ELEMENTS OF A VALID SALE

Transcription

1 CHAPTER 7 ELEMENTS OF A VALID SALE A valid sale has four essential elements 1. Contract or Transaction (Aqd) 1.1Offer & acceptance (Ijab-o-Qobool) The term "Offer" means that one person proposes to either sell his commodity to another person or buy from him and "Acceptance" means that the person who has been offered gives his approval of the proposal. Offer and acceptance are always done in past tense e.g. "I have sold" or "I have purchased" etc. There are two ways of doing it: i) Oral/Verbal (Qauli) By saying or expressing. The offer (Ijaab) and Acceptance (Qabool) should be communicated orally/verbally between the parties in such a manner that the transaction is executed spontaneously. E.g. one can say I have sold but one cannot say I shall sell to you. ii) Implied (Isharaa) By indicating. This of two types. a) Credit Sale (Istijrar) Example settlement of the bill at the end of the month. b) Hand to Hand Sale (Taati) Exchange of Money with goods without uttering Ijab-o- Qabool for procedure adopted in various supermarkets and departmental stores.

2 92 Meezan Bank s Guide to Islamic Banking 1.2 Buyer & Seller (Muta'aqiain) Both must be: i) Sane: Should be mentally sound at the time of making contract. ii) Mature: Should be adult, however, in case of minor, he must understand the nature of the transaction. 1.3 Conditions of contract (Sharaet-e-Aqd) Sale must be non-contingent. The delivery of the sold commodity to the buyer must be certain and should not depend on a contingency or chance. For example, 'A' sells his stolen car to 'B' who purchases it in the hope that he will manage to recover it. The sale is void. (a) Unconditional contract The sale must be unconditional. For example 'A' buys a car from 'B' with a condition that B will employ his son in his firm. The sale is conditional and hence invalid. (b) Under reasonable conditions The conditions of sale should not go against the contract for instance, 'A' tells 'B' to deliver the goods within a month, the sale is valid. (c) Under unreasonable condition but in market practice If a sale is under unreasonable condition but is in market practice and not against the teachings of Quran and sunnah, the sale is valid. For eg. 'A' buys a refrigerator from 'B' with a condition that 'B' undertakes its free service for 2 years. The condition being recognized as a part of the transaction, is valid and the sale is lawful in Shariah.

3 Chapter # 07: Elements of a Valid Sale 93 (d) Sale must be immediate The sale must be immediate and absolute. Thus a sale attributed to a future date or a sale contingent on a future event is void. If the parties wish to affect a valid sale, they will have to affect it afresh when the future date comes or the contingent event actually occurs. For example, 'A' says to 'B' on the first of January: "I sell my car to you on the first of February". The sale is void, because it is attributed to a future date." Similarly, if 'A' says to 'B': "If x party wins the elections, my car stands sold to you", the sale is void because it is contingent on a future event, which may or may not occur However, in some specific cases, promise to sell on a future date, may be allowed. 2. Goods for Sale or subject matter (Mabee ) The following conditions regarding subject mater must be fulfilled: 2.1 Existence The subject matter of sale must exist at the time of sale. Thus, a thing which has not yet come into existence or which can not be delivered/possessed now cannot be sold. If a non-existent thing has been sold, even with mutual consent, the sale is void according to shari'ah. Eg. 'A' sells the unborn calf of his cow to 'B'. The sale is void. This rule does not apply in Bai Salam and Bai Istisna. 2.2 Valuable The subject of sale must be a property of value. Thus a thing having no value according to the usage of trade such as a leaf or a stone on a roadside cannot be sold or purchased.

4 94 Meezan Bank s Guide to Islamic Banking 2.3 Usable The subject of sale should not be a thing which is not used except for a haram purpose, like pork, wine etc. 2.4 Capable of ownership/title The subject matter should not be anything, which is not capable of ownership/title, for example, sea or sky. 2.5 Capable of delivery/possession Sale of any thing that due to non existence is not capable of being delivered is void. For instance, a chair which is not yet prepared cannot be delivered or possessed since it does not exist. 2.6 Specific and quantified The subject matter of sale must be specifically known and identified either by pointing out the asset or by detailed specification that can distinguish it from other things, which are not sold. For instance, there is a building comprising of a number of apartments built in the same pattern. 'A', the owner of the building says to 'B', "I sell one of these apartments to you"; 'B' accepts the offer. The sale is void unless the apartment intended to be sold is specifically identified or pointed out to the buyer. 2.7 Seller must have title and risk The subject matter of sale must be in the ownership of the seller at the time of sale. Thus what is not owned by the seller cannot be sold. If he sells something before acquiring its ownership and risk, the sale is void. For example, 'A' sells to 'B' a car which is presently owned by 'C' but 'A' is hopeful that he will buy it from 'C' and shall deliver it to 'B' subsequently. The sale is void, because the car was not owned by 'A' at the time of sale. The speculation in shares without acquiring ownership and risk is another example.

5 Chapter # 07: Elements of a Valid Sale Price (Thaman) 3.1 Quantified (Maloom) The measuring unit of the price should be known e.g. currency etc. 3.2 Specified & certain (Muta'aiyan) For a sale to be valid, the price should be ascertained and specified such as the total amount in rupees etc. If the price is uncertain, the sale is void. For example, 'A' says to 'B': "If you pay within a month, the price is Rs.50/- but if you pay after two months, the price is Rs 55/- 'B' agrees. The price in this case is uncertain and therefore the sale is void unless anyone of the two alternatives is agreed upon by the parties at the time of sale. 4. Delivery or possession (Qabza) The subject of sale must be in the physical or constructive possession of the seller when he sells it to another person. 4.1 Physical (Haqiqi) For example, 'A' has purchased a car from 'B'. 'B' has not yet delivered it to 'A' or to his agent. Therefore, 'A' cannot sell the car to 'C'. If "A" sells it before taking its delivery from 'B', the sale is void. 4.2 Constructive (Hukmi) "Constructive possession" means a situation where the possessor has not taken the physical delivery of the commodity, yet the commodity has come into his ownership and all the rights and liabilities of the commodity are passed on to him, including the risk of its destruction. For example, 'A' has purchased a car from 'B', 'B' after identifying the car has placed it in a garage to which 'A' has free access and 'B' has allowed him to take the delivery from that place whenever he wishes. Thus the risk of the car has passed on to 'A'. The car is in the constructive possession of 'A'. If 'A' sells the car to 'C' without acquiring physical possession, the sale is valid.

6 96 Meezan Bank s Guide to Islamic Banking Contract or transaction (Aqd) 1 Offer & Acceptance (Ijab-o-Qobool) 1.1 Buyer & Seller (Muta aquadeen) 1.2 Oral (Qauli) (in past tense) 1.1.i Implied (Isharaa) (in past Sane tense) 1.1.ii 1.2.i Mature (If minor, must understand nature of transaction) 1.2.ii Credit Sate (Istijirar) (eg settlement at the end of the month) 1.1.ii(a) Cash Sale (Taati) (eg as in Super markets) 1.1.ii(b) Unconditional contract 1.3(a) Valid Sale (Bai Sahih) Sold good or subject matter (mub e) 2 Price (Thaman) 3 Conditions of Contract Existable (Sharaet-e-Aqd) Quantified (Maloom) 3.1 Sale must be noncontingent Sale must be immediate Not deferred to future (eg property must pass on sale date not on future date 1.3(d) Valuable (eg not a stone or leaf) 2.2 Specific & certain (Muta aiyan) (eg currency etc.) 3.2 Under reasonable conditions 1.3(b) Under unreasonable condition but in market practice (eg. waranty of 1 year on sale of fridge) 1.3(c) Usable (eg not a pig or alcohol) 2.3 Capable of ownership/title (eg not sea/sky) 2.4 Capable of delivery / possession (eg unconstructed flat having no base) 2.5 Specific & quantified 2.6 Seller must have Title & Risk 2.7 Delivery or possession (Qabza) only in respect of movable goods, not immovable 4 Physical (Haqiqi) 4.1 Constructive (Hukmi) (eg possession of documents or keys of a car) 4.2