Contract of Sale and its Conditions

The most basic type of an exchange (mu’awadat) contract is a contract of sale. Kharofa outlines seven conditions for a sales contract to be valid. These are:

  1. The contract should be concluded willingly and with mutual consent as per the Qur’anic injunction in Surah an-Nisaa 26.
  2. Both parties to the contract must have the capacity to conduct such a sale. A sale by an insane person (temporarily or permanently insance), a child or a drunken person is not valid. Hanafis permit such a contract by a child as long as the guardians permit it. Hanbalis permit such a contract by a child as long as the child is mature enough to make a decision. The Hanbali position is based on verse 6 of Surah an-Nisaa.
  3. The object of sale should carry a legal benefit to the buyer, usually in the form of property or service received.
  4. The object of sale must be owned by the seller or the seller should have the owner’s express permission. In an agency situation if the owner gives a belated permission, after the sale has taken place, the contract is considered valid but without it the contract is void.
  5. The seller must be capable of delivering the subject of the contract to the buyer, or the sale is nugatory. One cannot, therefore, sell something that is not in his or her possession (e.g., cannot sell a bird in the sky or fish in the water until possession has been taken).
  6. The object of sale should be made known to the purchaser by sight or by ample description. If the object being sold is not seen by the purchaser and has not been sufficiently described, the sale is invalid. A major implication of this is the obligation on the seller to disclose any and all defects in the object of sale to the buyer for the sale to be valid. A strong opinion among the scholars is that the sale will be valid but the buyer will have the option to invalidate it upon inspecting the object bought.
  7. The price, or consideration due, must be known to both parties. Therefore, a contract of ribaa where the price ultimately paid changes by the timing of the payment is not valid due to the uncertainty involved with respect to the price.

Source: Kharofa, 73-76.

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2 Comments

Filed under Contracts and Transactions

2 responses to “Contract of Sale and its Conditions

  1. fahad hashim

    pls i want a full describtion of legal and illegal trasaction in islam and there types

  2. bilquis

    thank u for this informantion .. jazkum allah kheer
    i need more details about what is prohibition in derivative contract

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