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Flawed Sales

In the Name of Allâh, the Most Beneficent, the Most Merciful

Various Authors
Source: A summarized translation from the "Fiqh of Financial Contracts

Flawed (Fasid) sales fall into twelve categories:

1- Sale where either merchandise or price is unknown:
If there is a flagrant ignorance about the merchandise or the price that would lead to dispute, the Hanafi consider the sale flawed (fasid), and the majority of scholars consider it invalid (batil).

Example: The sale of a tape player of unknown brand, sale of an animal of unknown kind. These are unknown merchandises that will inevitably lead to strong dispute between the contractors.

2- Sale pending on a condition:
This means that the sale will be finalized only if a condition that has no relation with the sale will be fulfilled. Example: -If a person says to another: "I will sell you my house with such price if so-and-so sells me his house, (or if my father returns from his trip, etc.)."

The scholars agree by consensus that this type of sale is incorrect (ghayr sahih), except that the Hanafi call it flawed, and the others call it invalid because of the risk involved.

3- Sale of unseen merchandise:
This is the case where the merchandise exists and is in the possession of the seller, but the buyer did not see it. Example: A catalog company offering its customers to buy a 'box full of goods' without disclosing its contents.

The Hanafi: The sale is allowed, even without description of the merchandise, provided that the buyer has the choice of revoking it after seeing the merchandise.
The majority of scholars: The sale is allowed if the merchandise is described, and the choice of annulling the sale is affirmed. The sale is invalid if the merchandise is not described.

4- Sales where the seller or the buyer is blind
The majority of scholars: His selling and buying are allowed, because the Prophet sallallahu alayhe wa sallam said: "Sale is with mutual consent." and he is consenting to the trade, and he can know the merchandise by touching, smelling, tasting, etc.
Shaft'ee: His sale is not allowed, unless it concerns a merchandise he has seen before he became blind, and which did not change since, because otherwise the merchandise is considered unknown to him.

5-Sale where the price is unlawful
The price is unlawful if instead of money, it is wine or pork for instance, or other unlawful things.
The Hanafi: The sale is flawed because there is exchange of wealth, but the price (wine, etc.) is not assessable in the Shari'ah, though it is assessable for the disbelievers. The majority: The sale is invalid (batil).

6- Using the sale contract for an unlawful purpose:
Example: A person buys a merchandise for a deferred price, then he sells it back with a cash down price, his purpose being to use this sale contract which is apparently sound, for an unlawful purpose: to acquire money that is not his. maliki, and hanbali:
sale is invalid if there is proof that the intention of the contractors is bad. Shafi'ee: sale is sound if the elements of the contract are sound, and the intention of the contractors is left to Allah ta'ala. Hanafi: The sale is flawed if there is no middle-man (to whom the money is deposited), and is sound if there is.

7- Sale of grapes for the purpose of making wine:
This also includes any sale of goods that will be used for unlawful purposes, such as selling arms to non-Muslims or to gangsters, selling gold to be used by men, etc.
Hanqfi and Shafi'ee: Sale is sound, because the elements of the contract are sound, but it is disliked, and the guilt is on the one who misuses the merchandise. Maliki and Hanbali: Sale is invalid, because Allah said: "And do not help one another in misdeed and enmity." [5:2] This is the most accepted opinion.

8-Two sales in one:
This happens when one, for example, says: "I sell you my house if you sell me your car." Or a merchant offers to sell either one of two merchandises and the consumer signs the contract without knowing which one he will get.
Hanafi:The sale is flawed. Shafi'ee and Hanbali: The sale is invalid, because it may involve deception. maliki: The sale is valid and the accepting party has the choice to revoke it.

9- Sale where the price has been artificially raised:
This happens when one person raises the price not intending to buy the merchandise, but so that others buy it at that higher price. The Prophet, sallallahu alayhe wa sallam, forbade such sale.
Example: If during a car auction, a bidder, hired by the car seller, raises the price not for the purpose of buying the car but so that others buy it at that price.

10- Musarrat sale:
Musarrat is a milking cow, or ewe, left without being milked for a number of days until its udders are distended, to give the illusion to the buyer that it gives abundant milk, so he buys it at a much higher price. The sale contract is sound, though a sinful act, for the hadeeth: "Do not artificially gather the milk in the she-camels' and the ewes' udders, and whoever buys the animal has the choice after he milks it, to keep it or return it with four pounds of dates." (Bukhari, Muslim)

11- City man selling the countryman's good:
This is when a merchant comes to a town, from another place, and wants to sell his goods all at ounce with cash down and the price of the day, and a townsman offers to keep the goods with him and sell them for him later at a higher price. The Prophet, sallallahu alayhe wa sallam, said: "The city man should not sell the goods of the Bedouin." (Bukhari, Muslim).

12- Meeting the caravan outside the town:
This is when a merchant goes to the outskirts of the town to welcome the caravan of traders, makes them believe that the merchandise they want to sell is in little demand, and offers to buy it at a price much lower than the market's. Sellers who discover they have been deceived have the option to revoke the sale. The Prophet, sallallahu alayhe wa sallam, forbade meeting the caravans for this
purpose, and gave the sellers the option to revoke the sale ounce they arrive to the marketplace.

13- Down payment sale:
It is when the buyer pays part of the merchandise's price as a down payment with the agreement that if the sale is finalized, this sum will count towards the total price of the merchandise, and if the sale is not finalized, the money will not be returned to him, but the seller will keep it as a gift.
The majority of scholars say that this is a forbidden, invalid sale, because the Prophet, sallallahu alayhe wa sallam, forbade the down payment sale (Ahmad, an-Nasa'i), and on account of the deception involved in this transaction.

The Hanafis consider it a flawed sale. Imam Ahmad said : "It is a permissible sale." Because Zayd ibn Aslam asked the Prophet, sallallahu alayhe wa sallam, about paying a down payment toward a sale and he, sallallahu alayhe wa sallam, allowed it." (Abdurrazzaq), Also Nafi' ibn Abdil-Harith bought for Umar Dar as-Sip for four thousand Dirhams due to Safwan ibn Umayyah, with the understanding that if Umar agreed, the sale would go on, and if not, Safwan would keep four hundred Dirhams ."Ahmad has ranked weak the hadeeth used as proof by the majority of scholars.

The most acceptable opinion is that this sale is allowed and is valid, considering the interests of both parties. The down payment is kept by the seller as a compensation to the lost opportunities, and time. Also, because the ahadeeth mentioned concerning this sale are not sahih, it remains permissible.

Courtesy Of: Islaam.com

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