Rafed English

Fatwas on Credit and Cash Sale

Q1578: What is the view on buying goods on credit for a price that is higher than the cash price? And what is the view on exchanging a check, due after a while, for an amount that is less than the amount written in the check itself?
A: There is no objection to buying and selling goods for a given price for cash or for a higher price on credit. However, it is not permissible to sell a check to a third party for an amount that is lower than that written in the check. But it is permissible to sell it to the person who drew it for a lower amount.

Q1579: The owner of a car offered it for sale at a particular price in cash and a higher one on a ten-month credit. To his mind, the buyer concluded that the difference in price is a surcharge over and above the cash price. Taking into consideration the conclusion of the buyer that he was going to enter into a ribā-bearing deal, is such a transaction considered as a ribā-based one and, therefore, invalid?
A: There is no harm in that if the transaction was based on buying on credit, i.e. paying for the goods by installments. Such a transaction is not considered as a ribā-based one.

Q1580: In a sale contract, it was agreed that the price of the goods should be paid by installments over a period of one year. The buyer would then take delivery of the goods after one year of the payment of the first installment. However, the payment of the first installment is long overdue. Has the vendor the right to exercise the choice of revoking the contract for delay?
A: In the given case that the sold item is going to be delivered later, the price should be paid at the time of concluding the contract. Otherwise the transaction is invalid.

Q1581: If the first installment is delayed beyond its usual time, while there is no specific time for the payment, and no right to revoke on delayed payment is stipulated in the contract for the vendor, has he the right to revoke the transaction because of a delay in paying the installment?
A: In selling on credit, the period during which the settlement of the amount has to be made has to be determined. However, if the sale was concluded without specifying a date for settling the installments, the sale is deemed null and void to start with. But, if the timetable for paying the installments has been agreed, and the buyer delayed the payment beyond the due date, this, per se, should not give rise to the vendor’s exercising the right to revoke.

Q1582: The Ministry of Education constructed a building to house the facilities of a technical institute on a plot of land, on the understanding that it would pay the owners of the land at a later date. However, having finished the building, the officials of the Ministry did not keep their word. For their part, the landlords made it clear that they were not happy and that they regard the building as a usurped property, in which case holding prayer on the premises is deemed lacking in validity. What is the ruling in this matter?
A: After agreeing to hand the land over to the Ministry to build the technical institute in return for money that should be settled at a future date, the landlords have no right to claim it back. Accordingly, the land shall not be regarded as usurped. They can, however, demand from the Ministry to be paid the price of the land. Thus, there is no legal problem in conducting study and holding prayers on the premises. This is not dependent on the consent of the previous landlords.

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