Laws of Trade
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What is the ruling on not selling an item after promising to sell it?
Question: What do the esteemed scholars say regarding this matter: I made an agreement with my friend to sell him a motorbike after ten days. It was merely an agreement; I had not received any portion of the payment. After a few days, prices increased by 25%, due to which I no longer intend to sell as I would incur a loss. At the time of the agreement, I had a firm intention to sell, but I did not anticipate that prices would rise so much. Meanwhile, my friend is insistent on buying because if he purchases at the market rate, he will have to pay 125,000 for the motorbike, whereas if he buys it from me according to my promise, it will cost him 100,000. Please guide me on the SharꜤī ruling regarding retracting from the sales promise I made.
اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ
Answer: Using future tense expressions like "I will sell this item to you" or "I will buy that product" is not a true sale but rather a promise of sale. According to Islamic legal rulings, for a transaction to be valid, it is necessary that each of the contracting parties uses a past tense word, for example, "sold," "bought"; or each party uses present tense words, like, "I sell," "I buy"; or one uses a past tense and the other a present tense, for example, "sold," "I buy." If someone uses future tense expressions that, in customary usage, do not imply an intention to conclude a contract, then such an agreement will not constitute a contract of sale. Since your intention at the time of making the promise was to fulfil it, and rightly so, as the pure Shariah encourages the fulfilment of promises- however, now that you wish to withdraw from it to avoid financial loss, you will not be considered sinful.
Allah Almighty states: “يَاأَيُّهَا الَّذِينَ آمَنُوا أَوْفُوا بِالْعُقُودِ” Translation: O believers! Fulfil your pledges (covenants).[1]
The erudite Hanafi jurist, Mufti Amjad Ali AꜤẓamī رَحْمَةُ الـلّٰـهِ عَـلَيْه , writes: "The words of both parties should be in the past tense, such as 'bought' 'sold'; or both in the present tense, like 'I buy' 'I sell'; or one in the past and one in the present, for example, one says 'I sell' and the other says, 'bought.' A sale cannot take place with future tense expressions, whether both words are in the future tense or one- for example, 'I will buy' or 'I will sell'- because the future tense indicates an intention to conclude a contract at a later time and does not establish the contract immediately."[2]
Imam Ahmad Raza Khan رَحْمَةُ الـلّٰـهِ عَـلَيْه states: "Breaching a promise has three forms: If the promise was merely verbal, made as a formality from the outset, and at that very moment, the intention was not to fulfil it, then- without a religiously valid excuse or a state of compulsion- it is a grave sin and unlawful. Such a breach of promise has been listed among the signs of hypocrisy in hadith. If the promise was made with sincerity, and then an acceptable excuse or reasonable cause arose, there is no harm in not fulfilling it, not even the slightest disapproval, provided that this excuse or benefit is preferred over the goodness and virtue of fulfilling the promise. If there is no excuse or benefit, and the attribution is annulled without reason, then this situation is makrūh tanzīhī (undesirable). This action is inappropriate and against proper conduct, but it is neither unlawful nor sinful. The Master of all Worlds, the Holy Prophet صَلَّى اللّٰهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم, states:
”لیس الخلف ان یعد الرجل ومن نیتہ ان یفی ولکن الخلف ان یعد الرجل ومن نیتہ ان لایفی“
This means that a breach of promise is not when a person makes a promise with the intention to fulfil it, but breaking a promise is when a person makes a promise with the intention not to fulfil it."[3]
وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ علیہ واٰلہٖ وسلَّم
Is it permissible to rent out a house before completing all the instalment payments?
Question: What do the esteemed scholars say regarding this matter: Zayd wishes to purchase a house from Bakr for 1.5 million rupees on instalments, of which he will pay 1 million rupees at the time of purchase, and the remaining 500,000 in instalments over a pre-determined period. After paying the 1 million rupees, Zayd will take possession of the house and rent it out, using the rent received to pay Bakr the remaining price in instalments. My question is, is it permissible for Zayd to rent out the house before completing the full payment?
اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ
Answer: In the given situation, it is permissible for Zayd to rent out the house even without paying all the instalments.
The detail of this ruling is as follows: a sale contract is valid only through a correct offer and acceptance, after which the buyer becomes the owner of the goods and the seller becomes the owner of the price. Thereafter, the payment of the price is sometimes made in cash and sometimes in the form of deferred instalments. Whether the price is paid in cash or in instalments, the sale is valid in both cases, and the buyer becomes the owner of the goods. When the purchase is entirely or partly on credit, the seller does not even have the right to withhold the item before receiving the payment. Therefore, in the given scenario, once Zayd purchases the house from Bakr and mutual offer and acceptance occur, Zayd will become the owner of the house. After taking possession of it, he can rent it out, even if the price is agreed to be paid in instalments.
While explaining the ruling of sale, it is stated in Bahār-e-SharīꜤat: "The ruling of a sale is that the buyer becomes the owner of the goods, and the seller becomes the owner of the price."[4]
وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ علیہ واٰلہٖ وسلَّم
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