Prohibited Transactions – II

Sale of non-existent or near non-existent things

These sales were prohibited in the context of yet unborn offspring. This has wide-spread application in the present-day context.

Sale of things that cannot be delivered

These sales include fish in the sea and bird in the sky and are prohibited. Though the bird or the fish might eventually be caught and delivered on time, it is impossible to point to a specific or give ample description before the contract is accepted.

Sale involving ignorance or doubt

This typically refers to doubt with respect to the price, or consideration paid. An example of this is contracting to sell a commodity on “market price” where the term “market price” has not been defined in units of money.

Two sale proposals in one

This refers to proposing (first step of the contract) to sell one object at one of two different prices. For example, a proposal to sell a widget at $100 in cash or $150 six months hence is invalid even though the two proposals are valid on their own, independent of each other.

Sale of an impurity

Things considered unclean in Islam like wine, pork, meat of a dead animal and blood, to name a few.

Sale of water

Most jurists allow sale of water if it is from a privately owned source, though the Dhaheri scholars state the sale of water to be prohibited whether from a public or a private source (e.g., fountain or a well). One may, however, charge for the effort to retrieve or treat this water.

Sale of something before receiving the price

The Prophet said, narrated by Ahmad and Muslim from Jaber, “If you have bought foodstuff, do not sell it until you have received it in full.”

Sale of ‘inah

‘Inah or deferred-payment contract is a special arrangement whereby Party A sells an object to Party B for Price X to be paid at a later time and then purchases it back from Party B at Price Y in cash, where Y is lower than X. This effectively results in creating a ribaa like transaction. This sale is considered nugatory or invalid by all jurists, except a small minority among the Shafe’i and Dhaheri schools, who consider it makruh. Unfortunately, this type of sale contract is widely used in Islamic banking in Malaysia based on the minority opinion. We will discuss this is more detail later.

Source: Kharofa, 79-82.

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2 Comments

Filed under Contracts and Transactions

2 responses to “Prohibited Transactions – II

  1. Dr Samir Radwan

    Gentlemen,
    Your effort is great and deserves all respect and estimation and we beseech God to reward you for all the hardships you have borne.But for honesty I would like to turn your attention to what has been titled ” Sale of something before receiving the price ” as forbidden . It is not the price that must be received before sale but the subject matter i.e the commedity itself must be in possession of the seller . the price can be delayed to the agreed time But the delivery cannot be postponed or delayed except in Salam Contract . Thank you
    Dr Samir radwan.

  2. Dr Samir Radwan

    Dr Samir Radwan Says:
    March 17th, 2006 at 2:44 pm e
    Gentlemen,
    Your effort is great and deserves all respect and estimation and we beseech God to reward you for all the hardships you have borne.But for honesty I would like to turn your attention to what has been titled ” Sale of something before receiving the price ” as forbidden . It is not the price that must be received before sale but the subject matter i.e the commedity itself must be in possession of the seller . the price can be delayed to the agreed time But the delivery cannot be postponed or delayed except in Salam Contract . Thank you
    Dr Samir radwan.

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