Fiqh201_fathima_1.docx

Student Name: Fathima.HS Student ID: 10108863 Course Name/Code: Fiqh201 Assignment Question: 1 Attempt Count: 1

Trade transaction also called as Baí is the need of People because people needs different thing in life such as food, cloth, home, vehicle etc and all these needs is fulfilled through trade. Permissibility of trade is proved through Quran, Sunnah and consensus of Muslim’s scholar. “Linguistically Baí means exchange and in Islamic contract jurists have defined it as “exchange of a useful and desirable thing for similar thing by mutual consent in a specific manner.” (ALHumam, 1995) The key idea in trade transaction is that there is transfer of ownership of subject matter from seller to buyer in exchange of agreed consideration which is then transferred from buyer to seller. In order to incorporate this concept in above definition jurists have added “for the alienation of property” towards the end of the definition. (Al-Sharbini, 1958) This implies that after concluding the trade transaction the ownership of subject matter is exchanged and now buyer can use the acquired property in any way he likes but under the limits of Islamic law.

Conditions to Validate Trade Transaction: The trade transaction can be validated by verbal formula for example when seller says I sell it to you and buyer says I buy it or by just actual exchange without any verbal formula or by both verbal formula and actual exchange. There are certain conditions to be fulfilled in order to make the transaction valid. These are conditions related to seller and buyer and conditions related to commodity. The conditions related to seller and buyer are two: 1) Mutual consent between both seller and buyer 2) Both the seller and buyer should be free, should have reached puberty, should be sane and being legally accountable. 3) They should be owner of the commodity/money or representative of the owner. Conditions related to commodity are also three and they are as follows: 1) The commodity should be lawful for use and not unlawful as per Islamic law 2) The commodity and price should be available during transaction because any unavailable commodity is considered non-existent for example selling a fugitive slave. 3) The price and commodity must be known to the seller and the buyer because hiding any is considered as deception which is prohibited in Islam. All these conditions are met in this transaction of car making the transaction valid. (Al-Fawzan, 2009)

Valid Stipulated Conditions: There are certain conditions set by either seller or buyer to gain lawful benefit from the transaction. The conditions can be either valid or invalid conditions. Following are the valid conditions that can be set while concluding trade transaction. (Al-Fawzan, 2009)

FIRST Valid condition: It is the condition which ensures or consolidates the trade and it benefits the one who sets the condition. The conditions which can be set by seller in this case are stipulating taking a security deposit or demanding a surety etc. These kinds of conditions set seller free from worry. The buyer under this category can set condition such as demanding to delay the payment or part of payment to certain specified period and this transaction is valid as long as the buyer holds to this condition by making the payment at specified time later. As in this case Mike stipulated to make a part of payment i.e. $10 000 after two weeks so this transaction will remain valid if Mike makes the payment at specified time. (Al-Fawzan, 2009)

SECOND Valid condition: This is the condition where one of the two parties demands to benefit from the commodity in certain way. Similarly there are two invalid conditions in trade transactions. FIRST Invalid condition: When either of the parties stipulates another contract within the transaction. This condition makes the transaction invalid. SECOND Invalid condition: The second type of condition is that which in itself is null but does not nullify the transaction such as Mike making a condition in this case that he will return back the car if he faces any defect or loss in the car. (Al-Fawzan, 2009)

Transference of ownership and its significance: Transference of ownership of the car from Peter to Mike took place when they both concluded the sale with the option given to Mike that he will pay a part of the price amount of car after two weeks. Although car’s engine stopped in one week before paying the rest of the amount to Peter, Mike has to pay the amount to Peter at due time as per the transaction concluded as they had such agreement and it is important that Muslims stick to the agreement made and also because Mike is the new owner of the car so it is his responsibility to bear any loss to the car without blaming Peter for it or asking him to bear the loss because Peter is not the owner of the car anymore. But yes all these rulings apply if Peter has not cheated Mike in any way by hiding any defects if existed in the car at the time of transaction because there is Hadith of Prophet PBUH regarding this Narrated Hakim bin Hizam: Allah's Messenger (‫ )ﷺ‬said, "The seller and the buyer have the right to keep or return goods as long as they have not parted or till they part; and if both the parties spoke the truth and described the defects and qualities (of the goods), then they would be blessed in their transaction, and if they told lies or hid something, then the blessings of their transaction would be lost." (Bukhari)

Options Available to Mike based on different scenarios: Let us consider various scenarios which can exist in this transaction between Mike and Peter and discuss options in trade Mike may have based on these scenarios. Option in trade also called as al-khiyaar fil-bai’ is the option or right of the seller and buyer to conclude or cancel the

trade. There are totally eight options in trade transaction but we will discuss only those Mike may have based on different scenarios here. Scenario 1: Peter has not maintained the car properly and displayed it in better way decorating externally showing it in better condition than it was in that case Mike will have an option in case of cheating where he can cancel the transaction. (Al-Fawzan, 2009) Scenario 2: There were other internal defects in the car before sale about which Peter was not aware of which led to stoppage of engine after a week. In that case Mike has an option to either cancel the contract or confirming the deal taking due compensation (which is difference in this price due to this defect). (Al-Fawzan, 2009) Islam is a religion where every matter which concerns a person to live a life is discussed in detail making dealing easy between people. Trade transaction is one of the matters of dealing between people which can be matter of dispute between them and cause chaos if there will be no proper guidelines as provided by Shariah. Islam has made life easy guiding a person in every matter.

Bibliography Al-Fawzan, D. S. (2009). A Summary of Islamic Jurisprudence Volume 2. AL-MAIMAN PUBLISHING HOUSE. AL-Humam, I. (1995). Fath Al-Qadir Volume 5. Riyadh: Dar Alim al-Kutub. Al-Sharbini. (1958). Mughni Al-Muhtaj Volume 2. Cairo: Matba 'ah Mustafa al-Halabi. Bukhari. (n.d.). Sahih Bukhari, Book 34, Chapter 19, No.293. Retrieved from Sunnah.com: https://sunnah.com/