Ruling of Selling by Credit without Setting The Price
Assalamu’alaikum. Ustadz, in my village, there’s a practice of rice trading in which the farmer sells his rice with due time system, that is, the buyer/collector will pay its price after a year, with the highest price of rice at that time. Thus for example, the crop in January 2014 was immediately sold, but the payment will be received on December 2014 with the price that is determined by the seller, according to the highest price of rice in 2014. The farmers are delighted with this practice since they are not having trouble to stock their rice anymore. And the buyers are happy because they get additional capital to turnover for a year.
What is the ruling of this system, is it allowed or not?
May Allah reward you greatly, wassalam.
From: Abu Hamza
In the name of Allah, peace and prayer of Allah be upon His messenger. Amma ba’du.
The scheme that you’ve mentioned is included in credit trading ( al-Bai bi at-Taqsith). The goods are being handed in advance with non cash or in debt payment.
Among the stipulation of this kind of transaction, is that the price should be clearly settled when the deal is done at the time of contract signing, thus there’ll be no clash later on.
If in such trading the price has not yet been settled at the contract signing, or it is not clarified yet because it is intended to follow the fluctuation of the market price, then such action is included in prohibition of unclear/ vague trading.
Abu Huraira – may Allah be pleased with him- said,
نَهَى رَسُولُ اللهِ صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ عَنْ بَيْعِ الْحَصَاةِ، وَعَنْ بَيْعِ الْغَرَرِ
The Messenger of Allah –peace and prayer of Allah be upon him- prohibited trading by anything that is hit by the thrown pebble and unclear/vague trading. (Narrated by Muslim no. 1513)
Therefore, among the stipulations drawn by the scholars in credit trading, is that the price must be clear. An Nawawi said in “al Majmu’”,
واتفق الأصحاب على أنه يشترط كون الثمن معلوم القدر لحديث النهي عن بيع الغرر فلو قال بعتك هذا بدراهم أو بما شئت أو نحو هذه العبارات لم يصح البيع بلا خلاف
The scholars of the school (of Shafii) agreed that it is stipulated for the goods value to be clear. Based on the hadith about prohibition of vague trading. If there’s someone who said, ‘I sell this goods for several dirhams or the price is up to you”, or similar saying, his trading is invalid, without any dissenting opinion upon it.” (See: al-Majmu Syarh al-Muhadzab, 9/333).
Similar explanation also recorded from al Kasani – a scholar of school of Hanafi – in his book, “Bada’i as-Shana’I”, in which he mentioned several stipulations of validity of trading, among which is,
ومنها : أن يكون المبيع معلوما و ثمنه معلوما علما يمنع من المنازعة فإن كان أحدهما مجهولا جهالة مفضية إلى المنازعة فسد البيع
Among the stipulations of trading is that the goods (item) must be clear and the price must be clear, thus preventing any clash from happening. If one it is not clear, where it may cause a clash, the trading is cancelled.” (See: Bada’i as-Shana’i, 4/353).
Allah knows best.
Answered by ustadz Ammi Nur Baits
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