Shariah gives people freedom to sell and purchase their properties and exchange their wealth and goods with each other in order to fulfill their different needs. The only thing they have to consider is to do these activities in a proper and fair manner. Because, it’s not allowed and not acceptable to get the properties of other in unfair way. This includes every wrong way to take the property of other such as gambling, ambiguity in agreements which exploit the contracting parties, fraud, bribery and theft. The fairness is the core requirement in contract of sale and exchange.
Sale is the most extensive and commonly used contract is our markets. Because, it has a very broad and wider scope. It ranges from our daily sale and purchase activities for our basic needs to sale the shares of companies in stock markets and international trade among different countries. Therefore, it’s important to know what is sale? What are the types of sale? How valid sale is differentiated from void sale? What are the basic things we need to observe in the contract of sale? These are some important questions which we’re going to discuss in next few paragraphs.
Definition of sale
The Arabic word for the contract of sale is “bay” which literally means exchange and it applies for both sale and purchase. It is defined in Shariah as “the exchange of a valuable thing by another valuable thing with mutual consent”. For instance, the sale of a commodity in exchange of cash.
Types of sale
The jurists and scholars have divided the sale contract into three categories from the perspective of its validity.
(a) Valid sale (b) Void sale (c) Voidable sale
Valid sale (Sahih)
The sale is deemed valid when all the elements of a contract such as offer and acceptance, the subject matter and the contracting parties (which have been discussed in some detail in our previous article) are found to be in order. The conditions for every element have been met and it’s free from all prohibited harmful activities.
Void sale (Batil)
The sale is deemed void and batil if the major conditions relating to elements of contract such as offer and acceptance, subject matter, parties of the contract, possession and deliverability of subject matter are not fulfilled. For instance, the contracting party is not sane and mature or it involves in exchange of illegal things or a sale with unknown consideration etc. Now the question arises what are the implications of void sale? The answer is that it’s considered as non-existing. In other words, the buyer doesn’t have title to subject matter and the seller doesn’t have title to price. Both subject matter and price cannot be used lawfully.
Voidable sale (Fasid)
This is the third category of sale. In this category, the contract is legal in its essence. However, some irregularities are found which can be removed or rectified. So, it’s void due to the defect or non-compliant attribute. But if the defect is removed, the contract becomes valid. The ruling for voidable sale (fasid) is that the buyer isn’t allowed to possess the subject matter. He must return it to the seller in order to remove irregularity and defect from the contract. We can find hundreds of examples of this category in our daily business activities. We need to be careful and have to avoid from this kind of sale.
Examples of voidable sale
Some forms of voidable sale are explained briefly in the following:
1. Sometimes, there is a lack of material information in sale transaction. For instance, the object of sale or its price or time of payment is unknown and unspecified.
2. Sometimes, the sale contract is contingent upon an uncertain event. For example, A says to B: “I sell my shares to you if X sell his house to me.”
3. Future sale is also a form of voidable sale. In other words, if the sale contract is executed now and will come into effect from future date, it is void and fasid. Because, the contract has to effective immediately after it’s executed.