Trade transactions

Allaah, in His Noble Book, the Quran, and the Prophet through his
honorable Sunnah (Prophetic Tradition), pointed out the rulings on
transactions because of people's need for them; people in general need
food, clothes, houses, vehicles and other necessities of life
inaddition to different luxuries which are obtained through trade.
Trade is permissible according to the Quran, Sunnah, consensus of
Muslim scholars, and analogical deduction.
Allaah Says (what means): {...but Allaah has permitted trade...} [Quran2: 275]
And also Says (what means): {There is no blame upon you for seeking
bounty from your Lord (during Hajj)…} [Quran 2: 198]
The Prophet said: " Theseller and the buyer havethe right to keep or
return goods as long as they have not parted. If both parties speak
the truth and point out the defects and qualities (of the goods), then
they willbe blessed in their transaction. But if they tell lies or
hide something, then the blessings of their transaction will be
destroyed." [Bukhaari]
Muslim scholars uniformly agree on the permissibility of trade in general.
Concerning analogical deduction, trade transactions are permissible
because people's needs are interdependent, and people grant nothing
for nothing. A person does not give what he has, money or goods, in
return for nothing, so wisdom necessitates the permissibility of trade
in order to enable people toget their needs.
Trade transactions can bevalidated by means of a verbal formula or an
actual one. The verbal formula expresses the seller's verbal agreement
on the sale when he, for example, says to the buyer, "Well, I sell it
to you" and the buyer's verbal acceptance when he, for example, says,
"And I buy it" . The actual formula is the act of exchange itself,
when theseller is given the usual price and the buyer takesthe
commodity, without any verbal declaration.
Sometimes a trade transaction is validated by means of both verbal and
actual formulas. Shaykh al-Islaam Taqiyyud-Deen said: "There are some
ways of exchange. First, when theseller gives only a verbal acceptance
and the buyer takes the commodity (without declaring his acceptance).
For example, a seller may say to the buyer, `Take this piece of cloth
for a dinar (a n old Arab coin that equals 4.25 grams of gold) , and
the buyer takes it (without saying aword). The same ruling applies
when the price is a given material; for example, the seller may say to
the buyer, `Take this piece of cloth for yours' and then the buyer
takes it. Second, when the buyer declares his acceptance and the
seller only gives him the commodity whether the price is a given
material or the sale is on credit (and the buyer is honestly
guaranteed to pay). Third, when neitherthe seller nor the buyer speaks
(about the price) for there is a custom to that effect."
[Majmu'ul-Fataawa', 29/7-8]
There are certain conditions to be fulfilled (some related to the two
parties while others to the commodity) to make a trade transaction
valid, lacking any of which invalidates the transaction:
Conditions Related to the Seller and the Buyer
First: Mutual Consent: A trade transaction becomes invalid if either
the seller or the buyer is unjustly forced to conclude it. Allaah, The
Exalted, Says (what means): {...but only [in lawful] business by
mutual consent...} [Quran 4: 29]
Moreover, the Prophet said: " Selling should be only by mutual
consent." [Ibn Hibbaan, Ibn Maajah, and other compilers of Hadith]
However, a transaction concluded through just compulsion is deemed
valid, as in the case whenthe ruler (or the one in authority) forces a
bankrupt person to sell his remaining property inorder to pay off his
debts.
Second: Being free, having reached puberty, being legally accountable,
and being sane: A trade transaction becomes invalid if either of the
seller or the buyer is a minor, a foolish or weak-minded person, an
insane person, or a slave who has not taken his master's permission
(to conclude the transaction).
Third: Being the owner (of the commodity or the money) or a
representative of the owner: The Prophet said to Hakim Ibn Hizam: "Do
not sell what you do not have (or possess)." [Ibn Maajah and
At-Tirmithi who deems it a Saheeh (authentic) Hadeeth]
Al-Wazeer said: "Scholars agree that it is impermissible for a Muslim
to sell whatever isnot present with him or whatever he does not
possess, and then goes out to buy that thing for his customer, for
this is a void trade transaction."
Conditions Related to the Commodity
First: Being absolutely lawful to use: It is impermissible to sell
whatever is prohibited for a Muslim to make use of, such as
intoxicants, the flesh of swine, musical instruments, and dead
animals. The Prophet said: "Allaah and His Messenger prohibited the
trade of intoxicants, dead animals, pigs, and idols." [Bukhaari and
Muslim]
He also said: "Allaah prohibited intoxicants and their (gained)
prices,dead animals and their prices, and pigs and theirprices." [Abu
Daawood]
It is also illegal to sell the impure fats (or the ones affected by
impurity) for the Prophet said: "When Allaah prohibits something, He
prohibits the price paid for it. " [Abu Daawood]
Also, Al-Bukhaari and Muslim related that the Prophet was asked: "O
Allaah's Messenger! What about the fat of dead animals, for it is used
for greasing the boats and the hides, and people useit (as oil) for
lamps?" He replied, `No, it is prohibited.' "
Second: The price and thecommodity must be available, (when the trade
transaction is concluded), for any unavailable commodity isconsidered
nonexistent and is illegal to be sold. For example, it is illegal to
sell a fugitive slave, a runaway camel, or a bird in the air.
Likewise, it is illegal for a Muslim to sell something taken by
forceexcept in the presence of the one who took it forcefully, or one
who is able to restore it (such as the police or a judge or the like,
to guarantee delivering it to the buyer).
Third: The price and the commodity must be known to the seller and
buyer, for hiding any is regarded as fraud which is prohibited in
Islam. Thereupon, it is invalid for the buyer to buy something he does
not see or recognize, and for the seller to sell an animal embryo in
its mother's womb or milk in udders, separately. Also, the selling
systems called mulaamasah (A way of selling used to be practiced
before Islam; it means that when the buyer touches somethingdisplayed
for sale, he has to buy it at the price decided by the seller) and
munaabadhah ) A way of selling used to be practiced before Islam; it
means that when the buyer throws something to the seller, the buyer
has to buy it at the price decided by the seller) are prohibited. Abu
Hurayrah narrated: "The Messenger of Allaah forbade selling by
mulaamasah and munaabadhah." [Al-Bukhaari and Muslim]
Selling by hasaah (stone), likewise, is prohibited; it is another type
of sale which means that when the buyer throws a stone at a certain
commodity displayed for sale, he has to buy it at the price decided by
the seller. - - ▓███▓ Translator:->
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