Chapter 4
Transactions
Business and Finance: Business Contracts
40752: Ruling on selling exorbitantly expensive
telephone numbers and "custom" licence plates
Question:
What is the ruling on buying and selling
telephone numbers and custom licence plates. If a person buys
a custom licence plate then sells it, is that money halaal?.
Answer:
Praise be to Allaah.
Every Muslim should realize that Allaah has
forbidden extravagance and wasteful spending, which both
mean going beyond the limit in spending money.
Allaah says (interpretation of the meaning):
"and eat and drink but waste not by
extravagance, certainly He (Allaah) likes not AlMusrifoon (those
who waste by extravagance)" [al-A'raaf 7:31]
"And give to the kinsman his due and to the
Miskeen (poor) and to the wayfarer. But spend not wastefully
(your wealth) in the manner of a spendthrift.
27. Verily, the spendthrifts are brothers of the
Shayaateen (devils), and the Shaytaan (DevilSatan) is ever
ungrateful to his Lord" [al-Isra'
17:26-27]
Every Muslim should realize that he will not be sent
either to Paradise or to Hell until Allaah has asked him
about several things, one of which is his wealth _ from
where he acquired it and on what he spent it.
It was narrated that Abu Barzah al-Aslami (may
Allaah be pleased with him) said: The Prophet (peace
and blessings of Allaah be upon him) said: "A person will
not move on (on the Day of Judgement) until he has
been asked about four things: his life and in what he spent
it, his knowledge and what he did with it, his wealth,
from where he acquired it and on what he spent it, and his
body and how he wore it out."
Narrated by al-Tirmidhi, 2317. He said: It is hasan
saheeh. It was classed as saheeh by Shaykh al-Albaani in
Saheeh al-Targheeb wa'l-Raheeb, 126.
Moreover it should be noted that buying distinct
mobile phone numbers and car licence plates for thousands
of riyals is a kind of extravagance and wasteful spending
on haraam things. Allaah will ask every one of these
people about his wealth and what he spent on such things.
Especially since we see the Muslims in most parts of
the world suffering misery and hardship in their lives.
Some of them cannot find a morsel of food with which to
ward off hunger, and others cannot find clothes with which
to cover their bodies, or a house in which to
shelter themselves, and the houses of some of them have
been destroyed with them inside.
Yet at such a time of hardship we find some
Muslims buying a licence plate with the number "1" for
the equivalent of 2.18 million dollars in an auction!
In the same auction, the licence plate bearing the
number "2" was sold for the equivalent of 1.11 million
dollars. The organizers of the auction said that the turnover of
the auction on the first day was nearly 3.9 million dollars.
It is similar with mobile phone numbers where a
number was sold for the equivalent of 360,000 dollars.
This madness has spread in a number of countries
where it would have been better for them to help the
Muslims and keep their wealth safe from such
foolishness, extravagance and waste.
It should be noted that what makes these people buy
such things is deplorable attitudes such as arrogance, pride
and feelings of superiority. One of the most
ridiculous comments that was made on this matter was that
which was published by one of the newspapers which spoke
of a man who came to ask for the hand of a girl in
marriage, and he said to the girl's father: "You do not need to
ask about me; look at my licence plate and you will
know who I am."
It may also be noted that the price for a distinct
number or licence plate is many times greater than the price of
a Rolls Royce which in the Emirates costs between 1
million and 1.5 million dirhams, and it may cost five times
as much as a high-end car like a Mercedes, or ten times
as much as a famous car such as a Lexus, which is
favoured by the rich.
How much food and drink and clothing, or even telephones and cars, could this have bought for those
who need them? How many young men could have been
kept chaste by spending this money on getting them
married? How many debtors in prison could have been set free
by paying off their debts? How many of those who
are misguided could have been brought back to the
straight path if this money had been spent on the distribution
of books and tapes?
All that a custom plate does is tell others that its owner
is distinguished by his naivety and concern with
trivial matters. A custom plate _ unlike the car itself _ is not
a product of technology which people seek out because
it offers comfort, speed or safety. A custom plate is
not something that you can enjoy looking at _ like some
kinds of birds. It is just a sign of arrogance, pride and
wasteful spending.
If a special phone number is used by a store or
business, or by an important department that people need to
contact, then there would be a point in buying it, so long as
the price does not reach the exorbitant levels described above.
But buying a special phone number is, to a large
extent, akin to wearing a garment of fame or vanity, which
is forbidden.
"Whoever puts on a garment of fame or vanity,
Allaah will clothe him with a garment like it (or a garment
of humiliation) on the Day of Resurrection." Some
reports add: "Then He will set it ablaze."
Narrated by Abu Dawood, 4029; Ibn Maajah, 3607.
Ibn al-Qayyim said:
That is because his intention in wearing it was to
show off and act proud, so Allaah will punish him with
the opposite of that and will humiliate him, just as
He punished the one who made his garment long by
causing him to be swallowed up by the earth, and he will
continue sinking into it until the Day of Resurrection.
Zaad al-Ma'aad, 1/145, 146
Shaykh al-Islam Ibn Taymiyah said:
It is makrooh to wear a garment of fame and vanity,
which is anything that stands out from the ordinary, whether
it is by wearing the finest and most expensive garments
or by wearing the cheapest and scruffiest. The salaf
disliked both extremes. According to the hadeeth, "Whoever
wears a garment of fame and vanity, Allaah will clothe him in
a garment of humiliation." The best of all matters is
that which is moderate.
Majmoo' al-Fataawa, 22/138
In conclusion:
It is not permissible to buy and sell these custom
numbers. Even if it may be permissible in some cases, it is
not permissible to sell them for such high prices.
The one whom Allaah has blessed with wealth should
be grateful for this blessing and take proper care of it.
He should not spend it on things that incur the wrath of
Allaah or things which serve no purpose. He should realize
that he will be questioned about this wealth on the Day
of Resurrection and will be asked from where he acquired
it and on what he spent it.
And Allaah is the Source of strength.
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40000: Selling by installments to the one who asked us
to buy something
Question:
I have been offered the opportunity to take part in a
project selling household appliances by installments.
This operates in the following manner:
We do not have a store, so the customer comes to us
and says, "I want to buy certain appliances (for example,
four air conditioners). We buy these appliances and give
the price to a store with which we deal and from whom
we always buy things. Then we sell it to the customer
who wants to buy them, after agreeing on a price to be paid
in installments. For example, if the cash price is 1200
riyals, we sell it by installments for 2000 riyals.
Some purchasers take them to use them, and some
take them to sell them back to the same store from which
we buy them, because the best price that can be found is
in that store. We are doing it this way now until we
have enough capital to open a store where we can
sell appliances directly for cash or by installments.
Is this way of selling valid? We hope that you can
explain that for us and for many Muslims who are selling in
this manner. May Allaah reward you with good.
Answer:
Praise be to Allaah. If the matter is as described, and
you buy the product that the customer wants in a real
sense, taking possession of it and then selling it for a price to
be paid by installments, there is nothing wrong with
that, even if the price by installment is higher than the
cash price.
It does not matter if the one who buys it from you sells
it to the first store, because there is no connection
between him and this store.
The Standing Committee was asked:
I agreed with another man that I would buy a car for
him. I told him that the showroom price is 50,000 riyals but
if I bring it to you the price will be 60,000. Is
that permissible?
They replied:
There is nothing wrong with selling a car or any
other product, if you are selling it after buying it and
taking possession of it. It is permissible for you to sell it for
a cash price or for a deferred payment that is higher
than the cash price, whether the deferred payment is made
in installments or otherwise. That is because Allaah
says (interpretation of the meaning):
"Allaah has permitted trading"
[al-Baqarah 2:275]
"O you who believe! When you contract a debt for a
fixed period, write it down"
[al-Baqarah 2:282]
This includes the price of goods sold for a
deferred payment.
Selling a product to a person who has asked for it
before you have bought it and taken possession of it is
not permissible, because it is proven that Zayd ibn
Thaabit (may Allaah be pleased with him) said: The
Messenger of Allaah (peace and blessings of Allaah be upon
him) forbade selling goods in the place where they had
been bought, until the traders had taken them to their
own locations.
Narrated by Abu Dawood, 3499. Shaykh al-Albaani
said: It is hasan because of corroborating evidence.
And the Prophet (peace and blessings of Allaah be
upon him) said: "Whoever buys foodstuff should not sell it
until he takes possession of it." Narrated by Muslim, 1596.
And the Prophet (peace and blessings of Allaah be
upon him) said: "Do not sell what you do not have with
you." Narrated by Ahmad and Abu Dawood, 3503; classed
as saheeh by Shaykh al-Albaani in Saheeh
al-Jaami', 7206.
Ibn `Umar (may Allaah be pleased with him) said:
We used to buy food willy-nilly, then the Messenger of
Allaah (peace and blessings of Allaah be upon him) sent word
to us forbidding us to sell it until we had moved it to
our own locations. Narrated by al-Bukhaari and
Muslim, 1527.
As for the `aynah transaction that is forbidden, this
refers to buying a product for a deferred payment, then
selling it back to the person who sold it to you for a lower
price. This is not what is being done in this case. See
question no. 36408.
And Allaah knows best.
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36410: He bought a car by installments from the bank,
then he sold it so that he could use the money to get married
Question:
I am a young man and I would to complete half of
my religion by getting married. I proposed to a girl but
there are a lot of expenses involved in getting married,
namely the mahr etc. I cannot afford all that, so one of the
brothers told me that the banks have a system called
muraabahah (purchase scheme). So I went there and the bank
official told me that I should go to one of the car showrooms
(he did not specify which one) and choose a car, and the
bank will buy it and sell it to me, in return for taking a profit
of 40,741 riyals on an original price of 95,000 riyals, over
a period of 6.5 years. I do not have any other option
because my father is deeply in debt. I tried to borrow the
money from anyone who would give it without
demanding interest, but I could not find anyone except one of
the banks. Any other method of raising the money
without any kind of buying or selling (i.e., money for money),
is regarded as blatant riba (usury). I want to get
married, and I fear temptation for myself. Please advise us,
may Allaah reward you.
Answer:
Praise be to Allaah.
This transaction that you want to engage in includes
two things:
1 _ Buying a car through the bank. This is not
permissible unless two conditions are met:
(i) That the car should be owned by the bank. So the
bank should buy the car for itself from the showroom,
before selling it to you.
(ii) That the bank should take possession of the car
by moving it physically from the showroom before selling
it to you.
If both or either of these two conditions are not met,
then the transaction is haraam. See question no.
36408.
2 _ Selling this car which has only been bought for
this purpose, namely obtaining money. This is what is
called tawarruq or buying and selling in order to obtain
wariq, i.e., silver.
This is permissible according to the majority of
scholars, subject to the condition that the car be sold to
someone other than the person from whom you bought it.
It says in Fataawa al-Lajnah al-Daa'imah (13/161):
We hope that you can advise us about the issue of
tuwarruq and tell us what the ruling is on that.
The Committee replied:
Tuwarruq means buying a product and deferring
the payment, then selling it for payment on the spot
to someone other than the person from whom you bought
it for a deferred payment, in order to benefit from its
price. There is nothing wrong with this transaction
according to the majority of scholars.
End quote.
See also question no. 45042.
If the two conditions outlined above are met, there is
no sin on you in sha Allaah.
And we ask Allaah to help you and guide you.
And Allaah knows best.
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36408: What conditions should be met in order for
the bank's purchase scheme (muraabahah) to be
considered permissible
Question:
My question is: how sound is the following
transaction, what is the ruling on it, what is the ruling on
someone who has already gotten involved in it and what should
he do?
The details of this muraabahah purchase program (as it
is called by the bank) are as follows:
1 _ The buyer goes and gets a price list for the bank
from the main supplier of the product (a car showroom
or agency, for example), including a description of the
car, its colour, features and price (100,000 riyals, for example).
2 _ The buyer obtains a letter stating his salary, and
fills out the required forms to have part of his salary
deposited in the bank for the period agreed upon with the bank
(for example, three years), to pay off the total cost
which includes the basic price plus the bank's profit
(for example, 7%).
3 _ The contract is drawn up, including the
processing fees (1000 riyals for example) and is signed by the
bank, the buyer and the witnesses.
4 _ The bank issues a draft cheque payable to
the showroom or agency (the supplier) for the value of
the car as quoted in the price list referred to in #1 above.
5 _ The buyer takes the cheque and gives it to the
supplier, who then does all the paperwork needed to register
the car in the name of the buyer and gives it to him.
Answer:
Praise be to Allaah.
This transaction is haraam and is not permitted.
Basically this transaction is a loan with interest, which is the
essence of riba (usury), because the bank gives the buyer a
cheque for 100,000 and takes payment for it in
installments, adding interest and what they call processing fees.
Calling this a purchase does not make it
permissible, because this deal is essentially a riba-based loan and
not a sale or purchase. Also, the bank is not buying the
car from the showroom or selling it to the buyer, rather it
is giving him a cheque for that amount.
Buying products (whether cars or anything else)
through the bank is not permissible unless two conditions are met:
1 _ The seller should take possession of this product
before selling it. So the bank should buy the car, for
example, from the showroom for itself.
2 _ The bank should take the car into its own
possession by moving it (physically) from the showroom
before selling it to the customer.
If both or either of two conditions are not met, then
the transaction is haraam, and the reason for that is that
when the bank did not buy the car for itself in a real
sense, rather it only issued a cheque on behalf of its
customer, that was a riba-based loan, because essentially the
bank loaned the price of the car (say, 100,000 riyals) to
the customer on the basis that it would take back
170,000 riyals.
If the bank buys the car then sells it before
taking possession of it, that goes against the words of the
Prophet (peace and blessings of Allaah be upon him) to
Hakeem ibn Hizaam: "When you buy something, do not sell
it until you have taken possession of it."
Narrated by Ahmed, 15399; al-Nasaa'i, 4613; classed
as saheeh by al-Albaani in Saheeh al-Jaami', no. 342.
Al-Daaraqutni and Abu Dawood (3499) narrated
from Zayd ibn Thaabit that the Prophet (peace and
blessings of Allaah be upon him) forbade selling goods when
they have been bought, until the merchants had added them
to their own goods. This hadeeth was classed as hasan
by al-Albaani in Saheeh Abi Dawood.
In al-Saheehayn it is narrated from Ibn `Abbaas that
the Prophet (peace and blessings of Allaah be upon him)
said: "Whoever buys food, let him not sell it until he
has acquired it." Al-Bukhaari, 2132; Muslim, 1525.
Muslim added: Ibn `Abbaas said: I think that this applies
to everything else _ i.e., there is no difference between
food and other things in this regard. Based on this, the
bank does not have the right to sell the car until it has
taken possession of it. Goods are taken possession of
according to custom, and taking possession of a car means that it
is moved physically from where it was. Shaykh Ibn `Uthaymeen (may Allaah have mercy on him) said:
"Whatever is moveable, such as garments, animals
and cars etc, possession is taken of it by moving it,
because this is the custom.
From Sharh al-Mumti', 8/381.
It says in Fataawa al-Lajnah al-Daa'imah (13/153): If
a person asks someone to buy a specific car for him or
a car that has certain features that he describes, and
promises to buy it from him, and he buys it and takes possession
of it, it is permissible for the one who asked for it to buy
it from him after that, with cash or in installments for
a known profit. This does not come under the heading of
a man selling something that he does not own, because
the one who was asked for the product only sold it to the
one who asked for it after he had bought it and
taken possession of it. He does not have the right to sell it to
his friend, for example, before buying it, or after buying
it but before taking possession of it, because the
Prophet (peace and blessings of Allaah be upon him)
forbade selling a product where it was bought, until the
merchants had added them to their own goods. End quote.
With regard to the one who engaged in such a
transaction in the past, if he did not know at the time that it is
haraam, and he did that thinking that it was permissible, then
he does not have to do anything, because Allaah
says (interpretation of the meaning):
"So whosoever receives an admonition from his Lord
and stops eating Ribaa, shall not be punished for the
past" [al-Baqarah 2:275] See also Question no.
2492.
But whoever did that knowing that it is haraam
has committed the major sin of riba and exposed himself to
a declaration of war from Allaah and His Messenger.
Allaah says (interpretation of the meaning):
"O you who believe! Be afraid of Allaah and give
up what remains (due to you) from Ribaa (from now
onward) if you are (really) believers.
And if you do not do it, then take a notice of war
from Allaah and His Messenger but if you repent, you
shall have your capital sums. Deal not unjustly (by asking
more than your capital sums), and you shall not be dealt
with unjustly (by receiving less than your capital sums)"
[al-Baqarah 2:278-279]
So he has to repent from this major sin, and resolve
not to do that again.
With regard to making use of the car that was bought
in this manner, there is nothing wrong with doing so, in
sha Allaah, after repenting and regretting. See question
no. 22905.
And Allaah knows best.
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1848: Ruling on transactions made via modern means
of communication
Question:
What is the ruling on purchase and rental
transactions etc. made via modern inventions such as the
telephone, fax, telex and the Internet etc. If the transaction
usually takes place in an office or store, what is the ruling
on cases where these modern means are used?
Answer:
Praise be to Allaah.
According to sharee'ah, a transaction is made when
there is an offer [of goods or services] and this is
accepted, within the framework of shar'i conditions and in
the absence of anything that might invalidate the
transaction. An example of this in the case of a sale might be
when the vendor says "I sell this to you" and the purchaser
says "I agree." There have been major developments in
the field of communications which are now widely used
to speed up financial dealings and transactions, which
we must bear in mind whilst also taking into account
what the fuqahaa' have said about carrying out transactions
via letter, in writing, by means of gestures or
through intermediaries. They also established that
transactions should be carried out between two parties who are
present in the same place _ with the exception of wills,
the appointment of executors and the giving of power
of attorney; the offer and agreement should both refer to
the same thing and price, there should be no expression
or indication that either party is turning away from the
deal, and the agreement to an offer should not be
delayed beyond whatever timespan is customarily regarded
as acceptable.
In the light of the above, the fuqahaa' have
established the following:
If the transaction is carried out between two parties
who are not present in the same place where one can
actually see the other or hear his voice, and the only means
of communication between them is by writing, mail,
sending a messenger, this applies also to telegraphs, telexes,
faxes and computer screens, in these cases the transaction
is complete when the offer reaches the prospective
purchaser and he agrees to it.
If the transaction is drawn up at the same time,
between two parties who are in different locations _ which
applies to telephones and wireless communications _ the
contract between them is considered to be a contract drawn
up between two parties who are present in the same
place, and in this case the basic rulings as stated by the
fuqahaa' and referred to in al-Deebaajah apply.
If the vendor makes a limited-time offer through
these means of communication, he is bound by it for the
duration and he cannot go back on it.
The rules outlined above do not include nikaah
(marriage contracts) because of the requirement of two
witnesses in nikaah, or barter because there has to be an
actual exchange of goods or services, or forward buying,
because this requires a cash down-payment.
In cases where there is the possibility of forgery, fraud
or error, reference should be made to the general
rules concerning the establishment of proof.l
And Allaah knows best.
Majma' al-Fiqh al-Islami, p.111 (www.islam-qa.com)
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6892: Paying for medical examinations in advance
Question:
The head of a hospital is saying to the hospital's
clients: pay five hundred riyals for twenty medical exams in
one year, whether for cases of sickness or for regular
check-ups throughout the year. If a person uses all twenty
exams, he has got what he paid for, but if he does not use
them because he did not come for check-ups or did not
get sick, he will not get any of his money back.
Answer:
Praise be to Allaah.
We put this question to Shaykh Muhammad ibn
Saalih al-`Uthaymeen, may Allaah preserve him, and
he answered as follows:
Have they agreed on a specific number?
Yes.
Then it is OK.
Question:
Even if he does not come for all twenty
appointments, whether because he doesn't get sick or he is lazy
and doesn't come for check-ups, so the five hundred
riyals are gone?
Answer:
That means he has forfeited his right.
Question:
Yes, so if he gives up his right, for example, that's OK?
Answer:
It is OK so long as what he has given up is a
known amount. And Allâh knows best.
Muhammad ibn Saalih al-`Uthaymeen (www.islam-qa.com)
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10274: Buying shares in a bank that does not deal in ribaa
Question:
The Islamic bank has shares for sale. The values of
one share is US0. Our understanding is that this bank
does not deal in ribaa and that the values of the shares will
be used in business ventures that are free of any dealings
in ribaa, and the profits will be divided among
the shareholders. Because we are worried about falling
into anything that is prohibited, we hope that you will tell
us whether this is allowed or not.
Answer:
Praise be to Allaah. It is permissible to buy shares in
banks which do not deal in ribaa, and the profits earned
through having shares in the bank and which are the result
of dealings that did not involve anything haraam are halaal.
And Allaah is the source of strength. May Allaah
bless our Prophet Muhammad and his family and
companions, and grant them peace.
Standing Committee on Academic Research and
Issuing Fatwas. Fataawaa al-Lajnah al-Daa'imah,
13/507 (www.islam-qa.com)
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2146: `Aqd al-Istisnaa' (contract to have something
made or done)
Question:
What is `Aqd al-istisnaa'? What are the rulings
and conditions governing it?
Answer:
Praise be to Allaah.
`Aqd al-istisnaa' _ which is a contract that applies
both to the labour and the product itself _ is binding on
both parties when it is drawn up in accordance with
certain conditions.
The following conditions apply to `Aqd
al-istisnaa':
Clear statement of the type, amount and required
features of the work to be done or product to be made.
Specification of the time frame involved.
In `Aqd al-istisnaa' it is permissible to delay paying
the full price, or it may be paid in installments at
specific times over a limited period.
It is permissible for `Aqd al-Istisnaa' to include a
penalty clause stating what the two parties have agreed on,
so long as there are no circumstances beyond their
control. And Allâh knows best. Majma' al-Fiqh al-Islami, p.
144 (www.islam-qa.com)
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1839: Paying "key-money" (money for vacating a property)
Question:
In many cities, markets and streets where there
are important locations, some tenants willingly give up
their tenancies to others in return for a certain amount of
money. What is the ruling on this?
Answer:
Praise be to Allaah. Firstly, there are four types
of transaction that may come under this heading, as follows:
Where there is an agreement to this effect from the
outset between the landlord of the property and the tenant.
Where the tenant and landlord come to an
agreement during the period of the tenancy or after it has ended.
Where there is an agreement between the tenant and
a new tenant, during the period of the tenancy or after
it has ended.
Where there is an agreement between the new tenant
and both the landlord and the first tenant, before the
first tenancy expires or afterwards.
Secondly, if the landlord and tenant agree that the
tenant will pay a certain amount of money in addition to
the regular rent _ which in some countries is called a
deposit _ there is nothing Islamically wrong with paying
this amount, provided that it is counted as part of the rent
for the agreed period; when the contract comes to an
end, this amount is subject to the rulings on rents.
When the rental period comes to an end, and is
not renewed explicitly or implicitly _ in cases where
automatic renewal is provided for in a clause of the lease _ it is
not permitted to pay this money, because the landlord
has more right to the property once the tenant no longer
has any right to it.
Fourthly, if an agreement is reached between the
first tenant and the new tenant during the period of the
tenancy agreement that the former will give up the remainder
of his lease in return for a sum of money over and above
the regular rent, this transaction is permissible, provided
that attention is paid to the terms of the contract drawn
up between the landlord and the first tenant, because
many rental agreements expressly state that tenants are
not allowed to sublet properties to other parties or to
accept "key-money" except with the agreement of the
landlord. If this is the case, it must be adhered to.
If the agreement between the first tenant and the
new tenant is reached after the expiry of the lease, it is
haraam to pay key-money, because the first tenant no longer
has any rights with regard to the property. And Allaah
knows best.
Qaraaraat Majma' al-Fiqh al-Islaami, p. 72.
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