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Commercial Law of Islam

Part 1/7

Legitimate Trade

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Translated from "Islamî Fiqh" by Maulànà Mujîbullàh Nadwî

by Abd ur Rahmàn O'Beirne

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FIRST PUBLISHED 1998/1419 AH Publication No A92

© 1998 (outside Republic of South Africa only)Abd ur Rahmàn O'Beirne

ByMADRASAH ARABIA ISLAMIAP.O. BOX 9786AZAADVILLE1750SOUTH AFRICA

TEL: {011} 413 2786FAX: {011} 413 2638

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Translation of the second half of Vol 2 of Islami Fiqh

Mu’àmalàt

(An Outline of the Laws of Islam Governing Business Transactions)

divided into seven parts

Part One

plus a Glossary of Terms

Commercial Law of Islàm

Overall Contents

Part 1Chapter 1 Business and

Monetary Dealings -Mu’àmalàt

Chapter 2 Permissible and Prohibited Goods -Halàl & Haràm

Chapter 3 Legitimate Trade -Tijàrat

Part 2Chapter 4 Illegitimate Trading Practices

Part 3Chapter 5 Investment -MudhàrabahChapter 6 Partnership and

Shareholding -SharàkatChapter 7 Loans -QardhChapter 8 Guaranty -Kifàlat

Part 4Chapter 9 Transfer of Debt -HawàlahChapter 10 Securities and

Mortgage -RihnChapter 11 Trust and Safekeeping -AmànatChapter 12 Borrowed Property -‘ÂriyatChapter 13 Gifts -Hibah

Part 5Chapter 14 Hiring -IjàrahChapter 15 Rent and Hire -Ijàrah

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Chapter 16 Trades and Services -Ajîr MushtarakChapter 17 Employment -Ajîr KhàsChapter 18 Working Animals -Huqùq ul

Hayawàn

Part 6Chapter 19 Sharecropping -Muzàra’atChapter 20 Ownership -MilkîyatChapter 21 Legal Restraint -Hajr

Part 7Chapter 22 Prior Option -Shuf’ahChapter 23 Unlawful Seizure -GhasabChapter 24 Damage -ItlàfChapter 25 Agency and

Power of Attorney -WakàlatChapter 26 Charitable Trusts and

Endowments -WaqfChapter 27 Division of Property -Al Qismatu

wal Muhàyàt

Note:

No one part of Dîn can be properly understood without reference to the rest, and particularly those parts that are closely related. The whole issue of Commercial dealings can also not be understood properly without seeing it in context.Unfortunately today many Muslims tend to treat Islàm like the cover of a book that they cannot be bothered to read except for the odd page here and there, and which

they just assume will contain justifications for their own opinions and desires somewhere in it. It somehow escapes people’s attention that it is not enough to start chanting Islàm, Islàm. We need to find out what the instructions of Allàh actually are.

It is therefore necessary first of all to refer to books on Zakàt and also to read up on the moral and social obligations of a Muslim with respect to wealth and its administration, and its expenditure.

In imposing the obligation of Zakàt (meaning literally the cleansing of wealth), Almighty Allàh has in effect made it obligatory for those Muslims who are not poor to see to the material welfare of those who are. The more wealth a person has the greater his obligation to spend time and effort to ensure that his Zakàt is properly discharged. It is evident that if a person spends time and effort trying to see to the welfare of people during one part of his time he will not be so inclined to exploit them during the other. Also, once a person becomes aware of the realities of the life and the problems of those who are poor, he will not so quickly turn into the kind of dressed-up fun-loving fool with whom the drawing-rooms of the rich are usually filled, and will not so easily acquire the various undesirable habits that historically tend to characterise the life of the wealthy classes. Once a person is motivated by intelligent good-will, and not foolishness and greed, his way of doing business with people and his way of making use of his wealth will be completely different.

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In reality in Islàm a person who has been given wealth and who is thus free of material worry for himself is required to spend it basically for the welfare and benefit of others. This may be on their material benefit or that of the society as a whole or on religious works.

There are also other obligations on the rich beyond the limit of Zakàt and it is necessary for people to get to find out what they are.

It is also necessary to consult some book on the subject of Mîràth or Inheritance. Islàm does not allow a person to dispose of more than one third of his estate by means of a will, and the remaining two thirds belongs to the heirs specified by the Law in the proportions that the Law specifies. Any wealth held in contravention to these laws falls under the category of Illegal Seizure or Ghasab. Ghasab is covered in Part 7 of this series. The building up of large estates and private holdings is not usually beneficial to society as a whole.

Many people are under the impression that for a wealthy person to spend his wealth largely on luxuries for himself and his family and friends is permissible. It is therefore necessary to find out the actual meaning of Isràf and Tabdhîr and also of Zuhd and Taqwà. This will require more than merely looking up these words in a dictionary. These issues should also be related to the issue of priorities in spending and the rights of relatives, neighbours and of those in distress.

The acquisition of good character is also an essential part of Islàm. This includes the elimination of qualities like greed, selfishness, arrogance, meanness, hard-heartedness, cupidity, stubbornness, vanity, ostentation, envy, contempt for people and disregard for their rights and a great many other characteristics that are usually found together with wealth. Conversely it includes the development of good will, competence, modesty, moderation, kindness, contentment, simplicity, politeness, respect for people, and other qualities which enable a person to earn and use his wealth in a way beneficial to people and pleasing to his Creator. These issues are to be found under Tasawwuf.

A person should also understand that in the matter of taking reckoning from a person, Allàh Almighty will most certainly look to see how that person went about trying to interpret the Law. A person who is very ready to interpret the orders of Allàh and the principles of Religion leniently in his own favour, and strictly when it comes to the turn of others, can expect to be subject to an extremely rigorous reckoning on the Day of Judgment. It should also be borne in mind that when it comes to the rights of other individuals Allàh Almighty will not interfere, and each person is going to have to sort things out directly with whomsoever he has wronged in this world. Those people who say at every step that Allàh is forgiving and merciful, and then carry on with their wrong-doings may find that they will have a lot of injured parties to answer to who might be less forgiving.

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Today many people seem to have the idea that since we do not have anything that can seriously be referred to as an Islàmic State in the world today, we are no longer bound by the laws of Sharîah concerning Commercial Dealings, and that we are free to do our dealings in accordance to the laws of the countries in which we live. This is a very serious and culpable misunderstanding. The absence of police and courts in a district does not make crime legitimate. On the contrary this situation is a test of the sincerity of people’s willingness to live according to the Law. If those who take advantage of a breakdown of Law and Order to engage in lawless behaviour are not criminals, then what are they? Islàm requires that we deal justly and honestly with people, and the Laws that cover Commercial dealings are the details of what this requires. These laws take precedence over any laws that go against their provisions. It is therefore necessary that as far as possible we take account of both Law of Allah and the laws of the land we live in. That is to say, when drawing up our contracts, we specify the provisions of the Law of Allah in a away that makes them binding in terms of the laws of the land.

We also have an obligation within the limits of our ability to enjoin what is good and discourage and prevent evil, and it is necessary to have a balanced idea of how to go about this. This comes under amr bi’l ma’rùf and nahî ‘anil munkar.

It is also strongly recommended for every serious-minded person to make some investigation into what is

going to happen to himself after death, and into the living conditions of Paradise and Hell respectively, and of the conditions of entry for each, so that in his business dealings he may then choose the course of action which would be more advantageous to himself in the long run, and not make the mistake of trading his place in Paradise for a few slices of the cake that is served in this world to those liberated individuals who have thrown off the shackles of Religion so as to leave themselves free to do as they wish in this world, and whose reservations in Hell are more or less confirmed.

All these questions are very relevant to the subject of this book and will not be found here.

A Note on Spelling

This work is translated from Urdu, not Arabic. There are some discrepancies between the way many words are spelt in Urdu and their original Arabic spelling - for example tijârah in Arabic becomes tijârat, and kafâlah becomes kifâlat. This often happens when words pass into common use in another language. I have taken the easy way of following the Urdu spelling. There may also be errors further that have escaped notice. I am not myself an Alim, only a translator.

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Contents of Part 1

CHAPTER 1MU’ÂMALÂT or BUSINESS & MONETARY DEALINGS.............................................................. 10The Meaning of Mu’amalât .................................... 11The Guidelines of Islam in Business Dealings...... 11Worldly Benefit of These Principles........................ 12The Point of View of the Âkhirat........................... 12Importance of Legitimate Earnings......................... 15

CHAPTER 2HALÄL & HARÄM.................................................. 16Those Things That are Haläl, Haräm, and Mubâh.. 16Haräm Animals and Carrion.................................... 17Fish and Other Aquatic Creatures.......................... 18Insects..................................................................... 18Dead and Wounded Animals and Birds (Carrion)... 18The Human Body.................................................... 19Jalâlah .............................................................. 19Intoxicating Substances.......................................... 19The Rule Concerning Things That Are Haläl, Haräm and Makruh................................................. 21Some Distinctions................................................... 22

CHAPTER 3TIJÀRAT OR LEGITIMATE TRADE....................... 23 1: SOME TECHNICAL TERMS CONCERNING TIJÀRAT................................................................. 25Bai’ Sahîh............................................................... 25

Bai’. Fàsid............................................................... 26Bai’ Bàtil.................................................................. 26Bai’ Mawqùf............................................................ 26Fuzùlî ............................................................. 26Bai’ Làzim............................................................... 26Màl – Goods........................................................... 26Màl Mutaqawwam................................................... 27Thaman.................................................................. 27Thaman Musammà................................................. 27Qîmat ............................................................. 27Types of Bai’........................................................... 28Bai’ Ta’àtî................................................................ 28Ghaban Fàhish....................................................... 28

2.TIJÂRAT.............................................................. 28The Definition of Tijàrat........................................... 28The Meaning of Bàtil and Fàsid............................... 29Bàtil......................................................................... 29The Legal Status of Bai’ Bàtil and Bai’ Fàsid........... 29The Meaning of Taràdhi (Willing Agreement )........ 30

3: TRADE IS A CONTRACT .................................. 30Procedure for Buying and Selling........................... 30Assent by Action .................................................... 31Assent in Writing..................................................... 31Telephone and Telex............................................... 31

4: GOODS AND PRICE......................................... 32The Goods Being Sold............................................ 32 i) Presence of the Goods at the Time of Sale 32 ii) Ownership by the Seller.............................. 32 When Can These Things Be Sold?....... 32

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Definition of Ownership........................ 33 The Ways in Which Something May Come into Someone’sPossession........ 34 iii) Full Description.......................................... 35 iv) Recognised Goods................................... 35 v) True Description........................................ 35 vi) Specification.............................................. 36What Is Automatically Included in A Sale and What Is Not Included........................................ 36Some Things That Are Permitted............................ 37The Price................................................................. 38Sale By Auction....................................................... 39Muràbahah and Tawlîyah....................................... 39

5: CONCLUSION OF THE TRANSACTION........... 40 When Can the Seller or Purchaser Cancel a Transaction?........................................................... 40 The Case of the Money Having Been Spent.......... 41 Some Further Conditions....................................... 41 Some Other Cases................................................ 42 i) Khiyàr.ush.Shart....................................... 42 Defects Arising From Use........................ 43 Death of Either Party................................ 43 Transactions in Which There is No Option 43 ii) Khiyàr.ul.Wasaf....................................... 44 iii) Khiyàr.ur.Ru’yat...................................... 44 iv) Khiyàr. ul. ’Aib.......................................... 46 Definition of ‘Aib........................................ 47 v) Khiyàr.ut.Ta’yîn......................................... 49The Options of the Seller and the Purchaser........... 49Payment of the Price and Expenses on the Goods 52Damage to Goods in Transit................................... 52

6: LEGITIMATE FORMS OF SALE........................ 53Bai’ Nas’iyah- Sale On Credit......................... 53

Instructions To The Purchaser.............. 54 Instructions To The Seller..................... 55

Bai’ Salam -Deferred Delivery........................ 55 Âyat............................................................... 55 Conditions...................................................... 57

Bai’ Istisnà’- Goods Made To Order............... 59 Examples.......................................................... 59

GLOSSARY OF TERMS... open file in separate window

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Translator’s Introduction

This series of booklets is a translation of a part of a fairly well-known Urdù book, “Islàmî Fiqh” written by Maulnà Mujîbullàh Nadwî of Âzamg’har, India. The aim of the book was to set out in reasonable detail the laws of Islàm concerning the different aspects of a person’s ordinary life in a form that would be easy for an ordinary literate person to refer to. As a result of the very considerable efforts made by the ‘Ulamàa of India/ Pakistàn during the last century and more, there is a good amount of solid and competent literature of this kind available in Urdù today.

This book was written originally in 1975 It is divided into sections according to the traditional headings of the Books of Fiqh: ‘Aqà’id (Tenets), ‘Ibàdàt (Worship), Mu’àsharàt (Marriage and Family Law) and Mu’àmalàt (Commercial Dealings). This translation only covers the section on Mu’àmalàt and will run to more or less 7 booklets of 70 pages each. As this subject is a little on the dry side, we have thought it better to publish it in the form of short booklets rather than one book. This is to a large extent a reference book of rules and regulations, and its contents are best understood from asking questions and trying to determine the answers to them. But it is necessary to read through it to get an idea of its contents. Real life does not fit into boxes, so every real transaction tends to involve several legal categories at the same time. It is therefore necessary to get to understand where to look things up.

The original text has very copious footnotes referring to the source books from which the Masà’il are taken. I have not copied these out as it would have been a lot of extra work and those who are in a position to go looking things up in Arabic Fiqh books are not in need of English translations. If any queries come before any of the ‘Ulamàa they can refer to the original Urdù text. Most of the references given are to Hidàyah, Ibn Abidîn (Radd ul Muhtàr) and to Al Majallat ul Ahkàm. The author is a Hanafî scholar, but on most questions he has set out the positions of the other Imàms as well.

Life was not invented yesterday and commerce is something that has been going on for thousands of years. Therefore there have been moral laws governing it as long as there has been religion in this world, that is to say from the time Man was first put down here. Moral principles do not change, and whenever anything new comes up in the world it has to be evaluated in the light of past experience. Most of the trade transactions that go on today are the same thing as what went on thousands of years ago. The trade of the Muslim world was conducted under these laws for fourteen centuries, and the abandonment of these laws by the world and by the people who call themselves Muslim today has not brought anything except scandalous luxury and corruption for a few and the most utter misery and oppression to the vast majority of mankind, and an unending succession of wars, revolutions, and breakdown of law and order.

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The commercial laws that are in use today also derive in large measure from these very laws, but with the difference that a great many harmful and mischievous transactions that were previously universally recognised as such, and were prohibited, have come to be regarded as permissible and “progressive”.

The world is a place where people are tested on their motivation and decisions. On the basis of the decisions we make about the situations Almighty Allàh puts in front of us, He will make His decision about what to do with each one of us. So, those who wish to take advantage of the present circumstances to exploit and take advantage of other people, and line their pockets and buy themselves a fleet of Mercèdes Benzes to parade around in, can of course do so for as long as Allàh gives them the necessary rope. However, if anyone has any moral conscience and wishes to earn an honest living in this world, and establish a relationship with people that is not based on mutual exploitation, it is very necessary that he should make himself aware of the Laws sent down by the Creator of the Heavens and the Earth about how the resources He has provided are to be used, and how His servants are to deal with each other. Whether or not we are in a position to change the evil that we find around us, we have to at least make sure that we do not ourselves become part of it. Whatever we ourselves do, be it little or much, should be for the good.

I am not a scholar or expert in Islàmic Law. All I am doing here is to make a straightforward text book of basic regulations on Commercial Law available to people

who do their business in English and are not able to read any of the established Muslim languages in which these kinds of books are available. A great deal of further background reading is in fact needed for a person to get a good understanding of this as well as any other aspect of life. Unfortunately we people waste our time reading newspapers and such-like instead of serious books on our religion. Also the number of reliable and competently written books on these matters available in languages like English and French is very limited. I therefore recommend anyone who is proposing to take life seriously to make some effort to learn Arabic, (which is not easy), or failing that at least one of the languages in which a good amount of serious and definitive religious literature is available. Meanwhile, this translation is put forward as a stop-gap measure so that the reader can at least become aware of the existence of some of the issues involved in the matter of business dealings.

In these booklets I have generally not translated the basic Arabic terminology. There are several reasons why I have not done so. First of all the Muslim world does not trade exclusively with English-speaking countries, and the persons we are involved in business with, both Muslim and non-Muslim, are not all necessarily exclusively English-speaking, or familiar with English legal terms.

Secondly, words in different languages are not exactly equivalent to each other, and particularly in the matter of legal definitions, different legal systems do not draw the lines in the same place. If we wish to make sure that our

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dealings stay on the right side of the Law of Allàh, then it is better to think from the beginning in the terminology of His Law and not in the terminology of a law that is often opposed to it.

Thirdly, it often happens that some way of doing business that is current today is prohibited in Sharî’ah. If we get used to thinking in the same terms as those in which the Sharî’ah is framed it becomes a great deal easier to think of some legitimate and viable alternative. Also, by using these terms as part of our thinking we are less likely to get involved in futile arguments with the ‘Ulamàa over apparent “technicalities” which we do not understand, or with spurious justifications and excuses based on complete misunderstanding of the terms in which the Law is framed. It is itself a requirement of intelligent study that we be able to understand the terminology that is used by the Ulamàa so that we can talk sensibly with them.

I do not wish to add a lengthy preface of my own to this book, but I hope to be able to write some separate related booklets later, and I will reserve most of what I have to say for there.

CHAPTER 1

MU’ÂMALÂT or

BUSINESS & MONETARY DEALINGS.

Next in importance in Islàm after Aqà’id (Tenets), ‘Ibàdat (Formal Worship), and Mu’àsharàt (Social Regulations), is Mu'àmalàt- that is to say the ways and means by which a man earns his own living and makes the necessities of life available to the people in general. In essence aqà’id and ‘ibàdat give food for the heart (qalb) and soul (rùh). Also through the soul they also have their effort on the body. And by means of social regulations (mu’àsharatî ahkàm) the Sharî’ah of Islam sets the foundation of a good and pure family by means of which a moral and clean-living society can be created. Then a person’s means of livelihood provides his body with physical food. So whatever means of livelihood, be they good or bad, that people adopt will have their effect through the medium of the body on their hearts and souls. This in turn has its effect on their social life. Thus to whatever extent our dealings with each other are based on justice and fair dealing, to that extent a pleasant social life will be created and the paths of progress will open for us in the world. And to whatever extent our dealings with each other are corrupt, to that extent our society will become corrupt and degenerate.

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There are countless was of earning a living. But in general outline, people basically obtain their livelihood by means of trade, agriculture, manufacture, labour, investment and partnerships, loans and securities and by their mental skills. Through these means a person keeps his body and soul together, looks after his wife and children, and benefits his country and society at large. In the Sharî’ah of Islàm the transactions involved in doing this are called Mu'àmalàt.

THE MEANING OF MU’ÂMALÂT

In Arabic ‘amal means work, and the word mu’àmalàt is derived from this word. But mu’àmalàt does not mean any kind of work. It specifically means those working arrangements in which at least two persons or two parties are involved.

In all the means of livelihood listed above the participation of two persons or two parties is necessary. In trade there is both a seller and a buyer. In agriculture there is a farmer and also other factors of production. In work involving labour there is an employer and an employee. In investment there is one party's money and another party's effort. And in partnership there are two or more partners.

THE GUIDELINES OF ISLAM IN BUSINESS DEALINGS.

The guiding principles laid down in Islam concerning business dealings are of two kinds - one negative and one positive. The basic positive principle is that all transaction must be based on mutual agreement. And the basic negative principle is that the transaction must not be bàtil or wrongful. For example in buying and selling it is necessary that the buyer and seller should both agree. In the same way when any arrangement is made between an employer and an employee, it is necessary that it be by mutual consent. If either one of the parties does not consent to the arrangement, then in Islam this transaction will be declared impermissible. In business dealings, up to the point of mutual agreement the principles of Islam and those of other systems in this world are to a considerable extent similar. But with respect to the other negative condition which is set together with that of mutual agreement, the Sharî’ah of Islam is quite different to other systems. This condition is that this mutual agreement should not involve any wrongful transaction or prohibited thing. For example if any trade or agricultural agreement involves interest or deception or lies, then in the Sharî’ah of Islam that transaction will be declared haràm (prohibited) even if all the parties involved have agreed to it, because in Islam these things have been prohibited absolutely. Similarly in industry and manufacture the same negative principle applies. If someone opens a liquor factory, or produces any item which encourages promiscuity, or on which peoples’ money gets wasted, or which is a means of ruin

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and destruction, then this manufacture can not be permitted. Even labourers will be prohibited from working in such factories, regardless of whether the manufacturer and the buyer and the employer and employee are all in agreement with each other. The reason for this agreement not being taken into consideration is that agreement on any prohibited thing can only be permitted in the case of extreme crisis in society or in time of serious danger to life, property and honour. Here none of these factors apply. On this basis some jurists, in the definition of trade, have made màl mufîd i.e. useful goods a condition of validity. That is to say their usefulness should be accepted in Sharî’ah, and on the basis of this Shari’î usefulness transactions are to be divided into valid, invalid, and wrongful. This is referred to in Sharî’ah as màl mutaqawwam, that is goods that have a value in the eyes of Sharî’ah. And in the eyes of Sharî’ah prohibited and wrongful things have no value.

THE WORLDLY BENEFIT OF THESE PRINCIPLES. In this world the result and benefit of these two principles is that no dispute remains between the parties to any transaction nor can any one party oppress the other nor, by disregarding the permissibility or impermissibility of the means, can any small group reserve a life of luxury for themselves nor can the rest of the people be pressed into misery and ruin.

Today the shortages and rising costs of the necessities of life that is being felt throughout the world and also

here in India and Pakistan, and the unrest that is affecting the lower income farm workers, labourers and petty traders is in the main the result of not observing in any real sense either of these two conditions. And the influence of interest and speculation in business dealings has turned the whole world into an veritable economic hell. For further discussion see "Islàmi Qànùn-e-Tijàrat” and "Islàmi Qànùn-e-’Ujrat" by the same author (in Urdù)

Iqbàl said about interest:"To pay one man his interest charges costs hundreds of thousands of sudden deaths”

THE POINT OF VIEW OF THE ÂKHIRAT

The instructions that have been given concerning business transactions are not only matter of benefit from a worldly and material point of view. For a Muslim their observance is a road to success and happiness, and failure to observe them a road to loss, failure and ruin, both in this world in the àkhirat. If any Muslim makes any transaction that is haràm, or bàtil or without the agreement of the other party, then in this world he is trampling on one person or another's rights and causing him harm, and he is also making preparations for his own loss and ruin in the âkhirat. For this reason in the Holy Qur’àn Allah Ta’àlà has in material terms related

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their actions to murder and oppression, and has warned of the punishment of Hell in the âkhirat. "O you who are faithful do not consume each others wealth wrongfully but by fair trade by mutual agreement between you (In this there is no objection) and do not kill each other (either literally as a result of wrongful dealings, or in an economic sense) when Allah has been merciful towards you (so do not then be unmerciful yourselves) and whoever does that aggressively and unfairly then soon enough We will put him into a fire. And that for Allàh is very easily done”

Here the Holy Qur’àn, by both prohibiting wrongfulness and specifying mutual agreement has made it clear that those commercial transactions which take these conditions into account are valid, and those that do not take account of these conditions, because of their being in themselves dishonourable, or for various other reasons, are either undesirable, impermissible or totally prohibited (haràm). The full details of this are found in the Hadîth-e-Nabawî, some of which will be quoted under separate headings further on.

Apart from this Âyat, wrongful consumption and absence of agreement have also been referred to in other Âyats of the Holy Qur’àn. For example in connection with bribery:

"Do not consume each others wealth wrongfully by bringing dishonest lawsuits against each other before the government so that you can sinfully consume some part of peoples’ wealth."

And concerning orphans:

"Those who consume the wealth of orphans by misappropriation they are filling their stomachs with fire and soon they will enter Hell."

It is in the light of these Âyats and the Hadîth-e-Nabawî that the Fuqahàa (jurists) have in the coming questions given verdicts of valid, permissible, impermissible or undesirable. It is as if the Holy Qur’àn has in these two words defined the rule concerning all commercial transactions.

Qàzi Thanà’ullàh Panipatî rahmatullahi alaihi in his Tafsîr Maz’harî has written"The Holy Qur’àn has used here the word Tijàrat (trade) but under this heading come all transactions in which

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two or more persons are involved in commercial dealing." In their definition of Bai' as "the exchange of wealth for wealth by mutual agreement" the provisos that the jurists have set exclude interest, gambling and speculation, hoarding, dealing in futures and all such transactions. Tijàrat means the exchange of wealth for wealth or goods for goods. If on one side there is wealth or goods, and on the other side there is no wealth or goods then this is not trade, but some kind of fraud. Take for example interest. Interest is remuneration for the period of time specified at the time of taking a loan or taking some item on credit. And it is obvious that a fixed time is not wealth or goods. So this transaction is not valid.

The same applies to speculations, betting and lotteries. On the one side is a sum of money and on the other side their is no guarantee of there being any money or goods. There may be or there may not be.

And it applies also to the sale of commodities that do not yet exist. On the one side is money, but on the other side these is only a doubtful promise. Therefore the Fuqahàa (jurists) have declared it to be a wrongful sale (bai' bàtil)

When the ordinary necessities of life are hoarded then prices rise, and people are still obliged to buy them. In this case it is not with their agreement, but by force. Therefore in Sharî’ah ihtikàr (hoarding) has been declared makrùh (offensive, or objectionable) and in Hadîth the person who does this has been cursed. Also

in the cases of interest, betting and bribery, while there is apparent agreement between the parties, it is a fact usually the result of some force or pressure.

The point to be understood is that in trying to earn a livelihood, the kind of transaction that is wrongful or is done without mutual agreement, might possibly result in some benefit for a few days, but at the same time it will cause harm to other people in this world, and both in the long run in this world, and also in the next world it will be a cause of harm and disaster for the person involved.

On this basis the Holy Qur’àn has described those people who consume wealth wrongfully and without the other parties’ agreement as "akkàlùna ‘s suht." Suht means destruction ruin or obliteration Those who earn their living in these kind of ways are "consumers of ruin." In the long run they destroy themselves and also cause harm to others in doing so. It comes in Hadîth that Hazrat Jàbir radhiyallàhu ‘anhu has said that the Rasùl of Allàh sallallàhu ‘alaihi wa sallam has said "The flesh that has been fed on haràm wealth will not enter Paradise, and whatever flesh has been fed on haràm wealth, its place is the fire of Hell"

Those dealings that are free of bàtil and suht and are done by mutual agreement, Allah Ta’àlà has described as fadhl or generosity and has encouraged us to seek from it. After giving the order for Jumu'ah Salàt, the Âyat continues:“And when the Salàt is over then disperse into the earth

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and seek (your honest living) from the generosity of Allah.”

and after giving instructions for Hajj the Holy Qur’àn continues: “(and after fulfilling the duty of Hajj) there is no objection against your seeking your livelihood from the generosity of Allah.”

IMPORTANCE OF LEGITIMATE EARNINGS

Much clarification of the meaning of bàtil and taràdhî i.e. wrongfulness and mutual agreement is to be found in the Holy Qur'àn itself. But full explanation is to be found in the statements and orders in the Hadîth of the Nabî sallallàhu ‘alaihi wa sallam. From these sources the Fuqahàa-e-kiràm or jurists have derived thousands of mas'alas.

First of all the Nabî sallallàhu ‘alaihi wa sallam has stressed the benefit of earning one’s living by one’s own hands, because in this the likelihood of bàtil or suht in minimal.

It is reported by Hazrat Miqdàd bin Ma'dîkarib radhiyallàhu ‘anhu that the Nabî sallallàhu ‘alaihi wa sallam has said "No man eats better food then that which he earns by the work of his own hands. (i.e. his own labour)

The Nabî sallallàhu ‘alaihi wa sallam has said about himself that "I used to graze the goats of the Quraysh for a wage of 1 Qîràt per day"

Thus also it comes in Hadîth that Hazrat Dàwùd - Hazrat Idrîs and other Anbiyàa, alaihimus salàm used to eat and drink from the work of their own hands.

These days this is considered to be something low and degrading. But the majority of the Sahàbah radhiyallàhu anhum and the elders of the Ummah, on the basis of this guidance, used to earn their living by their own hands. How many of them used to cut wood, how many were iron workers, how many were goldsmiths, how many were shoemakers, how many were tailors, how many were farmers, and how many of them used to make ends meet by just undertaking common labour? And in society, because of their religious knowledge and achievement they enjoyed a status that high-ranking noble and chiefs did not have. The Nabî sallallàhu ‘alaihi wa sallam has said that whatever ‘ibàdat is done from haràm earnings, will not be accepted by Allah. And he has also said that the body that has been fed a haràm wealth will not enter Jannat without being burnt in the fire of Jahannam, and its prayers are not accepted. There is a report from Hazrat Abù Hurairah radhiyallàhu ‘anhu that "A time will come when a man will not worry whether what he earns is halàl or haràm.”

Concerning halàl and haràm there is a Hadîth reported by Hazrat Abù Bakr radhiyallàhu ‘anhu from the Rasùl of

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Allàh sallallàhu ‘alaihi wa sallam that warns "Allah Ta’àlà is pure and only accepts what is pure and Allah Ta’àlà has given the same order to the faithful as he has given to his Messengers for he has said to them "O Messengers, eat from what is pure and do good" and he has said "O you who are faithful to me, eat from the pure things that I have given you." Then he described the kind of man who journeys far, whose hair is in disarray, and who is covered with dust, and raises his hands in prayer towards the heavens and calls out, “ O my Lord,” and his food is haràm and his drink is haràm and his clothes are from haràm sources, and he was brought up on haràm wealth so how can his prayer be accepted?”

The Rasùl sallallàhu ‘alaihi wa sallam has said that whoever took a span of ground by oppression will on the day of Qiyàmat wear it around his neck as a curse. And he has said that to earn a halàl living is faradh for every Muslim. And he has said that the reward of searching for a halàl livelihood is the same as that of Jihàd.

These are general guidelines from Qur’àn and Sunnah on business dealings. Now we will proceed to the orders from Qur’àn and Sunnah concerning particular transactions, and to the detailed conclusions that the Fuqahàa-e-kiràm rahimahumullàh have drawn in their light. But before this, it is necessary to take a look at the list of those things that are haràm or halàl or mubàh because in the explanation of transactions they are repeatedly mentioned.

CHAPTER 2

HALÄL & HARÄM

THOSE THINGS THAT ARE HALÄL, HARÄM AND MUBÂH.

In their books the Fuqahàa have a section called “Bàb ul Hadhar wal Ibàhah" In it they list the things which are haràm or makrùh to eat or to wear and those which are halàl or mubàh to eat or wear, and then of them, those things which are permissible to buy and sell. It comes in the Holy Qur'àn that:

"Say that I have not found in the orders that have been revealed to me any prohibition of food a man eats except that it be carrion or flowing blood or the flesh of pigs because that is filth or an idolatrous sacrifice slaughtered in the name of someone other than Allah. And if someone is in desperate difficulty and is not looking for enjoyment and not trying to sketch the limits

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( he may eat from them up to the limit of absolute necessity) for your Lord is forgiving and merciful.”

And in this connection, in some places where Allàh Ta’àlà has given the instruction to eat and make use of the pure things that he has created, he has also prohibited the eating and use and buying and selling of haràm things. “Carrion is prohibited for you and (also) blood and the flesh of pigs and whatever has been dedicated to someone other then Allah and then slaughtered and whatever has died from its neck being twisted or from a blow or by falling from height or has been gored, or what has been eatenby wild animals-but only what you yourselves slaughterand what has been slaughtered in the name of Allàh;or that you make use of divining arrows.”

And also it comes in a Hadîth reported by Hazrat Ibn Abbàs radhiyallàhu ‘anhu that the Rasùl of Allàh

sallallàhu ‘alaihi wa sallam prohibited the eating of any carnivorous animal or predatory bird.

From these and many other Âyats of Qur'àn and Hadîth the Fuqahàa have derived the rules in the following pages about animals and birds.

The writer of Durr e Muktàr has defined Hadhar and Ibàhat in these words:

“The dictionary meaning of Hadhar is prevention or prohibition. And in Sharî’ah a thing that a prohibited is called Mahdhùr and its opposite is mubàh. So a mubàh action is something for which there is no punishment and for abstaining from which there is not necessarily any reward. But for its use a light account will be taken on the day of Qiyàmah.”

HARÄM ANIMALS AND DEAD ANIMALS

Pigs, dogs and animals that hunt are haràm to eat. And trading in some of them is also not permissible. For example lions, tigers, cheetahs, wolves, jackals, foxes, and cats. And in the same way among birds and flying creatures hawks, falcons, vultures, kites, bats and flying foxes and crows that eat carrion are haràm to eat or to sell. And any animal or bird that eats carrion is haràm to eat or to sell. More detail on this follows. Also monkeys, mules, donkeys, elephants, and rhinoceros are prohibited. Pigeons, starlings, peacocks, herons, and cranes, are halàl. And locusts are also halàl to eat.

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FISH AND OTHER AQUATIC CREATURES

Imàm Abù Hanîfah rahimahullàh regards only fish and those marine creatures that have the appearance of fish as being halàl, and regards all other creatures that live in rivers or lakes or the sea as being haràm, that is to say crabs, frogs, turtles, crocodiles and so on.

Imam Màlik rahmatullahi ‘alaihi regards all purely aquatic creatures as halàl. (i.e. not amphibious animals - translator) Some Ulamàa have given fatwà of impermissibility on shrimps and prawns. But others give permission. In Arabic they are called Rubyàn. Maulàna Abd ul Hayy Faranjî Mahallî rahmatullahi alayhi and Maulànà T’hanwî rahmatullahi alayhi and Mufti Abd ur Rahîm Sàhib Làchpurî and others have written that they are permissible (if one regards them as being samak which is the Arabic word usually translated as fish. The issue is basically over the definition of this word- translator). In Kitàb ul Hayawàn, quoting from Damîrî and other is written: “Rubyàn is a kind of small fish (samak).”

SNAKES AND SCORPIONS Hasharàt-ul-Ardh, that is to say all animals that creep or crawl along the ground are haràm. This category includes snakes, scorpions, caterpillars, ans also rats and mice, and weasels.

INSECTS

It is not permissible to eat either live or dead insects. However if weevils and so on that live in wheat and other grains are ground in the mill together with the grain, then there is no objection to eating the flour. It is not permissible to eat wasps or bees or flying ants. And if bees get ground into some honey then the honey should not be eaten.

Locusts however are specifically permitted.

In the Âyat of Qur'àn quoted previously mention was made of dead and wounded animals. Some further explanation of these follows.

DEAD AND WOUNDED ANIMALS AND BIRDS I.E. CARRION

Maytah or carrion means basically those animals that have died by themselves. Sometimes an animal or bird gets wounded and then dies. They all come under the same order.

1. Munkhaniqah: An animal that has been killed by twisting and breaking its neck. Hindus and other non-Muslims frequently kill animals in this way.2. Mawqùdhah: An animal that has been killed by a blow from an iron bar or a club.3. Mutaraddîyah: An animal that has died from falling from a high place.

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4. Natîhah: An animal that another animal has killed with its horns.

All these four, if they are halàl animals or birds, and are still alive, may be slaughtered in the proper way and eaten. But if they have died then they are haràm. An animal shot by a gun is included under Mawqùdhah

THE HUMAN BODY

Human blood, flesh, bones, skin are all haràm either to eat or to make use of in any way or to sell.

JALÂLAH

Any animal or bird that eats dirt and filth is called jalàlah, be it a chicken, a goose, a cow, a buffalo, or a camel, and its milk and meat is makrùh, and the water they have drunk from is najis - unclean. If they are kept confined or tied up for a few days (to prevent them from eating any filth) and then milked or slaughtered, then the milk and meat are permissible to eat. This is also the opinion of Imàm Ahmad bin Hanbal rahmatullahi ‘alayhi. However Imàm Màlik rahmatullàhi ‘alaihi considers the meat of such birds or animals to be mubàh and their milk to be makrùh.

The animals that have here been declared to be haràm or makrùh have been so declared because of their internal dirtiness and their filthy habits. But a human being, because he is ashraf-ul-makhluqàt, the best of creation, out of respect the use of any part of his body

has been prohibited. The use of human blood is therefore haràm. But there is some latitude for permitting its medical use as has been stated previously.

INTOXICATING SUBSTANCES.

All intoxicants whether they be eaten or drunk or inhaled or injected in any way are haràm. For example wine, beer, spirits, alcohol, opium, marijuana (cannabis) hashish, cocaine, heroin and so on, are all included in this. It is on the basis of the following Âyats of the Holy Qur'aan as well as in the light of the Hadîth-e-Nabawî that the Fuqahàa have declared all intoxicants to be haràm or makrùh.

“O you who have pledged your faith wine, gambling and idols and divining arrows are all foul things from the work of Shaytàn so stay away from them completely.”

After stating the legal status of some haràm things, the Holy Qur’àn has also pointed out their damaging effects on people’s character

“Shaytàn wants to set between you enmity and hostility by means of wine and gambling and to prevent you from being conscious of Allah and from prayer

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so now are you going to stay away from them?”

In another Âyat the effect of intoxicants is made clear.

“They ask you about wine and gambling. Say that in them these is great harm and some benefit for people and their sin and harm is greater than their benefit.”

In these Âyats ten proofs for intoxicants being haràm are given.1. They are mentioned together with gambling and the like. Therefore it is also haràm like them2 They have been referred to as rijs, and rijs means something haràm.3. They have been called the work of Shaytàn.4. We have been ordered to stay away from them completely.5. Success has been made dependent on staying away from them.6. Through them Shaytàn creates enmity between people.7. Through them Shaytàn creates ill feeling and envy.8. Drinking makes a person unconscious of Allah.9. It creates disregard for Salàt.10. Finally it is condemned implicitly in the question "so now are you going to stay away from it?"In another Hadîth The Rasùl sallallàhu ‘alaihi wa sallam has condemned those who drink:

“No one drinks wine where it is drunk while he is a Mu'min.”

Once a drunkard was brought before The Rasùl sallallàhu ‘alaihi wa sallam. Huzur sallallàhu ‘alaihi wa sallam ordered that he should be beaten; and he himself threw dust in his face. (Abù Dàwùd)

Liquor is made from various things - grapes, dates, barley. Whatever it is made from, it is haràm. The following passage by Abd ur Rahmàn al Jazairy makes the meaning of the word khamr clear.

“Khamr: whatever weakens a man’s mind when it is taken and intoxicates him and makes him beside himself. So whatever makes a man beside himself is khamr whether it be distilled from grapes or prepared from dates or from honey or wheat or barley, or even milk or food or any other thing. The Nabî sallallàhu ‘alaihi wa sallam has declared every thing that intoxicates to be haràm.”

Whatever intoxicates in larger quantities is also haràm in small quantities.

From this explanation the position of beer which some Muslims imagine to be permissible can be judged.

Imàm Abù Hanîfah and Imam Abù Yùsuf say concerning the liquor that is made from wheat or barley that the use of small quantities of it is permissible. But Imàm Muhammad and the remaining three Imàms on the basis

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of the Hadîth quoted above, say that small quantities are also haràm. And the Hanafî Fatwà is on this also.

At the present time a result of Western culture spreading into Muslim countries, some of the Ulamàa of some of these countries have began to consider the liquor of barley, that is beer, to be permissible in small quantities, and quote the above opinion of Imàm Abù Hanîfah and Imam Abù Yùsuf in this regard. Concerning this Abd ur Rahmàn al Jazairy writes.

“Some beer drinkers think that in Hanafî fiqh there is no objection to drinking small quantities of beer. The actual fact is that both in small quantities and in large quantities its use is haràm, just as it is haràm in the sight of the other Imams, and this is the correct and binding Hanafî verdict. This is because the actual disagreement (between the Imàms) was concerning three things:

1. Thuluth: When fermented grape juice is distilled then two thirds is evaporated and collected and one third remains. The residue is intoxicating in large quantities but not in small quantities. It is also called talal.

2. The fermented date juice that is heated to evaporate off the alcohol and which, if drunk in large quantities, intoxicates and when drunk in small quantities does not.

3. The drink that is derived from barley and its ear. In large quantities it intoxicates and in small quantities it does not. Imàm Abù Hanîfah rahmatullahi alayhi and

Imàm Yùsuf rahmatullahi alayhi say that in large quantities it is haràm and in small quantities it is not. And Imàm Muhammed rahmatullàhi alaihi says that just as other intoxicants are prohibited both in large quantities and in small quantities so also the same applies here. Imàm Shàfi’î, Imàm Màlik and Imàm Ahmad bin Hanbal rahmatulahi alayhim have given the same verdict. In Hanafî Fiqh, the Fatwà is on the view of Imàm Muhammad, and it is his view that is the Hanafi view. And despite their disagreement on this point all three of the Hanafî Imàms as are agreed that if a drink is not intoxicating in small quantities and someone uses it for the purpose of relaxation and getting happy, as is the practice if those who drink it, and not for getting strength to the body, then it is haràm even if it is only one drop. Beer and every kind of liquor be they in small quantities or large quantities, are in the sight of all the Imàms and all the Muslims haràm.

The actual basis of the disagreement between the Imàms was as to at what point the Hadd of Khamr (i.e. the stipulated criminal punishment for drinking wine) should be applied. Otherwise on the point of its being haràm these was no disagreement. And basically the same applies to Opium, Cocaine, marijuana, Hashish, Heroin and so on.

THE LAW CONCERNING THINGS THAT ARE HALÄL, HARÄM AND MAKRUH.

1. If an animal is haràm, then without any extreme necessity, to buy and sell it is also haràm. But it is

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permissible to buy and sell its tanned leather or treated horns or skin or any article which is made from them.

But the purchase or sale or use of pigskin or any other part of a pig is in any condition is not permissible. Also the buying or selling of any organs or part of a human being is not permissible as it is a matter of respect for human life and human kind.

2. Maytah or Carrion: it is haràm to sell the meat or skin of carrion. But it is permissible to sell its tanned leather or skin. Without it being tanned it is not permissible to deal in it.

3. It is not permitted eat any carnivorous animal or any animal that eats only filth - for example lion, cheetah, wolf, jackal, hawk, falcon, vulture, kite etc. And to deal in them is makrùh.

4. All intoxicants are haràm such as liquor of all kinds - wine, spirits, beer etc. and also opium, heroin, cocaine, marijuana, hashish, mandrax, barbiturates, L.S.D. and all other narcotic or psychotropic substance and chemicals.

5. All poisons are haràm - such as arsenic and the like.

6. The use of gold and silver is permissible for women but haràm for men. And for women this permission is restricted to personal bodily ornaments.

Gold and silver vessels, spoons, pàn boxes, clocks, mirrors and the like are haràm for men and women alike.

7. Silken clothes of any kind are haràm for men. But there is no objection to trimming the edges of quilts, blankets and so on with silk.

8. All kinds of dealings in interest are haràm. Detailed explanation of this will be found further on.

9. All kinds of gambling are haràm - for example lotteries, speculation, betting, buying and selling commodities in their absence and so on. Also any business done through cheating and deception is haràm

10. Trade in all things that are used specifically for music and dancing is haràm The question of radios etc. will be found further on.

11. Pictures and images of living things and photography, drawing and filming in which dancing, musical instruments and women are featured are all haràm.

SOME DISTINCTIONS.

Some of these things are under all circumstances prohibited, and their use, purchase, sale, use in manufacture and also their admixture in purchase, sale, and manufacture are all impermissible - such as pork,

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gambling, musical instruments, liquor and other intoxicants.

But some things are prohibited and haràm to use, but trading in them is not haràm. For example silken clothes are only haràm for men. For women they are permitted. And gold and silver jewelry and personal ornaments are prohibited for men but permitted for women. So therefore trade in these items is not haràm. The meat and fat of haràm animals and carrion are under all circumstance haràm. But the use of their bones, horns, and hair is permissible. In the same way the use of or trade in untanned skins of such animals is haràm. But once they are tanned it is permissible. But the use of and the buying and selling of any part or product of a pig remains haràm under all conditions. And the use of the fat of carrion is haràm to eat, but its use for other purposes is permissible.

CHAPTER 3

TIJÀRAT or

LEGITIMATE TRADE

Their are two main means by which people obtain their food and other necessities of life - trade and agriculture. And at the present time agriculture, manufacture and all other essential activities have become subservient to trade. And if trade and business is not conducted on proper lines, then regardless of how much grain or cloth or other necessities of life are produced, shortages will continue to increase and prices will continue to rise. For example consider the price of grain in India.

Year Price/Unit Increase1957 15/-1963 20-22/- 30%-40% in 6 years1971 45/- 100% in 8 years1974 60-70/- 50% in 3 years1986 80-85/- 30% in 12 years

This has happened for two reasons - firstly the hoarding, speculations, selfishness and dishonesty of the merchants controlling the grain market, and secondly the involvement of the government in the grain market as a merchant in its own right, and its exploitation of the

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market. In the Sharî’ah of Islam the government is not given the option of involving itself in business.

Referring to the importance of trade the Rasùl of Allàh sallallàhu alaihi wa sallam has said that nine tenths of rizq is in tijàrat. And to straighten out the ideas of traders, there are many different positive and negative injunctions in Islàm. These are of two kinds -firstly moral and secondly regulatory. Moral injunctions are those that explain that such and such a kind of behaviour is contrary to the îmàn and aqîdah of a Muslim, or contrary to respect for humanity as a whole. Therefore it will lead to a bad outcome for him in the next world. And by regulatory injunctions is meant that whoever goes against them can also be penalised in this world. The purpose of this book is essentially to explain the latter kind of injunctions.

However a few moral injunctions are also given here as a reminder that all the regulations given in Islàm are essentially related to the îmàn and aqîdah of every Muslim.

The Holy Qur’àn has expressed the moral and legal importance of trade and buying and selling in a number of Âyats. One has been quoted already. Two more Âyats are these:

“Allah Ta’àlà has made trade halàl and ribà (interest) haràm.”(so how can they be similar?)

and

“And when you buy and sell have it witnessed.”

The Messenger of Allàh sallallàhu alaihi wa sallam has said: “If it were not for these transactions, you would become a burden on people.”

It has been stated above that in the Holy Qur’àn those who earn their money through bàtil and suht have been warned of the punishment of Jahannam, and have been described as oppressors. The Messenger of Allàh sallallàhu alaihi wa sallam has explained matters in detail. He has said that: “The trader is the trustee on the Earth of the means of livelihood that Allah has given, and the guardian of his own honour and respect and that of the people in general.”And the Messenger sallallàhu alaihi wa sallam has said: “On the day of Qiyàmat the truthful and honest trader will be together with the Nabîyîn, the Siddiqîn and the Shuhadàa” and he has said "May Allah have mercy on the person who is kind-hearted when he buys and when he sells and when he claims his debts.” And he has said: "On the day of Qiyàmat every trader will be raised as an offender except for those who feared Allàh and who were good and kind to people.” - that is to say that in business they did not operate in a way as to cause problems and trouble for people.

And the Messenger sallallàhu alaihi wa sallam has said. "Whatever trade is done through lies and deception,

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while it might appear to be profitable, will in fact in the end turn out to be a cause of loss."

And he has also said: "Trade is only valid by virtue of mutual agreement.” The whole structure of trade stands on the foundation of these moral precepts of Islàm. In this way of doing business is benefit for every human being. But the shameful fact is that the same Muslims to whom these teachings are addressed have themselves forgotten these teachings and are instead ruining everybody else’s worldly affairs as well as their own as well as their own life in the hereafter. Someone once asked Imàm Muhammad, the famous disciple of Imàm Abù Hanîfah rahimahullàh why he had not written any book on Zuhd and Taqwà i.e. piety and abstaining from worldly involvement. He answered:” I have written a book on the way to buy and sell.”

What he meant here is that real piety and abstention is to avoid haràm and to earn a halàl livelihood and all these things come in this book.

1 SOME TECHNICAL TERMS CONCERNING TIJÀRAT

There are some words and expressions that will occur again and again. Therefore they are explained below:

1. Bai’: The word bai’ means sale and the seller is called bà’î’. And the thing sold is called mubî’.2. Sharà: the word sharà means purchase or buying, and the buyer is called mushtarî.

Sometimes these two words are used the opposite way round.

3. Îjàb and Qubùl: The words by means of which the sale is transacted between the buyer and the seller are called îjàb and qubùl. For example the seller says that I have put this article up for sale for so much and the buyer says that I buy it. Here the seller’s word is called the îjàb and the buyer’s word is called the qubùl - in other words offer and acceptance. And if the buyer first says that I want this thing and the shopkeeper agrees then the buyer’s word is called îjàb and the seller’s word is called qubùl. In other words whoever speaks first, his word is the îjàb.

Bai’ falls into two categories. One is mun’aqid and the other is ghair mun’aqid.

Bai’ mun’aqid means a sale that has been contracted. It may be of four kinds either sahîh or fàsid, that is to say valid or invalid and either nàfidh or mawqùf that is to say effected or suspended. And the bai’ or sharà that is not contracted at all (ghair mun’aqid) is the one that is bàtil or wrongful. The definition of each one of these is as follows.

Bai’ Sahîh - Valid Sale

A valid sale is a sale which is lawful both in itself and in its manner. That is to say it is not bàtil and wrongful,

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there is real mutual agreement, the seller owns the goods, and the buyer owns the price.

Bai’ Fâsid - Invalid Sale

An invalid sale is a sale which is according to the law in itself but not in its manner.

That is to say there is some deficiency in offer and acceptance. For example neither party mentioned the price, or the item is question is undefined, as in the purchase of fruit before it has appeared.

When a sale is invalid then both parties have the option to cancel the sale. But if the buyer has already taken possession of the goods, then the sale is effected and it will come under the same regulations that applies to transactions involving interest.

Bai’ Bâtil - Wrongful Sale

Wrongful sale is sale that is invalid in itself i.e. it is in itself unlawful. In other words it is unsound in terms of either basic requirements or of the item being sold. For example the seller is a minor, or the sale involves haràm goods, or the goods do not yet exist and it is not possible to take possession of them.

Bai’ Mawqûf - Suspended Sale

If someone makes a transaction without permission of the actual buyer then the sale is suspended conditional

on the approval of the buyer. Or if an intelligent minor makes a transaction then it is suspended conditional on the approval of his guardian.

FuzûliA fuzùli is a person who acts on someone’s behalf without his legal permission

Bai’ Nâfidh - Effective Sale

Bai’ nàfidh or effective sale falls into two categories: làzim & ghair làzim, i.e. binding and non-binding.

Bai’ Lâzim - Binding Sale This is a sale in which there remains no option of return.

Bai’ Ghair Lâzim - Sale On Option

This is a sale in which the buyer or the seller still have the option of returning or taking back the article.

This is of three kindsKhiyàr ush ShartKhiyàr ul ‘AibKhiyàr ul WasfAll these three will be defined further on.

Mâl - Goods

Màl is defined as whatever uncorrupted human nature inclines to and which it is possible to collect at the time when it is needed.

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Mäl Mutaqawwam

Màl mutaqawwan is used in two senses; one is a thing that is mubàh from which it is permissible to take benefit, and the second is a thing that is mubàh which a person has taken possession of. For example fish in a river are màl that is not mutaqawwam, but once they are caught then they are màl mutaqawwam. In the first situation their sale is not permissible. In the second situation it is permissible.

Similarly some things may be regarded as goods but the law does not accept them as good. These are ghair (not) mutaqawwam for example liquor, interest, carrion, blood and so on. For a Muslim all these things are not goods at all.

Milkîyat

Milkîyat is anything of which a person is the owner, be it a particular thing, or some benefit that he derives from it (i.e. either property or a propriety right). A’yàn (property) includes goods, land, animals, and so on. Nafa’ (benefit) includes things like giving or taking a house on rent, working for a wage, work done by an artisan or craftsman, and so on. In the latter on one side is money (or goods) and on the other side is work or benefit. Therefore it is called milkîyat rather that màl. Màl is something that can be stored, and munàfa’ah (benefit) can not be stored. It occurs as it occurs.

Thaman - Price

Thaman is what is given in exchange for goods bought or which remains owing for them.

Thamanun Musammâ

The thamanun musammà or stated price is the price named and fixed at the time of agreement regardless of whether it corresponds with the real value of the article bought or is less or more than that.

Qîmat - Actual Value

The real value of a thing is in Law called its qîmatThis is the difference between thaman and qîmat - i.e. price and value.

Types of Bai’

With respect to the article sold there are four kinds of bai’1. Bai’ ul màl bith thamanSale of property for price (cash) This is basic sale. 2. Bai’ sarfExchange of money for money or of precious metals i.e. gold and silver.3. Bai’ ul muqà’idhahExchange of property for property other then cash i.e. barter.4. Bai’ salam

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Exchange of cash for goods to be supplied at a specified future date.

All these four transactions can take many forms.

Bai’ Ta’àtî

The function of îjàb and qubùl (offer and acceptance) is to establish the mutual agreement of the two parties. Therefore if, without anything being said, exchange is physically made in such a way as to clearly indicate mutual agreement, then the sale is valid. This is called bai’ ta’àtî.

For example the price of an item is written on it. The buyer takes the item and tenders the amount of the price, and the seller takes the money without anything being said. This is a bai’ ta’àtî.

Ghabn Fàhish

If in buying and selling a person is grossly deceived this is called ghabn fàhish. Definition: It there is a loss of 5% in a sale of goods, or 10% in a sale of animals or 20% in a sale of land, then this is ghabn fàhish.

In this case both the buyer and the seller have the option of canceling the agreement. And if the amount involved is less then this, then the agreement will be regarded as binding.

This all refers to the situation where a person buys some goods and subsequently finds that he has paid more than their actual market value e.g. he bought goods for $100 and finds that their market value is $95 or less. In this case he can take them back to the seller, and demand his money back.

2 TIJÄRAT

The Meaning of Tijârat

In the Sharî’ah both the term tijàrat and the phrase bai’ and sharà are used to refer to exchange and buying and selling between people. The dictionary meaning of tijàrat is exchange for profit; bai’ means sale and sharà means purchase. Sometimes these two words are used the other way round.

Definition of Tijàrat

In today's Economics any exchange that is made for profit is termed trade or tijàrat. But in the Sharî’ah of Islàm only the exchange and sale of desirable legitimate goods in a fair and permissible way by mutual agreement is termed tijàrat, as has been stated previously.

In other words in the Sharî’ah, the meaning of the word trade is restricted to fair trade. Exchange of illegitimate goods or exchange by illegitimate means, regardless of

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any apparent profitability is classified as improper and invalid. And even if the exchange is of legitimate goods by legitimate means, if it is not done by real consent of both parties, it will also be invalid.

(There is a well known saying that: "Fair exchange is no robbery.” It is not difficult to see that the same can not be said of unfair exchange. The point at issue in Law is the distinction between the two. The first step in making the distinction is to not use one blanket term to cover both. Therefore in Sharî’ah whatever is not fair trade is not trade at all and will have to get itself classified elsewhere - translator).

For any exchange to be regarded in the Sharî’ah as tijàrat it has to fulfill both the negative and positive conditions set out in the Âyat of the Holy Qur’àn quoted previously (p ) i.e. it must not be wrongful (bàtil) and it must be by real mutual consent (taràdhî)Mere exchange for profit is not sufficient to deserve the name of trade.

The Meaning of Bâtil (Wrongful, Null, Invalid) and Fâsid (Spoilt, Broken)

As has been said before there are two ways in which a transaction can be invalid. One is that it is impermissible and invalid in itself. This is called bàtil. And the other is that it be done in such a manner that it becomes invalidated in the process. This called fàsid. Since these are technical terms in the Sharî’ah it is necessary to

make use of them themselves, rather then some approximate translation.

Bàtil

The following types of transaction are bàtil

1. The buying or selling of anything that is classified in the Sharî’ah of Islàm as haràm - for example alcoholic drinks, musical instruments, any product derived from a pig, carrion meat, or its fat.

2. Making money by any means that has been classified in the Sharî’ah of Islam as haràm for example ribà (interest) or qimàr (gambling). The meaning of ribà is not limited to interest on loans. There is a long list of transactions that fall under this category which will come later. In the same way the countless transactions in the modern world that fall under the heading of qimàr will also be explained in more detail.

3. Buying or selling any thing that is not in the sellers physical possession, or does not yet exist.

The Legal Status of Bai’ Bâtil and Bai’ Fâsid

Bàtil transactions are prohibited and wrongful at the outset, and the transaction is legally null and void and in no way binding on either party, and it is prohibited for either of them to proceed with the transaction and obligatory for both to reverse it.

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A fàsid transaction is one that is in itself permissible, but is then conducted in a way that renders it invalid. In a fàsid transaction if the buyer has taken possession of the goods with the consent of the seller then the sale is regarded a having been effected, but it will be classified under ribà transactions, and it will be obligatory for both parties to cancel the transaction.

The Meaning of Tarâdhi (Mutual Agreement )

The second condition in the Sharî’ah for a transaction to be valid is mutual agreement. The essential purpose of this condition is that there should be no quarrel or dispute between the buyer and the seller. No one should be exploited. No person’s wealth should be taken from him unfairly. Therefore any contract in which one party's profit is fixed and another party's profit is not fixed is regarded as contrary to the condition of mutual agreement and therefore prohibited. Obviously no one will agree to such a condition unless he is under some kind of pressure, or is defective in understanding.

Similarly when hoarding or speculation cause prices in the market to rise, consumers are obliged to either buy their necessities at high prices or do without them. Now obviously if the consumer knew that the extra that he is paying is the result of these activities, he will pay only with the utmost reluctance. So it cannot be said that he has agreed to buy at that price. Again if a trader deceives a customer into buying something at a higher price, then it can not be said that the customer agreed to this transaction, because if he gets to know the real facts

of the matter he will not agree to that price and will show his most extreme displeasure. So all forms of deception, fraud, lies and pressure are contrary to the condition of mutual agreement and are classified under ghabn fàhish.

3 TRADE IS A CONTRACT

Tijàrat is a contract between a seller and a buyer. For this reason it is called in the Sharî’ah “aqd ul bai’ “. The word aqd means binding or tying a knot. That is to say by means of the contract two or more parties are bound together. Therefore in the same way that any treaty or contract that involves fraud and deception, or which is entered into without the consent of any one of the parties concerned, can not be considered to be concluded or to be binding, so also any sale agreement of this nature is neither concluded nor is it binding.

Procedure For Buying And Selling

The procedure for buying and selling is that when anything is to be bought or sold, the goods should first be properly inspected, and the price should be clearly fixed. If two items are to be exchanged then both should be properly inspected. Then the Agreement of Sale should be made in words. The seller should say that I am selling this or offering this at this price, and the buyer, having inspected the item, or taking it in his hand should say: Yes, I agree to that. For example a

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customer asks a shopkeeper: How much is one kilo of flour? The shopkeeper answers: Seventy rupees a kilo. Now if the customer says: Yes, okay, then the flour is sold. And if the customer says: No, sixty rupees, and then the shopkeeper says: Okay, give me the money, then also the flour is sold. Now the customer is obliged to buy it and the shopkeeper is obliged to sell it. And if either of them refuses they can legally be forced to do so. This proposal and agreement is termed in the Sharî’ah “Îjàb and qubùl” or offer and acceptance. The proposal of the party who opens the transaction is called Îjàb (offer) and that of the party who signifies his agreement afterwards is called qubùl (acceptance). Sometimes the opening offer is made by the seller and sometimes it is made by the buyer.

Assent By Action

If neither party signifies their assent in words, but each act in a way that clearly signifies their assent, then this is also permissible. For example someone goes into a shop and says, "Give me one tin of shoe polish". If the price has been previously set either in the shop or the market and the shopkeeper takes that sum from the customer, and the customer takes the shoe polish, without either party saying anything, then this is sufficient.

The writing of the price and the customer’s tendering the money constitute agreement. But if the shopkeeper is not agreeable to the market price, then the customer can not take the goods.

Similarly if a customer takes an item in a shop and says, "Give it to me for so much" and the shopkeeper takes that sum then this also constitutes agreement. For example someone takes ten mangoes or four apples from a fruit vendors stall and puts two rupees in his hand. Then if he takes the two rupees then the sale is done. Or a bunch of spinach is selling at ten paisas. A customer takes the bunch and gives the vendor ten paisas without either party saying anything. So the sale is made.

This kind of sale is called bai’ ta’àtî (Sale by mutual handover). Some fuqahàa have restricted the validity of bai’ ta’àtî to small everyday items, but in general the fuqahàa have considered it valid for any item, small or large, ordinary or not. Imam Shàfi’î rahimahullàh however does not consider it valid at all.

Assent In Writing

Just as agreement may be expressed verbally or by action, so also a transaction can be effected by either or both parties in writing. But the writing should be in a form on which reliance can be placed, and which leaves no room for dispute at a later stage.

Telephone And Telex

If anyone give shahàdat that he has sighted the new moon over the telephone or by telex it will not be accepted. But for buying and selling it is permitted. Any

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transactions that do not involve witnessing may be conducted over these instruments provided that both parties are satisfied with the arrangement.

4 GOODS AND PRICE

It is necessary that both the goods and their price be clearly defined. In the Sharî’ah there are many conditions applying to each of these two, and these will now be set out. In Arabic the goods being sold are called the mabî’ and the price is called the thaman

A - The Mabî’ or Item Being Sold

1. Presence of the Goods at the Time of Sale

It is necessary that the item being sold be present at the time of sale. If it is not present then the sale is not valid. For example if someone sitting in India sells grain, cloth etc., which he has in his possession in America, then this sale is not valid. But if the sale is made subject to the condition that the buyer go to America and see the goods and then make a final decision, then this is valid. Or if a sample of the goods is present then they can be bought and sold. In the same way if the item sold does not exist, then its sale and purchase is not allowed. For example an orchard has not come into fruit and the fruit of the orchard is sold; or a field of wheat has not yet come into ear and the crop is sold; or the offspring of an animal is still in the mothers womb and it is sold. In all

these cases the sale and purchase is bàtil. Also if something did exist but has been lost or ceased to exist then it can not be bought and sold. For example someone had an animal and it got lost. So it can not be sold. Or there was a two storey home and the upper storey collapsed. So the upper storey space can not be sold.

2. Ownership By The Seller

The seller should be the owner of the item being sold, or have been given permission by the owner to sell it. For example if someone sells the water of a pond or a river or of the sea or the fishes in it, or sells birds in the air or the wood of a forest or its animals or the grain of a field, then because in Islàm these things do not belong to anybody, nobody has the right to sell them, even if on the face of it he is understood to be their owner. The Nabî sallallàhu alaihi wa sallam has said that water, grain and fire are a shared resource of all mankind. In the same way if an animal gets lost and is then sold or a wild animal in the bush is sold then these sales are bàtil, because these things are neither in the possession of the seller, nor are they his property.

(Some aspects of this question are still under discussion by the ‘ulamàa - translator)

When Can These Things Be Sold?

These things can be sold when either effort or money has been spent on them. For example if some person or

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government builds a dam on a river, or makes some system to retain water in a pool, or constructs a canal to take water from a river, or installs a pump to take out water, or if a person spends effort or money on a forest or a grassland, or plants it himself by his own effort, or if he catches fish from the river or makes some system for catching them, or if he cuts timber from the forest and brings it, then in all these cases he can sell them, or the government can give someone permission to sell them.

In the same way minerals under the ground can not be sold, until they have been extracted e.g. iron, copper, gold, silver, sulphur, mica, coal, petrol. However if effort and money has been spent in locating these deposits, then they will be accepted as the property of the person who spent this effort.

Definition of Ownership

There are many ways in which something can become somebody's property. But before coming to these ways the definition of milkîyat should be borne in mind. Ibn Hammàm in Fat'h-ul-Qadîr (V5 P456) and Ibn Nujaim in Al Ashbàh wa'n Nadhwàhir (p.605) have given this definition of ownership:

“Milkîyat (ownership) means the power of use and disposal which the Sharî’ah confers.”

Fuqahàa have also given other definitions. In the light of all of them Shaikh Mustafà Zarqàa in his book Al Mudkhil ul Fiqhî quotes this solid definition from Imàm

Quràfî in Kitàb-ul-Furùq (v2 p216): “The exclusive (hàjiz) right of disposal that Sharî’ah allows a person as long as there is no impediment (màni’’).”

The word hàjiz means that other persons may not take benefit from it without his permission, and màni’ (impediment) means his (the owner) being unfit to have disposal over it (e.g. his being incompetent to make use of it), or its belonging to someone else. Opposed to this definition of ownership in Islàm is the definition of ownership given in the West. In this the concept of ownership is completely unrestricted. One recognised Western legal expert, John Austin in "Lectures on Jurisprudence Vol II p. 190 writes "In its basic meaning this indicates a right over a particular thing that in terms of use is unlimited and in terms of possession and transfer is unconditional." (retranslated from Urdù back into English)

In this definition transfer of ownership and right of use have been made completely unrestricted, free of all limitation and conditions, regardless of how much harm may be caused to others. Contrary to this, in the definition in the Sharî’ah of Islàm, two conditions have been put on the use and transfer of ownership so that it does not become a bridleless camel. One condition is that the exercise of the right of ownership be in accordance with Sharî’ah that is to say that whatever Sharî’ah has declared haràm (prohibited), its use and possession is not permissible. The second is that in the exercise or transfer of his right of ownership a man is free as long as there is no other prohibition, that is to say

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as long as his right of use does not cause harm to others. For example someone is digging a well on his land, but it is situated on a right of way. So he will be prevented from doing so.

On the basis of the Âyat of Qur'àn "They are not to do wrong nor to be wronged.” and the Hadîth of the Messenger "Trouble should neither be caused or accepted." the fuqahàa have written this principle: "Individual difficulty will be tolerated for the sake of avoiding general difficulty.” Further explanation of Milkîyat (Ownership) will be found later in this book (Chapter 20)

There are two types of milkîyat - one is milk ul ‘ain - the right of ownership over property; the other is milk ul manfa’ah or beneficiary right . At this point it should be remembered that the Hanafî fuqahàa distinguish between milk and màl. Milk is what a man is the owner of whether it be a particular thing or a benefit. And màl is defined in this way.

“Whatever can be kept available for when it is needed, be it movable or immovable.” (Al Majallah)

In effect màl is limited to physical objects and milk may include physical objects and other things i.e. receiving benefit. This has been referred to above.

The Ways In Which A Thing May Come Into Someone’s Possession

There are four way or four means by which a person can become the owner of some thing.

1. Contract or agreement.-

That is to say two parties make a transaction between themselves to make each other the owner of something. One kind of contract is forced contract. The government may make someone the owner of another’s property. For example it may make a creditor the owner of his debtor’s property, or sell the stock of a trader who is hoarding at the market price, or enforce a first option. Also for some public need the government may take possession of someone’s property and put it to use for the benefit of the public e.g. by removing some land from private ownership for use for a Masjid or School or road, or other public utility.

2. Ihràz-ul-Mubàhàt -

If someone expends his effort or his money on those things that are not anyone's property but are the shared resource of all mankind then they become his property. For example the water of the sea, its fish, and its other resources, the grass of the wilderness, and whatever is in the air or in outer space. In the opinion of the writer no one has a right of absolute possession or control over these things.

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3. Khalafîyat or Succession -

There are two forms of this:

a) Becoming some person’s successor - for example becoming the owner of inherited property.

b) Obtaining something as a replacement or in the form of damages or penalty - for example someone’s property is damaged and the damages are exacted, or someone is killed and a diyat is paid to his heirs. In these cases the person to whom these payments are given become their owner.

Generally the fuqahàa refer only to these three ways. Al Majallah also refers only to these three categories. But there is arguably a fourth, and that is natural increase, for example the fruits of a tree, the young of an animal, the hair and milk of a goat. So in any purchase or sale these things can not be separated from each other, but are automatically included each with the other. All these ways will be explained in detail further on.

Whatever is beyond the power of mankind to take possession of, over those things no person’s ownership can be declared nor can they be sold. For example those who declare ownership over the sea or the air or whatever is in outer space, they are wrongfully seizing the shared resources of mankind. They have no right to do this.

3. Full Description -

The third condition concerning the item being bought or sold is that the buyer should be told its full description. For example if wheat flour is being sold it should be specified whether it is white or brown, coarse or fine; if rice is being sold then whether it is new or old, broad grain or long grain. If it is a house then its full description should be given including both its defects and its good qualities. If it is a field then its fertility; it is an animal then both its good points and its defects should be clearly described. If it is cloth it should be stated clearly that it is not worn or damaged, whether it is strong or weak, from what mill it comes. In short those things that can not be seen, or which can be seen, but only become clearly evident after trying it out, such as a leak in the roof of a house, or a field being salty or stony, or animal being aggressive, or a piece of cloth having been stored away for a long time and become weak, or a roll of cloth having a cut inside it, it is necessary that the seller should clearly state these matters. If he does not do so then the sale is invalid, and the buyer has the right to return the goods.

4. Recognised Goods -

The item being sold must be something that is recognised in Sharî’ah as màl - for example all things that are haràm in Islam are not accepted as being màl. Therefore their purchase and sale is also haràm. However if they are permissible for some section of mankind to use then their purchase and sale is

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permissible. For example gold and silver jewelry (with the exception of a silver ring within prescribed limits), silk clothes etc. are permissible for women to use, but for men they are haràm.

5. True Description -

The item being sold must be as the seller describes it. If it turns out not to be as described, then the sale is invalid. For example if he says that a cloth is dyed with fast colours and they wash out, or that this is a Bhasakar lantern and it turns out to be a different brand, or that these are genuine pearls and they turn out to be imitation, or that this is a pure gold bracelet and it turn out to be gold plate, then all these sales are invalid.

6. Specification -

The item being sold must be defined. If anyone says that I am selling everything that I own, then this sale is invalid because this description is indefinite and unspecific. He has to specify what he owns.

B - What Is Automatically Included in a Sale And What Is Not Included.

There are some things that are automatically included in a sale and can not be charge for separately. For example:

1. If someone sells a house then automatically its doors, windows, kitchen, toilets (these might be

outbuildings) and access are included in the sale. If someone sells a horse then its bridle and saddle are included. If someone sells a lock then its keys are included. If someone sells a cow with a calf or a cow that is in milk, then the calf and milk are included. But if the calf is no longer drinking milk from the mother, then it is not included. If someone sells his garden then the fruit is also included. But if he sells an orchard or field then unless the crop or fruit are specifically mentioned they are not included. In the same way small movable items are not included- for example if someone sells a house, and in it there are plants and flowers in pots, then they are not included in the sale.

In short those things that are generally recognised as being included in a sale are considered as being a part of the item sold.

2. If a sale has been made but the buyer has not yet taken the item from the seller, and in the interval there is some increase in it then that increase also belongs to the buyer. For example someone buys a garden and before he takes possession it comes into fruit, or he buys a pregnant animal and it give birth, then the fruit or the baby animal belongs to the buyer. The seller can not take them.

3. If someone sells his own garden, or sells a field, and there is fruit on the trees or a ripe crop in the field, then these belong to the seller. The buyer has no right to take them. However if it is specified at the time of sale

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that the fruit on the trees or the crop in the field is included in the sale then they will belong to the buyer.

In the same way if someone sells a house, then those things that are not part of the house like benches, beds, chairs, tables and other household furnishings belong to the seller and the buyer has no right over them.

C - Some Things That Are Permitted .

1. Commodities which are sold by weight, measure or number may be sold by weight, measure or number, or in the form of a pile or heap. For example grain may be sold on a basis of 4 rupees per kilo or on a basis of 50 rupees for this pile, or 100 rupees for the crop in this field. In the same way a pile of fruit can be sold as it stands, or for so much per fruit. For example the seller may say 4 rupees for this heap of guavas or oranges, or he may say 5 oranges or 10 guavas for 2 rupees or he may say one rupee for a kilo of guavas. In the same way if a full pocket of fruit is sold as it stands then this is permitted, regardless of how much fruit it may turn out to contain. But if anyone says that it contains so many fruit, for example if the seller says that this pocket contains 500 oranges and it costs 100 rupees, and it turns out to contain less, then the buyer has the option of returning it. But if it turns out to contain more, then the extra fruit are the property of the seller.

2. If an item is present at the time of sale, then it is sufficient to point towards it. For example the seller says

I am selling this pile of grain for so much. This is permissible.

3. If a tree or plant does not give a single crop of fruit but continues to bear fruits one after the other, then once the first fruits appear, they can be sold. For example, guava trees, vegetable plants, flowering plants.

4. Trees or plants that produce fruit or seeds in one single crop, such as mango trees or grain crops, may be sold when the crop becomes clearly apparent. It is not necessary for the crop to be ripe - for example when the mangoes appear in profusion on the mango trees, or when wheat comes into ea,r the fruit or crop may be sold.

5. If someone sells a right of way, i.e. a pathway or sells the water of a well or reservoir or sells a water channel, then the sale is impermissible. However if together with a tract of land he sells a pathway or a water channel or together with a well he sells its water then this is valid.

6. According to the Shaikhain (Imàm Abù Hanîfah and Imàm Yùsuf rahimahumallàh) if someone sells a tree then he must immediately remove the fruit. But istihsànan Imàm Muhammad rahmatullàhi alayhi does not regard it as necessary to remove them immediately, and allows the buyer to make the condition that they be left to ripen because without them benefit from the orchard etc. is not possible.

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Similarly it is permissible to exclude a particular tree or branch from a sale. But it is not permitted to exclude a specified number of trees without specifying exactly which trees or which branches are being excluded.

7. If some land or property is jointly owned then it is permitted for one shareholder to sell his share to some other person, whether or not the property has been divided up, and whether or not permission has been taken from the other shareholders.

D- The Price (Thaman)

By thaman or qîmat is meant the amount that is given in exchange for something bought - for example one animal in exchange for another animal, or one cloth in exchange for another cloth. When one thing is given in exchange for another thing or one commodity is given in exchange for the same kind of commodity, then there are many situations where if proper care is not taken, the transaction becomes ribà. This will be fully explained under the heading of Ribà. A few points concerning this are given here.

1. It is necessary to define the price clearly and exactly because if it is left undefined then the transaction is invalidated (fàsid). For example someone says that I will buy that thing in exchange for the money that is in this bag or which I am holding in my hand. This is not permissible. Or if a trader says to a customer: Take this thing. I will charge you whatever it is worth, or: I will tell you the price later, or: whatever so and so paid for it you

can pay the same amount, or: you can pay whatever you consider suitable, or: whatever price so and so sets, you can pay that much, - in all these conditions the sale is invalidated (fàsid). However if the price is fixed at the time of sale and paid later, then there is no objection. And if the price is fixed and the seller says: take the item and decide if you want to buy it or not then this is valid. If the buyer then sends the price, the sale is completed. The distinction between thaman and qîmat has been defined earlier.

If the price being offered in exchange for something is present and visible at the time of sale, then it is not necessary that its amount be defined. It is enough to say that I am offering this cloth or this animal in exchange for this money here or for this heap of grain.

3. If the price is not paid at the time of sale but the seller says to the buyer that I am buying this for so much money and I will pay later then this is valid.

4. If someone buys something and says that I will pay when the rains start, then this sale is fàsid. It is necessary to specify a number of days or a date.

5. If a buyer takes some goods on credit but does not specify a time at which he will pay, and takes the goods with him then the time will be understood to be one (lunar) month. After one month has passed the amount of the price will fall due, and if he does not pay then the seller may take legal action against him.

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6. If a person gets goods regularly from a merchant and pays the amount owing at the beginning or at the end of every month, then this is valid provided that there is no risk of dispute over the price. If there is fear of such dispute at time of payment of the account then it is necessary that the price be agreed on at the time of taking the goods.

7. Whatever currency be in circulation in a country, a merchant has to accept that currency in whatever denominations it be given. However if the merchant specifies in the beginning that I will not take small change, or as a general practice small change is not accepted in payment, then he can refuse to accept it.

If in some country a number of currencies are in circulation then it is necessary to define which currency is meant. For example if in some country Singapore Dollars and Malaysian Dollar and American Dollars are in circulation and their rates are different then it will be necessary to define which one is meant.

E- Sale By Auction

8. It is permissible for a seller to sell by auction - that is to say that between a number of prospective buyers he gives it to the one who offers the highest price. Examples of this are found in the Hadith of the Nabî sallallàhu alaihi wa sallam. The Nabî sallallàhu alaihi wa sallam himself set a price on a cup belonging to one of his Sahàbah and then asked "Who will give more," and

then gave it to the person who offered the most. On the basis of this Hadîth the Hanafî fuqahàa have written:

“There is no objection to sale by auction.” (Sharah Waqàyah)

When some item is sold on credit then the price may be paid all together at one time or in installments. But in both cases it is necessary to specify the time when payment will fall due. 10. If the buyer says, "First give me the goods and then I will give you the money" and the seller asks for the money first, then first the money has to be given to the seller, and then the goods to the buyer.

F- Selling At Cost (Tawlîyah) or At Cost Plus Margin (Muràbahah)

If some item is sold at cost, then in the Sharî’ah this is called Bai Tawlîyah. And if it is sold at a profit, this is called Bai’ Muràbahah. The Sharî’ah of Islam has not put any fixed restriction on profit, but it is unethical to sell it at more than the market price. And according to some of the Imàms, a person who does this, should not be allowed to sell anything in the market-place. Hadrat ‘Umar radhiallàhu anhu used to have such people removed from the market-place. In this connection there are a number of masà’il that should be kept in mind.

It is not necessary for any trader to tell his customers the cost price of the item or his costs incurred. But if he tells

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someone, "I bought this item at one dollar and I am selling it at a twenty five cent profit, then he does not have the right to charge more than that. If the customer comes to know that he was telling a lie, then he has the option of returning the item. But if he wants to keep the item and have the price reduced, then according to Imam Abu Hanîfah rahimahullàh, this will not be permitted. But his pupil, Imam Abu Yùsuf rahmatullàhi alaihi permits him to do so. And Imàm Muhammad rahimahullàh leaves it to the discretion of the buyer - either he can give back the item or he can get the price reduced.

This applies to where the seller has said that he is selling at a profit. If he says that he is selling at cost, and is not telling the truth, then the buyer does not have the right to get the price reduced, but only to return the item.

When a seller sells at a profit, then he should not say that he paid so much for the item, but that altogether it has cost him so much, and include his costs like railage, customs duties and so on, so that he does not tell a lie.

Similarly, if after buying an item, the seller has spent money on it, then he has the right to include this also in the basic price, for example putting dye powder into packets, or binding paper into exercise books, getting a book bound and so on. Again he should not say, "I bought it for so much", but he should say, "It has cost me so much altogether," otherwise it would be a lie. And to sell anything by telling a lie is makrùh.

5CONCLUSION OF THE TRANSACTION

Once a transaction of purchase and sale has been concluded in the manner set out above and in accordance with the conditions described concerning the goods and the price, then neither the buyer nor the seller has the right to withdraw from the transaction. For example if a purchaser has concluded a transaction with a cloth or grain merchant and the price has been agreed on then neither the buyer nor the merchant has the right to refuse to go through with the sale, except in the case where there turns out to be some defect in either the goods or the price paid, or the buyer has not yet seen the goods.

And if the seller says that I will give you the goods tomorrow, there is no time today, or the purchaser says I will give you the money tomorrow, then the following day regardless of whether the general market price has gone up or down, both parties are bound to the agreement and to the price agreed on the previous day. If either party refuses he can be compelled to keep to his agreement and an Islamic Government will legally declare the sale to be effective.

When can the Seller or Purchaser Cancel a Transaction?

Sometimes it happens that a purchaser, after buying something, for some reason needs to give it back or the seller for some reason does not want to give over the

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goods and wants to return the price. If this situation comes up then both parties have the right to cancel the transaction provided that both parties agree. If both agree then the buyer can return the goods and the seller can return the price.

Sometimes it happens that the buyer has used some of the goods or the seller has spent the money. So even if the buyer has used some of the goods he can still return the remainder provided that the seller is agreeable to taking back the remainder and deducting the price of the amount that has been used. But if the buyer is not agreeable to this and asks for the whole price to be returned then the seller has the right to refuse.

For example someone buys a carton containing twenty packets of biscuits. He uses four packets but does not like them or for some other reason wishes to return the remainder. If he wishes, the shop owner can take back the remainder and deduct the price of the four used packets and give back the remainder of the price. But the buyer can not compel him to do so. Or someone buys a field together with its crop. Then after cutting the crop he wants to return the field. This will depend on the agreement and generosity of the seller and on his setting a value on the crop and deducting this value from the price. But if he has used the whole of the goods then there is no question of returning them. For example if he has used the whole carton of biscuits then there is no question of getting his money back whether he liked the biscuits or not, and whether they were in good

condition or not. The goods are no longer with him so what is he going to give back?

In Sharî’ah this is called Iqàlah

The Case of the Money Having Been Spent

But the question of the price money is different. That is to say that even if the money has been spent the goods can be taken back, because he can give other cash in place of the cash paid. So if the seller has agreed to take back the goods then for him to make an excuse that he has already spent the money will not be valid. However he does have the option of paying back the money at later date, but this is dependent on the agreement of the purchaser. In other words just as in the case of the original purchase, it is also necessary that the transaction of returning the goods be clear and straightforward, and by mutual agreement.

Some Further Conditions

1. The return of the goods should not be at a higher price than the original price paid.

2. If the seller had sold the goods at a higher price than the market price then he must return that same price.

3. If the purchaser has created some increase or some defect in the goods then Iqàlah can not be made unless the seller is agreeable to it.

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Some Other Cases In Which Goods Or Their Price Can Be Returned

Prior to a transaction being effected the option that each party has is called Khiyàr-ul-majlis or Khiyàr-ul-qubùl. Once the transaction has been effected then there are seven cases in which the goods can be returned and the price taken back or the price returned and the goods taken back.1. Khiyàr-ush-Shart2. Khiyàr-ul-Wasaf3. Khiyàr-un-Naqd4. Khiyàr-ul-Ta’yîn5. Khiyàr-ur-Ru’yat6. Khiyàr-ul-’Aib7. Khiyàr-ul-Ghaban

These will be explained below

Khiyàr-ush-Shart or Purchase On Approval

If the purchase and sale has been effected but the buyer at the time of purchase makes a condition that I will tell you in two or three days time whether I will take it or not, or I will show it at home and then tell you, then the buyer has the option of returning the goods. This is called Khiyàr-ush-Shart. Shart means condition. He has this option because he has made it a condition. Similarly when a purchaser wants to buy some favoured item, the seller may make a condition that I will give you a final answer after two or three days.

But these are a number of points that need to be kept in mind concerning Khiyàr-ush-Shart.

1. The period of Khiyàr-ush-Shart must be defined - that is to say after how many days the final answer of taking or not taking the goods will be given.

2. If this option is given to a third party as well, then this does not invalidate either the buyer or the seller’s option.

3. If after the expiry of the time set the person with the option does not give any answer then neither the buyer nor the seller have the option of giving or taking back the goods. If the seller takes them back of his own accord that is another matter.

4. In the same way as the buyer or the seller may make a verbal agreement of Khiyàr-ush-Shart at the time of buying and selling, similarly if either one takes some action from which permission or cancellation of Khiyàr-ush-Shart is understood, then this is also permitted. For example if a person uses the goods then it will be understood that he has accepted them.

5. If the buyer at the time of purchase made a condition of Khiyàr-ush-Shart but on reaching home started to use the goods, then his option of returning than no longer remains, and he will now have to pay for them. However if it is in the nature of the goods that he can only come to a decision about them after putting them to use, then he does have the right to do so. For

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example someone buys a bed, or a chair and table, or a sheet, and takes it home and starts to use it, then he does not now have the right to return it. But is he only uses it a little and no harm is done to the article then there is no obligation. Also if he buys a watch and wears it on his wrist for two or three days, or a clock and puts it on a table or hangs it on the wall and checks its time and then returns it then he has the right to do so. Similarly if he buys a motor vehicle or a cycle, then he has the right to drive or ride it a little to see its performance. And if he buys a cow or a buffalo for milk, or a horse for riding then he has the right to milk or ride the animal for the period agreed on. And if someone buys a sweater or a pair of socks or a vest then he can try them on to see how they look and fit. This is because the usefulness of all these things can only be seen by trying them out.

Also the seller can stipulate that up to two or three days I will take the goods back. After that I will not.

Defects Arising from Use

If any defect arises in the goods as a result of the buyers use, then his right to return them no longer remains, and the buyer will have to pay their price. Similarly if the goods are lost or destroyed then the buyer will have to pay the agreed price. In the first case, if the seller takes them back then that is a favour on his part. And if some socks or a vest have a label stuck to them and its removal will reduce the market value of the goods, then the purchaser will not have the right to try them on. If he puts them on he will have to pay for them.

Death of Either Party

If during the period of option either the buyer or the seller dies, then his heir will not have the option of canceling the sale, i.e. if the seller dies the buyer will have to take the goods and if the buyer dies then the seller will have the right to demand the price. The buyer’s heirs will not have the right to return the goods. If the option is on the side of the seller then the goods will be regarded as remaining his property. If during the period of option the buyer loses the goods then he will have to pay the actual value of the goods. And if the option is on the side of the buyer, and after he takes possession of them they are lost than he will have to pay the agreed price.

Transactions in Which There is no Option

There are ten transactions in which Khiyàr-ush-Shart is not permitted.

1. Nikàh (Marriage)2. Talàq (Divorce)3. Qasm (Oath)4. Nadhr5. Bai’ Sarf6. Bai’ Salam7. Iqràr (declaration) - in this there are two

possibilitiesa) Iqràr in a transaction where khiyàr ush shart is not allowed (such as nikàh). A transaction like this will be effected through iqràr.

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b) Iqràr in a transaction where khiyàr ush shart is allowed ( such as sale). Whether a transaction like this is be effected will depend on the transaction itself, not the iqràr.

8. Wakàlat9. Wasîyat10. Hibah

Khiyàr-ul-Wasaf

Generally the Fuqahàa have not classified Khiyàr-ul-Wasf separately, but have included it with Khiyàr-ur-Ru’yat and Khiyàr-ul-’aib. But the compilers of Al-Majallah mention it separately and in the present times this has become very necessary.

If a merchant spoke highly of the qualities of a piece of cloth, or a jeweler of some jewelry, or a fruit seller of some fruit, or an animal-trader of the pace or the milk yield of an animal, and because it was night time and the customer could not inspect properly, or else he just bought the goods on the basis of the seller’s description, and then on taking them home he found that they did not fit this description, he then has the right to return them. Similarly if an agent or representative shows a high quality sample, or shows photographs of an airplane or machine and describes its performance, and the customer gives an order for it, but when the goods arrive they are not according to the sample or the description given, then the customer has the right to return them.

However if he has sold them to someone else or himself made use of them then the right to return them does not remain. The meaning of making use of them here is the same as that given for Khiyàr-ush-Shart.

In the case of Khiyàr-ul-Wasaf, if the buyer dies then his heirs still have the right to return the goods. The remaining regulations of Khiyàr-ul-Wasaf are more or less the same as those for Khiyàr-ush-Shart and Khiyàr-ur-Ru’yat.

Khiyàr-ur-Ru’yat - Option On Inspection

If someone buys something on the basis of the seller's description and without seeing it, then on seeing the goods he has the option of buying or not buying. This is called Khiyàr-ur-Ru’yat. However the seller does not have the right of Khiyàr-ur-Ru’yat. For example if someone buys a house in some other place or orders goods from some other country and on seeing them he does not like them, then he has the right to take them or not to take them. But if someone inherits some goods or property in some other town or obtains such property by some means, and then sells them to someone else, then on seeing the property or goods he does not have the right to take them back, regardless of how much loss he might have suffered. He should have gone to look at them first. They were in his possession. Whereas in the case of the buyer they were not in his possession. Therefore he has been given the option of making a final decision on seeing them.

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In this connection some further points need to be kept in mind.

1. If a transaction has been made after seeing a sample of some goods then there is no right of returning the goods. However if they turn out not to be in accordance with the sample, then they can be returned. For example if a seller shows a sample of some cloth or wool or a clock or some grain and then sends goods according to the sample then the customer does not have the right to return the goods. But if they are not according to the sample then the customer can return them.

2. In the case of things which can not be gauged by seeing a sample it is not enough to show a sample, and even after seeing a sample the customer will have the option of returning the goods. For example if someone sees one goat and agrees to buy one hundred or he sees one ox or horse and agrees to buy four, or he sees a few fruits and agrees to buy a truck load, then because these things are not all standard and similar the purchaser retains the right of Khiyàr-ur-Ru’yat.

3. In the case of food and drink , the buyer does not only have the right of seeing the goods, but has the right to taste them as well, provided that this does not cause serious loss to the seller, or that the goods are not spoilt, and that the seller is told in advance that we want to taste them. For example if someone buys a carton of biscuits or a tin of jelly or some guavas or oranges he can taste them, provided that he tells the seller that I

want to taste them and then decide, and that the seller agrees. In this case after tasting them he can return them. But if the seller does not agree then he does not have the right to taste them. Or if tasting them will cause appreciable harm to the seller then he can not be compelled to allow the customer to taste the goods. For example if someone opens a jar of jelly to taste it and then returns the jar then the seller will suffer a serious loss because once the jar is open its price will drop, and if it is not sold after a few days it may also go bad. But in the case of ordinary fruits there is not this danger. So therefore it is permitted to taste them. But in the case of wheat or flour, if after grinding or cooking it is found to have gone bad, then the seller can be compelled to take it back. However the seller has the right to deduct from the price an amount equivalent to the wheat or flour that has been used.

4. If goods were seen prior to purchase, and then the purchase was made, then there is no second Khiyàr-ur-Ru’yat. But if between the time the goods were seen and the actual purchase some defect occurs in the goods, then they can be returned. For example some goods are lying at the railway station or some other place. The purchaser sees them there and then makes an agreement of purchase with the owner. Now on seeing them again, he can not return them. However if in the intervening period they are damaged by rain or some accident then he does have the right to return them.

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5. If the representative of a merchant buys some goods then the owner does not have the right to return them. But if he sent his representative only to see that the goods are packed carefully and sent off, or to collect the goods and did not delegate him to purchase them, then it is not enough for the representative to see the goods. The owner himself has to see them, and has the right to return them.

6. If the purchaser put the goods to his own use then he does not have the right to return them But this use does not mean just tasting or testing. For example if someone buys a carton of one hundred jars of jelly and he then sells ten or twenty jars, then he does not have the right to return the remainder. But if he opens one jar to taste it and it turns out to be bad, or if he has already sold one or two and his customers complain about them, then he does have the right to return them.

7. If a man is blind and he feels some goods with his hand, or tastes them, or smells them or asks some third party to describe them to him and then buys them then he will not afterwards have a right of Khiyàr-ur-Ru’yat.

8. If during the period of Khiyàr-ur-Ru’yat the purchaser dies, then the right of Khiyàr-ur-Ru’yat will not pass on to his heirs. The transaction will be regarded as finalised.

9. If someone buys a house it is necessary for him to see all the rooms. But if they are all the same then it is enough to see one of them. If the rooms are different

and he does not see all of them then his right of Khiyàr-ur-Ru’yat will remain.

10. If a variety of different goods are heaped together then it is necessary for the buyer to see each one. If he only sees some of them and not others then he may either keep all of them or return all of them. For example a whole lot of shoes and sandals, or motor-cycles and cars are together in one place and are all being sold together. So the buyer should see each shoe or each vehicle separately and then purchase the lot, or leave the lot.

Khiyàr-ul-’Aib - Option On Defect

As has been said previously when some thing is being sold the seller should point out its virtues and its defects. If anyone sells some item fraudulently or someone fraudulently gives counterfeit or invalid money in payment for something then what he has done is haràm and he has committed a serious sin, and the sale is invalid (bàtil). The purchaser has the right to return the goods. This is called Khiyàr-ul-’aib. Once the Nabî sallallàhu alaihi wa sallam passed by a grain shop, and put his hand into a heap of grain to see it. He felt some dampness. He asked "What is this?" The owner said that some of the grain got wet in the rain. The Nabî sallallàhu alaihi wa sallam said "Then why do you not put the wet grain on top so that people can see and not be deceived?" Then he said "Whoever sells anything fraudulently he is not of my Ummah." In the light of this and other Hadîth-e-Nabawi and Âyats of Qur’àn the

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Fuqahàa have deduced countless masà’il on Khiyàr-ul-’aib.

Definition of Defect ( ‘aib)

By ‘aib or defect is meant any blemish or deficiency or fault that causes a reduction in the value of the goods.

1. If the seller has charged the price of goods in good condition and the goods then turn out to be defective, then the purchaser has the right to return them. If he wants to keep the goods he does not have the option of getting a reduction in the price, but must either take them at the price paid or else return them. However if the seller is himself happy to reduce the price then that is up to him.

2. If the seller has himself pointed out a defect, and someone then still buys it, then he does not have the right to return the goods.

3. The defect on the basis of which goods can be returned in a defect that had arisen when they were still in the seller’s possession. If some defect arises while they are in the buyer’s possession then he does not have the right to return them. And if a defect arose when they were in the seller’s possession and another defect arose while they were in the buyer’s possession then he still does not have the right to return them. For example someone buys some cloth and it has a cut in it. He takes it home and some ink spills on it or rats get at it or he himself cuts it with scissors. So now because of the

second defect he does not have the right to return the cloth. However he does have the right to ask for a reduction in the price in respect of the original defect. The amount of this reduction should be determined by an experienced professional or trader in the field in questions. If in spite of the second defect the seller takes the goods back then that is kindness on his part. But the buyer should not take advantage of his kindness because it is causing him loss.

4. If the seller at the time of sale of some goods says that these things seem to be all right and the purchaser then examines the goods carefully and then buys them, then he does not have the right to return them. But if he just took the word at the seller and did not examine them himself and just bought them, then he does have the right to return them.

5. As soon as a defect is discovered the buyer should straightaway return the goods. If he still makes use of the goods then he will now not have the right to return them. However if the nature of the goods is such that their defect can only be discovered through use - such as a clock or a fountain pen or a riding animal or motor cycle or motor car - then some limited use is permitted. Similarly if someone tries on a pair of shoes or a sweater and a defect is discovered, he can return them. But if he uses them for several days then he does not have the right to return them. But if he makes use of a thing whose defect can be discovered without using it - such as a bed or table or a piece of cloth, or a book or paper- then by using it his right to return it is lost. Or if he buys

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an animal and on taking it home discovers that it is sick or has some other defect, but he still starts to ride it, or to milk it, or harnesses it to a plough or starts to give it treatment, then he does not have the right to return it. Or is he buys some cloth, and after discovering some defect in it has it dyed, or has it sewn up into a garment, then he does not have the option of returning it. Or he buys a field and then finds that it is salty and barren but nonetheless he plants a tree in it or sows a crop then he does not have the right to return it.

6. If someone buys some goods and on taking them home finds part to be defective and part to be good, then he does not have the right to keep the good part and return the defective part. For example if he buys a sack of wheat and it turns out to be more than half barley, or to have a large amount of grit and dust mixed in with it, or he buys some fruit and half turns out to be rotten, then he must either keep the whole lot or return the whole lot. He may only pick out and keep the good part if the seller freely and readily agrees to that.

7. If someone buys some wheat and finds in it a little dust and grit or barley or peas then this does not matter. However if there is 5% or 10% or dust and grit then he has the right to return it. This depends on the recognised practice of the area. In other words if there is as much dust and grit or other grain mixed with it as is normally tolerated in the area, then he will not have the right to return it. And if there is more than that then he has the right. So if there is 1% of dust and grit and 5% of other grain then this will not be counted as a defect. But if

there is 10% or 15% of dust or other grains then the buyer has the right to return it.

Similarly if someone buys half a kilogram of almonds or four dozen eggs and when he breaks the shells three or four turn out to be bad then this will not be counted as a defect. But if more than that are bad then he has the right to ask for their price back from the seller. If he buys one egg and it turns out to be bad, or he buys two and one turns out to be bad, then he has the right to take it back.

In the case of vegetables or fruit which have a rind or other things whose goodness can only be seen after cutting them, if they all turn out to be only fit for throwing away then the buyer has the right to take his money back. And if some of them are bad, then the order is as given in (7) above. And if they are not fit for eating but can be put some other use then the buyer has the right to get the price reduced. For example someone buys pumpkins or cucumbers or watermelons. He takes them home and on cutting them finds them all to be bad. In this case he has the right to return them and take back his money. The sale is bàtil (invalid). And if they are not fit for human consumption but he feeds them to an animal, then in this case he has the right to get the price reduced. Or he buys milk and there is no fault in the container in which he collects it. Then the milk goes sour. If it is fit for use then he has the right to get the price reduced. And if it is only fit to be thrown away, then he has the right to take back the whole price. The same applies to almonds, eggs etc.

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Some Further Masà’il

1. If a purchaser returns some goods, and this involves some expense on labour, then this expense is the responsibility of the buyer.

2. If someone buys a rooster that crows at the wrong time, or an animal that eats droppings, then these will be regarded as defects, and the rooster or animal can be returned.

3. If an animal runs away two or three times, this is not a defect. But if it continues to run away, this is a defect and it can be returned.

4. If someone buys a house that people consider to be cursed or to have bad luck, then despite the fact that in Islàm such notions have no validity, this will still be regarded as a defect, because, as a result of this notion being accepted among people, no one will come to buy it, or it would have to be sold at a reduced price. Therefore he can return it.

Khiyàr-ul-Ta'yîn (Option To Select)

If someone states the price of a number of items and then tells the purchaser that within so many days you take whichever of these things that you want, then this sale is valid. And the purchaser may then within the stipulated time select whichever item or items that he wishes to buy. In the same way the buyer may also decide which of them he will sell. In both cases the sale

is valid. This is called khiyàr-ul-ta'yîn (option to select). But it is necessary for the period to be stipulated within which the selection will be made. As to whether the goods leave the possession of the seller during this period, according to some of the A'immah they do and according others they do not.

The Options of the Seller and the Purchaser

1. Up till the time that the sale is finalised each party has the option of canceling the transaction. After this the transaction can still be canceled by reason of khiyàr ush shart, khiyàr ur ru’yat, khiyàr ul ’aib or khiyàr ul wasf, or if either party has been seriously defrauded, which is called in the terminology of fiqh ghabn fàhish. For example someone buys gold jewelry and it turns out to be only gold plated, or the purchaser has given debased or counterfeit coins or money as payment. In such circumstances both parties have the right to return the goods or money.

2. If the agreement of sale has been made, but the purchaser has not paid the price of the goods then there are two possibilities. One is that the agreement was to pay cash on the spot. In this case the seller has the right to keep the goods until the purchaser pays. The other possibility is that the agreement was to sell on credit and the purchaser takes the goods home. Now the seller does not have the right to take the goods back. If the purchaser brings them back himself that is a different matter. He should first think carefully before giving goods on credit. Now the buyer is in the position of a

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debtor and the seller of a creditor. He may then recover his debt in the way set out in Sharî’ah for a creditor to do so. This will be explained further on under "Qardh" or "Loans." But if the period for payment has been fixed and payment has not been made by the time it expires then the seller may take back his goods.

3. First payment must be made then possession of the goods may be taken. The purchaser does not have the right to demand the goods first and then pay the price.

4. If a piece of land is sold, and it has a crop planted in it, or an orchard is sold which has fruit in it then the seller has to immediately remove the crop or take down the fruit from the trees, regardless of whether they are ripe or not. However if the purchaser gives permission for the crop or fruit to be left until they ripen, this is permissible. But his condition can not be made at the time of sale, otherwise the sale will be invalidated.

(In brief, to avoid the possibility of disputes over one man’s crop is another man's garden or from selling an indeterminate amount of fruit or whatever crop is planted, the easiest course is to sell land after harvest and before planting. So in effect the land market will then tend to become seasonal as well as the grain and produce market). (trans)

5. The goods that the seller sells should be handed over to the purchaser in such a way that nothing obstructs him from taking effective possession of them.

For example if someone sells a plot of land that is mortgaged then this sale is not permissible because the mortgage obstructs possession. Or if he sells a tree and some other person is a shareholder in the tree, then this is not permissible because here the shareholder is a hindrance to possession. In short he must create conditions in which the purchaser may take effective possession of the goods without any hindrance. If he sells a house he must hand over the locks and keys. This then constitutes effective possession. Or if he sells potatoes and the purchaser ties them up in a sack then he will have effective possession of them.

6. The meaning of handing over is that wherever the goods that are being sold are, they should be transferred there into the charge of the buyer. It is not necessary that they be handed over at the place where the buyer and seller are. For example if a merchant from India sells some goods that are in Egypt, or a merchant form Pakistan sells some goods that are in America, and transfers them over to the buyer then the sale is complete. If the buyer is from India or China or Japan, it is not necessary that that the seller should bring the goods to India or China or Japan to the buyer’s doorstep, or to bring them there and then sell them. He has the right to sell them where they are and transfer them into the buyers charge. Now it is the responsibility of the buyer who has bought them willingly at that point to take them wherever he pleases. But if the buyer makes it a condition that we will take delivery of the goods in India or in China then it will be the seller’s

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responsibility to deliver them there according to the agreement.

7. If a seller sells some goods which are not present and also does not state where they are, and then the buyer after concluding the agreement of sale discovers that they are at some place from where it will involve danger to collect them, or a great deal of expense, then he may cancel the agreement of sale (Al Majallah P.14)

8. If the agreement of sale has been concluded but the buyer has not yet paid the price of the goods, then until such time as the seller gives permission he may not take the goods. If he does take them and then some damage occurs to them then they will now be regarded as his property and he will be liable for their price.

9. If the agreement of sale has been concluded but the buyer has not yet taken possession of the goods, and they get damaged, then the seller will have to bear the damage. And if the buyer has taken possession of them and they get broken, then the buyer will have to buy and pay for them. (Al Majallah P.42)

For example someone buys a glass or a case or a sugar bowl. But before he has paid for it somehow gets broken, then the buyer is free of any responsibility. But if he takes hold of the item or puts it in front of him and it gets knocked or drops and breaks, then the buyer will have to pay for it. In other words in whoever's control it was broken, he will be responsible.

10. If an agreement of sale has been made, but before the price has been paid the buyer dies, or before the goods have been delivered the seller dies, then the seller has the right to collect the price and the buyer has the right to collect his goods.

Suppose for example someone has sold two hundred rupees worth of grain and has taken the money from the customer,. But before he has given him the grain the seller dies and the seller also had debts. Now the customer has the right to collect the grain from his heirs.

And if the seller’s other creditors want to take possession of that grain to cover his debts then they do not have the right to do so. Similarly if the customer dies and has not paid the price of the grain, but has taken delivery of it, then the seller has the right to collect the money from his heirs. Other creditors of the customer can not stop him.

11. If the seller has of his own accord given some extra goods or the buyer has of his own accord paid extra, then after the conclusion of the agreement neither can be compelled to give back the extra. For example a merchant sells a dozen buttons for one rupee, and of his own accord or out of consideration for the customer gives him one and a half dozen for one rupee, then he can not afterwards take back the extra buttons. Similarly if a customer of his own accord pays one and a half rupees for something costing one rupee, then he can not afterwards take it back. But if either party gives extra by mistake then they have the right to take it back. If the

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customer by mistake gives one and a quarter rupees instead of one rupee, or the seller gives fifteen buttons, instead of twelve, then both have the right to take back the extra amount.

Payment of the Price and Expenses of the Goods

The purchase and sale of ordinary small items on the spot does not present any great problem, but when large items or large quantities are bought, or when small items are ordered from abroad or when goods are exchanged for goods then the question arises as to who is responsible for postal and transport charges. On this matter the Sharî’ah has given the following guidelines.

1. Any charges that arise in making payment are the responsibility of the purchaser for example money order charges, postal insurance or bank draft charges.

2. Conveyancing and other such expenses will be the responsibility of the purchaser. For example if someone buys a plot of land then the transfer, registration and such like expenses will be paid for by the purchaser.

3. Whatever expenses are involved in handing over the goods to the purchaser are the responsibility of the seller. For example if grain is being sold then the seller is responsible for having it weighed. If the quantity is large and there is expense involved in weighing and measuring then that will also be the responsibility of the seller. Similarly if some property is being sold but its papers are not to hand, then the expenses involved in

getting hold of the papers will be the responsibility of the seller.

4. If some goods are sold not by weight but by estimation, such as a crop standing in the field or fruit in an orchard, then the responsibility for reaping or picking the crop or having it reaped or picked rests not with the seller but with the buyer.

5. If goods are sent by road transport, by post, by rail or hired porters, their entire expenses will be borne by the purchaser. However if the seller himself undertakes the expenses then that is a favour on his part. But the purchaser can not demand this favour from the seller. And if it is made a condition of sale that the seller undertakes to pay the carriage expenses then the sale becomes fàsid (invalidated).

6. If goods are exchanged for goods - for example the government of India or an Indian company buys grain from America in exchange for jute or leather or some other commodity, then both buyers will be responsible for the expenses of ordering and the freight charges for their goods. However if both parties agree that each will bring his goods to the others place of residence then each will bear the freight charges of the goods he is selling.

Damage To Goods In Transit

Any damage that occurs to goods being transported by rail, ship or road before they reach the buyer, is the

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responsibility of the seller. But once the goods reach the place where the buyer has ordered their delivery, or that station, and the buyer has been informed of the delivery, and the goods are the same amount ordered by the buyer, then the seller's responsibility is finished. If after the buyer has seen and checked the goods at the station, any theft or damage occurs at the station or on the way from the station to the shop, then the seller has no responsibility for this, and the loss will be borne by the buyer, because once he has seen and checked his goods, they have come into his possession. And once this occurs, the seller's responsibility is terminated.

Either the buyer or the seller may sue the railways etc. for compensation, depending on what stage the damage or theft occurred.

For further details on this question, see under Kafàlat

6 LEGITIMATE FORMS OF SALE

In general sale takes place in three ways, and the Sharî’ah of Islam permits these three forms. One is that purchase and sale or exchange of goods is done hand to hand - that is to say that the seller gets his price and the purchaser his goods on the spot. The most common and the best form of sale is this. And most of the explanations above refer to this form i.e. Cash Sale. The second is that the goods are given on conclusion of the agreement of sale and the price is on credit. This kind of

sale is called in Sharî’ah “Bai’ Nas’iyah ”(Sale on Credit). This has been permitted for the sake of convenience for the purchaser.

The third form is that the price is paid at the outset, but the goods are given later. In the Law of Islam this is called Bai’ Salam or Bai’ Salaf. And Bai’ istisnà’ (ordering of goods from a manufacturer) is a branch of this. This form of sale is essentially for the sake of convenience for the seller. But there is also benefit in it for the purchaser.

(What is not allowed is that both the goods and the price be on credit. This will be covered under Illegitimate Trading Practices - trans)

Some detail has been given previously about all of these. Hand to hand (cash) sale has been explained in detail. Some further detail on Bai’ Nas’iyah and Bai’ Salam is now given.

Bai’ Nas’iyah - Sale On Credit

The sale of goods on credit - that is to say the goods are given first and the price is paid after some time - is called bai’ nas’iyah. Some points on this have been covered under the heading of price. Further points are given here.

1. In a credit transaction the willing agreement of the seller is necessary. Without establishing this it is not permitted to pay on a credit basis.

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2. The time for payment should be fixed at the time of sale i.e. at the end of such and such a month or on this date or this day of this month I will pay. To say: on the day of Eid or the day of Eid ul Adh’hà is also permissible. But it is not valid to say: before winter comes or before summer comes or before the rains, because in this there is too much uncertainty and this may lead to quarreling. In the same way it is not valid to say: I will pay later or when my allowance arrives or when I have the money.

3. After selling goods on credit the seller does not have the right to take them back.

4. Extension of the period of credit is at the pleasure of the seller.5. If no period is specified then it will be taken as one month at the maximum. After one month the purchaser must either pay or ask the seller for an extension of time. If he does not give an extension then the purchaser has no option but to pay before the expiry of this time.

6. The period of credit will start from the time the seller gives the buyer possession of the goods. If the seller gives the goods ten days or a month after concluding the agreement of sale then the period of credit will start ten days or one month after the agreement of sale. And if the seller hands over the goods but the buyer only goes to collect them ten days later, then the period of credit will start from the time the seller handed over the goods, and not from the time they were collected.

7. If the seller agreed to payment in installments then he does not have the right to subsequently demand to be paid all at one time.

8. The seller has the option of selling something cheaper for cash and more expensive on credit. But it is necessary to tell the buyer and get his agreement. If he sells like this without telling him it is not permissible.

It is very necessary to keep in mind the instructions that the Nabî sallallàhu alaihi wa sallam has given on the matter of buying and selling on credit. It has been said earlier that there is great virtue in gentleness in giving credit and demanding payment. And on the other hand warning is also given to the purchaser.

Instructions to the Purchaser

Once the purchaser has the money to pay then for him to delay and prevaricate over payment is haràm. In an Islamic state a person who despite having the means does not pay someone's outstanding amount will be punished. The Nabî sallallàhu alaihi wa sallam has said:

“Prevarication by someonewho has the means to pay is oppression.”

The Nabî sallallàhu alaihi wa sallam has said that a good man is the one who pays his creditors in a good manner.

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Instructions to the Seller

Once the period for which credit is given expires the seller has the right to claim his money and in fact to demand it forcefully. Once the Nabî sallallàhu alaihi wa sallam himself owed some person some outstanding amount, and he came and demanded payment somewhat forcefully. Some Sahàbah radhiyallàhu anhum came to know of this and they wanted to deal with that man severely. the Nabî sallallàhu alaihi wa sallam stopped them and said:

“The person who has a right has a right to speak and to be heard.”

But in exercising this right the seller should bear in mind that it is possible that the other person is not in fact able to pay, or is under some pressure. On this basis the Rasùl of Allàh sallallàhu alaihi wa sallam has said that one person at the time of his death was asked by the Angels: Do you have any virtue to your credit? He said: No I have no virtues, but only this that when I sold on credit I would go easy on poor people and give them time to pay or let them off altogether, and I would be gentle in asking for payment. So in exchange for this good action Allàh Ta’àlà put him in Jannat, and said that: He used to forgive people, and I am more forgiving then him. (Bukhàrî and Muslim, from Mishkàt P.243)

Bai’ Salam

One kind of credit sale is Bai’ salam - that is to say the seller takes the price in advance or the buyer himself gives it in advance, and it is agreed to supply the goods later. In this also there is îjàb and qubùl (offer and acceptance) as in other forms of sale. Permission has been given in the Law for bai’ salam both for the seller’s and for the buyer's convenience. Sometimes the buyer needs to make this arrangement and sometimes the seller. Bai’ salam is permissible in all goods which can be described verbally or in writing and whose quantity can be defined by size or volume or number so that dispute can not arise between the buyer and the seller.

Äyat

The regulations for Bai’ salam have been derived by the Fuqahàa from the Âyat of the Holy Qur’àn in Sùrah Baqarah V.282, 283 and from a number of Hadîth of the Nabî sallallàhu alaihi wa sallam.

"O you who have pledged your faith when you make a transaction on credit until a specified time then write it down and let a competent writer write it down between you fairly and justly and a person who can write not refuse to write

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as Allàh has taught him, so let him write. And let the one who is undertaking the obligation compose the text and let him fear Allàh who looks after him and not leave anything out from it. And if the one who is undertaking the obligation is of defective understanding or weak or is for some other reason not able to compose it himself then let his attorney compose it fairly and justly; and get it witnessed by two witnesses from your men (i.e. Muslims) and if there are not two men then one man and two women whom you regard as being reliable as witnesses so that if one of them gets confused then the one of them will remind the other. And let the witnesses not refuse to come if they are called (to give evidence). And do not neglect to write it down be it small or large for as long as it is current. That is more just in the sight of Allàh and more reliable in terms of evidence and lessens the likelihood

of your falling into doubt - unless it be a hand to hand exchange which you transact between you - then there is no objectionif you do not write it down. And have witnesses when you buy and sell and let no pressure be put on any writer or on any witness and if you do that then it is blatant criminality on your part. And fear Allàh and it is Allàh who is instructing you and Allàh knows everything that is happening. And if you are on a journey and you do not find a competent writer then take a security into your keeping. And if one of you entrusts something to another then let the one who has been entrusted return the thing he has been entrusted with and let him fear Allàh. who looks after him And do not conceal evidence; and whoever conceals it then positively he has sinned in his heart, and Allàh knows everything that you do.”

It comes in one Hadîth: "Ibn Abbàs radhiyallàhu anhu reports that when the Rasùl of Allàh sallallàhu alaihi wa

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sallam came to Madînah Munawwarah the people used to sell on a bai’ salam basis; so the Rasùl sallallàhu alaihi wa sallam said that whoever sells on this basis should make sure that the weight or measure be fixed and the time limit be fixed."

Conditions

So for this transaction to be valid there are a number of conditions. If any one of these conditions is not fulfilled then the sale will become bàtil (invalid)

1. The first condition is that the agreement must be fixed and there must be no purchase on approval (Khiyàr-ush-shart)

2. The second condition is that the goods being bought be fully described, and preferably a sample should be shown.

For example if grain is being bought then the grain should be specified in full - wheat or barley, if it is wheat then what kind - coarse or fine, white or brown, that it should be free of dust and grit, not mixed with other grain, dry and so on. Similarly if cloth is being bought then it should be defined what kind of cloth it is, cotton, silk, synthetic, etc. If a bicycle or a motor vehicle or a fountain pen is being bought then the manufacturer and brand name and the model should be specified. If someone says that any kind will do then the sale will not be valid, because there is then danger of dispute in the

future, and where there is danger of dispute the sale is not valid.

3. The third condition is that the rate and price should be fixed. That is to say that if flour is being bought it must be specified how much per kilo and how much the whole amount. It is not valid to say that whatever the market price is at the time of harvest, that will be the price. In the same way if someone wants a bicycle or a fountain pen or a clock, and the shop owner says you pay me in advance and I will order it for you, or the customer pays the money and says please order it for me, then the price must be fixed so that there should be no dispute afterwards. It is not valid to say that whatever it comes to, you take that much. So both the rate and the final price must be specified. As far as freight, postage and other expenses involved in ordering are concerned, it is permissible to agree to pay whatever they come to because there is no risk of dispute in this, and they are the responsibility of the buyer.

4. The fourth condition is that the period after which the goods may be collected be specified, that is to say that on this date of this month, or before Eid or Bakrî Eid we will supply the goods.

5. The fifth condition is that the buyer specifies at what place he will take delivery of the goods. But this condition applies to those things which are not easy to carry from one place to another, such as one hundred or two hundred kilograms of wheat or three or four bundles of cloth or ten or twenty chairs. For such items the buyer

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should tell the seller where they are to be delivered. If the goods can be easily carried like a clock or fountain pen or lantern or five or ten metres of cloth or five or ten kilograms of wheat then it is not permissible to make this condition.

6. The sixth condition is that the whole price be paid over at the time of making the agreement. If an agreement is made today and the money is paid tomorrow then the seller is under no obligation tomorrow to keep to the agreement made today, but is free to cancel and negotiate the whole agreement from the beginning. In effect the original agreement falls away. On this all the Imàms are agreed.

7. The seventh condition is that for the entire period over which the agreement has been made, the goods in question be available on the market. If they go off the market then the seller has the right to return the price to the buyer. This condition has been put by the Hanafî Fuqahàa. But Imàm Shafi'î, Imàm Màlik, and Imàm Ahmad rahimahumullàh state that it should be available at the time agreed for delivery. If the commodity is scarce then it is not necessary that it be available throughout the entire period. In the opinion of the writer under normal circumstance the Hanafî opinion seems closer to the general guidlines given in the Kitàb and Sunnah. For example it comes in Hadîth that The Rasùl of Allàh sallallàhu alaihi wa sallam prohibited the sale of date palms until (the fruit) was ready for eating.

There are also other Hadîth to this effect, from which it appears that it is not valid to sell on credit anything that does not yet exist. But in case of serious necessity the opinion of the other three Imàms may be followed. The meaning of serious necessity is that when there is serious danger of shortage of goods and the public is suffering - in such cases Maulànà T’hànwî rahmatullàhi alayhi has given permission to follow the opinion of Imam Shafi’î rahimahullàh (Imdàd ul Fatàwà)

Also things that cannot be specified can not be sold by bai’ salam - for example animals. Concerning animals Imàm Màlik, Imàm Shafi'î, and Imàm Ahmad rahimahumullàh say that they can be specified, so therefore their sale by bai’ salam is permissible. Both viewpoints have Hadîth to justify them. Therefore the matter will depend on recognised practice. If there is a recognised practice of specifying them then their sale in this way is permissible, otherwise not.

If after the period agreed on the seller fails to supply the goods then the buyer does not have the right to take other goods for the same money. Either he can take his money back or give the seller an extension of time.

Similarly if the buyer no longer needs the goods he ordered he can (with the agreement of the seller) cancel the sale, but he can not take some other goods in their place, but he can take his money back. After this he can make a separate agreement to buy some other item. This has been prohibited for a number of reasons. One of these is that if for some reason the seller is unable to

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supply the goods, and he gives the buyer some other goods in their place then out of embarrassment at not being able to keep his word he will certainly give the buyer some concession. And it is obvious that in exchange for this concession the seller is not getting anything, but on the contrary is losing. And this is called ribà. Another reason is that the money paid was given in the form of a loan, and to take any benefit from a loan is prohibited. And this concession is a kind of benefit. Thirdly in this there is the possibility of dispute.

Bai’ Istisnà’ - Goods Made to Order

One form of Bai’ Salam is Bai’ Istisnà’. Istisnà’ means to have (something) manufactured or made. So this is the transaction of having some thing made to order. The only difference between the two is that in bai’ salam the price is paid at the time of making the agreement, and in bai’ istisnà’ it is not necessary that the price be paid immediately, but can be paid on delivery of the goods. In the same way as bai’ salam, all relevant matters must be specified at the outset. Bai’ istisnà’ is permissible in all goods whose manufacture is legitimate and customary.

Examples

For example if you order a pair of shoes then either you have to show the shoemaker a sample of the shoes you want, or you must fully explain what you want. What style, what colour of leather - brown, black, dark brown. If a trader gives an order to some company in India or in

America for bicycles or motor cars or airplanes then it must be specified what kind of bicycles or cars or airplanes, what model, whether American or German or British parts are to be used, how much each will cost, whether they will be delivered in Bombay or Delhi or Lucknow, whether the price will be paid in Indian rupees or in American Dollars, or in Pounds Sterling etc. In short all those factors must be specified over which there is any likelihood of dispute arising afterwards. If the time limit is specified to prevent prevarication over delivery then it comes under the same regulations as bai’ salam. And if it is set for the sake of urgency then it remains bai’ istisnà’ (Sharah-ul-Mujallah). Once the agreement to make and have made is reached neither party can cancel the agreement. But if the goods are not in accordance with the specification, then the buyer can refuse to take them. And if the buyer does not take the goods after they are made to his specification then the seller may keep his deposit (Imdàd-ul-Fatàwà)

End of Part One

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