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Rules of Sale

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Concept of Sale

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Sale is defined in Shariah as

Definition of Sale

Exchange of a thing of value, by anotherthing of value, with mutual consent

Permissibility

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Allah has permitted Sale (trade) and prohibited Riba

(Al Baqarah)

Types of Sale

.

2. Void/Non existing Sale ( Bai Baatil)

3. Existing sale but void due to defect ( Bai Fasid)

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.

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Valid Sale

VALID SALE ( Bai Sahih)

a sale is valid if all elements together withtheir conditions are present

elements of valid sale are

Contract ( Aqd ) Subject matter ( Mabee)

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Possession or delivery ( Qabza )

Valid Sale

Valid Sale

(Bai Sahih)

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(Aqd)

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subject matter

(Muta'aquadeen)2

(Thaman)

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(Qabza)

only in respect of movable

goods, not immovable 4

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1. CONTRACT ( Aqd )

Element of a Valid Sale

- - Oral ( Qauli ) Implied ( hukmi )

Buyer and seller ( Mutaaquadeen ) mustbe Sane

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Conditions of contract ( Sharaet-e-Aqd )

sale must be non-contingent

sale must be immediate

2. SOLD GOOD OR SUBJECT MATTER ( Mubee )

Element of a Valid Sale

Existing Valuable Usable Capable of ownership/title Capable of delivery/possession Specific & Quantified

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Se er must ave tit e & ris

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3. PRICE ( Saman )

Element of a Valid Sale

Quantified ( Maloom )

Specified & certain ( Mutaaiyan )

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4. DELIVERY OR POSSESSION (QABZA)

Element of a Valid Sale

Physical ( Haqiqi )

Constructive ( Hukmi )

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BASIC RULES OF SALE

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Sale is defined in Shariah as

Rules of Sale

Exchange of a thing of value, by anotherthing of value, with mutual consent

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Rule 1

The subject of sale must exist at the time of sale

Rules of Sale

For Example, A sells the unborn calf of his cowto B,the sale is invalid.

Rule 2

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seller at the time of sale. Hence, what is not

owned by the seller cannot be sold.

For Example, A sells to B a car which is

presently owned by C, but which A intends to

Rules of Sale

.A at the time of sale, the sale is void.

Rule 3

The subject of sale must be in the physical orconstructive ossession of seller at the time of

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sale.

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Constructive Possession means where the

buyer has not taken physical delivery of goods,but the oods are under his control. And all

Rules of Sale

rights and liabilities of the goods have passed tohim,i.e. the goods are at his risk.

For Example, A has purchased a car from B,B has not physically handed over the car to Abut has placed it at a garage which is in control

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of A. A can access the car whenever he wantsto do so. The risk of the car has practicallypassed to A, the car is in the ConstructivePossession of A,now A can sell the car tothird party.

Rules of Sale

Rule 4

The sale must be instant and absolute. Thus asa e a r u e o a u ure a e or a sa econtingent on a future event is void.

For Example, A says to B on the 1st of

January: I sell my car to you on the 1st ofFebruary. The sale is void, because it is

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.

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Rule 5

The sub ect of sale should be an ob ect of value. A

Rules of Sale

thing having no value according to the usage oftrade cannot be sold.

Rule 6

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Haram purpose, e.g. pork, wine etc. The subject

should be Maal-e-mutaqawwam

Rule 7

The sub ect of sale should be s ecificall known

Rules of Sale

and identified to the buyer. The subject of salemust be identified by pointing out or by detailedspecification which can distinguish it from otherthings not sold.

For Example, A points to a building and says to

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to you. The sale is void unless the apartment isspecifically identified to the buyer.

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Rule 8

The deliver of the sold commodit to the bu er

Rules of Sale

should be certain and should not depend on acontingency or chance.

For Example, A sells his stolen car to a personin hope that he will manage to get it back, thesale is void.

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Rule 9

The certainty of price is a necessary condition for

Rules of Sale

the validity of sale.

For Example, A says to B: If you pay in one

month, the price is Rs50, but if you pay in 2months the price is Rs55. The price is uncertainand the sale is void.

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A can give the two options to B, but then Bmust select one option to validate the sale.

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Rules of Sale

Rule 10

The sale must be unconditional. A conditionalsale is invalid, unless the condition is recognisedas a usual practice of trade

For Example, A buys a refrigerator from Bwith a condition that B undertakes its freeservice for 2 years. The condition, being

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recognized as a part of the transaction, is validand the sale is lawful.

Gambling & Risk

O believers! Intoxicants and gambling and Al Ansab(Animals sacrificed for idols) and Al Azlam (arrows for

'

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handiwork. So avoid them in order that you may besuccessful. Satan wants only to excite enmity and hatredbetween you with intoxicants and gambling and hinder youfrom the remembrance of Allah and from prayer. So, willyou not then abstain? (Al Maidah 90 91)

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In case of a promise to sell the sale transaction

will take place at a future date through a separate

Promise to Sell

o er an accep ance

Exceptions to the rule

The above-mentioned rules of sale are relaxed infollowing two types of sale:

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Bai Salam

Istisna

Valid Sale

A valid sale contract exhibits two features:

a) Knowledge; i.e. parties fullknowledge of the object of sale

b) Existence; a concrete sale object

Absence of these features introduces Ghararin the transaction.

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