposit, his
guaranty is not dropped unless the trust is renewed from the owner.
22
The H
. anbals listed five actions that render a deposit guaranteed:
1. Re-deposit with another without a legal excuse.

2. Negligence or transgression (e.g. putting the deposit in a dangerous
place, or showing a thief where it is).
3. Violating any of the conditions of how it should be kept, even if it is
kept in an equally safe place.
4. Mixing the deposit with other properties in a manner that makes it
unidentifiable.
5. Utilization of the deposit. Even if the depositary discontinues utilizing the deposit, his guaranty is not dropped unless the trust is
renewed from the owner.
44.9
Some subsidiary rulings
Ibn Juzayy ((Malik), p.374 onwards) listed a number of subsidiary rulings

pertaining to deposits:
1. If a depositary trades with deposited monies, the Maliks ruled that profits
are a legal income for him. However, Ab
uH
. anfa ruled that such profits
must be given away in charity, and some other jurists ruled that such
profits belong to the owner.
21 Al-Sharq
aw
((Sh
afic), p.167).
ibn Y
. anbal), vol.2, pp.269-272), Ibn Hubayrah ((H
. anbal),
p.268 onwards).
22 Mar
c
598
2. Most jurists ruled that lending a non-fungible deposit is reprehensible.

However, Ashhab ruled that it is permissible if the depositary lent such
a deposit to a reliable and trustworthy individual.

Jurists agreed that lending non-monetary goods is not permissible. For
items that are measured by weight or volume, jurists differed in their rulings depending on whether they drew analogies to money or to foodstuffs.
3. If a depositary is asked to return the deposit, and claims that it perished,
his claim is accepted if he supports it with an oath.
If he claims that he had already returned it, then his claim is accepted if
supported with his oath and there is no proof of having received it initially.
If there is proof that he had received it, then the Maliks ruled that he
needs to provide proof of delivery. However, Ibn Al-Qasim, Ab
uH
. anfa,
and Al-Shafic ruled that the depositarys claim is accepted even if there
was an extant proof of his initial receipt.

4. A depositary may not demand wages for safekeeping the deposit. However, he may demand a lease payment if the deposit occupies a significant
portion of his house. In this regard, if there are costs associated with providing appropriate containers or locks for the deposit, then the depositor
should incur all such costs.
5. If one person denied having received a deposit from another, and later
the second person had an opportunity to deny having received a deposit
from the first, most of the Maliks ruled that he is not permitted to do so.
However, some of the jurists ruled that he may, but that it is reprehensible,
while others still ruled that such behavior is permissible.
Chapter 45
Termination of a deposit
A deposit is terminated by one of five events:
1. Return of the deposit to the depositor, whether the latter requests it or
not. This follows from the fact that the deposit contract is not binding,
and thus the deposits return terminates the contract.
2. Death of the depositor or the depositary terminates the contract, since
they are the only two parties to the contract.
3. If either depositor or depositary falls into a long-term coma or becomes
insane for an extended period of time, he would lose his eligibility to
continue the contract, and it is thus terminated.
4. If legal restrictions (h.ajr) are imposed on the depositor (due to mental
incompetence) or on the depositary (due to bankruptcy), the contract is
terminated to protect the benefits of the concerned parties.
5. If the depositor transfers ownership of the deposit to another (through a
sale or gift, etc.), the deposit contract is terminated.
599
Part XI
Simple Loans (caqd al-ic

arah)
601
603
Preliminaries
We shall study the simple loan contract in six chapters:
1. Definition and legality.
2. Cornerstones and conditions.
3. Legal status.
riyyah) in terms
4. Characterization of the possession of a loaned item (al-c a
of trust and guaranty.
5. Disputes between the lender and borrower.
Chapter 46

The object of a simple loan is called in Arabic al-c a
riyyah, and the simple
loan contract is interchangeably called c aqd al-ic a
rah or c aqd al-c a
riyyah. The
etymology of the term may be derived from the term c a
ra, in reference to
the fact that the object of a simple loan goes to another, and comes back.
Another explanation refers the term to al-tac a
wur, which means taking turns.
A third opinion was stated by Al-Jawhar, who argued that it is derived from
the Arabic word c a
r, meaning shame, since some consider it shameful to ask
to borrow anothers property. However, the last view was rejected since the
Prophet (pbuh) borrowed items and returned them, and he (pbuh) would never
do anything shameful.1
There are two main definitions of the simple loan contract:
Al-Sarakhs and the M
aliks defined the simple loan contract as transfer
of ownership of usufruct without a compensation. They also said that the

name is derived from tac riya (stripping off), since the contract is devoid
of compensation.2
On the other hand, the Shafics and H
. anbals defined simple loans as a
permission of deriving usufruct from ones property, without a compensation.3

The first definition renders the simple loan a contract that provides ownership
rights to the borrower, and hence empowers the borrower to re-lend what he
borrowed, since the usufruct is his property to deal in as he wishes. In contrast,
the second definition is more restrictive, whereby the borrower only has the
permission to use the lent object, and hence has no right to re-lend it or lease
it to another. On the other hand, both contracts agree on the restriction of
1 Al-Khat
irbn ((Sh
am ((H
. b Al-Sh
. anaf), vol.7, p.99),
n ((H
Ibn c Abid
. anaf), vol.4, p.524).
2 Al-Sarakhs
(1st edition (H
alik), p.373).
. anaf), vol.11, p.133), Ibn Juzayy ((M
3 Al-Khat
b Al-Shirbn ((Sh
ut (3rd printing (H
.
. anbal), vol.4,
p.67).
605
606
the contract to usufruct of the lent property. This restriction is the difference
between a simple loan and a gift, since the latter pertains to the property itself.
Simple loans are recommended charitable contracts that bring Muslims closer
to Allah. Proof of this fact is provided in the verse: Help one another in
righteousness and piety [5:2]. Moreover, some exegetes interpreted the verse
admonishing those who refuse to supply neighborly needs [107:7] to refer to
neighborly needs to borrow properties from ones neighbor.4 Moreover, proof
is provided by the H
narrated in Al-Bukhari and Muslim that the Prophet
. adth
5
(pbuh) borrowed a horse from Ab
uT
. alh.ah, and rode it. There is also a narration in Ab
u Daw
ud based on a good chain of narrators that the Prophet (pbuh)
borrowed a shield from S.afwan ibn Umayyah on the day of H
. unayn. The latter
asked: Will you usurp it, O Muh.ammad?, and the Prophet (pbuh) said: No,
it is a guaranteed loan.6
4 Al-Khat
b Al-Shirbn ((Sh
afic), ibid.), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.392),
.
Ibn Qud
amah (, vol.5, p.203).
5 Narrated by Ahmad, Al-Bukh
ari and Muslim on the authority of Anas ibn M
alik, that
.
there was fear in Madnah, so the Prophet (pbuh) borrowed a horse named Al-Mand
ub from
Ab
uT
. alh.ah, and rode it. He (pbuh) returned later, and said, I saw nothing to worry about,
and commented and this horse was fast, c.f. Al-Shawk
an (, vol.5, p.299).
6 Narrated by Ab
u D
aw
ud, Al-Nas
a, Ah.mad, and Al-H
akim (who validated it) on the
.
authority of S.afw
an ibn Umayyah that the Prophet (pbuh) borrowed a number of shields from
him on the day of H
. unayn, and that he asked him Will you usurp them, O Muh.ammad?,
but the Prophet (pbuh) said: No, they are a guaranteed loan. Then, he said, some of the
shields were lost, and the Prophet (pbuh) offered to compensate him for them, at which time
S.afw
an said that he wanted to accept Isl
am. Al-H
akims narration indicated that the number
.
of shields was one hundred, while Ibn D
aw
uds narration indicated that the number was
between thirty and forty. There is another valid narration on the authority of Ibn c Abb
as,
in which the Prophet (pbuh) said: No, they are a loan to be returned. Other narrations
exist in Al-D
araqut.n and Al-Bayhaq, on the authority of Ish.
aq ibn c Abdul-W
ah.id, whose
narrations are not accepted. Also, Ab
u D
aw
ud and Al-Nas
a have other reports of the
H
with incomplete chains of narration. For references, c.f. Ibn Al-Athr Al-Jazar (,
. adth
vol.9, p.109), Al-H

), vol.4, p.116), Ibn H
.
. adth
. ajar (, p.252),
Al-Shawk
an (2nd printing, vol.3, p.69). The difference between
the two expressions guaranteed (mad.m

unah) and to be returned (mard
udah) used in the
different narrations is significant. The first term indicates that if the guaranteed items were
to perish, the owner must be compensated by its value. On the other hand, items to be
returned must be returned if they continue to exist, but their value is not guaranteed if they
were to perish.
Chapter 47
Cornerstones and
Conditions
The majority of H
. anafs stipulated that there was only one cornerstone for the
simple loan contract: sic. the lenders offer. While reasoning by analogy (as
Zufar did) to gifts would dictate making acceptance a cornerstones as well, most
of the H
. anafs reasoned by juristic approbation that it is not a cornerstone. As
we have seen in our discussion of the gift contract, this leads to different rulings
in the case where a person takes an oath never to lend a particular other person,
and then proceeds to lend him. In this case, the majority of H
. anafs do not
consider that he broke his oath, while Zufar considers that he did.
On the other hand, the non-H
. anaf jurists enumerated four cornerstones for a
simple loan contract. Those four cornerstones are: (i) lender, (ii) borrower, (iii)
loaned item, and (iv) contract language. In this regard, the contract language
consists of any words or actions that indicate giving the usufruct of the lent
item as a gift.
The H
. anafs did not require necessarily that the term for simple loan be
used in the offer. Thus, they consider any offer that implies granting the other
person usufruct of ones property without compensation to be a simple loan
offer.1 In contrast, most of the Shafics insisted that either the offer or the
acceptance must use the term loaned, since using the property of another
2
requires his explicit permission.
Jurists stipulated three main conditions for the simple loan contract:
1. The lender must be eligible to lend his property. For the H
. anafs, this
meant that the lender must be sane and discerning, but not necessarily of
legal age.
The other jurists stipulated that eligibility to make a simple loan requires
free will and eligibility to make charitable contributions. Thus, in addition
1 Al-K
as
an
2 Al-Khat
b
((H
. anaf), vol.6, p.214).
Al-Shirbn ((Sh
afic), vol.2, p.266).
607
608
CHAPTER 47. CORNERSTONES AND CONDITIONS

to disallowing gifts given by coerced individuals, they require that the
lender satisfies sanity, being of legal age, and discernment.3
2. The lender must accept the simple loan for the contract to be concluded.
This follows since a simple loan is a voluntary charitable contract, and
thus it requires receipt, in analogy to gifts.
3. The loaned object must be possible to use without consumption, otherwise
it cannot be loaned.4
All jurists agree that items that remain intact while usufruct is derived from
them (e.g. homes, clothes, riding animals, etc.) are eligible for being lent.
Thus, and item can be the object of a simple loan if it is: (i) not consumed by
utilization, (ii) identifiable, and (iii) its usufruct is permissible in Islam.5
3 ibid.
4 Al-K
as
an
((H
. anaf), ibid.).
Al-Shr
az ((Sh
alik), p.373), Al-Khat.b
.
Al-Shirbn ((Sh
afic), vol.2, p.266).
5 Ab
u-Ish
aq
Chapter 48
Legal Status
In this chapter, we shall study the legal status of simple loan contracts in two
sections:
1. The actual legal status.
2. Characterization of the legal status.
48.1
The actual legal status
The term simple loan (ic a

rah) is sometimes used metaphorically to mean a
loan (qard.). Fungibles measured by weight, volume, or numbers of homogeneous goods (e.g. gold coins, dates, wheat, eggs, etc.) do not produce any
usufruct except by consumption. If such items are lent, the borrower is required
to repay an equivalent (e.g. an equal measure of wheat to that he borrowed), or
the value of what he borrowed. Thus, such contracts are not eligible for simple
rah) is
loans, since the same lent item is never returned. Even if the term (ic a
used metaphorically for lending such items, the contract is treated by jurists as
a (qard.), whether the contract stated that the borrower owned the usufruct, or
was permitted to derive usufruct from the lent object.1
In what follows, we are concerned with the legal status of an actual simple
loan contract, whereby the usufruct of an identifiable non-fungible is given to
another, and the item itself remains intact. There are two main rulings on the
legal status of this contract:
The Maliks and most of the H
. anafs ruled that the contract establishes
the borrowers ownership of the lent items usufruct (and all other rights
commonly associated with the usufruct) without any compensation.2
1 Al-K
as
an ((H
s (1st edition (H
. anaf), vol.11, p.145), Ibn
c
Al-Hum
am ((H
an
at (p.55), c Abd Al-Ghan Al-Mayd
an
. am
((H
. anaf), vol.2, p.203).
2 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.11, p.133), Al-K
c
n ((H
shiyat AlAl-Hum
am ((H
. anaf), vol.4, p.524), H
.a
Dus
uq (vol.3, p.433).
609
610

Al-Karkh, the Shafics and the H
. anbals ruled that the contract establishes
a permission for the borrower to use the lent item. Thus, they ruled that
it is a permission contract, and not one that establishes ownership.3
As we stated in earlier chapters, this distinction between ownership of the

usufruct (as ruled by the first group) and permission to derive it (as ruled by the
second group) has consequences on the borrower rights of dealing with the lent
item. Thus, the first group ruled that the borrower may re-lend the borrowed
object to another, with or without the owners permission, provided that the
objects usage does not depend on its user. The H
. anafs justified this ruling
by arguing that ownership of usufruct gives the owner all the rights the owner
of a physical object has regarding this object, including allowing others to use
his property. However, the Maliks protected the lender by disallowing the
borrower from re-lending the item if the lender forbade him from doing that.
As we have seen also, the second group of jurists argued that the contract
only gave the borrower a permission to use the lent object, and the one who
is given permission cannot extend that permission to another. For instance, a
guest who is given permission to eat at ones table may not give permission to
another person to eat that food. Moreover, they argued on legal grounds based
on the fact that all jurists permit simple loans without an expiration date. In
this regard, they argued that had the contract resulted in ownership of the
usufruct, it would be necessary to specify the term of the contract, in analogy
to leases.
On the other hand, all jurists from both groups agreed that the borrower
does not have the right to lease what he borrowed. This follows directly for
the second group, who ruled that the borrower does not own the usufruct, and
thus cannot sell it. For the first group, the ruling was based on legal reasoning
from the binding nature of lease contracts. Since the simple loan is a voluntary
charitable contract, none of its consequences can be used to support a binding
contract. Similarly, both groups agreed that the borrower is not allowed to
pawn what he borrowed, since his rights under the simple loans pertain only to
the usufruct and not to the lent item itself.4
48.1.1
Usufruct rights
The non-H
. anaf jurists ruled that limits to the borrowers derivation of usufruct
from the lent object are dictated by the lenders conditions and permission. On
. anafs distinguished in this regard between restricted and
unrestricted simple loans:
An unrestricted simple loan contract would not specify the identities of
authorized users of the property, and the permitted means of using it. In
this case, the H
. anafs argued that the borrower would have all the rights
3 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.364), Ibn Qud

amah (, vol.5, p.209).
4 As we have seen, a deposit may not be leased, pawned, re-deposited, or lent, c.f. Ibn
c Abid
n ((H
. anaf), vol.4, p.525).
48.1. THE ACTUAL LEGAL STATUS
611
of the owner. Thus, any normal usage of the property would be deemed
permissible for the borrower. However, if the borrower abuses the lent
property in a manner that causes a defect or a loss, he must guarantee it.
Thus, an unrestricted contract is considered to be implicitly restricted by
convention, as we have seen in the lease contract.5
A restricted simple loan may include restrictions in terms of the duration
of usage, the type of usage, or both. In such contracts, the H
. anafs ruled
that the borrower should abide by the stipulated restrictions as much as
possible. However, if a restriction that does not have any benefit to the
owner pauses unnecessary difficulties to the borrower, the restriction is
considered nugatory.6 In what follows, we discuss some of the common
restrictions in some detail:
If the owner restricts the borrower not to allow anyone else to use the
lent object, then the ruling depends on whether or not the objects
usage varies from one user to another:
If the usage does vary with the user (e.g. riding an animal,
wearing clothes), then the borrower should honor this restriction.
If the usage does not vary with the user (e.g. living in a house),
then the borrower is permitted to let another reside in the house,
despite the lenders restriction. Thus, if the borrower was considering allowing a blacksmith to live in the house and possibly
cause some damage, then he should abide by the lenders restriction. However, if he was considering allowing a person live in
the house in a manner similar to his own residence, then the restriction is of no use to the lender, and the borrower may ignore
the restriction. In this regard, what is restricted is any tennant
that has a negative effect that is conventionally restricted, and
the explicit restriction of the lender plays no role.
Any temporal or spatial restriction must be observed, since such restrictions are beneficial for the lender. Thus, if the borrower transgresses against such restrictions, he must guarantee the lent object.
If the lent object was a transportation vehicle, and the lender restricted the amount or genus of the load, we need to consider different
cases:
If the borrower put a larger load on the transportation vehicle,
he must guarantee it. For instance, if two individuals rode on it
instead of one, and the vehicle could bear them both, then he
guarantees half of its value if it becomes defective. In this case,
5 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.11, p.144), Al-K
. anaf), ibid.), Ibn Al
c
c
n ((H
an
at
Hum
am ((H
. am
(p.57 onwards).
6 Al-K
as
an ((H
am ((H
n ((H
s (1st edition (H
anaf), vol.11, p.137 onwards),
Ibn c Abid
.
Majmac Al-D
an
at (p.60 onwards).
. am
612

he would only have transgressed the restriction in that one half
of the load. However, if the vehicle could not have borne them
both, he must guarantee its full value, since he would thus have
destroyed it.
If he transports a load of different genus than what was stipulated in the contract, then he guarantees the vehicle if and only if
the load was heavier than what was stipulated. However, the difference in the loads genus may affect the vehicle independently
of the weight (e.g. if it is denser, and distributes the weight differently). In such cases, the borrower must guarantee the vehicle
if he loaded it goods of such restricted genera, even if the weight
was the same as stipulated in the contract.
If he loads the vehicle with heavier goods of the specified genus,
then he guarantees the vehicle in proportion to the increased
weight. However, if the genus was different and the weight was
heavier, he must guarantee the entire value of the vehicle.
In this regard, if the lender and borrower disagree over the stipulated restrictions (be they temporal, qualitative, or quantitative),
the lenders claim is accepted.7 This ruling is based on the view that
the lender gave the borrower the permission to use his property, and
thus he is entitled to specify the limits of such permitted usage. In
this regard, if they disagree, the borrower is considered to be making
a claim that he had more usage rights, while the lender is denying
that claim. Thus, the lenders claim (as a denier) is given priority
over the borrowers.
48.2
Characterization of the legal status
The H
afics, and H
. anafs, Sh
. anbals ruled that the ownership of usufruct that
is established for the borrower is not binding, since it is not compensated (in
analogy to gifts). Proof for the ruling that simple loans are a permissible but
non-binding contract is based on the H
: Gifts may be returned or recalled,
. adth
and simple loans must be returned.8

Thus, under normal circumstances, the lender has the right to recall the
lent item at any time, and the borrower has the right to return it at any time,
whether the simple loan was restricted or unrestricted. A few exceptions exist,
however, where early return or lent items may cause losses for the owner, or
7 Al-Sarakhs
(1st edition (H
. anaf), vol.11, p.143).
by Ab
u D
aw
ud, Ah.mad, Ab
u Yac l
a, Al-D
araqut.n, Ibn Ab Shaybah,
Al-Tirmdh (who classified it as a H

hasan) and Ibn H
an (who
. adth
. ibb
.
validated it) on the authority of Ab
u Um
amah as follows: A simple loan is returned, a gift
may be returned, a debt must be repaid, and a transgressor must guarantee the object [in all
of those contracts]. Al-T
an narrated a similar H
in Musnad Al-Sha
miyyn on the
. abar
. adth
authority of Anas, and Ibn c Adiyy also narrated a similar H

in his Al-K
amil on the
. adth
authority of Ibn c Abb

as. c.f. Al-H
), vol.4, p.57), Ibn
.
. adth
H
r Al-Jazar (, vol.9, p.110).
. ajar (, p.250), Ibn Al-Ath
8 Narrated
c Abdul-Razz
aq,
48.3. RECALL OF LENT LAND
613
in special cases where the simple loan is binding. An example of a mutually

binding simple loan is the case where a person lends another land to bury a
dead person.9 Another example is the case where a person lends the other a
house to live in for a specific time period, in which case he cannot rescind the
loan during that period.
On the other hand, most of the M
aliks ruled that a lender may not recall
the object of a simple loan prior to its usage. In this regard, even though no
term of the loan was specified, the contract still has an implicit term that is
dictated by convention. However, Al-Dardr ((Malik)A) ruled that the lender
may recall the object of an unrestricted simple loan at any time.10 Those two
opinions may be reconciled if we say that the Maliks permitted recalls of objects
of unrestricted simple loans, but forbade it for ones that are restricted either
explicitly, or implicitly (by convention).
48.3
Recall of lent land
The reason for the reported differences in opinion among the juristic schools
illustrates the different degrees of bindingness they commission to the simple
loan contract. We shall highlight those differences further by considering an example in some detail. The example we consider in the remainder of this chapter
is the case where the object of a simple loan is land intended for construction
or planting. In this case, jurists expressed many different opinions about the
permissibility of recalling the lent land:
The H
. anafs ruled that the owner is allowed to recall the land at any time
if the simple loan was unrestricted, since the loan contract is not binding.
If the owner recalls the land, the borrower must clear it of any building or
plants, since keeping them can be costly for the owner. In this case, the
lender does not guarantee any of the borrowers buildings or plants, and
he bears no responsibility for them. This follows since the lender never
deceived the borrower, even though the borrower deceived himself by not
recognizing that the land may be recalled at anytime.
If the loan had a specified term, the H
. anafs still maintain that the lender
has the right to recall the land, based on the previously cited H
.
. adth
However, they consider recalling the land prior to the expiration of the
loan term a reprehensible act of reneging on a promise. In this case, the
borrower is not required to remove his building or plants, and he has an
option to ask the lender for compensation, or - if removing the building
or plants does not affect the land adversely - to remove his building or
plants. In this case, the lender is deemed to have deceived the borrower
by specifying a term for the loan, and then recalling his property before
9 Al-K
c
as
an ((H
an Al-Mayd
an ((H
. anaf), vol.2, p.202),

u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.262),
Ibn Qud
amah (, vol.5, p.211), Al-Sharq
aw ((Sh
afic), p.166).
10 Ibn Rushd Al-Haf

alik), vol.2, p.308), H
shiyat Al-Dus
uq (vol.3, p.439).
. d ((M
.a
614

that term expired. On the other hand, if removing the building or plants
would affect the land adversely, and the borrower wishes to remove them,
then the lender has the option: either to allow the borrower to remove
and take his property, or he may keep them and pay the borrower an
appropriate compensation. This was the reported opinion in Mukhtas.ar
of Al-H
ahd. On the other hand, Al-Qadd
ur ruled that the
. akim Al-Sh
lender must compensate the borrower for any losses caused by removing
the building or plants, due to his deception.
On the other hand, if the simple loan contract explicitly stated that land
was lent for growing a crop, then the land may not be recalled before the
crop is collected. In this case, whether or not a term was explicitly stated
for the loan, the crop-reaping time is well known. In this case, if the lender
recalls the land, the crop may be kept in the land, and the borrower would
have to pay the going market rental for similar land to preserve the rights
of both the lender and the borrower. This ruling for growing crops is
different from the case of growing other plants (e.g. trees), since the latter
case does not have a natural termination date. Thus, the borrower would
be forced to remove such plants to protect the owners rights.11
The Maliks also ruled that the lender is generally permitted to recall the
land if it was loaned in an unrestricted simple loan. However, they ruled
that if a loan term was dictated by an explicit condition or by convention,
then the lender may not recall the land before that date.
In such restricted loans, the lender may only recall the land if he pays the
borrower a just compensation for his costs of building or planting. Then,
after the termination of the conventional or conditioned loan period, the
owner has the option of ordering the borrower to return the land to its
initial state, or, if the additions were of any value after their removal, he
may pay the borrower the value of those removed items less the cost of
their removal.12
The Shafics and H
. anbals ruled that the lender has the right to recall the
land whether or not the simple loan did not have a specified term. In both
cases, the borrower may continue to use the land until the lender recalls it.
Then, when the lender recalls the land, if it contained buildings or plants,
the borrower has to remove those additions if that was stipulated in the
contract. If the borrower is required to remove those additions, he must
also return the land to its initial form (e.g. if he removes added plants, he
must also fill the resulting holes).
If the lender had not stipulated a condition that the borrower has to clear
the land, then the borrower still has the option to remove the additions,
11 Al-K
c
n
as
an ((H
am ((H
((H
s (1st edition (H
anaf), vol.11, p.141), c Abd Al-Ghan
.
Al-Mayd
an ((H
. anaf), vol.2, p.203).
12 Ibn Rushd Al-Haf
alik), vol.2, p.309), H
shiyat Al-Dus
uq (vol.3, p.439), Ibn
. d ((M
.a
Juzayy ((M
alik), p.373).
48.3. RECALL OF LENT LAND
615
but the lender is not responsible to compensate him for any losses. In this
case, the Shafics and some of the H
. anbals argue that the borrower would
have to return the land to its initial condition. In this case, they argued,
the borrower voluntarily removed the additions, and thus he must return
it to the lender in a normal shape, in analogy to the responsibility of any
person who caused damage to anothers property. On the other hand,
the H
ad., and the majority of H
. anbal jurist Al-Q
. anbals, ruled that the
removal would thus be with the lenders permission, and therefore the
borrower need not return the land to its initial condition.
On the other hand, if the borrower is not required to remove the additions,
and he chooses not to remove them, then the lender has an option. He
may thus choose to keep the addition and pay the borrower the going
market rental rate for the additions, or he may remove the addition and
compensate the borrower for the loss caused by removal.
The Shafics and H
. anbals also distinguished between land lent for growing
a crop and land lent for other purposes. Thus, they ruled that if land
was lent for agriculture, the lender may recall the land before planting.
However, once the crop was planted, the lender may not recall the land
until reaping time. If he does recall the land before that time, then the
borrower must pay him the going market rental for the remaining period
until he reaps his crop.13
In summary, the H
afics, and H
. anafs, Sh
. anbals ruled that the lender may
recall land used for building or planting, whether or not the simple loan is restricted. If the land is lent for agriculture, the lender must wait until reaping
time, and the most he can demand in the meantime is the lands rent for the
period between his recall of the land and reaping time. In contrast, the Maliks
ruled that the lender may recall the land at anytime if the simple loan is unconstrained. However, they ruled that the lender does not have the right to recall
the land in temporally constrained simple loans.
13 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
pp.271-273), Ibn Qud

amah (, vol.5, p.212).
Chapter 49
Guarantees of Simple Loans

The H
. anafs ruled that the object of a simple loan is held by the borrower as a
trust, whether or not he uses it. Thus, in analogy to the lessor and depositary,
the borrower in a simple loan only guarantees the lent object against defects
or perishing caused by his negligence or transgression. In the absence of such
negligence or transgression, the borrower is considered a keeper of the lenders
property, which is a good act, and Allah (swt) said: Is there any reward for
good other than good? [55:60].1
The Maliks ruled that the lender guarantees lent objects that are not easily
observable at all times (e.g. clothes, jewelry, and means of transportation),
but do not guarantee easily observable objects (e.g. a house). In both cases,
the borrower does not guarantee the borrowed object if he can prove that the
negative effect was not caused by his negligence or transgression. The proof
of this view is based on combining two H
s. The first H
is the one
. adth
. adth
quoted previously on the authority of S.afwan ibn Umayyah, where he was

quoted to say: No, it is a simple loan to be repaid or no, it is a simple loan
to be returned. The second H
was also quoted previously stating that
. adth
the non-transgressing borrower or depositary does not guarantee the objects

of such contracts. They argued that the first H
applied guaranty to lent
. adth
items that were not observed by the lender, and the second H
stated that no
. adth
guaranty is established for observable lent items. In this regard, the Malik view
2
is partially similar to the H
. anaf view that simple loans are trust contracts.
c
Most of the Shafi s ruled that the borrower is required to guarantee the
value of the lent item if it is destroyed or adversely affected due to unauthorized

1 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.11, p.135), Al-K
c
Al-Hum
am ((H
an
an
. am
((H
. anaf), vol.2, p.202).
2 The M
alik legal status of the object of a simple loan can be summarized in four points:
(1) guaranty, (2) the borrowers usage is restricted by the lenders conditions, (3) bindingness
on the lender if a specified time, distance, or amount is explicitly specified, whereby the lender
cannot recall the lent item before then, (4) if the borrower claims that it was a simple loan,
but the owner claims that it was a lease, then the latters claim is accepted if supported by
his oath, c.f. Ibn Juzayy ((M
alik), p.373).
617
618
CHAPTER 49. GUARANTEES OF SIMPLE LOANS
usage. Al-Nawaw said in Al-Minh

aj that the Shafics established this guaranty
even if the unauthorized usage was not excessive, based on the H

of S.afwan:
. adth
No, it is a guaranteed simple loan. Moreover, legal analysis shows that the lent
property should be returned to its owner, and thus its guaranty is determined
on the same grounds as received goods in an unfinished sale. The compensation
in this case is determined by the value of the item on the day it was adversely
affected, and not the maximum value it had or its value on the day it was
received.
On the other hand, if the borrower only used the lent item according to
the lenders permission, then the Shafics ruled that he is not responsible for
any losses that are not caused by his own negligence or transgression.3 Thus,
whether the lent object is affected because of the authorized usage, or due to
exogenous natural causes, the borrower does not guarantee it.4
Most of the H
. anbals ruled that the object of a simple loan is always guaranteed by the borrower against any adverse effects, even those not caused by
his transgression. In case of incidence of a defect or perishing of the item, they
ruled that compensation is determined by the items value on the day the defect occurred. Their proof was also based on the previously cited H
of
. adth
S.afwan, which was narrated by Ah.mad and Ab

u D
aw
ud on the authority of
as and Ab
u Hurayrah, which stated: No, it is a guaranteed simIbn c Abb
ple loan.5 They also provided proof for their ruling of guaranty based on the
H
: Every recipient is responsible for what he took until he returns it.6
. adth
They also reasoned legally that, unlike a pawned object taken for guaranty, the
borrowed item is anothers property taken to derive benefits, without deserving
it or authorization to consume the object, and thus he must guarantee it in
analogy to the usurper. However, the H
. anbals made an exception for a person
who borrowed religious books or religiously endowed weapons, whereby he only
guarantees them if he is negligent or transgressing.
In summary, the Shafics and H
. anbals consider the borrower a guarantor,
while the H
. anafs and Maliks consider him a trustee. All jurists agree that
3 Al-Baghd
ad said in Majmac Al-D
an
at (p.55): The difference in rulings between the
. am
afics applies to the case where the lent object is not being used. However, if
. anafs and Sh
it is adversely affected during usage, all jurists agree that the borrower does not guarantee it
[if he was neither negligent nor transgressing].
4 Al-Im
u-Ish.
aq Al-Shr
az
((Sh
afic), vol.2, pp.267,274), Al-Suy
ut.
c
((Sh
afi ), p.150), Al-Iqn
ac and Al-Khat.b Al-Shirbni ((Sh
afic), vol.3, pp.136,139), main
c
c
text by Ab
u Shuj
a with H
shiyat Al-B
aj
ur (vol.2, p.10), Al-Sharq
aw ((Sh
afi ), p.166),
.a
Ab
u-Bakr Al-H
afic), vol.1, p.555).

. is.n (4th printing (Sh
5 Al-Buh
ut (3rd printing (H
amah (, vol.5, p.203), Ibn Rajab
(1st edition (H
. anbal), p.59).
6 Narrated by Ahmad and the four authors of the Sunan, and rendered valid by Al-H
.
. akim,
on the authority of Samurah ibn Jundub that the Prophet (pbuh) said: Every recipient is
responsible for what he took until he returns it. Ab
u D
aw
u and Al-Tirmidh said that
Qut
adah said that Al-H
: ... but in simple
. asan had forgotten the remainder of the H
. adth
loans, he is a trustee who does not guarantee the item. The H

was also narrated by
. adth
Al-T
an, Al-H
akim, and Ibn Ab Shaybah, c.f. Ibn Al-Athr Al-Jazar (, vol.9, p.110),
. abar
.
c
Al-H
a
fiz
Al-Zayla
(1st
edition,
(H
ad
th
),
vol.4,
p.167),
Ibn
H
ajar
(, p.253), Al-Sakh
aw (,
. .
.
.
p.290), Al-Shawk
49.1. CAN THE LENDER REQUIRE GUARANTY?
619
the lender is exonerated of all guarantees by delivering the lent object to any
customary recipient (e.g. the lenders wife, or a legal agent who commonly
receives others property).
49.1
Can the lender require guaranty?
The H
. anafs ruled that a lenders condition that the borrower must guarantee
the loaned item is invalid. They considered type of condition to be contrary
to the nature of the simple loan contract. Thus, like other conditions that
contradict the nature of contracts (e.g. guaranty in deposit, or non-guaranty in
pawning), the condition is rendered invalid.7
The Maliks ruled that if the lender stipulates a condition of guaranty in a
case where guaranty is not required, the contract is deemed a defective lease
rather than a simple loan. This ruling follows since the lenders condition of
a guarantee in a simple loan is tantamount to an unknown compensation in a
lease. Hence, a legal solution is devised by stipulating a known lease payment,
determined by market conditions.8 Thus, the borrower in this case pays the
going market rental rate for the lent item, and does not guarantee it except
against his negligence and transgression.
Recall that the Shafics and H
. anbals ruled that the borrower guarantees the
object of a simple loan in most cases. Then, they ruled that if the borrower were
to stipulate a condition of non-guaranty, his condition is considered nugatory,
and he still guarantees the object. This ruling is based on the general principle that guaranty cannot be removed by conditions in contracts that require
guaranty (e.g. the guarantee of received objects in a valid or defective sale).9
49.2
Changes from trust to guaranty
For the H
. anafs, the same conditions that would change the possession of a
deposit from trust to guaranty also apply to the possession of a simple loan. We
list some of those conditions for completeness:
1. If the borrower wastes the borrowed item, destroys it physically (e.g. by
showing a thief how to get to it), or denies to the lender when he has a
right to recall it.
2. If the borrower abandons safekeeping the borrowed object, or if he leases
it to another.
3. If the borrower uses the borrowed object in an unauthorized or unconventional manner.
4. If the borrower does not follow the lenders instructions for safekeeping.
7 Ibn c Abid
c
((H
an
at (p.55).
. am
Al-Dus
u
q
(vol.3,
p.436),
Ibn
Rush
d
Al-H
afd ((M
alik), vol.2, p.309).
.
.
9 Ibn Qud
amah (, vol.5, p.204).
8 Ha
shiyat
620
CHAPTER 49. GUARANTEES OF SIMPLE LOANS
While those conditions for converting the possession of trust into a possession
of guaranty are similar for deposits and simple loans, there are some significant
differences between the two contracts in this regard:
1. If the borrower in a simple loan contract takes actions that convert his
possession into a possession of guaranty, and then reverts to abiding by all
the conditions, the guarantee remains in place. This is different from the
case of deposits, where removal of the reason for guaranty would absolve
the depositary. The reason for the difference is that the purpose of the
deposit contract is safekeeping of the deposit. Thus, removal of the factors
that effect guaranty reverts the contract to its original form. However, the
purpose of the loan contract is use of the loaned item, and violation of the
nature of that contract effects a guaranty condition irrevocably.
2. If the borrower returns the borrowed item to the lenders home, he is
absolved of his guarantee for the loaned object. This is in contrast to the
return of a deposit or a usurped object, where the item must be given to
the owner, in accordance with the verse: Allah commands you to return
trusts to those to whom they are due [4:58]. However, it is customary in
simple loans to return the loaned item to the owners home or give it to
his dependants, and thus simple loans are excluded from the requirement
derived from this verse.
On the other hand, if the borrowed item was valuable, and the borrower
returned it to the lenders house, but did not give it to him personally,
then he must guarantee the item. This ruling is also based on conventional
behavior, whereby valuable assets are returned to their owners.
3. We have seen previously that if the depositor and depositary disagree,
the depositarys claim is usually accepted. In simple loans, the rule is
reversed, thus accepting the lenders claim in most cases.10
49.3
Cost of re-delivery
Since returning the borrowed items is the borrowers responsibility, jurists ruled
that he must thus bear the cost of delivery. This responsibility follows from
the fact that the borrower receives the loaned item for his own benefit, thus he
must also bear the cost of returning it. Thus, this ruling is identical to the case
of usurped objects, where the usurper bears the responsibility of returning the
usurped object to its owner, and thus bears the cost of delivery.
This is in contrast to the ruling in leases, where the cost of re-delivery
of leased objects is borne by the lessor. This follows since the lessee is only
responsible to give the lessor access to the leased object at the conclusion of the
lease, but he is not responsible to deliver it.11 The main difference between the
10 Al-K
as
an
11c Abd
onwards).
c
((H
an
at (p.57).
. anaf), ibid., p.211 onwards), Majma Al-D
. am
n ((H
Al-Ghan Al-Mayd
an ((H
anaf
),
vol.2,
p.204),
Ibn c Abid
. anaf), vol.4, p.527
.
49.3. COST OF RE-DELIVERY
621
two cases is the fact that the lessor seeks his own benefit (by receiving rent),
while the simple contract only provides benefits to the borrower.
Chapter 50
Lender-Borrower
Disagreements
When disagreements occur between the lender and the borrower, the type of
disagreement dictates the party whose claim is accepted. In what follows, we
give some detailed discussion of the different circumstances that may arise:1
50.1
Disagreements over the contract nature
If the two parties disagree over the nature of the contract, e.g. if the owner
claims that the contract was a lease and the other party claims that it was a
simple loan, the Shafics ruled that the owners claim is accepted if he supports
it with an oath. The same ruling applies if the owner claimed that the object
was usurped and the other party claimed that it was loaned to him. In all such
cases, the default status of the object is impermissibility of usage by any party
other than the owner. Thus, the owner is denying that he gave permission for
the other party to use the object, and his claim (as a denier) is accepted if
backed by his oath. Thus, if he does take the oath, his claim is accepted and he
is entitled to collect the going market rental rate for his property.
50.2
Disagreement over causes of defect
If a borrowed item perishes or becomes defective, the borrower claims that he

only used it in the authorized manner, and the owner claimed that the borrower
was responsible for the defect, then all jurists agree that the borrowers claim
is accepted if he supports it with an oath. For the jurists who consider the
borrowers possession one of guaranty, they base this ruling on the difficulty of
1 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic),
.
vol.1, p.366 onwards), Ibn Qud

amah (, vol.5, pp.217-219), H
ash
iyat
Al-S
a
al
a
Al-Sh
arh.
.
.
Al-S
. aghr (vol.3, p.579).
623
624
CHAPTER 50. LENDER-BORROWER DISAGREEMENTS
providing a proof that he did not cause the defect by abusing the lent object.
For the other jurists who consider the borrowers possession one of trust, the
ruling follows immediately from the general principle that the trustees claim is
always accepted.
50.3
Disagreement over return
If the borrower claims that he has already returned the lent object, but the
lender claims that the object was not returned, the lenders claim is accepted if
he supports it with his oath. In this case, the ruling is that the default status
of the object is not being returned. Thus the borrower is making a claim that
he needs to support with a proof. The lender, on the other hand, is a denier of
that claim, and hence his claim is accepted based on his oath.
Chapter 51
Termination of the contract

The simple loan contract is terminated if any of the following events takes place:
1. If the lender recalls the loan, the contract is voided and terminated. This
follows from the non-binding nature of the simple loan contract.
2. If the borrower returns the lent object to the lender, the contract is voided
and terminated at that time.
3. If either borrower or lender falls prey to long-term insanity or unconsciousness, the loan is terminated. This ruling follows from the termination of
one partys eligibility to initiate or maintain the voluntarily charitable
simple loan contract.
4. If either borrower or lender dies, the simple loan is terminated. This
follows since the contract is based on permission of using the lenders
property. Clearly, this basic tenet of the contract cannot be maintained in
the absence of either the one giving the permission or the one who received
that permission.
5. If either borrower or lender is put under legal restraint (h.ajr) due to mental
incompetence, he would thus lose his eligibility for the contract, and it is
voided and terminated.
6. If the owner-lender is put under legal restraint due to declaring bankruptcy,
the simple loan contract must be terminated to protect the interests of his
creditors.
625
Part XII
The Agency Contract (caqd

al-wak
alah)
627
629
Preliminaries
The agency contract will be studied in six chapters:
1. Definition, cornerstones, and legality.
2. Contract conditions.
3. Legal status.
4. Multiple legal agents.
Chapter 52
Definition, Cornerstones,
and Legality
52.1
Definition
The term wak

alah or wik
alah literally means preservation. For instance, in
verse [3:173]: They said: for us, Allah suffices, and He is the best Disposer
of affairs [the best wakl]. The Prophet (pbuh) was also urged in [73:9] to
take Allah (swt), the only true God, as his preserver and protector (wakl), as
explained by Al-Farra.
The term is also used to mean delegation of ones affairs to another. Thus,
Allah is also described as the best one to whom one must delegate ones affairs:
For those who put their trust [mutawakkil
un] should put their trust on All
ah
[14:12]. Also, the Prophet H
ud (pbuh) said to his people: I put my trust
[tawakkaltu] in Allah, my Lord, and your Lord [11:56].
The H
alah legally as the delegation of one person (the
. anafs defined wak
principal) for another (the agent) to take his place in a known and permissible dealing.1 In this regard, the wakl (agent) deals in the others property
and preserves it. On the other hand, Shafics postulated the following more
restrictive definition for wak

alah: It is the delegation of one living person to
another of the performance of an act that permits delegation, and that the first
person is permitted to perform himself.2 In this regard, they stipulated that
the delegating party must be living to distinguish the agency contract from a
persons will. Dealings that are permissible for agency contracts include financial dealings such as trading, as well as many other actions that allow for legal
representation (e.g. giving permission for entry into a property).
1 Ibn Al-Hum
c
n
am ((H
as
an ((H
c
((H
anaf
),
vol.3,
p.417),
Al-Zayla
((H
anaf
Jurisprudence),
vol.4,
p.254).
.
.
2 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2, p.217).
.
631
632
CHAPTER 52. DEFINITION, CORNERSTONES, AND LEGALITY
52.2
Cornerstones
The H
. anafs stipulated valid offer and acceptance (e.g. if the principal says I
have commissioned you as an agent for such and such, and the agent says I
accept) as cornerstones of the agency contract.3 While the H
. anafs restricted
the contracts cornerstones to offer and acceptance or actions implying acceptance, the other jurists enumerate four cornerstones: (i) principal, (ii) agent,
(iii) object of the agency contract, and (iv) the contract language.
Jurists agreed that it is not necessary for acceptance to be indicated verbally.
This follows from the fact that delegation is a permission similar to permission to
eat, and thus acceptance of the offer may be established through many different
actions.4 Moreover, jurists agreed that acceptance may follow immediately after
the offer, or it may be delayed. This ruling is based on the historical fact that
some of the Prophets (pbuh) agents only accepted the agency after some time.
Thus, if the agency offer and acceptance were not established, the contract is
not concluded. For instance, consider the case where one person offers another
to be his agent in collecting a debt, but the second person refused. If the second
person were then to proceed to collect the debt, the debtor is not relieved of his
debt, since the agency contract was never concluded.
In this regard, both offer and acceptance need to be established for the
contract to be concluded. Thus, the one making the offer may rescind it prior
to its acceptance, in analogy to sales.
5
The H
. anbals also permitted so called automatic or cyclic agency. In this
contract, the principal says: I have commissioned you as my agent, and if your
agency is terminated for any reason, then I am automatically re-commissioning
you as my agent. Similarly, they permitted automatic termination of agency:
If I ever commission you as my agent, then I am stipulating that this agency
will be automatically terminated upon commission.
52.2.1
Restricted agency
The H
. anafs and H
. anbals permitted unrestricted agency contracts, as well as
agency contracts that are restricted by some condition. For instance, they allow
a principal to stipulate that a second becomes his agent in selling a particular
item if a named customer were to arrive. In this case, the agent is not permitted
to deal in the owners property unless the condition is satisfied. The condition
may also be temporal, e.g. permitting an agent to sell an item the next day,
in which case the agency does not commence until the following day. The
permissibility of such restricted agency contracts is based on the view that the
contract results in a permission, which may be deferred or suspended pending
a condition. This is one of the aspects in which the agency contract resembles
a will.6
3 Al-K
as
an
((H
. anaf), ibid., p.20).
irbn ((Sh
amah (, vol.5, p.84).
. Al-Sh
5 Marc
ibn Y
. anbal), vol.2, p.156).
6 Al-K
c
as
an ((H
. anbal), vol.2, p.147).
4 Al-Khat
b
52.2. CORNERSTONES
633
On the other hand, most Shafics accept the opinion of their Imam that
agency contracts may not be deferred or suspended pending a condition. However, he permitted the first party to make the agency unrestricted, but to stipulate a condition that the agent does not act for sometime. Al-Shafics proof
was the view that ignorance (jah

alah) invalidates the legal agency contract, and
thus deferment and suspension on a condition are not allowed in analogy to
sales and leases. In this regard, he distinguished between the will contract and
the agency contract, since the (gharar) caused by deferment or suspension on a
condition does not affect the former,

whereas it affects the latter.
In this case, the Shafics ruled that if an agent acts according to such a
deferred or suspended agency contract, his actions are valid, despite the defectiveness of the agency contract. The defectiveness of the contract implies that
any promised wage in the agency contract must be dropped, and his work should
be compensated by the going market wage for that work. This ruling is made
in analogy to the proper manner of compensating a hired worker in a defective
hiring contract.7
In contrast, if the agency contract is concluded, but the actual action is
suspended pending a condition, jurists agree that the agency contract is valid.
For instance, the principal may say I have commissioned you as an agent to
buy this item, but buy it only after the first of the month.
52.2.2
Temporary agency
Jurists agreed that the agency contract may specify a termination date. This
follows from the fact that agency is permitted to meet specific needs, and such
needs may be temporary.
52.2.3
Compensated agency
The agency contract can be valid with or without the agent being paid a wage.
This follows from the fact that the Prophet (pbuh) paid his agents for the
collection of charities.8 Indeed, that is the reason that the Prophets (pbuh)
cousins asked him to send them to collect those charities, promising that they
would deliver the same amounts as his other agents, and looking forward to
receiving the commissions that such charity collectors were paid.
7 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.350).
8 Ibn Hajar said that this is a well known Had
. For it is narrated in Al-Bukh
ari and
.
. th
Muslim on the authority of Ab

u Hurayrah (mAbpwh) that the Prophet (pbuh) sent agents
to collect charities. They also narrated on the authority of Ab
uH
ac id that the
. umayd Al-S
Prophet (pbuh) used a man from Al-Azd named Ibn Al-Lutaybah. They also narrated on
the authority of c Umar that he (pbuh) used Ibn Al-Sac diy. Also, Ab
u D
aw
ud narrated
that the Prophet (pbuh) sent Ab
u Masc u
d to collect charities, and Ah.mad narrated in his
Musnad that he (bpuh) sent Ab
u Jahm ibn H
ayfah as a collector of charities, and another
. udh
narration on the authority of Qurrah ibn Dac m

us. that he (pbu) sent Al-D
ak ibn Qays. It
. ah.h.
was also narrated in Al-Mustadrak that the Prophet (pbuh) sent Qays ibn Sac d, sent c Ub
adah
ibn Al-S.
amit, and sent Al-Wald ibn c Uqbah as agents for the collection of charities, c.f. Ibn
H
. ajar (, pp.176,251,275).
634
Moreover, the agency contract is a permissible contract in which the agent

is not required to perform the specified task. Thus, he may collect a wage for
performing the task. This is in contrast to witness whose testifying obligation
is a religious and legal requirement who thus may not be paid a wage.
Thus, agency without wages is a form of charity from the agent. On the
other hand, agency with compensation (juc l) inherits the legal status of hiring
contracts. Thus, if the agency involves delivering an item to the principal,
the agent is entitled to his compensation upon delivering the object. If the
agency involves trading or performing a pilgrimage, the agent is entitled to his
compensation as soon as the task is performed. Thus, if an agent sells an item
on behalf of the principal, he is entitled to his wages even if he had not yet
collected the price.9
In an agency contract where the agent is entitled to a wage, the principal
may stipulate a condition that the agent does not terminate the agency before a
specified date. In this case, if the agent terminates the agency before the stated
date, the principal will not be required to pay any compensation to the agent.
52.2.4
Comprehensive agency
The H
. anafs and Maliks permitted comprehensive agency, or power of attorney, whereby the agent is permitted to take all legal actions of the principal
that may be delegated to another.10 Their ruling is based on the fact that
agency is permitted for each of those actions individually, and thus a general
power of attorney, or a comprehensive agency, is also permitted. On the other
hand, the Shafics and the H
. anbals argued that such powers of attorney lead
to massive uncertainty (gharar), and thus forbade the practice. This difference
in opinion pertains to agencies

that are completely unrestricted. However, all
jurists are in agreement regarding the legality of restricted agency.
52.3
Legality
Agency contracts are permissible, with proofs available in the Quran, the Sunnah, and consensus of the scholars:
Proofs are found in a number of verses in the Qur
an. For instance, an
example of agency in purchasing foodstuffs is found in [18:19]: Now send
one of you with this money to the town; let him find out which is the
best food and bring some to you. There are many other verses that
specify a variety of permissible agencies: Commission two arbiters, one
[representative] from his family and one [representative] from hers [4:35],
Go with my shirt... [12:93], set me over the storehouses ... [12:55], and
Alms are for the poor and the needy and those employed to administer
the funds... [9:60].
9 Ibn Qud
amah (, vol.5, p.85 onwards), Ibn Al-Hum
am ((H
. anaf), vol.6, p.2), Ibn Juzayy
((M
alik), p.329).
10 Ibn c Abid
n ((H
d Al-H
alik), vol.2, p.302).
. afd ((M
52.3. LEGALITY
635
There are many H

s that establish the permissibility of agency. One
. adth
such H
was narrated in Al-Bukhari and Muslim that the Prophet
. adth
(pbuh) sent agents to collect the zak

ah (alms tax). Another narration establishes that he (pbuh) commissioned c Amr ibn Umayyah Al-D
. amariy as
an agent to ask for the hand of Umm H
ab
bah
bint
Ab
u
Sufy
an in mar.
riage.11 Another H
ad
th
establishes
that
he
(pbuh)
commissioned
Ab
u
.
Rafic as an agent to accept marriage with Maym

unah bint Al-H
.12
. arith
Another narration also establishes that he (pbuh) commissioned H

. akm
ibn H
. uzam as his agent to buy an animal for ritual sacrifice, and his commissioning of c Urwah Al-Bariq to buy a sheep.13 Proof is also provided
in Al-Bukharis narration that he (pbuh) commissioned an agent to give
a camel as repayment of his debt, saying: The best among you are the
best in repaying their debts.
The Muslim nation has established a consensus on the permissibility of

agency contracts, since individuals often cannot administer all of their
affairs, and thus have a need to commission agents.14 Thus, the agency
contract is a means for cooperation in doing good, and it is permitted thus.
Such cooperation is often needed since different people possess different
skills. For instance, an individual may need to hire a legal agent who is
better at legal argument (i.e. a lawyer) to defend him in a court of law.
11 Narrated by Ab
u D
aw
ud in his Sunan (vol.1, p.468). Al-Bayhaq said in Al-Mac rifah:
We heard on the authority of Ab
u Jac far Muh.ammad ibn c Al that he narrated that H
.
. adth
He also narrated it in Al-Mac rifah and Al-Khil

afiyy
at without a chain of narrators. He pro
vided a full narration in his Sunan on the authority of Ibn Ish.
aq that A
u Jac far told him
that the Prophet (pbuh) sent c Amr ibn Umayyah Al-D
ash as an agent to
. amariy to Al-Naj
marry him (pbuh) to Umm H

ars on his behalf (pbuh), c.f.
. abbah, and pay four hundred Din
Ibn H
ajar
(,
p.251
onwards).
.
12 Narrated by M
alik in Al-Muwat..ta, and also narrated by Ah.mad, Al-Tirmidh, Al-Nas
a,
and Ibn H
an on the authority of Sulayman ibn Yas
ar that the Prophet (pbuh) sent Ab
u
. ibb
R
afic and a man from the Ans.
ar as agents to marry him to Maym
unah bint Al-H
arith while
.
he was still in Madnah prior to leaving it for H

in Muntaq
a
. ajj. Ibn Taymiyah used this H
. adth
Al-Akhb
ar to conclude that he (pbuh) married her prior to entering the state of ritual purity
for pilgrimage, and that Ibn c Abb

as was not aware of that marriage, c.f. Ibn H
. ajar (, p.252),
Al-Shawk
an (, vol.5, p.269).
13
The first agency H
was narrated by Ab
u D
aw
ud and Al-Tirmidh on the authority
. adth
of H
abit that the Prophet (pbuh) told him to sacrifice a sheep and give a Din
ar
. abb ibn Th
as charity. The second agency H

ad
th
is
also
valid
as
narrated
by
Ah
mad, Al-Bukh
ari,
.
.
Ab
u D
aw
ud, Al-Tirmidh, Ibn M
ajah, and Al-D
araqut.n on the authority of Shabb ibn
Gharqadah Al-Salam Al-K

uf on the authority of c Urwah ibn Ab Al-Jac d Al-B
ariqiyy. The
H
also stated that the Prophet (pbuh) prayed for him to be blessed in his trading,
. adth
and his trading became extremely profitable, c.f. Ibn Al-Athr Al-Jazar (, vol.12, p.289),
Al-H
), vol.4, p.90), Ibn H
awk
an (,
.
. adth
. ajar (, p.251), Al-Sh
vol.5, p.270).
14 Ibn Qud
amah (, vol.5, p.79), Ibn Al-Hum
am ((H
atb Al-Shirbn
.
((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.348), Al-Sarakhs (1st edi
tion (H
anaf
),
vol.19,
p.2
onwards).
.
636
52.3.1
Legal status
The default legal status of agency is permissibility. However, it may become

recommended if it can assist an individual in performing a recommended task.
Also, if the agency can ward-off adverse consequences to the principal, it becomes obligatory on the agent to protect the principal. Similarly, it may be
reprehensible if it assists in performing a reprehensible act, or forbidden if it
assists in forbidden tasks.
Chapter 53
Contract Conditions
There are many conditions for the validity of an agency contract, some pertaining to the contract language, some pertaining to its object, and some pertain
to the principal and agent. For instance, we shall see that jurists agree that the
principal may be female, absent, or sick. Moreover, the majority of jurists ruled
that the principal may be a present male in good health, while Ab
u H
. anfa
did not permit the agency contract in that case. Also, we shall see that the
conditions for agents permit them to perform on behalf of others tasks that
they could perform on their own behalf. However, jurists agree that it is not
permitted for a person to commission his enemy as an agent, and the Maliks
do not permit an infidel to be commissioned as an agent in trading, lest he
conducts an illegal sale. They also do not permit commissioning an infidel as
an agent for collecting debts from Muslims, lest he use that power to obtain a
higher status among them.
53.1
Conditions for contract language
The Shafics stipulated two conditions for the agency contract language:
1. The principal must make a verbal offer to establish his consent to agency,
either explicitly or metaphorically (e.g. you are in my place for selling
this house). Acceptance by the agent may take place verbally or through
his actions, in analogy to a guest who is offered food, where acceptance
by action is permitted.
2. The contract must not be suspended pending a condition (e.g. if so-and-so
returns from his travels, then you are my agent for such-and-such).
The latter condition is not as restrictive as might appear. For it is permitted
to conclude an unconditional agency contract, and suspend the actual action
pending the satisfaction of a condition (e.g. you are my agent for selling this
house; conclude that sale when so-and-so arrives). Moreover, it is permissible
for a specific period of agency (e.g. one month) to be specified.
637
638
53.2
Conditions for the principal
The principal must be himself eligible to take the action for which he commissions an agent, and the legal status of such actions would thus accrue to him.
Thus, it is not permissible for an insane person, an undiscerning child, or a person in a coma, to commission an agent. In all such cases, the potential principal
would not satisfy the discernment condition that would make him eligible for
taking such an action or being bound by its legal status. Moreover, a discerning
child may not commission an agent for taking actions that he may not take
himself (e.g. divorce, gift-giving, charity-giving, and other actions that result in
pure financial losses. On the other hand, such a discerning child is permitted [in
the H
. anaf school] to take financially beneficial actions such as accepting gifts,
and he may thus commission an agent for such action. In intermediate cases
such as trading, where the action may result in financial gains or losses, the
ruling depends on whether or not the discerning child is permitted to conduct
the trade himself. If the child is permitted to trade on his own behalf, then
he is also permitted to commission an agent for trading on his behalf. If he
requires a legal guardians permission for trading, then the agency contract is
also suspended pending the guardians approval.1
As we have seen previously, Al-Shafic did not permit a discerning child to
deal in his property. Thus, he does not permit any child to commission an agent.
2
This is also the ruling in the Malik and H
. anbal schools.
Ab
uH
. anfa ruled that the agents ability to conduct a trade is what matters
in the agency contract. Thus, he permitted a Muslim principal to commission
a Jewish or Christian agent for buying wine or pork.
Jurists agree that a mentally incompetent person, who is put under legal
guardianship, may not commission an agent for financial dealings on his behalf,
since he may not conduct such dealings himself. Moreover, the non-H
. anafs
ruled that a woman or a person in a state of ritual purity for pilgrimage may
not commission an agent to conduct a marriage contract, since they may not
conduct that contract themselves. Also, jurists agree that an immoral father,
who is not permitted to represent his daughter in marriage, may not commission
an agent to take his place in such a marriage.
In all such cases, if a person cannot conduct a contract himself, he may
not commission an agent to conduct it on his behalf. However, the Shafics
permitted a single exception to this general rule by permitting a blind person

(whom they do not permit to trade in goods that must be inspected visually)
to commission an agent for inspecting goods and trading on his behalf. They
argued that this exception is stipulated due to necessity of conducting such
trades.
1 Al-K
as
an
((H
am ((H
. anaf), vol.6, pp.12,134).
Al-Shirbn ((Sh
amah (, vol.1, p.349), Al-Jazir
p.236 onwards).
2 Al-Khat
b
(1986,
.
vol.3,
53.3. CONDITIONS FOR THE AGENT
53.3
639
Conditions for the agent
The agent must be sufficiently sophisticated to understand the nature of the

business that he conducts on behalf of the principal, and thus he must distinguish between good and bad deals. Consequently, jurists agree that insane
persons and non-discerning children may not be commissioned as agents. On the
other hand, the H
. anafs permitted a discerning child to act as agent, whether
or not he is permitted to conduct trade on his own behalf. In this regard, all jurists agree on the general view that the agent represents the principal in his legal
rights and responsibilities, and thus must be himself eligible for such rights and
responsibilities. The H
. anaf position is supported by the fact that Ibn Umm
Salamah acted as an agent for the Prophet (pbuh) in a marriage contract while
he was still a [discerning] child.
However, the Shafics, Maliks, and H
. anbals ruled that insane individuals,
persons in coma, and all children (discerning or otherwise) are ineligible for
agency since they cannot deal on their own behalf. Thus, a mentally incompetent person may not be an agent in financial dealings. Moreover, the majority
of non-H
. anaf jurists also ruled that a woman, or a man in a state of ritual
purity for pilgrimage, may not act as an agent in a marriage contract, since
they may not conduct such a contract on their own behalf. The Shafics also
do not permit the commissioning a blind person as an agent in dealings that

require vision.
As an exception to the general rule, the majority of the Shafics permitted the
agency of a discerning child to give permission for entry into a house, delivery
of a gift, pilgrimage, supererogatory acts, sacrificing animals, and distribution
of zak
ah.
The H
. anafs further stipulated that the agent must know of the agency contract, and must accept it seriously. Thus, if an agent were to sell the principals
property before he is commissioned as a selling agent, the sale is not concluded
on behalf of the principal unless both the principal and agent approve it after
the establishment of the agency. In this regard, the agent is considered informed
of the agency contact if he heard such an offer directly from the principal, received it in a letter, received it with a messenger, or if he heard it from two
witnesses or one witness (honorable or not) whom the agent believed.3
Also, jurists agree that the principal must specify the agent either by name
or by identifying him physically. Also, the agent must know his principal either
by name or by his characteristics.4
The Maliks stipulated three conditions for the principal and the agent: (i)
freedom, (ii) sanity, and (iii) being of legal age. The Shafics further stipulated
that a person serving as the agent of a judge or ruler in financial dealings must
c
be known to be of good charachter ( adl).
3 Al-K
as
an ((H
s (1st edition (H
. anaf), ibid., p.20 onwards), Al-Sarakh
. anaf), vol.19, p.158
n ((H
at.b Al-Shirbn ((Sh
afic), vol.2, p.218).
4 Al-K
as
an ((H
anaf
),
ibid),
H
a
sh
iyat
Al-Dus
u
q
(vol.3,
p.378),
Al-Kh
atb Al-Shirbn
.
.
.
((Sh
ut (3rd printing (H
anbal), vol.3, p.450).
.
640
53.4
Conditions for contract objects
The H
. anafs ruled that the object of an agency contract cannot be the utilization
of public properties (e.g. collection of wood from public lands, mining, etc.). In
such cases, if an agent is commissioned and performs the job, he is deemed to
perform it on his own behalf, and none of the output accrues to the principal.
On the other hand, the majority of non-H
. anaf jurists permitted agency in such
tasks, whereby the principal and agent would share the proceeds according to
their respective claims. In this regard, the sharing ratios vary from one case
to another, as the benefits vary.5 The non-H
. anafs supported their ruling by
the fact that utilization of public properties is one of the means of acquiring
ownership, and thus the act resembles trading in this respect, and agency is
permitted by analogy.
Jurists agree that the object of an agency contract must belong to the principal. This follows from the fact that the principal cannot give the agent the
right to deal in the property of another.
The Shafics also stipulated a condition that the object of an agency contract
be sufficiently known to ensure that the contract does not contain significant
gharar.
Jurists agree that agency is not effected in borrowing. Thus, if a principal
commissions an agent to request a loan from a third party, the agent is considered the debtor. On the other hand, they allow the principal to send the agent
with a message to borrow on his behalf (e.g. the agent may say so-and-so
requests to borrow $x, and he has sent me to collect the amount if you agree).
Jurists also agree that the object of an agency contract must be eligible
for legal representation, e.g. financial dealings, etc. However, agency is not
permitted in pure acts of worship (e.g. praying and fasting). In such acts of
worship, the individual is required personally to show the perseverance and piety
required to fulfil those obligations, and thus he may not commission another as
his agent in such acts. Also, jurists ruled that an agency contract for oath
swearing is not permitted, since the purpose of swearing is to establish the
truthfulness of the one taking the oath. Thus, oath taking is a legal procedure
in which the individual supports a legal claim by appealing to the greatness of
Allah. Thus, agency is not permitted in this case. Finally, jurists agree that a
person may not commission an agent to impregnate his wife, since the purpose
of impregnation is to have biological offspring for the father.
On the other hand, most jurists permitted agency in acts of worship that
have a financial dimension (e.g. payment or receipt of charities, performance
of pilgrimage on behalf of an incapacitated or deceased individual, slaughtering
ah and slaughtering
sacrifice animals, etc.).6 In the cases of distributing zak
sacrificial animals, the purpose is delivery of the money and meat, respectively,
5 Indian Authors ((Hanaf
), vol.3, p.440), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.221),
.
Rawd.at Al-T
libn (vol.4, p.291).
.a
6 Ibn c Abid
n ((H
d Al-H
alik), vol.2, p.297),
. afd ((M

amah (, vol.5, p.83), Al-Dardr
((M
alik)A, vol.3, p.377 onwards), Rawd.at Al-T
libn (vol.4, p.294).
.a
53.4. CONDITIONS FOR CONTRACT OBJECTS
641
and that can clearly be accomplished through agency.

However, the Maliks did not permit agency in pilgrimage. They argued that
the financial aspect of pilgrimage is transient, and that the intent of the ritual is
self-discipline and glorification of Allah, which cannot be accomplished through
agency.7
As we have seen, there are a number of differences among the jurists regarding the actions that may be performed through agency and those that may not.
Those differences can best be understood by first dividing all actions into two
categories: (i) those that pertain to legal affairs (lit. the rights of Allah), and
(ii) those that pertain to the rights of others.
53.4.1
Agency in Rights of All

ah
An agent in legal affairs may be commissioned to establish the commital of

a crime that warrants punishment, the type of punishment that needs to be
exacted, or the act of exacting the punishment.
1. Prosecution Agency
The H
. anafs ruled that in cases where the need for punishment is not established
through legal disputation (e.g. punishments for adultery or drinking wine), then
agency is not permissible for establishing such punishments. Such punishable
actions are established by legal proof or confession, and require no legal claims
by a wronged person or legal disputation.
uH
. anfa and Muh.ammad ruled that if a legal claim
and disputation are necessary (e.g. if there is a claim of theft, slander, or
punitive damages), then agency is permissible to prove the charge. Ab
u Y
usuf
disagreed and insisted that such claims only require material proof or admission
by the principal, and thus denied the permissibility of agency. In this regard,
Ab
u Y
usuf argued from the opinion that agency is not required in exacting legal
punishments (h.ud
ud) that establishing the need for exacting such punishments is
part of the process, and thus denied agency in prosecution as well. On the other
hand, Ab
uH
. anfa and Muh.ammad, argued that the reason for impermissibility
of agency in exacting legal punishments (as we shall show below) does not
apply to prosecution, and hence distinguished between the two parts of the
legal process.8
The Shafics did not permit agency in establishing the need to exact legal
punishment, since the affected rights in this case are the rights of Allah (swt). In
7 The Sh
afics stipulated a general demarcation rule for the permissibility of agency. Thus,
they ruled: agency is permissible in general, the exceptions being: (i) powers of attorney, (ii)
the performance of legal punishment or permitted revenge, (iii) the collection of the capital of
a salam contract, or any other fungible property eligible for rib
a, (iv) copulation, (v) bearing
witness, (vi) oath swearing, (vii) confession or admission of rights, (viii) injurious estrangement
of ones wife, (ix) acts of worship other than pilgrimage, distribution of zak
ah, and slaughter
of sacrificial animals, c.f. Al-Sharq
aw ((Sh
afic), p.169). As we shall see, the Sh
afic exception
of the performance of permitted revenge (qawad) is disputable.

8 Al-K
as
an ((H
am ((H
aw
. anaf), ibid., p.21), Ibn Al-Hum
. ah.
((H
. anaf), p.109).
642
this regard, Allah (swt) ordered us to do all that we can to avoid exacting such
punishments, whereas prosecution attempts to establish the need to exact the
punishment. Thus, they argued, agency would not be permitted in prosecution.
On the other hand, they permitted agency in prosecution in matters that pertain
to the rights of other individuals (e.g. punitive damages, slander, etc.), in
analogy to the permissibility of agency to establish financial rights.9 In contrast
to the H
afics permitted
. anafs, we shall see later in the chapter that the Sh
agency in exacting the legal punishment.

The H
. anbals permitted agency in establishing the need for punishments
whether the crime affected the rights of others (e.g. punitive damages or slander), or the rights of Allah (e.g. adultery). In the former case, the need to protect the rights of individuals often require the employment of such legal agents,
whether the principal is present or absent. For the latter case, the H
. anbals
ruled that agency is permitted based on the tradition that the Prophet (pbuh)
commissioned an agent to establish the need and exact the punishment for adultery by saying to the agent: If she admits her sin, then stone her. The H
. adth
is proof that the crime of adultery was not yet established, and the agent was
given the task both of establishing the need for punishment, as well as exacting
that punishment.10
On the other side of the legal dispute, all jurists agreed that an agent may
be commissioned to defend the accused and attempt to establish that there is
sufficient doubt to prevent the implementation of punishment.
2. Exacting punishments
All four major Sunni schools agreed that the ruler is permitted to commission
an agent to exact the legal punishments in crimes that pertain to the rights of
Allah (swt) and in cases of punitive damages. However, there are differences
among the schools regarding the validity of agency in exacting punishments
when the principal is absent. In what follows, I shall discuss the details of each
schools rulings separately:
Ab
uH
. anfa and Muh.ammad ruled that agency must be initiated by the
principal whose rights were affected by the crime (e.g. in cases of theft or
slander). Thus, they permitted agency only if both the principal and the
agent are present at the time of exacting the punishment. They permitted agency in this case based on the view that many individuals will not
be able to exact the punishment themselves. While some H
. anaf jurists
argued that agency is also permitted in exacting the punishment in the
absence of the principal, most H
. anafs argued that the principals presence is required. The majority based their view on the fact that doubts
can prevent the exacting of punishments. Thus, if the principal is absent,
there is the possibility that he might have forgiven the transgressor or
9 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.2,
p.221).
10 Ibn Qud
. anbal), vol.2, p.150).
643
dropped his charge, and the agent would not be permitted to exact the
punishment when such doubts exist. The minority argued that presence of
the principal is not necessary since the matter would have already reached
the judge, and thus the right becomes a right of Allah (swt), which cannot
be shared by others. Thus, the minoritys view is that even if the principal were to forgive the thief, the legal punishment must still be exacted.
However, the accepted opinion is that of the majority: that the exacting
of legal punishments requires the presence of the transgressed upon.
u Y
usuf did not permit agency in the establishment
or the exacting of punishments in the cases of theft or slander. It appears
that he is arguing generally that it is meaningless to commission agents in
legal cases involving the rights of Allah (swt), whether or not establishing
that right of Allah (swt) requires legal claims and disputation. In all such
cases, he argued, the ruler is required to exact the punishment, and the
transgressed upon has no control over the matter.11
All jurists of the H
. anafs and other schools agree that agency is permitted in establishing and exacting discretionary punishments (tac a
zr).12 In
such cases, the agent may exact the punishment in the presence or absence of the principal, since discretionary punishments are the rights of
individuals. Such punishments are not prevented by doubts, in contrast
to legal punishments that are thus prevented.
As for exacting retaliatory punishments (qis.a
s), the H
. anafs ruled that the
principal (e.g. nearest relative of the killed individual) must be present
for agency to be permissible. In this case, agency is permitted since the
principal may not be able to exact the punishment himself. However, if
the principal is absent, then agency in exacting the punishment is not
permissible, in accordance with the opinion of the majority of H
. anafs
who find that doubts may exist in this case since the principal may have
forgiven the transgressor.
In summary, the H
. anaf position is that agency in exacting legal and
retaliatory punishments is permitted only the presence of the principal
(the transgressed upon). This ruling is based on the general principle that
such punishments would be prevented if sufficient doubt existed, and the
ruling that the absence of the transgressed upon provides sufficient doubt
that they might have forgiven the transgressor.13
The Maliks ruled that agency is permitted in exacting punishments,
whether the principal is present or absent.14
11 Al-Jaz
ir
(1986, vol.3, p.232), Ibn Hubayrah ((H

. anbal), p.208).
ibid.), Al-Dardr ((M
alik)B, vol.3, p.503), Rawd.at Al-T
libn (vol.4,
.
.a
p.293), Ibn Qud
amah (, vol.5, p.207).
13 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.19, pp.9,106), Ibn Al-Hum
. anaf), vol.6,
c
n ((H
pp.6,104 onwards), Al-K
as
an ((H
. anaf), vol.4,
p.218).
14 Ibn Rushd Al-Haf
. d ((M
12 Al-K
as
an ((Hanaf),
644

The majority of H
. anbals ruled that agency is permitted in exacting punishment whether the principal is present or absent. They based this ruling
on the H
where the Prophet (pbuh) said to Ans: Go to this mans
. adth
wife and ask her if she committed adultery, and have her stoned if she
admits the charge. He proceeded to ask her, and she admitted the crime,
and he ordered her stoning.15 There are also other traditions in which the
Prophet (pbuh) ordered the stoning of Mac iz, and he was thus stoned. It
is also recorded that c Uthman (mAbpwh) commissioned c Al (mAbpwh)
to exact the punishment of drinking wine on Al-Wald ibn c Uqbah. Then

c
Al offered H
. asan to be his agent in exacting the punishment, but the
latter refused. c Al then commissioned c Abdullah ibn Jac far as an agent
to exact the punishment, which he did while c Al counted [the lashes].
The H
. anbals also argued generally that the ruler cannot exact [all] punishments himself, and thus agency is necessary.
Some H
. anbals agreed with the predominant H
. anaf opinion that the principals presence is required in the exacting of retaliatory and slander punishments. This group reasoned similarly to the H
. anafs that the principals
absence gives rise to sufficient doubt that he may have forgiven the transgressor, thus preventing the exacting of the punishment. However, the
majority of H
. anbals adhered to the opinion that agency in exacting punishments is valid whether or not the principal is present. In this regard,
they argued that: (i) the chances of forgiveness are remote, and (ii) had
the principal forgiven the transgressor, he could have informed his agent.
Thus, the default situation is non-forgiveness, and agency in exacting the
punishment is permitted in his absence.16
The Shafics ruled that agency is valid in exacting punishments for crimes
affecting the rights of individuals (e.g. retaliatory damages, slander, etc.)

in analogy to exacting financial rights. In fact, they argued, it may be
obligatory to hire an agent in the exacting of punishment for slander or
piracy. In this regard, they permitted agency in the exacting of such
punishments whether the principal is present or absent.
Al-Shafic also permitted agency in exacting punishments for crimes that
affect the rights of Allah (swt), based on the above cited H

s of Ans
. adth
and M
ac iz, and c Uthmans delegation to c Al to exact the wine-drinking
punishment on Al-Wald ibn c Uqbah.17 Al-Bukhari has also narrated
traditions that the Prophet (pbuh) commissioned agents for stoning individuals who were established to have committed adultery, and lashing of
individuals who were established to have imbibed intoxicants.
In summary, the Maliks, Shafics, and H
. anbals permit agency in exact
ing punishments for punitive damages and legal punishments for crimes
15 Narrated in Al-Muwatta, Ahmad, and the six major books of Had

with the exception
..
.
. th
of Ibn M
ajah, on the authorities of Ab
u Hurayrah and Zayd ibn Kh
alid Al-Juhan.
16 Ibn Qud
amah (, vol.5, p.84), Ibn Hubayrah ((H
. anbal), p.208).
17 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.349).
645
affecting the rights of Allah (swt), whether or not the principal (affected
party) is present. On the other hand, the majority of the H
. anafs require
the presence of the principal for exacting the punishment.
Jurists agree that it is not permissible to commission an agent to exact
a forbidden punishment (e.g. punitive estrangement of wives).18 It is
also not permissible to commission agents to usurp an object or steal
it, or to commit any other crime. In all such cases, the criminal acts
would be attributed to the one committing them, and agency is rendered
meaningless.
53.4.2
Agency in human legal affairs
There are two categories of transgressions against human rights, as they pertain
to exacting punishments:
1. The first class of transgressions includes murder and amputations, for
which punishments may not be exacted if there is sufficient doubt that the
accused committed the crime. In this class of crimes, we have seen that
Ab
u H
. anfa and Muh.ammad permit agency in prosecuting such crimes
to establish the need to exact punishment. We have also seen that the
dominant H
. anaf opinion in this case is impermissibility of agency in exacting such punishments in the absence of the principal, since such absence
provides for sufficient doubt that he may have forgiven the transgressor.
2. The second class includes all financial transgressions and other lesser
crimes. For this class of transgressions, all jurists permit an agent to collect
the financial penalty on behalf of the principal, even if there is a possibility
that he forgave the transgressor. In this case, all jurists agree that agency
is granted both in prosecution, and in exacting the punishment. This permission is permitted due to peoples need for having legal representation.
In this regard, a valid narration states that c Al (mAbpwh) commissioned
c
Aql as a legal representative in the court of Ab
u Bakr (mAbpwt), and
when the former became elderly, he commissioned c Abdullah ibn Jac far
as a legal representative in the court of c Uthman (mAbpwt). c Al justified
this usage of legal agents by saying: Legal disputes are troublesome, and
the devil is always present at such disputes, that is why I hate to attend
such disputes.
However, jurists differed over the requirement that the principals adversary
must accept the formers legal representation in disputes over financial damages:
Ab
uH
. anfa ruled that agency in such disputes is not permitted unless:
(i) the principal is present with his agent at the legal proceedings, (ii) he
is sick or traveling for three or more days, (iii) he does not possess the
requisite skills for engaging in legal disputes, (iv) the principal is a shy
18 Al-Dard
r
((M
alik)B, vol.3, p.504), Marc ibn Y
. anbal), vol.5, p.22).
646

covered woman, (v) the principal is a mensturating woman and the legal
proceedings are taking place in a mosque, or (vi) the adversary accepts
representation of the principal claimant. Otherwise, the adversary has the
right to require that the claimant attend the legal proceedings, since the
legal dispute - like debts - cannot be transferred to a third party without
his consent.19
Ab
u Y
usuf, Muh.ammad, and the non-H
. anafs ruled that agency is permitted both in prosecution as well as representation at legal prosecution,
whether or not the principal claimant is present or absent, and irrespective
of the adversarys acceptance or rejection of the claimants agency. In this
regard, they argued that legal disputation is a right that is eligible for legal
representation. Thus, the claimant has the right to send an agent in his
place, in analogy to the cases where he is sick or traveling away, as well as
his right to send an agent to collect a debt. They also argued based on the
need to commission agents who are more skilled at legal disputation, and
the consensus of the Prophets companions (mAbpwt) that such agency
is permitted, as evidenced in the above cited story of c Als representation
in various courts.20
One exception jurists stipulated in this case is that the claimants agent
must not be an enemy of the adversary. The M
aliks also stipulated that
if the claimant had already participated in three legal sessions with his
adversary, he may not later commission an agent unless he has a valid
excuse such as illness.
The H
. anbals enumerated two conditions for the permissibility of agency
in legal disputes:
1. The agent must not be aware that his principal is the transgressor in
initiating the legal dispute, as per the verse: So be not an advocate
for those who betray their trust [4:105].
2. The agent must know the truth of the claim he makes on behalf of
his principal.
The dominant H
. anaf opinion is that the judge should decide whether or
not agency is permitted. Thus, if he finds that the adversary is rejecting
the claimants agency out of spite, he can accept the agency without the
adversarys consent. On the other hand, if he finds that the principal hired
19 Al-Sarakhs
(1st edition (H
am ((H
. anaf), vol.6,
c
pp.6,104-5), Al-K
as
an ((H
aw ((H
n
. ah.
. anaf), p.108), Ibn Abid
((H
ac id Al-Fiqhiyya by
. anaf), vol.4, p.418; vol.7, p.280), Al-Far
c
n said: There is no juristic difference over

Shaykh Mah.m
ud H
. amza (p.134). Ibn Abid
permissibility [of agency], jurists only differ over the bindingness of agency, i.e. whether or
not it can be nullified by the adversary. In this regard, Ab
uH
. anfa ruled that the adversary
can nullify it, while Ab
u Y
usuf and Muh.ammad ruled that it is binding on the adversary.
20 Mukhtasar Khal
c
c
l (p.216), Al-Sha ar
an ((Sh
amah (, vol.5,
p.81), Ab
u-Ish.
aq Al-Shr
az ((Sh
Hubayrah ((H
ut (3rd printing (H
. anbal), p.207), Al-Buh
. anbal), vol.3, p.471).
647
an agent to gain an unfair advantage over his adversary, he may reject the
agency.21
Agency in testimony
Jurists agree that agency is not permissible in legal testimony, since the legal
effect of the testimony is predicated on his own credibility and knowledge of what
happened. This effect would not be accomplished if an agent were to testify on
behalf of the one who witnessed the relevant events.22 Moreover, jurists ruled
that agency is not permitted in the fulfillment of vows and oaths, since Allahs
name is invoked in such vows and oaths, and thus their fulfillment becomes
similar to acts of worship. For similar reasons, agency is not permitted in legal
swearing, oath taking, condemnation, or testimony resulting in the annulment
of a marriage, in which the name of Allah is invoked.
Agency in admission/confession
Muh.ammad stated in Al-As.l that the H
. anafs permit a principal to commission
an agent to admit legal rights or obligations, which is also the Malik and H
. anbal
position. They argued that such admissions establish liability for a right through
a verbal statement, and thus permitted agency in such cases in analogy to
sales.23
On the other hand, the majority of Shafics ruled that agency is not per
mitted for such admissions of rights or obligations. They reasoned that such
admissions are essentially reports of rights based on the knowledge of the principal. In this regard, they argued by analogy to testimony that agency is not
permitted in this case.24 The majority of jurists rebutted this Shafic analogy
between admission and testimony by arguing that the latter merely reports a
right for another party, whereas the former establishes a right directly.
Agency in debt-collection
Jurists permit agency in debt-collection, since it is often the case that the principal is himself incapable of collecting debts owed to him. Thus, in analogy
to agency in trading and other financial transactions, they ruled that agency
in debt collection is a necessary business practice, which is thus permitted. In
the case of receiving the capital in a salam (forward sale) or .sarf (currency exchange) contract, the agent must receive the money during the contract session.
This follows since the principal himself would be bound to collect such monies
during the contract session, and thus the agent may only collect it thus. In all
21 Ibn c Abid
((H
. anaf), vol.4, p.418).
Al-Shirbn ((Sh
amah (, vol.5, p.82).
.
23 Al-K
as
an ((H
d Al-H
. afd ((M
Qud
amah (, vol.5, p.82).
24 Al-Khat
b Al-Shirbn ((Sh
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.349).
22 Al-Khat
b
648
cases, the payer of debts or other obligations is exonerated of his liability as

soon as the agent receives the payment.25
Agency in debt-payment
Jurists agree that a debtor may commission an agent to pay his debts on his
behalf. This permission is based on the view that the debtor can pay his debts
himself, and that he is sometimes unable to do so in person, and thus may
commission an agent to pay it on his behalf.
Similarly, it is permissible to commission an agent to exonerate a third party
of his debts. This follows from the fact that it is permissible to hire an agent
to establish a debt as well as to collect a debt. Therefore, it follows that it is
permissible to commission an agent to exonerate a debtor.
Agency in common contracts
More generally, the H
. anafs ruled that all contracts that a person can conduct
on his own behalf can be conducted through an agent.26 Jurists mentioned a
number of specific dealings - in addition to the ones listed above for which it
is permissible to commission an agent to conduct the contract on his behalf:27
Preemption, returns of defective merchandise, and division of proceeds.
Marriage, divorce, divorce at the instance of the wife in return for abandoning financial claims, reconciliation of blood revenge, and reconciliation
of a denial of debt in exchange for financial compensation.
Gift giving, charity-giving, simple lending and borrowing, depositing, pawning, and requests of gifts.
Partnership, silent partnership, and borrowing, provided that the agent
borrows on the principals behalf rather than his own (e.g. so-and-so
sent me to borrow $x). In the latter case the agent is in fact considered
a messenger rather than an agent.
Explicit mention of agency
It is essential in certain contracts that the agent makes the agency explicit:
In marriage, the agent must say: I accept the marriage on behalf of
my principal so-and-so, or I marry so-and-so who is my principal, etc.
Thus, if he does not specify the marrying party, or if he were to specify
himself as the contracting party, he would be marrying, not his principal.
25 Al-K
as
an
((H
. anaf), ibid.).
Rushd Al-H
alik), vol.3, p.109).
. afd ((M
.
. afd ((M
Al-Shirbn ((Sh
afic), vol.2, p.220 onwards), Ibn Qud
u-Ish.
aq Al
Shr
az ((Sh
am ((H
anaf
),
vol.6,
p.21
onwards).
.
26 Ibn
27 Al-K
as
an ((Hanaf),
649
In gift-giving, the agent must say: My principal gives this as a gift, and
the gift is not valid if he says I give this as a gift, since it is not his to
give.
In charity-giving, if the agent does not mention that the charity is given
on behalf of his principal, he would be considered the charity-giver.
In a contract where monetary compensation is paid for exoneration of a
murderer or exoneration of a denied debt, it is necessary for the agent
to say I accept this settlement on behalf of so-and-so..., otherwise the
settlement is not valid. This is in contrast to exoneration based on verbal
admission (iqr
ar), where either the principal or the agent may be named
in the contract.
In deposits, simple loans, pawning, partnerships, and silent partnerships,
the agent must explicitly refer to his principal as the contracting party.28
Agency in utilizing public properties
We have seen that the H
. anafs render impermissible commissioning an agent for
the utilization of public properties (e.g. watering, hunting, mining, etc.), and
consider that any output in such cases belongs to the acting agent rather than
the principal. We have also seen that the Maliks, H
afics
. anbals, and most Sh
ruled that such utilization is yet another permissible means of establishing ownership, and thus render agency for such acts permissible.
Legal agency of an attorney
We have seen from the story of c Als commissioning of c Aql as a legal representative (advocate) in the courts of Ab
u Bakr and c Umar and the commissioning
c
c
of Abdullah ibn Ja far in the court of c Uthman that the commissioning of
attorneys as legal agents is permissible.29 Moreover, jurists argued that there

is clear need for hiring such legal representatives, since many individuals are
either incapable of defending themselves, or hate to be a direct party to the
legal dispute.30
Agency in trading
We have seen that jurists agree that agency is permitted in trading, since the
principal is permitted to trade on his own behalf, and thus may commission
an agent to trade on his behalf. However, jurists qualified this permission by
requiring the agency to be devoid of excessive ignorance (jah
alah) in restricted
trading agencies. In order to understand this condition, we discuss jurists
28 Al-Jaz
ir
(1986, vol.3, p.233).

tradition is narrated in Al-Bayhaqs Sunan (vol.6, p.81).
30 Al-Hid
ayah (vol.2, p.136), Mukhtas.ar Khall (p.216), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic),

amah (, vol.5, p.81).
29 The
650
opinions according to the H

. anaf distinction between unrestricted and restricted
trading agencies:
In unrestricted trading agencies, the principal authorizes the agent to
buy a general item without specifying characteristics or price, etc. For
instance, the principal in this case may simply say to the agent: Buy
me any dress you deem appropriate. In this case, since the principal
gave the agent full discretion, the H
. anafs ruled that no level of ignorance
would invalidate the agency. This ruling is based on analogy to silent
partnerships.
The Maliks agreed with the H
. anaf permission of unrestricted agencies in
trading as well as other financial dealings, marriage, divorces, etc. Thus,
they permit the principal to commission an agent for all dealings except
the ones he explicitly excludes from the agency.
On the other hand, the Shafics and H
. anbals rendered unrestricted agen
cies impermissible. Their ruling is based on the view that such agencies
contain significant gharar that is unnecessary.
In restricted agencies, the principal does not give explicit full discretion to
the agent. For instance, the principal may say to the agent: Buy a house
for me. For such agencies, the legal effect of ignorance may be inferred
based on reasoning by analogy (qiy
as), or through juristic approbation
(istih.s
an):
The ruling by analogy dictates that such agencies are invalidated by
ignorance, no matter how minor or major. Thus, the principal must
specify the genus, type, characteristics, and price of the object to be
bought by the agent. The ruling thus follows from the fact that minor
ignorance invalidates regular trading, and hence invalidates trading
agencies as well.
The ruling by juristic approbation is that minor ignorance does not
invalidate such agencies, while major ignorance does. This juristic
approbation is based on the tradition that the Prophet (pbuh) gave
a Dinar to H
. akm ibn H
. uzam to buy a sacrificial animal. Had minor ignorance been sufficient grounds for invalidating agencies, the
Prophet (pbuh) would not have given him such instructions without
specifying the animals characteristics and the exact price to pay.
More generally, agency is based on giving the agent a certain amount
of permitted discretion. Thus minor ignorance does not lead to disputes, and hence does not invalidate the agency contract.
In this regard, when ruling according to juristic approbation, we need to
provide demarcation criteria to distinguish between minor and major ignorance,
and to give examples for each:
The ignorance is considered minor if the agency contract specified the
object to be purchased with a name that limits it to a single relatively
651
homogeneous type, and either the price or the characteristics were mentioned. Thus, naming the objects characteristics or price by itself is not
sufficient, and the type must be named either explicitly, or implicitly if
there is little variation among objects described by the given name.
For instance, if the principal tells the agent: buy me English wool the
agency would be valid, since the characteristics of the wool were specified.
Alternatively, if he said: buy me $100-per-yard-wool, the agency would
be valid since the price was specified.
Jurists also rendered the agency valid if the principal said: buy me a
donkey or buy me a horse, without specifying either the price or the
characteristics. In this case, jurists ruled that variation within the named
type is small, and that the type is implicitly known by the status of the
principal. However, jurists rendered the agency invalid if the principal
said: buy me a sheep or buy me a cow, since the characteristics of the
named sheep or cow cannot be inferred from the status of the principal.
Hence, they require naming either the characteristics or the price in the
latter case.
On the other hand, the ignorance is considered major if the genus of the
object of purchase is not known. Thus, the H
. anafs forgive certain types in
trading agencies that they do not forgive in sales. Their demarcation in the
case of trading agency is determined by the level of excessive ignorance,
which renders the sale invalid for most of their jurists, and that which
renders the sale non-binding for a few others.31
An examples of excessive ignorance that invalidate a trading agency is the
case where the principal says to the agent: buy me a dress, buy me
an animal, or buy me a house, etc. In such cases, the named object
of purchase (animal, house, etc.) can apply to many different things of
different genera (e.g. cotton dress, silk dress, etc.). Thus, it is necessary
for the agency to be valid that the principal specifies the genus and type of
the object of purchase, e.g. buy me a cotton dress made in Damascus,
buy me wheat for $x, or buy me so many pounds of wheat, etc.32
31 Al-Gharar
wa Atharuhu f Al-c Uq
ud by Dr. Al-D
. arr (p.559).
edition (H
as
an ((H
. anaf), vol.6, p.23),
c
n ((H
Ibn Al-Hum
am ((H
. anaf), vol.4, p.420; vol.7,
p.365).
32 Al-Sarakh
s (1st
Chapter 54
Legal Status
A valid agency contract has consequences for the legal status of the agents
actions, his legal rights in trading, and whether what he holds as part of the
agency is considered a trust or a guaranty.
54.1
Agent s actions
The agency contract establishes the agents right to take the actions specified in
the contract. In what follows, we shall consider the types of actions that agents
can and cannot take in the most common types of agency contracts.
54.1.1
Attorneys
Attorneys are legal agents who represent the principal in courts of law and other
legal proceedings. Such agents are eligible for four types of actions:
Admission of legal rights
The majority of H
. anaf jurists agree that a legal representative is eligible to
make admissions of rights and responsibilities short of those admissions that
would result in the necessity of exacting a legal punishment or physical revenge
(qis.a
.s). In this regard, a legal agent is hired to answer the charges against his
principal, and such answers may require denials or positive admissions.1 Ab
u
H
. anfa and Muh.ammad restricted the attorneys eligibility for admissions of
rights and obligations in courts of law, while Ab
u Y
usuf asserted his eligibility
in courts of law as well as elsewhere.
Zufar, M
alik, Al-Shafic, and Ah.mad ruled that the attorney in an unre
stricted legal agency is not eligible to make admissions on behalf of his principal. This ruling is based on the view that the attorney is hired to represent
1 Al-K
as
an ((H
am ((H
s (1st
c
c
n ((H
an
edition (H
Al-Mayd
an ((H
. anaf), vol.2, p.151).
653
654
the principal in a dispute, while admissions are a means to ending disputes

and reaching friendly resolutions. Thus, the attorney does not have the right
to admit the rights of his principals adversaries, in analogy to his inability to
exonerate adversaries of their obligations. This is in contrast to denials of the
claims of the adversary, which are means to resolve the dispute legally in favor
of his principal.2
The Maliks allowed an exception to this general ruling in cases where an
agent with power of attorney is given the right to make admissions in the agency
contract. They also considered the attorney eligible to make admissions if the
principals adversary stipulated that eligibility as a condition for agreeing to
dispute the matter with his attorney.
The general difference in opinion between the H
. anafs and the other jurists
rests on their differing opinions regarding the general rule that general rulings
imply all their specific instances. Thus, the H
. anafs ruled that the superset
of rulings clearly implies its subsets, and thus the unrestricted legal agent is
necessarily eligible for admissions. On the other hand, the non-H
. anafs ruled
that the general statement of unrestricted agency does not necessarily imply
eligibility for admission, unless the latter is mentioned explicitly. Thus, not
only do the non-H
. anafs ruled that an unrestricted agent is not eligible to make
admissions, they also ruled that there are implicit restrictions on such agents.
Thus, they ruled that an unrestricted trading agent is not allowed to trade
at unreasonable prices that deviate significantly from market levels, or to trade
with deferment, etc. In fact, they argued that the agent is implicitly restricted to
trading at market prices, since convention dictates that this is what is expected
of a trading agent.3
In addition, the H
. anafs who permitted unrestricted legal agents to make
legal admissions on behalf of his principal also differed among themselves over
the types of admissions that they may make:
Ab
uH
. anfa and Muh.ammad ruled that agent admissions are only valid
in a court of law, and only if the admission does not lead to the establishment of a legal punishment or legal revenge against the principal. The
first restriction to courts of law is based on the fact that the agent is commissioned to represent the principal in legal disputes, and the latter only
take place formally in a court of law. As proof of this claim, they noted
that the agent and his principal are not obliged to answer legal questions
except in such courts of law, which are thus the only formal venue for
resolving and judging legal disputes.
Ab
u Y
usuf ruled that the legal agent is permitted to make admission on
behalf of his principal in courts of law and elsewhere. His proof is the
fact that the principal himself can make such admissions in courts of law
and elsewhere. Thus, the agent can make the same admissions that the
2 Ibn Rushd Al-Haf
u. d ((M
Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.91).
3 Takhr
j Al-Fur
uc c al
a Al-Us.u
l (p.100).
54.1. AGENT S ACTIONS
655
principal can make, and he can make them at all the venues that the
principal can make them.4
Finally, there are circumstances where all the jurists agree that the legal
agent is not permitted to make admissions on behalf of his principal:
The H
. anafs all agree that the agency contract explicitly mentions that
the agency is only for disputing, and excludes the right to admit rights of
the adversary or accept the credibility of his witnesses. In such cases, they
ruled that agent would be restricted to denying the rights of the adversary
and asserting the rights of his principal. On the other hand, if the agency
contract was concluded without any restrictions and the listed exceptions
were added thereafter, Ab
u Y
usuf ruled that the exceptions would apply,
while Muh.ammad ruled that the agency remains unrestricted.
All jurists agree that an admission of an obligation on a small child by his
father, legal guardian, or judge-commissioned arbiter is not allowed.
Collecting compensation
The majority of H
. anafs ruled that a legal agent in financial disputes is eligible
to collect the financial compensation that the judge rules for his principal. They
reasoned that when the principal empowered the legal agent to represent him in
the dispute, he automatically entrusted him to collect financial compensations,
since the latter is the natural end of legal disputes of a financial nature.
However, Zufar ruled that the agent is not eligible for collecting the financial compensation, since his agency is restricted to disputation to establish the
principals right. Eligibility for such disputation, he argued, does not imply
eligibility to collect financial compensations.5 In this regard, the author of AlHid
ayah said that the opinion of Zufar is the one most H
. anafs accepted in
later times. This ruling was based on the fact that agents are not trusted in
all respects, and thus one who is trusted in disputation may not be trusted in
financial receipt.6
The Shafics and H
. anbals also ruled that a legal agent is not eligible to
collect financial compensations, since he is neither permitted to take receipt of

such compensation explicitly, nor is it customary for legal agents to take receipt
of financial compensations. They based this ruling on the fact that empowering
the legal agent to establish the principals legal rights does not imply that the
principal accepts entrusting him with his compensation.7
Friendly settlements and exoneration
The H
afics ruled that a legal agent in legal disputation is not eligi. anafs and Sh
ble to reach friendly settlements, or to exonerate the adversary, on his principals

4 Al-K
as
an
((H
am ((H
. anaf), ibid.), Ibn Al-Hum
((H
am ((H
. anaf), vol.6, p.96).
Al-Hum
am ((H
s (1st edition (H
. anaf), vol.19, p.19),
Majmac Al-D
an
at (p.261).
. am
7 Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.91).
5 Al-K
as
an
6 Ibn
656
behalf.8
Agents commissioning agents
The legal agent in a legal dispute is not permitted to commission a second agent
without his principals consent. In this regard, attorneys vary in their abilities,
and the principal accepted the first person as his agent, and he may not accept
the second.9
54.1.2
Debt demanding agents
Early H
. anaf scholars considered agents for demanding debts to be automatically
agents for its collection. However, later H
. anaf jurists argued that convention
dictates that debt-demanding agents are not eligible for actual collection of the
debts. In this regard, the H
. anaf school puts conventional practice ahead of early
opinions in their school.10 Moreover, the agent for demanding the payment of
debts are not permitted to commission a second agent, since agents vary in their
abilities, and the principal may not accept to have the second one demanding
his debtors for payment.
54.1.3
Debt collecting agents
The three major H

. anaf jurists differed in opinion regarding whether or not a
debt collecting agent is eligible to act as a legal agent if the debtor disputed the
debt:
Ab
uH
. anfa ruled that the debt collecting agent is eligible to act as the
principals agent in a legal dispute regarding the debt. Thus, if he is given
sufficient proof that the principal had received the debt or exonerated the
debtor, such a proof would resolve the legal dispute.
This ruling was based on the view that the debt-collecting agent is essentially an agent for exchanging the money he receives for the credit owed to
his principal. This view of debt collection as a commutative financial contract is necessitated by the fact that debts are paid by their equals. Hence,
debt-collection cannot be viewed as a return, and it must be considered
a financial exchange of money for credit. In such financial commutative
contracts, the agent is the contracting party, and he is responsible for all
dealings. For instance, in a sales contract, the trading agent is the contracting party, and he is responsible to ensure that what he buys is free of
defects, etc. Similarly, the debt-collecting agent is the contracting party
in debt-collection, and thus he is eligible to engage in legal disputes to
collect that debt.
8 Ibn c Abid
((H
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.351).
. anaf), vol.7, p.365), Ab
(1st edition (H
anaf), vol.19, p.12).
.
10 Al-K
as
an ((H
am ((H
s (1st
n ((H
an
edition (H
anaf
), vol.19, p.67 onwards), Ibn c Abid
.
Al-Mayd
an ((H
. anaf), vol.2, p.150).
9 Al-Sarakhs
657
Ab
u Y
usuf and Muh.ammad ruled that the debt-collecting agent is not eligible to act as an agent in legal disputes regarding the debt. In this regard,
they argued that debt-collection and legal disputes are two different acts.
Thus, one who is entrusted to represent the principal in collection may
not be trusted as a legal agent in disputes. It follows that the principal
in a debt-collection agency contract does not authorize the debt-collecting
agent to act as a legal agent in disputes.
We have seen in the previous subsection that all three jurists agreed that a
debt-demanding agent is authorized to collect the debt, since they argued
that this is the natural conclusion of a legal dispute. This, as we have seen,
is contrary to the opinion of Zufar and later H
. anafs, which stipulates that
the principal only agreed to commissioning the agent in the legal dispute,
but he may not trust him to collect and deliver the debt.
On the other hand, all H
. anafs agreed that an agent who is sent to collect a
specific non-fungible is more like a messenger than an agent. In this case, there
is no exchange involved, and hence the agent is only authorized to receive the
item, and may not act as the principals legal agent. Thus, if the person from
whom he tries to collect refuses (e.g. if he provides proof that he bought the
item from the principal), then the agent must wait for the principal to resolve
the matter.
They also agreed that an agent who is sent as a monitoring agent, to ensure
that the debtor pays his debt, is not authorized to collect the debt, or to engage
as an agent of the creditor in legal disputes.
Finally, all H
. anafs agree that an agent in a preemption contract or a return
of defective merchandise is eligible to engage the adversary as a legal agent of
his principal. In this regard, preemption is similar to new sales, and returns
are also a form of exchange that can be classified as a commutative financial
contract. Thus, an agent who is empowered to effect such an exchange is also
empowered by his principal to engage in legal disputes regarding the rights upon
which such an exchange is based.11
The Shafics and H
. anbals each had two opinions regarding the debt-collecting
agents eligibility for engaging in legal disputes:

Most of the H
afics, ruled that an agent in
. anbals, and a few of the Sh
a collection contract is eligible to engage in legal disputes, whether what

he is commissioned to collect is fungible or non-fungible. They based
this ruling on the fact that the agent cannot collect the principals right
without proving his entitlement, and thus convention dictates that he is
entitled to engage in legal proceedings to prove such entitlement.
Most of the Shafics and a few of the H
. anbals ruled that permission to
act as an agent in collecting debts does not imply a permission to engage

11 Al-Sarakhs
(1st edition (H
as
an ((H
. anaf), vol.19, p.17), Al-K
c
c
n ((H
an
Al-Hum
am ((H
. anaf), vol.6, pp.99-102), Ibn Abid
Al-Mayd
an ((H
. anaf), vol.2, p.150).
658

in legal disputes. Thus, they ruled that the latter permission, if it is not
stated explicitly, cannot be inferred based on convention.
The two schools had similar splits of opinion regarding agents in preemption
and returns of defective merchandise.12
Commissioning an agent
The general rule among H
. anaf jurists states that an agent is not permitted
to commission a second agent to perform the task given to him without the
principals permission. The reasoning behind this rule is that the principals
acceptance of the first agents opinions, abilities, and trustworthiness does not
necessarily translate to accepting the same attributes of the second agent. However, the application of this general rule varied depending on the nature of the
agency contract:
If the agency contract was completely unconstrained, for example if the
principal told the agent to do whatever he sees fit, then the agent may
commission a second agent for debt-collection.
However, if the principal did not explicitly give the agent full discretion
to do as he sees fit, he is not entitled to commission a second agent for
debt-collection. In this case, if the first agent does in fact commission a
second agent, and the second agent does collect the debt, the debtor is
not exonerated from the debt. In this regard, the second agent is not an
agent of the principal creditor, and hence his receipt does not constitute
repayment of the debt. However, once the second agent gives whatever
he received to the first agent, the debt would be considered repaid to the
creditors legitimate agent, and hence the debtor would then be exonerated
of the debt.
On the other hand, if the received property perishes in the second agents
possession, prior to delivery to the first agent, the second agent must
guarantee the property to the debtor. The second agent may then demand
compensation from the first agent, since the latter deceived him into an
invalid agency contract, and thus must take responsibility for the formers
guaranty. In the meantime, the debtor is not exonerated of the debt, and
the creditor may still demand and receive repayment of the debt.13
The Maliks ruled generally that an agent is not permitted to commission a
second agent to perform the task commissioned to him. As an exception, they
allowed an agent to commission a second one if the task commissioned to him
is not appropriate given his status (e.g. if he is a nobleman and the task is
menial).14 Along somewhat similar lines, the Shafics and H
. anbals ruled that
12 Ab
u-Ish
aq
Al-Shr
az ((Sh
((H
anaf
),
vol.6,
p.25), Ibn Al-Hum
am ((H
.
14 Al-Dard
r ((M
.
13 Al-K
as
an
659
an agent may not commission a second agent to perform his task, unless he is
incapable of performing that task.15
Receiving compensation for debts
An agent for collecting a fungible debt is not permitted to collect a non-fungible
item in lieu of the debt. Such receipt would constitute a financial exchange,
which he was not authorized to conduct as part of debt collection.16
Multiple debt collectors
If a principal commissions two agents to collect a debt, neither one of them
is entitled to collect it on his own. In this case, the principal only expressed
trust in both of them combined, and not in either of them by himself. Thus, if
one of them were to collect the debt on his own, the debtor is not exonerated
of the debt until both agents are simultaneously in possession of what one of
them received, or until the debt is repaid to the principal. Once either of the
latter two conditions is satisfied, the legal status of the debt is equivalent to
simultaneous receipt by both agents.17
Collecting defective goods
If a debt collecting agent collects the debt and finds that the paid goods were
defective, then he may return whatever part the principal could have returned,
and receive its non-defective replacement. In this regard, the agent takes the
principals place in all his rights pertaining to receiving the debt in acceptable
condition.18
Unauthorized agency
If a person claims that he is the agent of an absent creditor and demands
payment of the debt, then if the debtor believes him, he must pay him the
debt he owes the principal. In this regard, believing the claimant of agency
is equivalent to admission that he must pay him what he owes, and thus he
must in fact make that payment. In this case, if the claimed principal confirms
the presumed agents claim, then there is no problem. However, if the claimed
principal denies that the debt collector was his agent, we must consider three
cases:
1. If the debtor had believed the presumed agent and paid him the debt,
he must re-pay it to the creditor. In this regard, the principals denial
of agency means that the debtor is not exonerated of the debt. In this
case, the creditors claim is accepted if he supports it with an oath, since
15 Al-Khat
b
Al-Shirbn ((Sh
amah (, vol.5, p.88).
((H
. anaf), ibid., p.26).
17 Ibn Al-Hum
am ((H
. anaf), ibid., p.86 onwards).
18 Al-K
as
an ((H
. anaf), ibid.).
.
16 Al-K
as
an
660

the default is non-payment, the debtor is claiming having paid it, and
the creditor is denying that claim. We have previously seen that the
general rule in such circumstances is the acceptance of a deniers claim if
he supports it with his oath.
The debtor must thus re-pay the debt a second time to the creditor, and
then demand repayment from the one who claimed agency. The latter
demand is supported since he only paid him the money to be exonerated
of his debt, and that effect was never realized. Thus, the debtor may
negate the claimed agents receipt and demand repayment of what he
gave him. However, if the first repayment was lost in the possession of
the one who claimed agency, the debtor may not demand repayment of
its equivalent from him. This follows from the fact that by believing his
claim of agency, the debtor admitted his right to receive the money, and
hence he is not responsible to guarantee what he received. In this regard,
even though the debtor was wronged by having to repay his debt twice,
that wrong cannot be righted by wronging another.
This ruling is different from the case where one who claims to be an agent
demands to collect the deposit of a presumed absent principal. In this
case, the depositary is not required to deliver the deposit to the claimed
agent, even if he believes him. In this case, believing the agent is tantamount to admitting a third partys ownership (the depositor). In contrast,
ownership of a debt is established for the party of the contract, and thus
admitting agency in debt collection establishes ownership for the debtcollector, and the debtor must pay.
2. If the debtor believed the claimant of agency, he can pay the debt to
him, but also establish an agent-guaranty, by saying: You must guarantee whatever I give you against claims of the creditor; thus whatever
the creditor later takes from me, I can take back from you. In this case,
the debtor establishes a separate contract with the one claiming agency,
whereby anything later taken by the creditor is considered usurped from
the vantage point of their side contract. In this regard, the debtors condition is tantamount to the one claiming agency volunteering guaranty of
any further receipt from the creditor. Of course, the latter guaranty is a
valid one, since all guaranties of future obligations are permissible.
3. If the debtor did not believe the claimant of agency, but still paid him the
debt, then if the creditor later demands repayment of the debt, the debtor
may demand compensation from the claimed agent. In this case, by not
believing the claimed agent, the latter has the status of a usurper, and the
debtor may demand that he returns what he usurped. Even if the debtor
was not sure whether or not he believed the claimed agent, paying him
would be driven by hope that the creditor would accept his agency. If the
creditor later refuses to accept that agency, that hope would be void, and
the debtor may still demand repayment from the claimed agent, since he
661
gained nothing by paying him.19
54.1.4
Selling agent
If the selling agent is restricted in his authorized actions, then he is bound by

whatever restrictions the principal stipulates in the contract. If the agent does
not abide by those stipulated restrictions, the principal is not responsible for
his actions, unless the deviation from stipulated restrictions was beneficial to
him. Otherwise, if the agent violates some restrictions and the violation does
not benefit the principal, the sale would not be executable unless the principal
approves of the agents action. Thus, if the principal ordered the agent to
sell an item for $1,000, and he sold it for more than that, the sale is considered
executed, but if he sold it for less, the sale is not executed. Many other instances
may be enumerated, interpreting various aspects of the sale as beneficial to the
principal or otherwise:
If the principal orders the agent to sell with a deferred price, and he sells
with an equal cash price, the sale is executed. However, if he asked him
to sell it with a cash price, and he sold it with a deferred price, the sale is
suspended pending the principals approval.
The Shafics and H
. anbals ruled that if the principal specified a particular
place in which the agent should sell, based on knowledge that the price
in that place is higher, then the agent is not permitted to sell the item
elsewhere. The H
. anafs also made the same ruling provided that the principals language clearly denied the agents right to sell elsewhere, e.g. do
not sell the item any place other than A.
If the principal specifies a time period in which to sell the item, the agent
must sell it then, since the timing of a sale may result in certain benefits.
If the principal specifies a buyer to whom the agent must sell the item, he
is not allowed to sell it to another, since the principal may prefer selling
to that particular person.
If the principal orders the agent to sell a certain amount of the good
(e.g. 100 units), he is not allowed to sell less than that, since that would
constitute a violation of the principals command.
On the other hand, if the agent was unrestricted in his selling, Ab
uH
. anfa
ruled that he may thus trade at any price, even if it deviates significantly from
market levels. They also permit him to trade with a non-fungible price, or a
deferred price, etc. His ruling is based on the view that unconstrained agency
means just that: that the agent is allowed to sell in any way he deems fit, and
conventional behavior is not considered in this case. In this regard, he argued
that conventions vary dramatically, and trading away from market prices may
19 Ibn Al-Hum
am ((H
as
an ((H
. anaf), vol.6, p.26),
Majmac Al-D
an
an ((H
anaf), vol.2, p.152).
. am
.
662
be strategically beneficial in seeking profits. Thus, he argued that unstable

conventions may not be used to add artificial restrictions to an unrestricted
contract.
However, the majority of later H
. anafs, including Al-T.ah.aw accepted the
opinion of Ab
u Y
usuf and Muh.ammad that the unrestricted selling agent is
in fact subject to a number of implicit restrictions. Thus, they ruled that he
may only sell for a price that is legal tender, and close to market values. AlT.ah.aw quoted Muh.ammads criterion for closeness to market value in Al-J
amic
Al-S.aghr as any price within 5% of the going market price. This ruling is based
on the view that unrestricted selling agencies are in fact bound by what is
conventionally expected of selling agents. Thus, their view is that unrestricted
trading agencies more generally are in fact implicitly governed by conventional
behavior, in analogy to buyin agents.20
A better measure of significant deviation from market prices was narrated to
be reported by Muh.ammad in Al-Naw
adir. His view was that any deviation that
falls within the appraisal range is minor, otherwise, it is considered significant
injustice (ghabn f
ah.ish).21 In legal circles, Majallat Al-Ah.k
am Al-c Adliyyah
ruled that
(item #165)
excessive injustice is determined in terms of deviations
from market prices that equal or exceed: 5% for mobile goods, 10% for animals
and livestock, and 20% for immobile real estate.
The non-H
. anaf jurists also accepted the dominant H
. anaf ruling that the
selling agent may not sell at a price that is significantly lower than the going
market rates without his principals permission. They based this ruling on the
view that the agent should always seek to maximize the principals benefits and
minimize his losses. They also ruled based on convention to restrict the selling
agent to accepting prices in legal tender currencies, and if there are multiple
such currencies, to choose the one that is most widely accepted in practice.22
The same difference in opinion, between Ab
uH
. anfa on the one hand, and
the rest of the jurists on the other, also applies to implicit restrictions of selling
agents to selling with a cash price. Thus, Ab
uH
. anfa ruled that an unrestricted
selling agent can sell with a cash or deferred price, while the other jurists ruled
that convention dictates that he would be restricted to selling for a cash price.
In this respect, the majority argued that trading is normally conducted with a
cash price, and that credit sales are rare, and used only in times of economic
recession.23
20 Al-K
c
n ((H
as
an ((H
aw ((H
. anaf),
. ah.
. anaf), p.111), Ibn Abid
c Al-Dam
am ((H
anaf
),
vol.6,
p.70
onwards),
Majma
an
at (p.249),
.
.
Mukhtas.ar Khall (p.216 onwards), Al-Im
afic), vol.13, p.563),
Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.353 onwards), Al-K
af by Ibn Qud
amah (vol.2,
p.254), Al-Buh
ut (3rd printing (H
21 Ibn Al-Hum
c
n
am ((H
as
an ((H
. anaf), ibid., pp.76-7), Al-K
((H
anaf
),
vol.4,
p.425).
.
22 Al-Dard
r ((M
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.353 on
wards), Al-Khat.b Al-Shirbn ((Sh

afic), vol.2, p.223 onwards), Ibn Qud
amah (, vol.5, p.124),
Ibn Rushd Al-H

alik), vol.2, p.298), Qaw
ac id Al-Ah.k
am by Al-c Izz ibn c Abd Al. afd ((M
Sal
am (vol.2, p.107).
23 ibid.
663
As we shall see in the following subsection, this difference in opinion does

not exist in the case of purchasing agents. In that case, all jurists agreed that
the purchasing agent is implicitly restricted to buy at or near the going market
price. The reason Ab
uH
. anfa distinguished between the cases of buying and
selling agents is the fact that a purchasing agent may buy an item for himself,
and then if he does not like it or feels that the price was too high given its
quality, he may then claim that he bought it on behalf of his principal. This
possibility, he argued, is not present in the case of selling agents.24
Partial sale
If a selling agent sells part of what he was commissioned to sell, we consider two
cases:
1. If the merchandise is not affected adversely by division, for instance for
all fungibles measured by weight or volume, all H
. anaf jurists agree that
partial sales are permitted.
2. On the other hand, if the merchandise is harmed by division (e.g. if the
agent was commissioned to sell a book and sold half of it), then Ab
u
H
. anfa considers the sale permissible. His logic is that the agent was commissioned to sell the full merchandise at a given price, and if he manages
to sell part thereof for the same price, the principal would clearly benefit
by receiving the price and keeping part of his merchandise.
u Y
usuf, Muh.ammad, the Shafics and the H
. anbals
ruled that such a sale is only permitted if the principal gave his permission,
or if the agent managed also to sell the other part. They based this ruling
on the view that selling part of conventionally indivisible merchandise is
potentially harmful. Thus, the partial sale is not permitted to avoid such
u Y
usuf
harms. While the Shafics and H
. anbals accepted the logic of Ab
and Muh.ammad,25 the Maliks disallowed partial sales based on the view
that an unrestricted agent is always implicitly restricted by convention.26
In this regard, it is unconventional to sell parts of books or other indivisible
goods.
This division in opinion only pertains to partial sales of a selling agent. In
the case of a purchasing agent, all jurists agree that partial purchases at the full
price are not allowed. The reason Ab
uH
. anfas opinion is different in the cases
of selling and buying agents is the above-mentioned possibility for a buying
agent to buy on his own behalf and then make the purchase on behalf of the
principal if he finds it disadvantageous.
24 Al-K
c
as
an ((H
am ((H
n ((H
. anaf), ibid., p.75), Ibn Abid
. anaf),
vol.4, p.424), Al-Im
amah (, vol.5,
p.127).
25 Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.126)
26 Al-Dard
r ((M
664
Exonerating a buyer of the price

Ab
uH
. anfa ruled that a selling agent is eligible to exonerate the buyer of the
price, defer its receipt, take another compensation in lieu of the price, or transfer
liability for the price to a third party. In all such cases, he ruled that the selling
agent would guarantee the price for his principal. This ruling was based on
his view that receipt of the price is the agents right in the sales contract, and
thus all the above listed dealings are also permissible for him. However, he
must guarantee the price for the principal, since he dealt on his own behalf, but
caused the property of another (the principal) to perish through the sale, and
u Y
usuf and Muh.ammad
hence he must guarantee it.27 On the other hand, Ab
ruled that the selling agent is not allowed to do any of the above, since they
ruled that such dealings would constitute dealing in the property of the principal
without his permission.
Commissioning a second agent
Jurists agree that a restricted selling agent is not permitted to commission a
second agent to take his place without his principals permission. The logic of
this ruling, as we have seen, is the fact that agents vary in their abilities and
trustworthiness, and hence the principals choice of one agent does not imply
acceptance of another.28 However, they enumerated a few exceptions to this
general rule:
1. If the task (e.g. selling livestock in the market) is not appropriate for the
social status of the commissioned agent who is a nobleman.
2. If the commissioned tasks are numerous, and cannot all be accomplished
by the agent without help.
3. If the task (e.g. designing and building a bridge) requires specific skills
(e.g. engineering and physical) that are not possessed by the agent.
. anafs and Maliks permitted an unrestricted agent
to commission a second general in all circumstances.
Dubious dealings
A selling agent is not permitted to sell to himself, since that would raise suspicions. Moreover, since a selling agent is the official seller in the sales contract,
he cannot also be the buyer, lest there be only one party to the sales contract.
As we know, jurists have stipulated multiplicity of the contracting parties as a
condition of sales.
Ab
u H
. anfa also prevents a selling agent from selling below or at market
prices to his father, grandfather, son, and other relatives whose testimony would
27 Al-K
as
an
c
((H
an
at (p.245).
. am
c
((H
n ((H
alik)B,
amah (, vol.5, p.88
onwards).
28 Al-K
as
an
665
not be accepted to support him in a court of law (e.g. wife, grandson, etc.). He
reasoned that sales to such individuals are equivalent to sales to oneself, since the
family members often share in property utilization and financial benefit. Thus,
selling to such individuals at or below market prices would raise suspicion that
he favored them (and thus himself) at the expense of his principal. Indeed, this
suspicion of conflict of interests is the reason such individuals testimony would
not be accepted to defend him in a court of law.
u Y
usuf and Muh.ammad ruled that the selling agent
may sell to such close family members (excluding himself) at the market price.
In this regard, they argued that if he is not restricted with regards to buyers,
selling to family members or others should raise no suspicion. In this regard,
they argued that family members do not share ownership of properties, and
hence do not share in the benefits derived from such properties.29
The Maliks ruled that a selling agent may not sell what he was commissioned
to himself, or anyone for whom he serves as a legal guardian (be it his child, or
a mentally incompetent person whose dealings he administers). However, they
permitted selling such items to his wife or child of legal age, provided that he
does not sell to them below the market price. Moreover, one narration stated
that Imam Malik permitted a selling agent to sell to himself.30
Most of the Shafics and some of the H
. anbals (accepting one of the reported
opinions of Ah.mad) ruled that a selling agent may not sell to himself or his
underage child. However, they permitted such an agent to sell to his father,
grandfather, child of legal age, or other independent members of his family. For
the latter class of people, if he sells the goods at the same price he would sell
them to anyone else, there is no suspicion, in analogy to selling to a friend.31
Thus, we have seen that the H
. anafs categorically forbade a selling agent
from selling himself. On the other hand, the majority of other jurists permitted
such agent sales to himself if the principal approves them, and forbid them
otherwise. The Maliks also added two other conditions for the validity of agent
sales to himself: (1) the principal must be present during the sale session, and
he does not forbid it, (2) the price must be explicitly stated during that session.
We have also seen that Ab
u H
. anfa forbade selling agents from selling to
fathers and paternal grandfathers, wives, and sons and grandsons, while the
majority of jurists permitted sales to fathers and paternal grandfathers at the
market price. In my opinion, the opinion of Ab
uH
. anfa is more appropriate,
especially in our day and age, to avoid unnecessary suspicions.
In general, a selling agent has to meet the obligations with which the principal commissioned him. The principal, on his part, is obliged to bear all financial
losses that are not caused by the agents negligence or transgression. If the agent
meets his obligations, the principal is also required to pay any wages that are
29 Al-K
c
n
as
an ((H
am ((H
c
((H
an
at (p.261).
. am
30 Al-Dard
r ((M
alik)A, vol.3, p.387 onwards), Ibn Qud
amah (, vol.5, p.107), Al-Kharsh

31 Al-Khat
c
b
Al-Sh
irb
n
((Sh
a
fi
),
vol.2,
p.224
onwards),
Ibn
Qud
a
mah
(,
vol.5,
p.107
.
onwards).
666
stipulated in the agency contract.
54.1.5
Buying agent
We have already discussed in previous sections the effect of ignorance (jah

ala)
on general and specific buying agencies. In what follows, I shall discuss the
dealings of a buying agent in restricted and unrestricted agencies.32
Restricted buying agency
In restricted buying agencies, the agent must try to abide by the stipulated
restrictions as much as possible, whether those restrictions pertain to the merchandise or the price. If the agent does not abide by the contracts restrictions,
the principal is not bound by his dealings, unless the deviation from stipulated
restrictions benefited him. In what follows, we discuss a few specific circumstances to illustrate how the bindingness of the agents dealings is determined:
Merchandise restriction: If the principal commissioned the agent to buy a
U.S.-manufactured refrigerator, but the agent bought one that was manufactured elsewhere, the agent is bound by the sale, but the principal is
not. Thus, the restriction of the country of manufacture is considered a
beneficial restriction, and it must be observed.
Price restriction: If the principal commissioned the agent to buy a refrigerator for $300, but the agent bought one for more than the specified
price, the agent is bound by the sale, but the principal is not. Thus, by
deviating from the principals condition, the agent is considered to have
bought the refrigerator for himself.
On the other hand, if he bought a refrigerator that normally sells for $300,
and paid $200 for it, the principal is bound by the sale since the deviation
was beneficial.
If the principal commissioned the agent to buy a certain quantity of merchandise, but the agent only bought a portion thereof, then the ruling
depends on whether or not the merchandise is divisible. If the merchandise is not divisible (e.g. a car), then the principal is not bound by the
partial purchase. However, if the merchandise is divisible (e.g. a lot of
land), the H
afics, and H
. anbals ruled that the partial purchase
. anafs, Sh
would be binding on the principal.

If the principal commissioned the agent to buy for a deferred price (or
in installments), and he bought with a cash price, the purchase would be
binding on the agent.
32 Al-K
as
an ((H
am ((H
Al-T
aw ((H
s (1st edition (H
. ah.
. anaf), p.110 onwards), Al-Sarakh
c
c Abid
n ((H
an
at (p.249).
. am
667
On the other hand, if the principal commissioned the agent to buy for a
cash price, and he bought for a deferred price, the sale is binding on the
principal. In this case, even though the agent violated the letter of the
contract, he is abiding by its purpose.
If the principal commissions the agent to buy with an option clause, and
he buys without one, the sale would be binding on the agent.
If the principal commissions the agent to buy a specific object, and he buys
another, the H
. anafs ruled that the principal is given an option whether
to accept the purchased object or return it. The other jurists ruled in this
case that the sale is binding on the agent.
In general, the H
. anafs ruled that a buying agents violation of agency restrictions would render the agent as the buyer. However, if the violation benefits
the principal, all jurists agree that the principal would be bound by the sale.
This is in contrast to the case of a selling agent, where violation of agency restrictions would render the sale suspended pending the principals approval. As
we have seen, the difference between the two cases is the suspicion associated
with the buying agents ability to exploit the agency to his advantage. Thus,
jurists ruled that violations of agency restrictions render the sale binding on the
buying agent to avert the suspicion.33
As a consequence of those rules, if a buying agent is commissioned to buy
one sheep for one Dinar, and he buys two sheep for that Din
ar, the H
. anafs ruled
that the sale is binding on the principal, since the restriction violation was to
his benefit. The Maliks also ruled in this case that the principal is bound by
that sale without any options. On the other hand, the Shafics and H
. anbals
only consider the sale binding on the principal if at least one of the sheep was
worth the one Dinar at market prices, in accordance with the story of c Urwah
Al-Bariqs buying agency on behalf of the Prophet (pbuh).34
Unrestricted buying agency
In unrestricted buying agencies, the agents actions are only restricted by proven
conventions, which are treated as implicit restrictions. Thus, if the principal
commissioned an agent to buy a donkey for a specified price, and the agent
bought a single-eyed one for that price, Ab
u H
. anfa renders the sale binding
on the principal, since he met the explicitly specified restrictions. On the other
hand, Ab
u Y
usuf and Muh.ammad ruled that donkeys are conventionally bought
for transportation, and if the defect prevents the purchased animal from being
used thus, the sale should not be binding on the principal. Thus, the latter two
jurists argue that convention adds an implicit restriction that the purchased
animal be free of defects that prevent it from performing customary tasks.
33 Al-Sarakhs
(1st edition (H
. anaf), vol.19, p.117).
((H
tasar Khall (p,217), Al-Kharsh (1317H, 1st
. anaf), vol.7, p.311), Mukh
and 2nd editions (M

u-Ish.
aq Al-Shr
az ((Sh
Im
amah (, vol.5, p.128).
34 Ibn c Abid
n
668
Also, if the principal commissions the agent to buy a specified object, but
does not name a price, H
. anaf jurists agree that the sale is binding on the
principal if the agent buys near or below the market price. However, if the
agent buys the specified object at a substantially higher price than the going
market prices of similar objects, the sale is binding on the agent, and not on the
principal.35 In this regard, minor injustice is tolerated to make agency feasible,
but excessive injustice (i.e. excessively high prices) can easily be avoided, and
agent purchases at such prices should not be made binding on the principal.
We have previously seen that the H
. anaf demarcation between excessively and
moderately high prices is determined by the range of prices assessors of the
object may specify.
The H
. anafs also ruled that to avoid potential disagreements, the principal should state the genus and characteristics, or the genus and price, of the
merchandise that should be bought. Otherwise, if the principal commissions
the agent in an unrestricted fashion (e.g. buy me whatever you deem appropriate, there would be differences of opinion. In the latter case, Ab
uH
. anfa
ruled that any purchase would be binding on the principal, while Ab
u Y
usuf
and Muh.ammad ruled that the agent would be implicitly restricted by convention. It is thus better to make commissions sufficiently restricted to avoid such
differences in opinion.36
. anbals ruled that the buying agent in an unre
stricted agency is bound to buy at or near market prices, and he may not buy
at substantially higher prices unless he obtains the principals permission. This
ruling is based on the view that the agent is forbidden from causing financial
harm to the principal, and buying at substantially higher prices violates such
positive consideration of the principals benefits.37 Similarly, the buying agent
should not knowingly buy defective merchandise, since he was not commissioned
to buy such defective goods, and the principal may not be able to return the
merchandise based on the defect.
Jurists also ruled that if a principal commissioned a buying agent to buy
a specific item on his behalf, the agent may not then buy it for himself. In
this case, if the agent does indeed buy the item for himself, it will be legally
considered a purchase on behalf of the principal. This ruling follows since the
agents purchase of the item for himself would require relieving himself from
the agency contract. Such relief of agency can only be effected in the presence
of the principal, and hence the sale would still be considered effective for the
principal. On the other hand, if an agent is commissioned to buy an item that
is not individually specified, then he may buy such an item for himself, unless
he purchases it with the intention that it is for the principal.
35 We have seen previously that all Hanaf
jurists agree that excessive injustice in buying is
.
not binding on the buyer, but that jurists differed in the case of selling agents. In the latter
case, Ab
u H
. anfa ruled that an excessively unjust sale is binding on the principal, while
Ab
u Y
usuf and Muh.ammad ruled that convention would apply in this case to render the sale
non-binding on the principal.
36c Abd Al-Ghan
Al-Mayd
an ((H
. anaf), vol.3, pp.142,147).
37 Ibn Rushd
Al-H
afd ((M
u.
Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.124).
669
The H
afics, and H
. anafs, Sh
. anbals, as well as most Maliks, agree that a
buying agent is not permitted to buy from himself, in similarity to the selling
agents prohibition of selling to himself. The H
afics based this
. anafs and Sh
ruling on their view that the buyer rights of the sale contract pertain to the
buying agent, and hence he cannot be simultaneously the buyer and the seller.
Jurists also forbade a buying agent to buy from himself in order to avoid the
suspicion that he may be benefiting at the expense of the principal. An exception to this general rule was reported, whereby Imam Malik was narrated to
have permitted a buying agent to buy from himself at a price that benefits the
principal.38
Ab
u H
. anfa forbade a buying agent to buy from his father, grandfather,
child, step-child, or anyone else whose testimony on the agents behalf would not
be accepted in a court of law. On the other hand, Ab
u Y
usuf and Muh.ammad
ruled that such purchases are permitted provided that the purchase price is near
or below the market price of similar items. Rulings of other schools regarding
buying from near relatives have been discussed in previous sections. For instance, the Maliks permit a buying agent to buy from his wife and child of
legal age or sell to them, as long as he does not favor them with unreasonable
prices.
The language used in an agency contract is commonly interpreted based on
conventional usage in the relevant time and place. In the remainder of this
section, we shall discuss some specific juristic rulings on the wording of buying
agency contracts and their implications:
If an agent is commissioned to buy food, this is conventionally understood to mean wheat and wheat flour.
If an agent is commissioned to buy meat, this is conventionally understood to refer to the type of meat most commonly bought at the market
(e.g. lamb, beef, etc.). Moreover, the wording implies the purchase of
raw meat rather than cooked or roasted meat, unless the principal and
agent were traveling. Also, the unqualified term meat would not be
understood to mean bird meat, wild animal meat, fish, live animals, or
un-skinned meat. The unqualified term would also exclude animal organs
such as lungs, liver, etc., since convention dictates that such organs are
not called meat.
Convention also dictates that if an agent is commissioned to buy fish,
the term refers to large fresh fish, rather than small or salted fish.
If an agent is commissioned to buy a head it is understood to mean an
uncooked head of sheep, rather than a cooked sheep head or the head of
cows or other eaten animals.
If an agent is commissioned to buy fruits, the term would refer to any
fruits that are commonly sold in the market. If he is commissioned to buy
38 Ibn Rushd Al-Haf
alik), ibid.), Ibn Qud
amah (, vol.5, p.107 onwards), Al. d ((M
Shac ar
an ((Sh
670

eggs, that is understood to mean chicken eggs. If he is commissioned
to buy milk, the term is understood to mean the milk that is most
commonly sold in the market (e.g. cow milk, goat milk, etc.).
The agent-principal relationship

If a buying agent uses his own money in the purchase and receives the merchandise, without an explicit permission from the principal, he may still demand
reimbursement of the price from the principal. In this case, the permission to
buy the specified goods using the agents own money is implicit in the agency
contract. This follows from our later discussion, which shows that the contract
rights pertain to the contracting parties, and since the principal is aware of
the price at which the goods are purchased, he implicitly approved the agents
purchase at that price.
In this case, the buying agent is permitted to withhold the merchandise until
he receives reimbursement of the price from the principal, even if he had not
yet paid the price to the seller. In this regard, the agents relationship to the
principal is that of the seller, who may demand full payment of the price before
he delivers the merchandise.
If the goods were to perish in the agents possession prior to withholding
them from the principal, then they are considered to perish in the principals
property. In this case, the principal is still obligated to pay the price, since the
agents possession is equivalent to his own.
On the other hand, if the goods were to perish in the agents possession
after he withheld them from the principal to collect the price, Ab
u Y
usuf ruled
that the agent must thus guarantee the goods in analogy to the pawn-brokers
guarantee of pawned property in his possession. Thus, he ruled that the agent
in this case owes the principal the lesser of the goods value and the price
paid. Zufar considers the agents guarantee in this case to be analogous to the
guarantee of a usurper, and thus requires that the agent owes the principal
equivalent goods or their value, no matter how high. Finally, Ab
uH
. anfa and
Muh.ammad consider the agents guarantee in this case to be analogous to the
guarantee of a seller for the withheld sold merchandise. Thus, they ruled that
the price, whatever it may be, is dropped, and the principal no longer owes it
to the agent.39
54.2
Contract rights, and status
Contract rights are those actions that must take place for the purpose of the
contract to be satisfied. For instance, the rights of a sale contract include
delivery of the merchandise, receipt of the price, return of defective merchandise
39c Abd
Al-Ghan Al-Mayd
an ((H
ayah (vol.3, p.140), Ibn
. anaf), vol.2, p.143), Al-Hid
((H
shiyat Al-Dus
uq (vol.3, p.381), Ab
u-Ish.
aq Al-Shr
az
. anaf), vol.7, p.304), H
.a
((Sh
ut (3rd printing (H
anbal), vol.3, pp.460,467).
.
c Abid
54.2. CONTRACT RIGHTS, AND STATUS
671
or based on inspection or condition options, and guarantee or returning the price

if the merchandise is proven to belong to a third party.
In agency contracts, jurists agree that the contract rights pertain to the
principal if the agent identifies him as the contracting party in contracts that
require offer and acceptance (e.g. sales). On the other hand, the non-H
. anbal
jurists ruled that if the agent names himself as the contracting party in trading,
then all contract rights pertain to him. Thus, they ruled that the agent would
be the party responsible for receipt or delivery of the price or merchandise, and
legal disputes required to return defective merchandise, etc. However, as we
shall see below, the H
. anbals ruled that the contract rights still pertain to the
principal, even if the agent names himself as the buyer or seller.
The H
. anafs classified contract rights in agencies into three categories: (1)
those where the only rights are those with which the agent was commissioned,
as in debt-demanding agencies, and agencies to follow someone40 until he pays
his debts; (2) contracts whose rights pertain to the agent; and (3) contracts
whose rights pertain to the principal.
54.2.1
Unidentified principal
H
. anafs stipulated a general rule for contracts in which the agent does not need
to name the principal. In all such contracts, e.g. sales, leases, settlement based
on admission, etc., the contract rights pertain to the agent, unless the agent
explicitly names the principal in the contract. Thus, provided that the agent is
eligible for the relevant legal rights, i.e. if he is not a young child, etc., and if
he is not a judge or a judges agent to act on behalf of the principal, the agent
would be responsible for all the contract rights. Such rights include delivering
sold items, receiving prices, demanding prices for sold items, entering into legal
disputes to return defective merchandise, guarantee the prices of sold items that
belonged to a third party, etc.
In the general case, the agent is responsible for all such rights, and he therefore has the right to commission a second agent to administer the contract
rights. In this case the original principal has no right to administer any of those
affairs as long as the first agent continues to act in his agency capacity. Thus,
if the principal were to demand delivery of the price from the ultimate buyer,
the buyer may refuse to pay it to him, since he conducted the sales contract
with the agent, and the principal is thus alien to that contract. However, if the
buyer were in fact to pay the price to the principal, that would be acceptable.
In the latter case, the agent should not demand the price payment from him
any longer, since he would have to return whatever he thus collects from him
after the price was paid to the principal.
54.2.2
Identified principals
H
. anafs also stipulated a general rule for contracts in which the agent needs
to name the principal. Examples of such contracts include marriage, divorce,
40 Usually
an annoying person that the debtor would like to be rid of.
672
divorce at the instance of the wife, financial compensation for murder and other
financial settlements, etc. In such contracts, all the contract rights pertain to the
named principal, and the agent is considered to be merely a messenger. Thus,
dowry must be demanded from the principal, and the agent cannot be demanded
to pay it unless he explicitly guaranteed it in the contract. Similarly, a womans
agent in marriage is neither entitled to receive the dowry, nor responsible to
take her to her husband. In all other named contracts, the named principals
have the rights and obligations to demand or pay compensations, respectively,
and the agents have none of those rights or obligations.
54.2.3
Property receipt agents
For contracts that are concluded through receipt, e.g. gifts, loans, simple loans,
pawning, etc., the H
. anafs ruled that the principal must be named in the contract, and thus all contract rights would pertain to him. However, if the principal is not named in such contracts, then the agent is considered the contracting
party, and all contract rights would thus pertain to him.41
As they commonly do, the H
afics
. anafs mention in their books that the Sh
disagree with their rulings in this regard, thus assigning the contract rights to
the principal in all cases.42 However, proper scholarship dictates that we use
each schools own references for reporting their opinions. In this regard, AlNawaw stated in his Al-Minh
aj that the contract rights pertain to the agent
43
rather than the principal, thus agreeing with the H
. anaf opinion in this case.
The Maliks also ruled that the contract rights pertain to the agent rather than
the principal.44
In contrast, the H
. anbals ruled that contract rights pertain to the principal,
and not to the agent. This follows from their general consideration of an agent
as a mere messenger of the principal, where the latter is considered the default
contracting party, unless otherwise specified.45 This H
. anbal opinion seems to
negate the very purpose of agency. In fact, a principal commissions an agent to
reduce his responsibilities in terms of managing his affairs, or to find someone
who can carry-out those duties of which he is incapable. Thus, if all contract
41 Al-Tah
as
an ((H
am
. . aw ((H
. anaf), p.109), Al-K
c
c
n ((H
an
at
((H
. am
(p.243), c Abd Al-Ghan Al-Mayd
an ((H
anaf), vol.2, p.141).
.
42 c.f. Al-K
c
as
an ((H
n ((H
Ibn c Abid
. anaf), vol.6, p.17).
43 Al-Raml
c
((Sh
afi ), vol.4, p.47), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.230 onwards),
Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.353).
44 Al-Qar
af ((M
alik), vol.3, p.506 onwards), Al-Mudawwanah Al-Kubr
a (1323 A.H. edition,
vol.10, pp.83, 186). In Al-c All
amah Khalls book, and the commentary by Al-Dardr (vol.3,
p.382): the buyer may ask the agent to return the price if the object is defective or proven to
belong to a third party, provided that he does not know that he is an agent (in analogy to the
ruling for sales brokers). However, if he knows that the seller was a legally unauthorized, he
must demand the price return from the principal. Finally, if the agent is known to be legally
authorized (mufawwad.), then the buyer has the option to demand repayment from the agent
or the principal, since a legally authorized agent is similar to a legally authorized partner.
45 Al-Buh
ut (3rd printing (H
Y
lib Uli Al-Nuh
a (vol.3, p.462).
. anbal), vol.3, p.156), Mat.a
54.2. CONTRACT RIGHTS, AND STATUS
673
rights are referred back to the principal, this objective underlying the agency
contract would not be attained.46
This difference in opinion among the various juristic schools applies only
to the case where the agent does not explicitly specify that the contract is
conducted on behalf of his principal. On the other hand, if the agent makes it
clear that the contract is being conducted on behalf of his principal, all juristic
schools agree that the contract rights would thus pertain to the principal rather
than the agent.
54.2.4
Rights and duties of trading principal and agent
In summary, we can enumerate the rights and responsibilities of the principal

and agent in a buying or selling agency. In what follows, we list the rights and
responsibilities of the principal, and then those of the agent.
Principal responsibilities and rights
The principal in a selling agency is responsible for any losses that are not
the result of the agents transgression or negligence. He is also responsible
to pay the agents wages after concluding his work, if the agency contract
stipulated the payment of such wages.
The principal in a buying agency is responsible to pay the price of purchased items. He is also liable to incur any losses caused by the agents
actions, provided that such losses did not result from the agents transgression or negligence. Finally, if the agency contract stipulates wages
for the agent, the principal is responsible to pay the wage once the agent
finishes his work.
In both buying and selling agencies, the principals right is the agents
fulfillment of his obligations as stipulated in the agency contract.
Agent responsibilities and rights
The agent in a selling agency is required to abide by the conditions and restrictions stipulated in a restricted agency contract. In unrestricted agency
contracts, he is required to abide by convention and common custom in
his dealings.
The agent in a buying agency is required to buy near the going market prices for similar goods, in accordance with convention. In addition,
various juristic schools added other responsibilities:
The non-H
. anaf jurists also stipulate that a buying agent is required
to buy goods that are free from defect.
46 Al-Amw
al

usuf M
us
a (p.376).
674

The H
. anafs forbid a buying agent from buying the specified items
for himself or a close relative.
The Maliks stipulated generally that the agent must do his best to
maximize the principals benefit.
The H
. anafs also ruled that if the agent violates any of the principals
conditions, he is considered to be buying for himself.
A buying agent has the right to buy at a lower price than the one specified by the principal, since this deviation is beneficial. He also has the
right to demand reimbursement from the principal for any items that he
purchases under the agency contract with his own money. Finally, while
the purchased item is in the possession of the buying agent, he has the
right to return it if he discovers a defect.
54.2.5
The contract s legal status
The legal status of the contract is its objective. In what follows, we shall discuss
the legal status of agency in a variety of contracts for completeness.
1. Sales contracts
In sales and other contracts that require offer and acceptance, the legal status
of the contract is establishment of the buyers ownership of the merchandise
and the sellers ownership of the price. In this regard, jurists agree that if
such contracts are conducted through an agent, the legal status of the contract
pertains to the principal and not the agent. This follows from the fact that
the agent speaks and contracts on behalf of the principal, thus acting as his
commissioned legal representative. The Maliks require in this case that the
agent declare in the contract that he is acting on behalf of his principal, while the
majority of jurists assign the contracts legal status to the principal regardless
if the principal or the agent are named as the contracting party.
Thus, all four major schools of jurisprudence decided that ownership resulting from the contract is assigned immediately to the principal (i.e. without
first being assigned to the agent and then transferred). This view follows from
the fact that the agent acts on behalf of his principal as commissioned.47 As
a consequence, if a Christian or Jewish agent buys wine or pork on behalf of
his Muslim principal, the sale is rendered invalid, since the Muslim principal
cannot own such items. This is indeed the opinion of all four schools, including
the H
alik books claiming incorrectly that
. anafs, despite some H
. anbal and M
the H
. anafs consider ownership to be established first for the agent, and then
to be transferred to the principal.
47 Al-Zaylac
((H
ac id
. anaf Jurisprudence), vol.4, p.256), Al-Far
Al-Fiqhiyya by Shaykh Mah.m
ud H
amza (p.137), Ibn Qud
amah (, vol.5, p.130), Al-Khat.b
.
Al-Shirbn ((Sh
afic), vol.2, p.229 onwards), Ibn Rushd Al-H
alik), vol.2, p.298),
. afd ((M
Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.356).
54.3. THE AGENT S POSSESSION
675
2. Contracts concluded by receipt

In contracts such as gifts and simple loans, where the contract is only concluded
through receipt, the contracts legal status pertains to the principal. This conclusion stands even if the agent were to name himself as the gift-giver or lender,
since the agent in such contracts is a simple middle-man.
3. Marriage
In marriage contracts, the legal status pertains to the party named in the contract. Thus, if the agent names his principal as the marrying party, the principal
would thus be married. However, if the agent names himself, as in saying: I
marry you, then the agent would have married, and not the principal.
4. Divorce
The rules governing the legal status of divorce are identical to those of marriage
if the agent represents the husband. However, if the agent represents the wife,
he must name her in the contract, buy saying: divorce so-and-so, according to
the following terms.
54.3
The agent s possession
Jurists agree that an agents possession is one of trust, in analogy to deposits

and similar possessions. This ruling follows from the fact that he would thus
possess goods as a legal representative of the principal (who is the owner).
Thus, his possession is similar to that of a depositary, following its rules for
trust and guaranty. Thus, if the agent only guarantees the held object in cases
of transgression and negligence, otherwise the principal bears all losses. In
this regard, if there is a dispute between the principal and agent, wherein the
principal claims that the agent must guarantee the item and the agent denies
such guaranty, the agents claim is accepted.48
Ibn Qud
amah explicitly discussed six common cases of principal-agent disputes over guaranty, which I list here briefly:
1. If the agent declares that the principals property perished, became defective, or was lost while in his possession, and the principal denies his claim,
the agents claim is accepted by all jurists if supported by his oath. In
this case, the agent is a trustee, and proving his claim is difficult. Thus,
unlike the case of a depositary who needs to provide proof, the agent need
not produce a proof for his claim.
However, the H
. anbals stipulated an exception in the case where the agent
claims that the principals property perished as a result of a fire, breakage
48 Al-K
c
as
an ((H
an
at (p.251), Khusr
u (1304H (H
. am
. anaf),

afd ((M
alik)B, vol.3, p.519),
.

u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1, p.357),
Ibn Qud
amah (, vol.5, p.94).
676

and entry, or other observable events. In such cases, they ruled that the
agent is required to provide proof for his claim.
2. The principal and agent may disagree over whether or not the agent was
negligent in safekeeping the principals property, or if he transgressed by
violating the principals conditions. For instance, the principal may claim
that the agent over-loaded a transportation animal beyond its capacity,
or was negligent in protecting it. Another example is the case where the
principal claims that he ordered the agent to return his property, and that
he did not and then lost it. In such cases, the majority of jurists ruled
that the agent is a trustee and his claim against guaranty is accepted if
backed by his oath. However, the majority of M
aliks ruled in this case
that the principals claim is given precedence.49
In this regard, most jurists agree that the agent is a trustee whether
or not he is compensated for his agency efforts. This follows from the
fact that the agent holds the principals property as a commissioned legal
representative to deal in such property. Thus, any loss in the agents
possession is considered equivalent to an equal loss in the possession of
the owner-principal, and the agent only guarantees the property against
losses caused by his own transgression.
3. The two parties may disagree over whether or not certain actions were
taken. Thus, the agent may claim that he sold the merchandise and collected the price, while the principal may claim that he neither sold nor
received a price, in which case they disagree over whether or not a sale
took place. Alternatively, the principal may claim that the agent did sell,
but never received a price, in which case they disagree over whether or
not the price was received.
In this case, the H
. anafs and H
. anbals ruled that the agents claim is
accepted. This opinion is based on the view that he has the right to
sell the merchandise and to collect the price, and thus his claim must be
accepted on both counts.50
There are two reported opinions in the Shafic school for this case. The
more correct of the two opinions is to accept the principals claim if supported by his oath. This opinion is based on the view that the default
case is one of non-trading and preservation of the principals property in
its initial state.51
4. The two parties may disagree over whether or not the agent delivered the
object of the agency to the principal. Thus, the agent may claim that he
delivered the principals property to him, while the principal may deny
that claim. In this case, the most accepted opinion in all four schools is
49 Ibn
Rushd Al-H
. afd ((M
((H
amah (, vol.5, p.95).
51 Al-Khat
b Al-Shirbn ((Sh
afic), vol.2,p.235), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic), vol.1,
.
p.357).
50 Al-K
as
an
54.3. THE AGENT S POSSESSION
677
to accept the agents claim, whether or not he received a compensation

for his agency efforts. This ruling is based on the fact that the principal
entrusted the agent. In the case of compensated agency, jurists note that
the agent benefits from the objects of agency (the principals property)
through his work and effort. Thus, the agent cannot be considered to
derive benefit from the object of agency itself, and his possession cannot
be equated to that of a borrower (who does benefit from the item while it
is in his possession).52
5. The two parties may also disagree regarding the agency itself. Thus, one
party may claim that he was commissioned as an agent, while the claimed
principal denies that he commissioned such an agency. In this case, all four
schools agree that the possible principals claim is accepted if supported
by his oath. This ruling is based on the view that non-agency is the
default-state, and thus the claimed-agent was not an established trustee.
Thus, the latters claim cannot be accepted.53
6. The two parties may also disagree over the nature of the agency. Thus,
the agent may claim that he was commissioned to sell on credit, while the
principal may claim that he only commissioned him to sell for cash. In any
such case, all four schools agree that the principals claim is accepted if
supported by his oath. In this case, they ruled that the default in agencies
is the impermissibility of various actions, and the principal knows better
the limits of what he commissioned the agent to do.54
In a buying agency, if the agent claims that he was commissioned to buy
an item at a certain price, and the principal denies it, jurists differed in
their opinions. Thus, the H
. anafs ruled that the agents claim is accepted
if the purchased items value was equal to the named price, otherwise they
accept the principals claim. On the other hand, the Shafics and H
. anbals
ruled that the agents claim is accepted in either case if supported by his
oath, since they ruled that he is a trustee.55
The Maliks, and others, ruled that if the agent uses the principals money
to buy a good, and then the principal claims that he commissioned him
to buy another good, the agents claim is accepted if supported by his
oath. Similarly, they ruled that if the agent sold the principals good for a
certain price, and the principal claims that he commissioned him to sell it
at a higher price, the agents claim is accepted if supported by his oath.56
52 Al-K
as
an ((H
s (1st edition (H
amah
c
(, ibid., p.96), Al-Khat.b Al-Shirbn ((Sh
afi ), vol.2, p.235), Ab
u-Ish.
aq Al-Shr
az ((Sh
afic),

alik), vol.2, p.299).
. afd ((M
53 Ibn Qud
amah (, ibid., p.97), Al-Khat.b Al-Shirbn ((Sh
afic), vol.2, p.233), Al-Dardr
((M
54 ibid., Ibn Al-Hum
am ((H
. anaf), vol.3, p.147).
55 Ibn Al-Hum
am ((H
afic), vol.13,
. anaf), vol.3,p .144), Al-Im
p.606), Ibn Qud

amah (, vol.5, p.95).
56 Al-Dard
r ((M
alik)A, vol.3, p.393), Al-Dardr ((M
Chapter 55
Multiple agents
A single principal may have multiple agents in a variety of activities: trading,
disputes, legal defense, etc. In this case, the H
. anafs ruled that if the principal
conducts separate contracts with each of his agents, then each of them may act
on his own, without consulting with the others. Thus, even if multiple agents
were separately commissioned to perform the same task, any of them may perform that task on his own. On the other hand, if the agents are all commissioned
in a single contract, the H
. anafs ruled that none of them is permitted to act on
his own without the principals permission. Exceptions to this latter ruling are
cases where consultations have no effect (e.g. repayment of debts or returning
deposits), or where joint actions are not possible (e.g. legal defense or divorce).
The other schools of jurisprudence had varying restrictions and rulings with
regards to multiple legal agents:1
The Maliks permitted having multiple legal representatives in a legal dispute, provided that the adversary in the dispute accepts that multiplicity.
The Shafics ruled that none of the multiple legal agents is permitted to
act alone in a legal dispute, since the principal only approved their joint
representation in such disputes.
There are two rulings in the H
. anbals schools. The first ruling agrees with
the Shafic opinion, while the second relies on convention to permit each
of the multiple legal agents to act alone.

We now proceed to discussing the specific applications of those general principles in agencies where consultation is required or not required.
1 Al-Dard
r ((M
alik)B, vol.3, p.505), Al-Im
afic), vol.13,
p.557), Al-Fur
uc by Ibn Muflih. Al-Maqdis (vol.3, p.693).
679
680
CHAPTER 55. MULTIPLE AGENTS
55.1
Consultation agencies
If the nature of the agency requires consultation, then the principal is deemed
to have only approved the joint action of all his agents, and no single agent is
permitted to act alone. In what follows, we list some specific examples of this
rule:
Thus, if two agents are commissioned to sell an item, neither one may sell
it without consulting with the other. In case one of the two selling agents
sells the goods on his own, the sale is not valid until the other agent or
the principal permit it. This follows since sales require consultation, and
the principal only approved their joint judgment.
If two buying-agents are commissioned, neither of them is permitted to
buy on his own on behalf of the principal. In this case, if one of the buying
agents does buy without the others permission, the sale is concluded on his
own behalf. This is in contrast to the case of selling agents, where the sale
is suspended pending the other agents or the principals approval. The
difference between the two rulings is explained by the fact that buying
agents are subject to suspicion of strategic trading to benefit themselves,
as we have seen in previous chapters.
If two agents are commissioned to conclude a marriage, divorce, or other
contract that contains a financial compensation, then neither of them is
permitted to conclude the contract on his own. In such cases, consultation and debating different points of view is crucial to arriving at a wise
decision.
If two agents are commissioned to collect a debt, neither one is permitted
to collect it on his own. This follows from the fact that the principal thus
accepted their joint opinion, and trusted them jointly. This joint trust
does not imply trusting the opinion or integrity of each agent individually.
55.2
No-Consultation agencies
On the other hand, if consultation is not necessary in conducting the object

of the agency contract, then the H
. anafs ruled that any agent may act on his
own. For instance, if two agents are commissioned to conclude a divorce without financial compensation, either one may conclude it. Other examples include
returning deposits and repayments of debts. In such cases, they argue that the
commissioned action is simple and does not require multiple actors or consultation. In contrast, the Maliks, Shafics, and H
. anbals ruled that if the principal
commissions multiple agents, none of them is permitted to act on his own without consulting the other, unless the principal explicitly permitted them to act
individually. This ruling is based on the general view that the principal in such
55.2. NO-CONSULTATION AGENCIES
681
multiple-agent contracts only approves joint action, and thus individual action
requires a special permission.2
In the case of multiple legal agents in a legal dispute, Zufar disagreed with
the majority H
. anaf view expressed above. In this case, the majority of H
. anafs
permitted each agent to act individually, since joint action is not feasible at
many stages of the legal proceedings (e.g. arguing in front of a judge). Of
course, drafting legal documents can be accomplished collaboratively, and the
act of legal defense can be divided among lawyers, whereby each one does part of
it. Therefore, they argued that the degree of collaborative or individual action
can be determined based on the nature of the task at hand. On the other hand,
Zufar argued that no individual legal agent is permitted to act individually in
this case. His ruling is based on the fact that legal disputes require consultation
and sharing of opinions. In this regard, the principals joint commissioning of
multiple agents implies his acceptance of their joint opinion, but does not imply
his acceptance of any one agents opinion.3
2 Al-Kharsh
u-Ish.
aq Al-Shr
az
((Sh
amah (, vol.5, p.87).
3
Al-K
as
an ((H
am ((H
. anaf), vol.6, pp.86-88).
Chapter 56
Agency termination
Jurists agreed1 that uncompensated agency is a permitted but non-binding contract for both parties. In this regard, the principal is not bound to the contract,
since he may decide that it is beneficial to terminate the agency or to appoint
another agent. On the other hand, the agent is not bound since fulfilling the
responsibilities of agency may put excessive demands on his time. Thus, both
parties to the agency contract are given the option of terminating the contract
at their discretion.
In compensated agencies, we need to consider two cases:
lah, whereby the task and the time period
If the compensation is a jic a
are not explicitly stated in the contract, then the majority of jurists agree
that the contract is non-binding on the parties. However, the Maliks
ruled that the contract is in this case binding on the principal once the
agent begins working.
If the compensation renders the contract an ij
arah (i.e. if the task or the
time period is specified), e.g. in brokerage contracts, then the H
. anafs and
most Maliks ruled that the agency contract is thus binding. In contrast,
the Shafics and H
. anbals ruled that the contract is still not binding in
this case.
In the remainder of this chapter, we enumerate the means by which an
agency contract may be terminated:2
1 Al-K
c
as
an ((H
n ((H
ab (1st
. anaf), vol.7, p.351), Al-H
. at.t.
edition (M
alik), vol.2, p.297), Al-Khat.b Al. afd ((M
c
c
Shirbn ((Sh
afi ), vol.2, p.231 onwards), Ab
u-Ish.
aq Al-Shr
az ((Sh
afi ), vol.1, p.356),
Al-Im
alik)A, vol.3, p.396
n ((H
. anaf), vol.4, p.433), Al-Jazir (1986, vol.3, pp.278-282).
2 The Hanaf
listing can be found in Al-K
as
an ((H
aw
.
. ah.
((H
am ((H
s (1st edition
c
c
n ((H
an Al(H
c
n ((H
Mayd
an ((H
. anaf), vol.7, p.308).
683
684
CHAPTER 56. AGENCY TERMINATION
56.1
De-commissioning of the agent
All jurists agree that an agency contract is terminated if the principal terminates
his commissioning of the agent. This follows from their reported opinion that the
contract is valid but non-binding, and therefore it can be voided by the principal.
However, the H
aliks required two conditions for the
. anafs, and most of the M
validity of this form of termination:
1. The agent must be informed of the termination. In this case, his decommissioning is a form of contract voiding, which requires mutual knowledge. In this regard, the agent is deemed informed of his de-commissioning
if the agent is present and informed in person, if he receives a written message informing him, if he receives a messenger, if he is informed by two
witnesses or one trustworthy witness, or if he hears a single witness and
believes him. Prior to the satisfaction of any of those conditions, while
the agent is not informed of the de-commissioning, the status of all his
legal actions continues as if his commissioning was still in place.
This condition was stipulated by the H
. anafs, most of the Maliks, and
in one reported opinion of Imam Ah.mad. This condition is based on
the fact that its absence can harm the agent in two ways: (1) his legal
representation of the principal would end without his knowledge, and (2)
he would become responsible for the contracts rights, thus having to pay
the price in purchases, and having to deliver the goods in a sale.
In contrast, the better supported opinion of Al-Shafic, and the second
opinion of Ah.mad that is accepted by his school, stipulate that this condition is not necessary. Thus, they ruled that the agent is de-commissioned
as soon as the principal decommissions him, whether he is present or
absent, knowing or unknowing. Their ruling is based on the view that
de-commissioning is a form of contract-voiding that does not require the
other partys consent, and thus does not require his knowledge, as in the
case of divorce. This ruling is thus deduced in analogy to the case of
commissioning an absent person, whereby the agent is thus commissioned
without his knowledge.3
On the other hand, all schools agreed that if the agent de-commissions
himself, he must inform the principal. This ruling is made to protect the
principals rights, and to avoid deceiving him.
2. The H
. anafs and most Maliks also ruled that validity of de-commissioning
requires that no third party have a right pertaining to the agency. Thus,
if a third party has a right in the agency, the de-commissioning is not
valid without that third partys consent. For instance, if a debtor had
commissioned an agent to sell a pawned object to pay the debt when it
3 Ibn Rushd Al-Haf
alik)A, vol.3, p.396), Al. d ((M
H
ab (1st edition (M
afic), vol.2, p.232),
. at.t.
Ab
u-Ish.
aq Al-Shr
az ((Sh
amah (, vol.5, p.113 onwards), Marc
ibn Y
alik), p.329).
. anbal), vol.2, p.155), Ibn Juzayy ((M
56.2. THE PRINCIPAL PERFORMING THE TASK
685
matures, the debtor-principal may not de-commission this agent without

the creditors consent. In this case the creditors right of receiving the debt
through the pawned objects sale prevents de-commissioning without his
consent.
Another example is an agent commissioned by a man to divorce the latters
wife whenever he wishes to do so. In this case, the man may not decommission that agent without the consent of the principals wife.
A third example is a traveling debtor who - at the instance of the creditor
commissions an agent to take his place in disputes regarding collection
of his debt. This agent cannot thus be de-commissioned, since the creditor
would not have anyone from whom to demand repayment of the debt.
56.2
The principal performing the task
If the principal himself concludes the task for which he had commissioned an
agent (e.g. if he sells the item for which a selling agent was commissioned),
all jurists agree that the agency would thus be terminated.4 In such cases,
the contract has no purpose or object, and thus the agent is automatically
de-commissioned, even if he did not know.
56.3
Expiration of the reason for agency
If the agent concludes the task for which he was commissioned, the contract
would also cease to have a purpose or object, and would thus be terminated.
56.4
Loss of eligibility
If either the principal or the agent dies or is afflicted by long-term insanity, the
non-Shafics ruled that the agency is thus terminated. The Shafics, on the other
hand, rendered the agency terminated even if the insanity was temporary. The
definition of long-term insanity was a subject of debate between Ab
u Y
usuf
and Muh.ammad. Thus Ab
u Y
usuf ruled that long-term meant one-month
or longer, since a month-long insanity would drop the legal requirement to fast
Ramad.an. On the other hand, Muh.ammad ruled that long-term means oneyear or longer, since a year of insanity is required to drop the legal requirement
for all acts of worship. Qad. Zadah (who authored the continuation of Ibn
Al-Humam ((H
. anaf))) said that the chosen opinion among the H
. anafs is that
of Ab
uH
. anfa, which identifies long-term with one-month. This is also the
n ((H
uH
reported better opinion in Ibn c Abid
. anaf)), based on Ab
. anfas logic
that anything less than a month is considered current and anything beyond a
month is considered deferred.
4 Al-Sarakhs
(1st edition (H
alik)B, vol.3, p.523), Al. anaf), vol.19, p.50), Al-Dardr ((M
Buh
ut (3rd printing (H
. anbal), vol.3, p.457).
686
All four schools agree that the agency is terminated if either party becomes
legally restrained due to mental incompetence. The Shafics also ruled that
falling into a coma renders a party ineligible and terminates the agency, while
the other schools disagreed with this ruling.
In the relevant cases, the H
afics, and H
. anafs, Sh
. anbals ruled that the
agency is terminated based on loss of eligibility of one party, even if the other
party is not informed.5 On the other hand, the Maliks ruled that the better
opinion is not to de-commission the agent of a deceased person until he knows
of the principals death.6
56.5
Apostasy of the principal or agent
In this case, Ab
uH
. anfa ruled that the apostate principal is thus an enemy of
Islam. In his opinion, the actions of such an apostate (including agency) are
suspended. Thus, if he reverts to Islam, the actions would be executed, but if he
dies an apostate or joins the land of war, the agency would be invalidated in
his opinion. However, Ab
u Y
usuf and Muh.ammad ruled that the agency is not
terminated, since an apostates legal actions are executable. Thus, the agency
is not terminated unless the apostate principal dies, is killed, or becomes a legal
fugitive through a court-order to chase him.
On the other hand, H
. anafs argued that the agency is not terminated if the
apostate agent joins the land of war, unless a judge orders him to be chased.
Thus, they ruled that the agency remains intact. However, the agent is required
not to take any actions unless he reverts to Islam. Then, if he does revert to
Islam, Muh.ammad ruled that the agency is fully restored, since the impediment
to his dealings would thus be removed. However, Ab
u Y
usuf ruled that by
joining the land of war, the agents status was that of a dead person, thus
terminating his legal representation and agency. Once such representation is
terminated, it cannot be restored.
The Maliks ruled that an apostate-agent is considered de-commissioned
during the period when he is given a chance to revert to Islam (ayy
am alistit
abah). After this period, if he is killed, he is de-commissioned. However, if
killing the apostate agent is delayed beyond that period (e.g. if she is a pregnant
woman), jurists differed in opinion regarding whether or not the agent is thus decommissioned. The Maliks also ruled that a Muslim agent is de-commissioned
if the apostate-principal does not revert to Islam during the allowed period,
even if he is not killed for a legal reason.7
The Shafics and H
. anbals ruled that an agency is not invalidated if the com
missioned agent becomes apostate, whether or not he joins the land of war.
5 Al-K
as
an ((H
am ((H
. anaf), vol.6, p.126 onwards), AlKhat.b Al-Shirbn ((Sh
u-Ish.
aq Al
c
Shr
az ((Sh
afi ), vol.1, p.357), Al-Sarakhs (1st edition (H
anaf), vol.19, p.13).
.
6
Ibn Rushd Al-H

alik)A, vol.3, p.396), Al. afd ((M

((M
alik), p.329).
7 Al-Dard
r ((M
56.6. AGENT SELF-DE-COMMISSIONING
687
In this regard, they ruled that apostasy would not prevent such an agent from
being commissioned anew, and does not prevent commissions from continuing,
in analogy to other forms of disbelief. On the other hand, the H
. anbals also
ruled that apostasy of the principal does not invalidate agency for all the actions that the agent may take. The is also the majority Shafic opinion, since
the apostates property rights are not terminated by apostasy.8
56.6
Agent self-de-commissioning
An agent may de-commission himself, in which case the agency is terminated.9

We have seen that some jurists required that the principal be informed of the
self-de-commissioning to prevent any undue losses. In this regard, the Maliks
ruled that an uncompensated agent may de-commission himself at any time,
provided that the principal had not stipulated that he is not allowed to do so.
56.7
Perishing of the agency object
All jurists agree that if the object of the agency contract (e.g. the object to
buy, sell, or lease) were to perish, the agency would be terminated.10 In this
case, the agency contract would have no purpose, and thus it is voided.
56.8
Transfer of property
If the object of the agency contract (e.g. an object to sell or lease) ceases to be
owned by the principal (e.g. if it is confiscated by the government), the agency
contract is terminated.11
56.9
Bankruptcy
The agency is terminated if its object is the property of a principal who declares his bankruptcy. In this case, by declaring bankruptcy, ownership of the
principals property is transferred to his legal adversaries, and thus the agency
is terminated in accordance with the previous rule.12
8 Ibn Qud
ut (3rd printing (H
atb
.
Al-Shirbn ((Sh
afic), vol.2, p.219), Tuh.fat Al-Muh.t
ah (vol.5, p.341), Ab
u-Ish.
aq Al-Shr
az
c
((Sh
afi ), vol.1, p.357).
9
alik), p.329).
10 Indian
Authors ((H
amah (, vol.5, p.116).
11 Al-Sarakhs
(1st edition (H
atb Al-Shirbn ((Sh
afic), vol.2,
p.232), Ibn Qud

amah (, vol.5, p.116).
12 Al-Dard
r ((M
amah (, vol.5, p.213).
688
56.10
Denial
The H
afics ruled that denial of the agency contract by the agent
. anafs and Sh
or principal is tantamount to voiding the contract, thus terminating the agency.

. anbals ruled that such denial does not invalidate the
agency contract.13
56.11
Transgression
If the agent transgresses against the object of agency (e.g. if he wears a dress he
is commissioned to sell), there are two opinions in the Shafic school. The first
opinion renders the agency terminated, on the basis that it is a trust contract
that is invalidated by such transgression. The second opinion states that the
agency is not invalidated. What is invalidated according to this second opinion is
the trust, while the agency remains intact and the agent is required to guarantee
the object.14 I favor that second opinion, which was also the H
. anbal view.
56.12
Lasciviousness
The Shafics and H

. anbals ruled that an agency contract is invalidated by las
civiousness of the agent in a contract that is violated by such characterization
(e.g. as an agent in making a marriage offer on behalf of the principal). In this
case, the agents lasciviousness renders him ineligible to make a marriage offer
for himself, and thus he cannot make it on behalf of his principal.15 This is in
contrast to other types of agencies (e.g. acceptance of marriage, or trading) for
which the agents lasciviousness does not render him ineligible, and where the
agency remains intact.
56.13
Divorce
The Maliks ruled that if a husband serves as his wifes agent, he is considered
de-commissioned of his agency if he divorces her. This ruling follows since the
husband has the right to divorce his wife. In contrast, a wife who is serving
as her husbands agent is not de-commissioned of her agency on behalf of her
husband if he divorces her, unless it is known that the husband wishes to decommission her.
The H
. anbals also ruled that if a man commissioned his wife as an agent in
some affair, that agency is not invalidated by divorce.16
13 Ibn c Abid
n ((H
atb Al-Shirbn ((Sh
afic), vol.2, p.233), Al. anaf), vol.7, p.387), Al-Kh
.
Buh
ut (3rd printing (H
anbal
),
vol.3,
p.458).
.
14 Ab
u-Ish.
aq Al-Shr
az ((Sh
afic),
vol.13, p.600).
15 Al-Im
ut (3rd printing
(H
anbal
),
vol.3,
p.457).
.
16 Al-Dard
r ((M
alik)A, vol.3, p.396), Al-Buh
ut (3rd printing (H
. anbal), vol.3, p.470).
56.14. EXPIRATION
56.14
689
Expiration

. anbals ruled that a timed agency is terminated once
its stipulated period (e.g. ten days) expires. However, most H

. anafs favored the
opinion that agency is not terminated thus.17
This was a listing of the most important manners in which an agency is
terminated. With the exception of de-commissioning, the H
. anafs consider all
the other reasons to be sufficient for terminating the agency, whether or not the
agent is aware of that termination.
17 Ibn c Abid
n ((H
atb Al-Shirbn ((Sh
afic), vol.2, p.233), Al. anaf), vol.7, p.393), Al-Kh
.
Buh
ut (3rd printing (H
. anbal), vol.3, p.460).
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Dr. Wahbah Al-Zuh.

Translated by: Mahmoud A. El-Gamal, Ph.D

In The Name of All

Typeset in LATEX 2 TM with ArabTEXTM macros by Mahmoud A. El-Gamal

c 2001 Dar Al-Fikr, Damascus

peace be upon him

may Allah be please with him(her)

may Allah be please with them

rad.iya Allahu c anhum (c anhuma)

ABBREVIATIONS AND TRANSLITERATION

0.3. GLOSSARY OF TRANSLITERATED TECHNICAL TERMS

Glossary of transliterated technical terms

Prophetic Actions and Traditions

madhhab (pl. madhahib)

fatwa (pl. fatawa)

Islamic legal opinion(s)

majority (of jurists)

rukn (pl. arkan)

shart. (pl. shur

ABBREVIATIONS AND TRANSLITERATION

h.aqq (pl. h.uq

divorce at the instance of the wife

0.3. GLOSSARY OF TRANSLITERATED TECHNICAL TERMS

Islamic forward contract

risk and uncertainty

ABBREVIATIONS AND TRANSLITERATION

peace be upon him

may Allah be please with him(her)

may Allah be please with them

rad.iya Allahu c anhum (c anhuma)

ABBREVIATIONS AND TRANSLITERATION

0.3. GLOSSARY OF TRANSLITERATED TECHNICAL TERMS

Glossary of transliterated technical terms

Prophetic Actions and Traditions

madhhab (pl. madhahib)

fatwa (pl. fatawa)

Islamic legal opinion(s)

majority (of jurists)

rukn (pl. arkan)

shart. (pl. shur

ABBREVIATIONS AND TRANSLITERATION

h.aqq (pl. h.uq

divorce at the instance of the wife

0.3. GLOSSARY OF TRANSLITERATED TECHNICAL TERMS

Islamic forward contract

risk and uncertainty

ABBREVIATIONS AND TRANSLITERATION

Abbreviations and Transliteration

The Sales Contract (c Aqd Al-Bayc )

Unity of the contract session . . . . . . . . . . . . .

2.5.4 Conditions of sale for the H

3 Status, Object, and Price

4 Invalid and Defective Sales

Legal status of insurance . . . . . . . . . . . . . . . . . .

The fatwa of Ibn c Abid

4.3.2 Suspended conditional sales and future sales . . . . . . . .

Valid conditions (al-shart. al-s.ah.h.) . . . . . . . . . . . . . 123

Invalid sales for the H

5.1.1 Option conditions . . . . . . . . . . . . . . . . .