Business Transactions

Yahya related to me from Malik from Nafi from Abdullah ibn Umarthat the Messenger of Allah, may Allah bless him and grant him peace,said, "Both parties in a business transaction have the right ofwithdrawal as long as they have not separated, except in thetransaction called khiyar."

Malik said, "There is nospecified limit nor any matter which is applied in this case accordingto us."

Malik related to me that he had heard that Abdullah ibn Masudused to relate that the Messenger of Allah, may Allah bless him andgrant him peace, said, "When two parties dispute about a businesstransaction, the seller's word is taken, or they make an agreementamong themselves.

Malik spoke about someone who sold goods toa man, and said at the contracting of the sale, 'I will sell to youprovided I consult so-and-so. If he is satisfied, the sale ispermitted. If he dislikes it, there is no sale between us.' They madethe transaction on that basis. Then the buyer regretted before theseller consulted the person.

Malik said, "That sale isbinding on them according to what they described. The buyer has noright of withdrawal, and it is binding on him, if the person whom theseller stipulated to him, permits it."

Malik said, "The wayof doing things among us about a man who buys goods from another andthey differ about the price, and the seller says, 'I sold them to youfor ten dinars,' and the buyer says, 'I bought them from you for fivedinars,' is that it is said to the seller, 'If you like, give them tothe buyer for what he said. If you like, swear by Allah that you onlysold your goods for what you said.' If he swears it is said to thebuyer, 'Either you take the goods for what the seller said, or youswear by Allah that you bought them only for what you said.' If heswears, he is free to return the goods. That is when each of themtestifies against the other."

Yahya related to me from Malik from Abu'z-Zinad from Busr ibnSaid from Ubayd, Abu Salih, the mawla of as-Saffah that he said, "Isold drapery to the people of Dar Nakhla on credit. Then I wanted togo to Kufa, so they proposed that I reduce the price for them and theywould pay me immediately . I asked Zayd ibn Thabit about that, and hesaid, 'I order you not to accept increase or to give to anybody.' "

Yahya related to me from Malik from Uthman ibn Hafs ibn Khaldafrom Ibn Shihab from Salim ibn Abdullah that Abdullah ibn Umar wasasked about a man who took a loan from another man for a set term. Thecreditor reduced the debt, and the man paid it immediately Abdullahibn Umar disliked that, and forbade it.

Malik related to me that Zayd ibn Aslam said, "Usury in theJahiliyya was that a man would give a loan to a man for a set term.When the term was due, he would say, 'Will you pay it off or increaseme?' If the man paid, he took it. If not, he increased him in his debtand lengthened the term for him ."

Malik said, "Thedisapproved of way of doing things about which there is no disputeamong us, is that a man should give a loan to a man for a term, andthen the demander reduce it and the one from whom it is demanded payit in advance. To us that is like someone who delays repaying his debtafter it is due to his creditor and his creditor increases his debt."Malik said, "This is nothing else but usury. No doubt about it."

Malik spoke about a man who loaned one hundred dinars to a man fortwo terms. When it was due, the person who owed the debt said to him,"Sell me some goods, whose price is one hundred dinars in cash for onehundred and fifty on credit." Malik said, "This transaction is notgood, and the people of knowledge still forbid it."

Maliksaid, "This is disapproved of because the creditor himself gives thedebtor the price of what the man sells him, and he defers repayment ofthe hundred of the first transaction for the debtor for the term whichis mentioned to him in the second transaction, and the debtorincreases him with fifty dinars for his deferring him. That isdisapproved of and it is not good. It also resembles the hadith ofZayd ibn Aslam about the transactions of the people of the Jahiliyya.When their debts were due, they said to the person with the debt,'Either you pay in full or you increase it.' If they paid, they tookit, and if not they increased debtors in their debts, and extended theterm for them."

Yahya related to me from Malik from Abu'z-Zinad from al Araj fromAbu Hurayra that the Messenger of Allah, may Allah bless him and granthim peace, said, "Delay in payment by a rich man is injustice, butwhen one of you is referred for payment to a wealthy man, let him bereferred."

86 Malik related to me from Musa ibn Maysara that he heard a manask Said ibn al-Musayyab, "I am a man who sells for a debt." Saidsaid, "Do not sell except for what you take to your camel."

Malik spoke about a person who bought goods from a man provided thathe provide him with those goods by a specific date, either in time fora market in which he hoped for their saleability, or to fulfil a needat the time he stipulated. Then the seller failed him about the date,and the buyer wanted to return those goods to the seller. Malik said,"The buyer cannot do that, and the sale is binding on him. If theseller does bring the goods before the completion of the term, thebuyer cannot be forced to take them."

Malik spoke about aperson who bought food and measured it. Then some one came to him tobuy it and he told him that he had measured it for himself and takenit in full. The new buyer wanted to trust him and accept his measure.Malik said, "Whatever is sold in this way for cash has no harm in itbut whatever is sold in this way on delayed terms is disapproved ofuntil the new buyer measures it out for himself. The sale with delayedterms is disapproved of because it leads to usury and it is fearedthat it will be circulated in this way without weight or measure. Ifthe terms are delayed it is disapproved of and there is nodisagreement about that with us."

Malik said, "One should notbuy a debt owed by a man whether present or absent, without theconfirmation of the one who owes the debt, nor should one buy a debtowed to a man by a dead person even if one knows what the deceased manhas left. That is because to buy that is an uncertain transaction andone does not know whether the transaction will be completed or notcompleted."

He said, "The explanation of what is disapprovedof in buying a debt owed by someone absent or dead, is that it is notknown what unknown debtor may be connected to the dead person. If thedead person is liable for another debt, the price which the buyer gaveon strength of the debt may become worthless."

Malik said,"There is another fault in that as well. He is buying something whichis not guaranteed for him, and so if the deal is not completed, whathe paid becomes worthless. This is an uncertain transaction and it isnot good."

Malik said, "One distinguishes between a man whois only selling what he actually has and a man who is being paid inadvance for something which is not yet in his possession. The manadvancing the money brings his gold which he intends to buy with. Theseller says, 'This is 10 dinars. What do you want me to buy for youwith it?' It is as if he sold 10 dinars cash for 15 dinars to be paidlater. Because of this, it is disapproved of. It is something leadingto usury and fraud."

Malik said there was no harm if a man who sold some drapery andexcluded some garments by their markings, stipulated that he chose themarked ones from that. If he did not stipulate that he would choosefrom them when he made the exclusion, I think that he is partner inthe number of drapery goods which were purchased from him. That isbecause two garments can be alike in marking and be greatly differentin price.

Malik said, "The way of doing things among us isthat there is no harm in partnership, transferring responsibility toan agent, and revocation when dealing with food and other things,whether or not possession was taken, when the transaction is withcash, and there is no profit, loss, or deferment of price in it. Ifprofit or loss or deferment of price from one of the two enters any ofthese transactions, it becomes sale which is made halal by what makessale halal, and made haram by what makes sale haram, and it is notpartnership, transferring responsibility to an agent, or revocation."

Malik spoke about some one who bought drapery goods orslaves, and the sale was concluded, then a man asked him to be hispartner and he agreed and the new partner paid the whole price to theseller and then something happened to the goods which removed themfrom their possession. Malik said, "The new partner takes the pricefrom the original partner and the original partner demands from theseller the whole price unless the original partner stipulated on thenew partner during the sale and before the transaction with the sellerwas completed that the seller was responsible to him. If thetransaction has ended and the seller has gone, the pre-condition ofthe original partner is void, and he has the responsibility."

Malik spoke about a man who asked another man to buy certain goods toshare between them, and he wanted the other man to pay for him and hewould sell the goods for the other man. Malik said, "That is not good.When he says, 'Pay for me and I will sell it for you,' it becomes aloan which he makes to him in order that he sell it for him and ifthose goods are destroyed, or pass, the man who paid the price willdemand from his partner what he put in for him. This is part of theadvance which brings in profit."

Malik said, "If a man buysgoods, and they are settled for him, and then a man says to him,'Share half of these goods with me, and I will sell them all for you,'that is halal, there is no harm in it. The explanation of that is thatthis is a new sale and he sells him half of the goods provided that hesells the whole lot."

Yahya related to me from Malik from Ibn Shihab from Abu Bakr ibnAbd ar-Rahman ibn al-Harith ibn Hisham that the Messenger of Allah,may Allah bless him and grant him peace, said, "Whenever a man sellswares and then the buyer becomes bankrupt and the seller has not takenany of the price and he finds some of his property intact with thebuyer, he is more entitled to it than anyone else. If the buyer dies,then the seller is the same as other creditors with respect to it."

Malik related to me from Yahya ibn Said from Abu Bakr ibnMuhammad ibn Amr ibn Hazm from Umar ibn Abdal-Aziz from Abu Bakr ibnAbd ar-Rahman ibn al-Harith ibn Hisham from Abu Hurayra that theMessenger of Allah, may Allah bless him and grant him peace, said, "Ifanyone goes bankrupt, and a man finds his own property intact withhim, he is more entitled to it than anyone else."

Malik spokeabout a man who sold a man wares, and the buyer went bankrupt. Hesaid, "The seller takes whatever of his goods he finds. If the buyerhas sold some of them and distributed them, the seller of the wares ismore entitled to them than the creditors. What the buyer hasdistributed does not prevent the seller from taking whatever of it hefinds. It is the seller's right if he has received any of the pricefrom the buyer and he wants to return it to take what he finds of hiswares, and in what he does not find, he is like the creditors."

Malik spoke about some one who bought spun wool or a plot of land,and then did some work on it, like building a house on the plot ofland or weaving the spun wool into cloth. Then he went bankrupt afterhe had bought it, and the original owner of the plot said, "I willtake the plot and whatever structure is on it." Malik said, "Thatstructure is not his. However, the plot and what is in it that thebuyer has improved is appraised. Then one sees what the price of theplot is and how much of that value is the price of the structure. Theyare partners in that. The owner of the plot has as much as hisportion, and the creditors have the amount of the portion of thestructure."

Malik said, "The explanation of that is that thevalue of it all is fifteen hundred dirhams. The value of the plot isfive hundred dirhams, and the value of the building is one thousanddirhams. The owner of the plot has a third, and the creditors havetwo-thirds."

Malik said, "It is like that with spinning andother things of the same nature in these circumstances and the buyerhas a debt which he cannot pay. This is the behaviour in such cases."

Malik said, "As for goods which have been sold and which thebuyer does not improve, but those goods sell well and have gone up inprice, so their owner wants them and the creditors also want to seizethem, then the creditors choose between giving the owner of the goodsthe price for which he sold them and not giving him any loss andsurrendering his goods to him.

"If the price of the goods hasgone down, the one who sold them has a choice. If he likes, he cantake his goods and he has no claim to any of his debtor's property,and that is his right. If he likes, he can be one of the creditors andtake a portion of his due and not take his goods. That is up to him."

Malik said about someone who bought a slave-girl or animaland she gave birth in his possession and the buyer went bankrupt, "Theslave-girl or the animal and the offspring belong to the seller unlessthe creditors desire it. In that case they give him his complete dueand they take it."

Yahya related to me from Malik from Zayd ibn Aslam from Ata ibnYasar that Abu Rafi, the mawla of the Messenger of Allah, may Allahbless him and grant him peace, said, "The Messenger of Allah, mayAllah bless him and grant him peace, borrowed a young camel and thenthe camels of sadaqa came to him." Abu Rafi said, "He ordered me torepay the man his young camel. I said, 'I can only find a good camelin its seventh year in the camels.' The Messenger of Allah, may Allahbless him and grant him peace, said, 'Give it to him. The best ofpeople are those who discharge their debts in the best manner.' "

Malik related to me from Humayd ibn Qays al-Makki that Mujahidsaid, "Abdullah ibn Umar borrowed some dirhams from a man, then hedischarged his debt with dirhams better than them. The man said, 'AbuAbdar-Rahman. These are better than the dirhams which I lent you.'Abdullah ibn Umar said, 'I know that. But I am happy with myself aboutthat.' "

Malik said, "There is no harm in a person who hasborrowed gold, silver, food, or animals, taking to the person who lentit, something better than what he lent, when that is not a stipulationbetween them nor a custom. If that is by a stipulation or promise orcustom, then it is disapproved, and there is no good in it."

He said, "That is because the Messenger of Allah, may Allah bless himand grant him peace, discharged his debt with a good camel in itsseventh year in place of a young camel which he borrowed, and Abdullahibn Umar borrowed some dirhams, and repaid them with better ones. Ifthat is from the goodness of the borrower, and it is not by astipulation, promise, or custom, it is halal and there is no harm init."

Yahya related to me from Malik that he had heard that Umar ibnal-Khattab said that he disapproved of one man lending another food onthe provision that he gave it back to him in another city. He said,"Where is the transport?"

A free loan which you lend by which you desire the pleasure ofAllah, and so you have the pleasure of Allah. A free loan which youlend by which you desire the pleasure of your companion, so you havethe pleasure of your companion, and a free loan which you lend bywhich you take what is impure by what is pure, and that is usury." Hesaid, "What do you order me to do, Abu Abd ar-Rahman?" He said, "Ithink that you should tear up the agreement. If he gives you the likeof what you lent him, accept it. If he gives you less than what youlent him, take it and you will be rewarded. If he gives you betterthan what you lent him, of his own good will, that is his gratitude toyou and you have the wage of the period you gave him the loan."

Yahya related to me from Malik from Nafi that he heard Abdullahibn Umar say, "If someone lends something, let the only condition bethat it is repaid."

Malik related to me that he had heard that Abdullah ibn Masudused to say, "If someone makes a loan, they should not stipulatebetter than it. Even if it is a handful of grass, it is usury."

Malik said, "The generally agreed on way of doing things among usis that there is no harm in borrowing any animals with a setdescription and itemisation, and one must return the like of them.This is not done in the case of female slaves. It is feared about thatthat it will lead to making halal what is not halal, so it is notgood. The explanation of what is disapproved of in that, is that a manborrow a slave-girl and have intercourse with her as seems proper tohim. Then he returns her to her owner. That is not good and it is nothalal. The people of knowledge still forbid it and do not give anindulgence to any one in it."

Yahya related to me from Malik from Nafi from Abdullah ibn Umarthat the Messenger of Allah, may Allah bless him and grant him peace,said, "Do not let any of you bid against each other."

Malik related to me from Abu'z-Zinad from al-Araj from AbuHurayra that the Messenger of Allah, may Allah bless him and grant himpeace, said, "Do not go out to meet the caravans for trade, do not bidagainst each other, outbidding in order to raise the price, and atownsman must not buy on behalf of a man of the desert, and do not tieup the udders of camels and sheep so that they appear to have a lot ofmilk, for a person who buys them after that has two recourses open tohim after he milks them. If he is pleased with them, he keeps them andif he is displeased with them, he can return them along with a sa ofdates."

Malik said, "The explanation of the words of theMessenger of Allah, may Allah bless him and grant him peace, accordingto what we think - and Allah knows best - 'do not bid against eachother,' is that it is forbidden for a man to offer a price over theprice of his brother when the seller has inclined to the bargainer andmade conditions about the weight of the gold and he has declaredhimself not liable for faults and such things by which it isrecognised that the seller wants to make a transaction with thebargainer. This is what he forbade, and Allah knows best."

Malik said, "There is no harm, however, in more than one personbidding against each other over goods put up for sale."

Hesaid, "Were people to leave off haggling when the first person startedhaggling, an unreal price might be taken and the disapproved wouldenter into the sale of the goods. This is still the way of doingthings among us."

Malik said, from Nafi from Abdullah ibn Umar that the Messengerof Allah, may Allah bless him and grant him peace, forbade najsh.

Malik said, "Najsh is to offer a man more than the worth of hisgoods when you do not mean to buy them and someone else follows you inbidding."

Yahya related to me from Malik from Abdullah ibn Dinar fromAbdullah ibn Umar that a man mentioned to the Messenger of Allah, mayAllah bless him and grant him peace, that he was always being cheatedin business transactions. The Messenger of Allah, may Allah bless himand grant him peace, said, "When you enter a transaction, say, 'Notrickery.' So whenever that man entered a transaction, he would say,'No trickery.' "