Price certainty, lawful subject matter, delivery, conditions and the foundations of deferred sales Read the bilingual lesson for Valid Sale, Deferred-Payment Sale (بيع مؤجل) and Cost-Plus Rules and test your understanding with a focused quiz.
Lesson
1. A Sale Must Be Present and Absolute
An ordinary sale must take effect when concluded. It cannot be attributed to a future date or made contingent on an uncertain future event. If parties want to sell later, they should conclude a fresh sale when that time arrives.
Commercial flexibility remains possible, but uncertainty should not be built into the basic existence of the sale. The parties should know what has been sold, for what price and under which valid conditions.
2. The Subject Must Have Lawful Value
The subject of sale must be recognized as property of value in commercial usage and must not be something whose use is confined to a prohibited purpose. A valid financing structure cannot make an unlawful subject matter lawful.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
3. The Commodity Must Be Clearly Identified
The buyer must know exactly what is being purchased, either by pointing to a specific item or through detailed specifications. Selling 'one apartment' out of many similar apartments without identifying which one leaves the subject uncertain.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
4. Delivery Must Be Certain
The seller must be able to deliver the commodity. Delivery should not depend merely on chance. Selling a stolen car held by an unknown thief only in the hope of recovering it does not provide certainty of delivery.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
5. The Price Must Be Certain
If the seller says, 'Rs. 50 if you pay in one month, Rs. 55 if you pay in two months,' the buyer must choose one option at the time of sale. If no option is selected, price and payment term remain uncertain.
The important point is certainty at the time of contract. Different options may be discussed beforehand, but once the sale is concluded one definite price must govern the transaction.
6. Conditions in a Sale
An unrelated condition that distorts the transaction is not valid, but a condition recognized by commercial usage may be accepted. Requiring the seller to employ the buyer's son is unrelated; including two years of free refrigerator servicing may be part of normal trade practice.
Commercial flexibility remains possible, but uncertainty should not be built into the basic existence of the sale. The parties should know what has been sold, for what price and under which valid conditions.
7. Deferred-Payment Sale (بيع مؤجل)
A deferred-payment sale (بيع مؤجل) is a sale in which payment is postponed to a clearly specified date or period. If a period is stated, it normally begins from delivery unless agreed otherwise.
Term explanation: Deferred-payment sale (بيع مؤجل): sale with payment postponed to a known future time.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
8. A Higher Deferred Price Is Allowed — Once Fixed
The deferred price may be higher than the cash price, but the chosen price must be fixed when the sale is concluded. Once fixed, it cannot be increased because of default, nor does early payment automatically reduce it.
The important point is certainty at the time of contract. Different options may be discussed beforehand, but once the sale is concluded one definite price must govern the transaction.
9. Security and a Charitable Undertaking
The seller may require security such as mortgage, lien or charge. A contract may also accelerate remaining installments after a missed installment. The buyer may undertake a charitable payment for deliberate default, but that amount cannot become the seller's income.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
10. The Basic Rules of Cost-Plus Sale (مرابحة)
The seller discloses exact cost and adds agreed profit. Direct acquisition costs such as freight and customs duty may be included in cost, but general recurring overheads such as office salaries and premises rent are not loaded into one transaction.
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
11. Exact Cost Must Be Known
Cost-plus sale (مرابحة) is possible only when exact cost can be established. If a suit and shoes were bought together for Rs. 500 without separate costs, the package may be sold on cost-plus basis but the shoes alone cannot. If individual cost is unknown, use bargaining sale (مساومة).
The ownership must be real rather than only documentary. Rights, benefits and the relevant ownership risk should follow the share actually owned at that stage.