Al-bayʿ al-fāsid
A defective sale has a recognizable contractual basis but includes a prohibited condition or characteristic.
Al-bayʿ al-bāṭil
A null sale lacks the legally effective basis for transferring ownership. It cannot simply be treated as an otherwise sound bargain with an incidental flaw.
In the Hanafi distinction, a defective sale is not legally meaningless, but neither is it a permissible and fully sound sale. Some effects can arise after possession while the obligation to undo the defective transaction remains.