Financial transactions

The status of sale in financial transactions

Sale is a lawful contract established by the Quran, the Sunnah, consensus and reason. All Muslims agree on its general lawfulness (reported from Ibn Qudamah, al-Suyuti, Ibn Hajar), and al-Ghazali adds that the ummah reached consensus that sale is the lawful means of acquiring ownership. The Prophet said that earning by one's own hands and any sale free of deception are pure gains (reported by Ahmad), and that carrying a bundle of firewood to sell is better than begging (al-Bukhari 1402).

The contract formula in financial transactions

Scholars agree that sale is concluded through offer and acceptance, since they indicate consent. The Prophet said:

The 2 parties remain free as long as they have not separated.al-Bukhari 2079, Muslim 1532

Consent being hidden, the ruling is attached to the outward sign, in any language. The offer is the first statement, from the seller or the buyer. The sale is also concluded in writing and by correspondence for the majority (Hanafis, Shafi'is, Hanbalis): written offer, written acceptance, the normal delay of acceptance being tolerated when the buyer is absent; the Shafi'is require prompt acceptance.

Prohibited transactions of time and place

• Sale after the Friday call: prohibited by consensus for those bound by the prayer, until it ends (Quran 62:9). The 4 schools specify that this is the second call; for Malikis, a sale concluded at the second adhan is dissolved and the goods returned, not one concluded before; marriage, gift and charity are not dissolved. Women, children, the sick and travelers are not concerned; Malikis discourage them from selling in the market during the prayer.
• Sale in the mosque: prohibited by all, mosques being meant for prayer and the remembrance of Allah: "If you see someone selling or buying in the mosque, say: may Allah not make your trade prosper" (at-Tirmidhi 1321); the Prophet forbade buying and selling in the mosque (Abu Dawud 1079, an-Nasa'i 714). Ibn Batal reports that a sale concluded in the mosque is not annulled, and Umar had the market of al-Bat'ha built outside; the Hanbali school holds it null.

Duress and the limits of the contract in financial transactions

A sale compelled in the name of right (by a judge, to repay a debt) is valid and without withdrawal: the Prophet let the Jews of Khaybar sell their property before exile (al-Bukhari 6545). A sale obtained by oppression does not bind the seller according to the reported consensus (Muhammad ibn Sahnun, al-Abhari), and restitution travels back hand to hand to the oppressor. A joking sale is not concluded for Hanafis, Malikis and the main Hanbali view, for lack of real consent; the Shafi'i school validates it, and Hanafis rank it fasid, with no acquisition by taking possession.

Practical note on financial transactions

This framework shows why an honest sale is protected: clear consent, no deception, respect for the time dedicated to prayer and for the dignity of places of worship. A written contract today follows exactly the path validated by fiqh.