3. SOME PROHIBITED KINDS OF TRANSACTIONS
SOME PROHIBITED KINDS OF TRANSACTIONS
(Prohibited transactions may be invalid, as is usually the case with the prohibited, for prohibition generally entails invalidity; or not, such that the transaction is valid despite being prohibited)
SELLING THE OFFSPRING OF EXPECTED OFFSPRING
It is invalid to sell the offspring of (expected) offspring, such as saying, “When my she-camel gives birth, and her offspring in turn gives birth to a camel, I hereby sell you that camel” (i.e. the offspring of the offspring. The reason for invalidity is that it is a transaction of an article that is not owned, known, or deliverable). Nor is it valid to sell something for a price whose payment is deferred to a time similar to the above (that is, till the time the offspring of an offspring is born, because the date of payment is not known).
EITHER-OR SALES
It is invalid to make a transaction whose terms include two different possible deals (without specifying which has been agreed upon) such as saying, “I sell you this for either one thousand in cash or two thousand in deferred payment” (0: which is invalid because the price is not known), or such as saying, “I sell you my robe for a thousand, provided you sell me your sword for five hundred” (0: which is invalid because of the invalid stipulation (dis: below)).
SALES WITH EXTRANEOUS STIPULATIONS
It is not valid to make a transaction that includes an invalid stipulation (such as a condition that is extraneous to the original agreement which adds to its price) (because the Prophet (Allah bless him and give him peace) forbade transactions with such conditions, like stipulating a loan or a second transaction), saying, for example, “I hereby sell it to you [n: for a thousand] provided you loan me a hundred” (or “provided you sell me your house for such and such a price” (or “provided you do not sell it to Sound-so”). Its invalidity is due to considering both the thousand and the accompanying second deal as the price. Stipulating this invalidates the transaction, and paying this “price” is void, it not being determinately known). (The invalidating factor is stipulating a second transaction, not the mere fact that it accompanies the first transaction, for it is permissible to join two transactions)
SALES WITH VALID STIPULATIONS
The following types of conditions do not invalidate transactions that stipulate them:
1. a condition to postpone payment, though this requires that the date of payment be specified;
2. a condition that collateral be put up as security (for payment of the price or for delivery of the merchandise);
3. a condition that a particular individual will guarantee payment;
4. or other conditions (from the seller, the buyer, or both) that the deal requires, such as an option to return the merchandise if defective, and so forth.
It is valid for the seller to stipulate that he is free of responsibility for defects in the merchandise. By doing so, he is not held responsible for an animal’s internal defects which he does not know of, though he remains responsible for all other kinds of defects. (The conditions for this ruling are that the defect be internal, be found in an animal, be unknown to the seller, and that it exist at the time of the agreement.)
PAYING NONREFUNDABLE DEPOSITS
It is not valid to pay a nonrefundable deposit towards the price of an article, such as paying a dirham for piece of merchandise on the basis that if the buyer decides to keep it, the dirham is part of the price, but if he does not, then the seller keeps the dirham for free. (The school of Imam Ahmad permits nonrefundable deposits.)
UNDERCUTITNG ANOTHER’S DEAL
It is unlawful to undercut a brother’s deal (or a non-Muslim’s, since there is no difference between Muslims and non-Muslims in rulings concerning commercial dealings) that he has made with a customer, after they have settled on the price (meaning to say to someone who has accepted something with the intention to buy it for so-and-so much, “Return it to its owner and I’ll sell you a better one for the same price or less,” or tell the seller, “Take it back from him and I’ll pay you more for it.” The above restriction after they have settled on the price excludes someone going around taking bids from those who are increasing them, as auctioneers do, which is not unlawful).
It is also unlawful to undercut a brother’s price (that is, during the option to cancel at the time of the agreement, or during a stipulated option to cancel period) by telling the buyer, “Cancel the deal and I’ll sell you one cheaper.” (This also holds for other contracts, such as renting or lending the use of something.)
BIDDING UP MERCHANDISE
It is unlawful to bid up the price of a piece of merchandise that one is not really interested in, to fool another bidder.
SELLING GRAPES TO A WINEMAKER
It is unlawful to sell grapes to someone who will make wine from them: (Like grapes in this is the sale of dates, bread, wheat, or barley, whenever one knows that this (i.e. alcoholic drink) will result, or thinks it will. If there is doubt or if one merely imagines it, then the transaction is merely offensive. (Think (zann) means to believe it probable, doubt (shakk) means one is undecided, and imagine (wahm) means to merely consider it possible.) Selling in such cases is unlawful or offensive because it is a means to disobedience, whether certain or suspected (means meaning an instrumental cause, as opposed to something which is not instrumental, such as renting a house to a drunkard, which is not unlawful because it is not a cause, though it is unlawful to rent a building to someone who intends to open a bar, for example). Tirmidhi relates that the Prophet (Allah bless him and give him peace) cursed whoever drinks wine, gives it to others to drink, sells it, buys it, presses it for another, transports it, receives it, or eats its price.)
If one makes any of the above unlawful transactions, the agreement is valid.
A VALID SALE COMBINED WITH AN INVALlD SALE
If one combines something valid to sell with something invalid to sell in one transaction, such as selling one’s own garment together with someone else’s without his permission, or such as selling wine and vinegar, then the transaction is valid for the portion of the price that covers the valid sale (no matter whether the person knew what the case was, or whether he did not and believed the sale permissible, thinking at the time, e.g. that the wine was vinegar) and is invalid for the portion of the price that was not valid (and the portion must be refunded to the buyer). The buyer has the option to cancel the whole agreement if, at the time the deal was made, he did not know it included something impermissible.
JOINING TWO TYPES OF TRANSACTIONS IN ONE CONTRACT
It is valid to join two contracts of different kinds (for example, a sale with a rent agreement) such as saying, “I sell you my horse and rent you my house for a year for such and such an amount” (though it is not necessary that they be different kinds, for the ruling also applies to two contracts of the same type, such as a partnership linked with financing a profit sharing venture (qirad), or such as saying, “I marry you my daughter and sell you her house [as her proxy, the proceeds being hers] for so-and-so much,” and the price is considered as proportionately distributed over the two transactions.
(Source: The reliance of the traveller, revised edition, Edited and Translated by Nuh Ha Mim Keller)
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