The Sales Contract
The Sales Contract
The Sales Contract
Lecture Outlines
Sale Contract
Definition
Classification/Types
Pillars/Constituents Conditions
Effects
Options
Dissolution
DEFINITION
Literal Meaning
From an Arabic word ba a means to buy
Technical Meaning
1. Exchanging one form of money for another, in which the parties exchange their ownerships accordingly/ 2. Subject Matters of sales can be in form of: 1. Money vs money = Bay al-Sarf 2. Money vs property = Bay al-Mutlaq 3. Money/Property vs usufruct = Al-Ijarah 4. Property vs Property = Bay al-Muqayadah (Barter)
PILLARS OF CONTRACT
Pillars of Contract/Constituents of Sales Contract
Contracting Parties Subject Matter and Consideration Format
Al-Ijab
Offeror
Offeree
Al-Qabul
Al-Jumhur Al-Hanafiyyah
2.
3.
CONDITIONS OF CONTRACT
(According to al-Hanafiyyah)
Conclusion
Validity
Execution
Bindingness
Null / Void
/
1. General Condition 2. Specific Condition
Invalid
Suspended
Dissoluble / Nonbinding
CONDITIONS OF CONTRACT
(According to al-Jumhur)
Conclusion
Validity
Execution
Bindingness
Null/Void
1. 2. 3. 4.
Invalid
Suspended
Dissoluble
EFFECTS OF CONTRACT
Specific
The purpose of a particular contract e.g. transfer of ownership in sale, ownership of usufruct in leasing and so forth.
General
Effective rights obligations Binding rights obligations and and
DISSOLUTION OF CONTRACT
(How to dissolve a contract?)
1. 2. 3. 4. 5. 6. Having elements that could render the contract null and void. The practice of options and choices Revocation by mutual consent ( ) Expiration: The period of contract or the contract is fully executed and performed Death: Al-Ijarah (al-Hanafiyyah), Al-Rahn, Al-Kafalah, AlShirkah, Al-Wakalah, Al-Muzaracah, Al-Musaqah. The suspended ( )contract is not approved/endorsed by its owner
CLASSIFICATION OF CONTRACT
TYPES OF SALES CONTRACT FORBIDDEN SALES CONTRACT
INELIGIBILITY OF CONTRACTING PARTIES
LANGUAGE OF CONTRACT
UNILATERAL CONTRACT
Gift (Hadiah/Hibah
Contract of Partnership
Capital Partnership (alInan/al-Mufawadhah)
Credit Partnership (alWujuh) Labour Partnership (Al-A;mal/al-abdan) Silent Partnership (Mudharabah)
OBJECTS OF SALES
Will (Wasiyyah)
Bay al-Salam
Endowment (Waqf
Bay al-Istisna
Loan (Qard
Bay Al-Ijarah
Bay al-Sarf
Sale of Insane Sale of non-discerning young child Sale of blind person Sale of Coerced person Sale of uncommissioned agent Sale of a person under legal supervision Sale of a person who needs to sell property due to transgression
Physical Exchange Sales Sales by correspondence or messenger Sale of mute persons by means of an understood Sale with a party who is absent from the contract session Sales where the offer and acceptance do not correspond Non-consummated sales
signal/writing
Sale of Non-Existence objects Sale of Undeliverable Goods Differed Sale of debts Excessive Gharar Sales Sale of Impure/ tainted Objects Sale of water Sale of unknown objects Sale of absent/unseen objects Sale of un-received items Sale of fruits and vegetables Down payment sales Same item resale Sale with riba elements Sale with a forbidden price Sale by a city dweller Meeting caravans outside the city Price hiking Auctions Sale during the call of Jumaat prayer Sale of grapes to wine maker Sale of mother without the child Replacing the sale of another A sale with conditions Combining a sale with one of these contracts in one agreement.
Al-Murabahah
Bay al-Amanah
Bay al-Musawamah
Bay al-Salam
Al-Tawliyyah Al-Wadiah
VALID CONTRACT
Bay al-Istisna
Bay Al-Ijarah
Bay al-Sarf Bay al-Jizaf Bay al-Mulamasah Bay al-Munabazah INVALID CONTRACT Bay al-Hasat Bay al-Gharar
Contract of Exchange
(Some examples)
Al-Tawliyyah
The object is sold to the buyer for the same price at which the seller obtain it
Al-Wadiah
The object is sold to the buyer for the known discounted price at which the seller obtain it.
Manufacturer
Retailer
Customer
Manufacturer
Retailer
Customer
Some of the conditions may also applied to Al-Tawliyyah and Al-Wadiah Sales
Manufacturer
Retailer
Customer
Retailer
What are the differences between Forward Sales to Commission to Manufacture Sales?
BAY AL-IJARAH
A contract over desirable, known, permissible, and accessible usufruct, in exchange for a known compensation
BAY AL-MUSAWAMAH
A normal type of sale in which the parties agreed upon price without disclosure of the original price of an object
OWNERSHIP OF USUFRUCT
Lessee
RM Buyer
Seller
BAY AL-SARF
The exchange of one monetary form for another in the same or different genera; (i.e Gold for gold, silver for silver, gold for silver, silver for gold, etc according to the hadith)
CURRENCY EXCHANGE
BAY AL-JIZAF
Gross Sale or purchasing a large quantity of goods. In which the amount is unknown in detail
UNKNOWN AMOUNT
Seller
Buyer
Seller
Buyer
BAY AL-MULAMASAH
Sale by touch. A person purchased an object by touching it without opening it or seeing it or examining it. (Contains element of Gharar)
BAY AL-MUNABAZAH
Sale by object of sale-throwing at commodity of sale. (Contains element of Gharar)
Eg: One man throws the cloth he sell towards another person and the sale is confirmed, even though the person may not have touched it or seen it.
Mr. B is a buyer for the briefcase since he is the one who catches it.
Mr. A is a buyer for the book since he is the one who touches it.
BAY AL-HASAH
The contract concluded by the buyer throwing stone or pebbles towards the merchandise, the one hit by the pebble becoming the object sold. (Contains element of Gharar)
BAY AL-GHARAR
Any sale by deceiving the opposite party. A sale incorporating risk that affects one or more parties and may result loss of the property. It is then an uncertainty on the existence of the object. In selling, gharar may appear in: 1. unknown existence sale 2. unknown measure sale 3. undeliverable sale
GHARAR FAHISH (Excessive)
All Jurist: Invalid Hanafis, Malikis and Hanbalis: Valid Shafiis Outer Shell (AnNawawi et al Invalid / AlGhazali et. al Valid)
Mr. Globe is a buyer of the cow since his pebble hits it.
I have sold you my house on the condition that you sell your car to me. I accept
ISSUE: May exist exploitation and uncertain situation of the 2nd sale
Hanafis: Defective (suspended) unless if the confusion is resolved Shafiis + Hanbalis: Invalid the existence of gharar Malik: Valid the sale contains options for the buyer
To a third party
Hanafis & Zahiri : Not concluded Shafiis: Valid selling confirmed debt at maturity Hanbali: Invalid Malikis: Valid with 8 conditions
All jurist: Prohibited and invalid sale w/h to the debtor or 3rd party
BAY AL-INAH
Same item /object sale
SAME OBJECT RESALE Mr A sells an object for deferred price to Miss C
Seller
Buyer
Bank
Customer
Mr A buyback the object for cash price from Miss C Abu Hanifah Abu Yusof
Defective If no intermediary between the buyer and seller
Valid
Discussion
Shafiis, Dawud of Az-zahiri
Malikis and Hanbalis
Valid but Makruh
Invalid
BAY AL-URBUN
Down payment Sale: Advance payment of some portions of the price of sale to the seller. Agreement: If the sale is executed, the portion applies to the actual price, if the sale is not executed it is considered as a gift from the buyer.
Hanafis
Defective
Majority
Discussion
Ahmad bin Hanbal
Majma Fiqh Islami
Majority: The above contract is invalid Hanafis: Defective Existence of Gharar in terms of the price of the object
Seller
Buyer
Wa ilalliqa Thank you for listening and attending the class. Wassalamualaikum Warahmatullah