#4 Stipulating an Option to Cancel Period & The Things Exchanged in a Transaction
Introduction
The article explores key concepts in Islamic transactions, focusing on the option to cancel a sale and the conditions of items exchanged in a transaction. It discusses the requirements for the items being sold, such as its purity, deliverability, ownership, and clarity about the item. These principles’ goal is to ensure fairness and prevent uncertainty in trade. Additionally, the article also discusses who owns an item during a cancellation period, according to whether the option to cancel is with the buyer, seller, or both. Additionally, references from Islamic teachings are provided.
| Ustaz Anwar Notes | English Translation | Arabic Text |
| Example, buyer wants to purchase this item but the seller sets a condition for a period of three days. So the option to cancel is only upon the seller. The seller owns the property during these three days, because he has the authority to cancel the agreement. | If the option to cancel is given to the seller alone, then the merchandise is considered his property during this period (O: meaning that he owns the proceeds earned by the property, and its increments such as its milk, eggs, or fruit, and he is obliged to cover its maintenance and other expenses). | وإذا كانَ الخيارُ للبائعِ وحدهُ فالمبيعُ في زمنِ الخيارِ مِلكُهُ |
| The buyer requested from the seller two days to test out the item, and the seller agreed. Hence the item is under the ownership of the buyer during this period. | If the option to cancel is given to the buyer alone, then the merchandise is considered his property during this period (0: and the above increments and expenses are his). | وإذا كانَ للمشتري وحدهُ فالمبيعُ في زمنِ الخيارِ مِلكُهُ |
| For example, both buyer and seller sets a period of three days. The ownership is suspended – meaning that the item is not owned by either party. If the sale transaction continues, then the ownership transfers to the buyer. If it gets cancelled, then ownership of the item is the seller’s. | If the option to cancel is given to both buyer and seller, then the ownership of the merchandise during this period is suspended, meaning that if the transaction is finalized, it is established that it belonged to the buyer (0: from the time the agreement was first made, together with its increments and expenses), but if the transaction is cancelled, it is established that it belonged to the seller (0: meaning that it never left his ownership). | وإنْ كانَ لهما فالمِلكُ فيهِ موقوفٌ، إنْ تمَّ البيعُ تبينَ أنهُ كانَ مِلكاً للمشتري، وإنْ فسخَ البيعُ تبينَ أنهُ كانَ مِلكَ البائعِ |
| المبيع – Item that is being sold, permissible, impermissible, disliked.
The item has to be pure. In the Shafi’ee school of thought, dogs are considered as impure. Hence, we are not able to sell or buy them. This perspective differs from the Maliki and Hanafi school of thought. |
Five conditions must exist in any article transacted. It must:
(a) be pure (O: in itself, or if affected with filth, it must be capable of being purified by washing); |
فصلٌ [في شروطِ المبيعِ]:
للمبيعِ شروطٌ خمسةٌ: أنْ يكونَ طاهراً |
| Non-useful items such as selling cockroaches, two grains of rice. | (b) be useful; | منتفَعاً بهِ |
| Something that we can give to the buyer. For example, we cannot sell a fish that is still underwater or a bird that is still flying in the air, or gems from the ocean. We cannot be sure that we can catch the item. However, if the item is already in our possession, we can hand it over to the buyer. | (c) be deliverable (O: by the seller to the buyer, meaning that the buyer is able to take possession of it); | مقدوراً على تسليمهِ |
| We have to own the item, we cannot sell something that we do not own. For example, I cannot sell someone else’s bicycle. I have to purchase it first before selling it to others.
If someone authorises us as a wakil (representative) to sell the item, then the transaction is permissible. E.g salesman receiving commission. |
(d) be the property of the seller or the person whom the seller has been authorized to represent; | مملوكاً للعاقدِ، أو لمن ناب العاقد عنه |
| The buyer has to know what they are buying. For example, selling a bicycle at $100 without stating its description. The buyer says he accepts the transaction but has never seen the item. This transaction is invalid, as such rules are implemented to prevent deceitful acts when carrying out sales.
Salam – buying something that is not physically there with you, but you know the descriptions/specifications of the item. |
(e) and be determinately known (ma’lum) (O: to the buyer and seller, as to which particular thing it is, how much it is, and what kind it is, in order to protect against chance or risk (gharar), because of the hadith related by Muslim that the Prophet (Allah bless him and give him peace) forbade the transaction of whatever involves chance or risk) (n: w42 discusses buying and selling insurance policies.) | معلوماً |
| نجسةٍ – Thing itself is impure
متنجسةٍ – Thing has been exposed to impurity. For example, dogs will still be impure in the Shafi’ee school of thought, no matter how much we attempt to clean it. We can sell clothing that is dirtied by impurities only if it can be cleaned. If it cannot be washed, then the sale transaction is invalid. For example, milk and oil that have been tainted with impurities. |
It is invalid to transact something that is impure in itself (najasa) such as a dog, or something affected with filth that cannot be purified (O: by washing), like milk or shortening, though it it can be, like a garment, then it may be transacted | لا يصحُّ بيعُ عينٍ نجسةٍ كالكلبِ، أوْ متنجسةٍ ولمْ يمكنْ تطهيرها، كاللبنِ والدهنِ مثلاً، فإنْ أمكنَ كثوبٍ متنجسٍ جازَ |
| Insects like cockroaches, flies, mosquitoes.
One grain of rice, there’s no benefit. Musical instruments that are prohibited are guitar, flute, stringed instruments, etc. |
It is invalid to transact something which is not useful (O: whether the reason for invalidity is the article’s baseness or the smallness of the amount being dealt with,) such as vermin, a single grain of wheat, or unlawful musical instruments (O: such as the mandolin or flute, since there is no lawful benefit in them). | ولا يصحُّ بيعُ ما لا ينتفعُ بهِ، كالحشراتِ، وحبةِ حنطةٍ، وآلاتِ الملاهي المحرَّمةِ |
| Selling something that we cannot give – a runaway slave, a bird that is flying, property that has been seized.
Those whose property have been seized have no power to retrieve back their items. |
It is invalid to transact something undeliverable, such as a slave that has ran away or a bird on the wing or something that a third party has wrongfully taken from one | ولا بيعُ ما لا يقدرُ على تسليمهِ، كعبدٍ آبقٍ، وطيرٍ طائرٍ، ومغصوبٍ |
| If we sell a seized property to someone that is capable of retrieving back the item, then the sale transaction is valid.
For example, selling something to a police officer. He can catch the one who seized your property. |
though if one sells the latter to a buyer who is able to take it back from the third party, the sale is valid | لكنْ إنْ باعَ المغصوبَ ممنْ يقدرُ على انتزاعهِ جازَ |
| If unable to do so, then the option of setting an interval (e.g three days) is applicable | while if the buyer is unable to take it from him, then the buyer has the option to either declare the sale binding or cancel it. | فإنْ تبينَ عجزهُ فلهُ الخيارُ |
| It is impermissible to sell a part of a glass, or sword.
Eg. Zaid and Hassan both share ownership of a glass cup. Zaid sells half of the glass to you, this transaction is invalid. As breaking the glass would lead to it being non-beneficial, having no value. |
It is invalid to transact a particular half of a whole object such as a vessel, sword, or garment (O: since the buyer cannot take possession of that part without breaking or cutting the article, involving the lessening and loss of property), or part of anything whose value is diminished by cutting or breaking. | ولا بيعُ نصفٍ معيَّنٍ منْ إناءٍ، أوْ سيفٍ، أوْ ثوبٍ، وكذا كلُّ ما تنقصُ قيمتُهُ بالقطعِ والكسرِ |
| If the value does not change, e.g. the cloth is big enough for two people. Then it is permissible because the value of the item does not diminish and is still useful. | though if it does not diminish its value, as with a bolt of heavy cloth, such portions may be sold. | فإنْ لمْ تنقصْ كثوبٍ ثخينٍ جازَ |
Conclusion
Having an understanding of the rules around cancel options and the conditions for items in a transaction, is essential in order to ensure fairness and compliance. This can help buyers and sellers maintain clarity and trust. By adhering to these guidelines, transactions can be conducted in an ethical and Shariah compliant manner whilst being transparent, and mutually beneficial.
Written by Maryam Binte Aziz for notes on Umdatus Salik episode 183 – ‘Stipulating an Option to Cancel Period Part II + The Things Exchanged in a Transaction Part I: Purity, Usefulness, Deliverability’.
Umdatus Salik #1 : The Concept of Sale in Islam & The Spoken Offer and Acceptance
