Principles of Business Part Four


Bay‘us Salam Or Forward Buying

The Taking Of Loans

Appointing A Person As A Wakîl (Representative)

Dismissing A Wakîl


Bay’us Salam or Forward buying

1. Prior to harvesting or after harvesting the crops, one gives R100 to a person and says, “(After two or three months) in a certain month, on a certain day, I will take wheat in exchange for this R100 which I am giving you now.” In addition to this, the person also specified the quantity of wheat that he will take in exchange for this money. This transaction is valid. He will have to give the wheat in the month and date which he had specified and at that very price which they had agreed upon. This is irrespective of whether the market value of the wheat on that specified date is more or less than the price that he had specified. Such a transaction is known as bay’us salam. In order for this transaction to be valid, there are several conditions. Try and understand them thoroughly.

(a) The type, quality, class, etc. of the wheat (or whatever other crop one is purchasing) should be clearly mentioned so that there is no dispute when taking delivery of the item. For example, he must state, “You must give me a certain type of wheat. It must not be too fine nor too coarse. It must be of a high quality and not of an inferior quality. It must not be mixed with anything else such as gram, peas, etc. It must be thoroughly dried and not wet.” In short, whatever type of item he wishes to purchase, he must clearly state how it should be so that there is no dispute later. If, at that time, he did not stipulate but merely said, “You must give me wheat in exchange for this R100”, then this transaction will not be permissible. Alternatively, if he merely said that he must give him some husk or rice without specifying the type or quality; then this will not be permissible.

(b) The second condition is that he must also specify the weight, that for R100 he will take 10 kilos or 15 kilos or whatever the amount may be. If the person says that he must give it to him according to the market rate at that time or that he must give 2 kilos more than whatever the market rate will be at that time, this will not be permissible. The market rate will not be considered. At the time when making the agreement, the amount must be decided upon and once the stipulated date arrives, he must take the specified amount.

(c) The third condition is that he must also specify the price that he is going to pay, i.e. he is going to take the wheat for R100 or R200 or whatever the case may be. If the person does not specify this clearly but speaks in vague terms by saying that he will take some wheat for a few rands, then this is not valid.

(d) The fourth condition is that he must pay all the money at that very time and at that very place. If they agree on the entire transaction, separate and go away, and then the person comes back to pay the money, this agreement of theirs will be invalid and they will have to recommence the entire transaction. Similarly, if the person pays R50 in cash and the balance of R50 after some time, the bay’us salam will be valid in respect of the R50 and invalid in respect of the balance R50.

(e) The fifth condition is that the person must specify the time of taking delivery which must be a minimum of one month. That he will take the wheat after one month on a particular date. It is not permissible to stipulate a period less than one month. He can stipulate more than one month irrespective of how much more it may be. However, he must clearly state the month, day and date so that there is no dispute and the person does not say that he will not give it you immediately and you demand that you want it immediately. Therefore, stipulate everything beforehand. If the person does not specify the month, day and date, and instead says that once the crop is harvested you must give it, this will not be valid.

(f) The sixth condition is that the person must specify the place where he wants the wheat, either in this town or in some other town. Alternatively, he could ask the person to deliver it to his house. In short, the person should clearly state where he wishes to have the wheat delivered or collected. If the person does not specify the place it will not be valid. However, if it is an item that is light and there is no labour involved in transporting the item, e.g. a woman purchases musk or pearls, etc. then it is not necessary to mention the place. Wherever he meets the person, he can hand it over. If the bay’us salam is executed according to the above-mentioned conditions, the transaction will be valid, if not, it will not be valid.

2. If items other than wheat and other crops are such that at the time of purchasing them they can be clearly described in order to prevent any dispute at the time of taking delivery, then bay’us salam with regard to such items will also be valid. Such items include eggs, bricks and clothes. However, all the necessary details will have to be mentioned, e.g. he will have to specify the size of the bricks, their length, their width, etc. The cloth will have to be described as to whether it is of silk, how fine or coarse it should be, etc. The eggs will have to be described as to whether they will be farm eggs or eggs produced from battery chickens, etc. In short, all the necessary details will have to be clearly mentioned so that there is no dispute later on.

3. A person purchased five bags or five baskets of husk for R100 on the basis of bay’us salam. This transaction will not be valid because you get different sizes of bags and baskets. However, if they are able to specify and agree upon a certain size or conduct the transaction by weight, it will be valid.

4. An additional condition for the validity of bay’us salam is that from the time that they conduct the transaction till the time that they specified for delivery of the item, that item must be available in the market and it must not become scarce. In the course of this time, if this item becomes absolutely scarce to such an extent that it is unavailable in the markets of this country and can only be obtained from elsewhere after much difficulty, then this bay’us salam will be invalid.

5. When conducting the transaction, the person says, “After the crop is harvested, in a certain month I will take the fresh wheat or, I will take the wheat that comes from a particular farm.” This is not permissible. Such a condition should therefore not be made. When the specified time approaches, the person can give the old or the fresh wheat. However, if the fresh wheat is already harvested, it will be permissible to make a condition with regard to the fresh wheat.

6. You had agreed to take wheat to the value of R100. The specified time expired and went beyond that as well and this person did not give the wheat as yet. Nor is there any hope of receiving it. In such a case it is not permissible for you to ask him not to give you the wheat and that in place of the wheat he should give you gram, rice or something else. It is not permissible to take anything else in place of the wheat. You could either give him more time in which he could give you the wheat or you could take your money back. Similarly, if both of you annul the bay’us salam and you decide not to take the wheat and take the money back, then you cannot take anything else from him in place of that wheat. You will have to take your money back. Similarly, if the transaction becomes annulled on its own, e.g. that item has become scarce and cannot be obtained, then even in such a case you will have to take your money back. You cannot take anything else in place of the wheat. You could take your money and purchase something else with that money from him.


The Taking of Loans

1. It is permissible to take loans of items which could be replaced, such as dry groceries, eggs, meat, etc. It is not permissible to take loans of items which are difficult to replace (i.e. it is difficult to obtain an exact replica of the item) such as, guavas, oranges, goats, fowls, etc.

2. At a time when 10 kilos of wheat was being sold for R10, you borrowed 5 kilos. Thereafter, the price of wheat dropped and 20 kilos of wheat began to be sold for R10. You will still have to give 5 kilos and not more. Similarly, if the price rises, you will still have to give 5 kilos.

3. When the person returned the wheat that he had borrowed from you, he gave you wheat of a higher quality. It is permissible to accept this wheat and it is not regarded as interest. However, at the time of borrowing the wheat it is not permissible to say that you will take wheat that is of a higher quality. It should be remembered that the wheat should not be more in weight. If you take wheat that is more in weight than the one that you had given, it will not be permissible. You must weigh the wheat properly and give it. If slightly more is given (as a precaution), it will be overlooked.

4. You borrowed money or some grains on the promise that you will return it within one month or fifteen days and the person accepted this promise. Even then, mentioning this period will not be considered. In fact, it is not permissible to mention any period. If the person who lent the money or grains needs the same and asks for it, or asks for it without even really needing it, you will have to return it.

5. You borrowed two kilos of wheat, flour or something else. When the person asked for it, you replied: “I do not have any wheat at the moment. In place of that wheat take R2.” The person agreed to take the money instead. In such a case, the money will have to be handed over to the person there and then. If the person goes into the house in order to bring the money and separates from the person, this agreement will become invalid. He will have to repeat the entire agreement with regard to taking the money instead of the wheat.

6. A person borrowed one silver coin whose market value was R5. Thereafter, the market slumped and the value of the same coin dropped to R4. The person does not have to give any additional silver in order to cover up the R1. Instead, he merely has to give the same silver coin back or any other one which is equal to that one in weight. The person cannot say that he is not going to take the silver coin and that he must bring R5 in cash instead.

7. It is the custom in certain homes that one house may borrow five cooked rotis now, and later when they make their rotis, they return them. This is permissible.

Giving Guarantees

1. Na‘îmah (name of a woman) was owing money to someone. You went and gave a guarantee that if she does not fulfil this debt, the person must come and collect it from you or that you are responsible for her, or that she owes you as well (i.e. since you have trusted her and lent her money, it is okay for the other person to trust her as well), or you mention some other words which could be regarded as a guarantee. The person to whom the money was owed also accepted this guarantee of yours. It now becomes wâjib on you to fulfil this guarantee which you gave. If Na‘îmah does not fulfil this debt, you will have to fulfil it and the creditor has the right to ask for the money from whomsoever he wishes, i.e. either from Na‘îmah or from you. As long as Na‘îmah does not fulfil her debt or does not have it waived, you will continue being her guarantor and being responsible for the fulfilment of the debt. However, if the creditor waives your responsibility and says that you are now completely absolved from this agreement and that he will not ask you to fulfil the debt, then this guarantee of yours will no longer remain. If the creditor does not accept your guarantee from the very beginning and says that he is not going to take your guarantee into consideration, you will not be responsible.

2. You had given a guarantee on behalf of someone. This person did not have any money to fulfil the debt. You therefore had to fulfil it on his behalf. If you had given this guarantee upon the insistence of the debtor, you can claim whatever money you paid to the creditor on behalf of the debtor. If you had given this guarantee out of your own free will, you will have to see who had accepted your guarantee first; was it the debtor or the creditor? If the debtor had accepted your guarantee first, it will be regarded as if you had given your guarantee on his instance. You can therefore claim your money from him. And if the creditor accepted your guarantee first, you do not have the right to claim it from the debtor. It will be regarded as if you fulfilled his debt out of your good-heartedness. If the debtor gives you the money on his own, it will be acceptable (but you cannot demand it).

3. If the creditor grants a respite of one month or fifteen days to the debtor, then he (the creditor) cannot demand this money from the guarantor during this period.

4. You did not give a guarantee to pay on behalf of the debtor. Instead, the money of the debtor was kept in your custody as an amânah. You therefore said that this person’s amânah is kept by you and that you will pay the creditor from this amânah. However, the amânah that was kept by you got stolen or disappeared through some other way. Your guarantee will no longer be applicable. It will not be wajib on you to pay it nor can the creditor demand it from you.

5. You wished to go somewhere, so you hired or rented a car or truck from someone. Another person came to the owner of the car and gave a guarantee that if you do not return it, he will give his own car to the owner. Such a guarantee is valid. If you do not return the car, the guarantor will have to give his own car to the owner.

6. You gave a certain item of yours to a person to go and sell it. He sold it but did not bring the money and says to you, “The money cannot go anywhere. I am responsible for it. If you do not get it, you must come and collect it from me.” Such a guarantee is not valid.

7. A person says, “Leave your fowl en-caged in this fowl-run. If the cat captures it, I am responsible. You must take it from me.” Alternatively, he says the following with regard to a sheep, “If the wolf captures it, I am responsible.” Such a guarantee is not valid.

8. If an immature boy or girl gives a guarantee, it will not be valid.

Passing Over Of Debts To Someone Else

1. You owe money to Shafî‘ah while Râbi‘ah owes you money. Shafî‘ah asked you for the money which you owe her. You reply: “Râbi‘ah is owing me some money. Take the money which I owe you from her and do not ask me.” If Shafî‘ah agrees to this there and then, and Râbi‘ah also agrees to this, then you are absolved from the responsibility of your debt to Shafî‘ah. Shafî‘ah cannot ask you for the money; she will have to ask Râbi‘ah, irrespective of when she receives the money. Furthermore, the money that you have asked Shafî‘ah to collect from Râbi‘ah, you cannot claim that amount from Râbi‘ah. However, if Râbi‘ah is owing you more than what you were owing Shafî‘ah, you can claim the balance from Râbi‘ah. If Râbi‘ah pays the money to Shafî‘ah, well and good.

But if she did not pay and passes away, then Shafî‘ah will be paid after selling all her (Râbi‘ah’s) personal belongings. If Râbi‘ah did not leave behind any wealth or possessions or, while she was alive she denied owing you any money, took an oath that she owes no money to you, and there are no witnesses in this regard as well, then in such a case Shafî‘ah can ask you for the money that you owe her and can also demand it from you. If in the very beginning you ask Shafî‘ah to take the money from Râbi‘ah and she does not agree, or Râbi‘ah herself is not happy about giving the money to Shafî‘ah, then this debt has not fallen off your shoulders (i.e. you are still responsible to pay Shafî‘ah her money).

2. Râbi‘ah was not owing you any money. However, you passed on your debt (money which you were owing to Shafî‘ah) to Râbi‘ah. Râbi‘ah accepted this and Shafî‘ah also agreed. Even in such a case your debt to Shafî‘ah will be passed over to Râbi‘ah and she will be responsible to fulfil it. Therefore, all the above-mentioned rules will also apply over here. After fulfilling the debt on your behalf, Râbi‘ah can claim that money from you. However, she does not have the right to claim that money before she can fulfil it on your behalf.

3. You had kept some money with Râbi‘ah as an amânah. You therefore passed over your debt (money which you were owing to Shafî‘ah) to Râbi‘ah. Thereafter, that money which was with Râbi‘ah got lost or disappeared in some way or the other. Râbi‘ah is no longer responsible. Instead, Shafî‘ah will demand the money from you and take it from you. Now she has no right to demand or take the money from Râbi‘ah.

4. If you pass over your debt to Râbi‘ah and thereafter you yourself fulfil this debt and pay the money to Shafî‘ah, this will be valid. Shafî‘ah cannot refuse to accept the money from you and insist on taking it from Râbi‘ah.


Appointing A Person As A Wakîl (representative)

1. Just as a person has the power to carry out a certain work on his own, he also has the choice of appointing someone to carry out that task on his behalf. This is applicable in buying and selling transactions, taking or giving on rent, getting married, etc. For example, sending the domestic servant to the market to purchase something, selling something through her, sending her to hire a car, taxi, etc. The person who is appointed for such a task is known as a wakîl (representative or proxy) in the Sharî‘ah. If you send the domestic servant or labourer to purchase something for you from the market, he will be your wakîl.

2. You sent the domestic servant to purchase meat. She purchased the meat on credit. The butcher cannot demand the money for the meat from you. He will have to ask the domestic servant who will in turn ask you for the money. Similarly, if you ask your domestic servant to sell a certain item for you, you do not have the right to ask or demand the money from the person who purchased the item. He will pay the money to the person from whom he purchased the item (in this case, your domestic servant). But if he comes and gives the money to you, it will be permissible. What this means is that if he refuses to give the money to you, you cannot force him to do so.

3. You sent your worker to purchase something and he brought it. He has the right to refuse to hand over the item to you until you give him the money for it. This is irrespective of whether he paid for it with his own money or whether he has not paid for it as yet. However, if he purchased it on credit on the promise that he will pay within five or ten days, then he cannot ask you for the money before the stipulated number of days.

4. You asked your domestic servant to purchase one kilo of meat. She comes home with one and half kilos. It is not wajib for you to accept the one and half kilos. If you do not take it, she will have to take the half kilo.

5. You asked a person to go and purchase a certain goat from a certain person for R200. This wakîl cannot go and purchase that goat at that price for himself. In other words, when you ask the wakîl to purchase something specifically for you, it is not permissible for him to purchase that very item for himself. However, if he purchases it at a price more than what you had specified, it will be permissible for him to purchase it for himself. But if you did not specify any price, it will in no way be permissible for him to purchase it for himself.

6. You did not specify any particular goat. You merely asked him to purchase a goat for you. It will be permissible for him to purchase a goat for himself as well. He can purchase whichever one he wishes to purchase for himself, and whichever one he wishes for you. If he purchases it with the intention that he is purchasing it for himself, it will be his. If he purchases it with the intention that he is purchasing it for you, it will be yours. And if he purchases it with your money, it will be yours irrespective of what intention he makes when purchasing it.

7. He purchased a goat for you. However, before he could give it to you, it died or got stolen. In such a case, you will have to give him the money for that goat. If you tell him that he had purchased that goat for himself, then your money will be lost if you had already given him the money. But if you hadn’t given him the money and he comes to you now to ask for the money, then if you are able to take an oath that he had purchased the goat for himself, then his goat will be lost. And if you are unable to take an oath, you will have to accept his word.

8. The labourer or domestic servant purchased an item for you at a high price. If the price is slightly higher than the normal market value, you will have to take the item and give the money for it. But if the price is extremely high to such an extent that no one can quote such a high price, it is not wajib on you to accept it. If you do not accept it, he will have to take it.

9. You gave an item to a person to sell. It is not permissible for this person to purchase the item for himself and give the money to you. Similarly, if you ask a person to purchase an item for you, he cannot bring his own item and sell it to you. If he wishes to sell his item to you, or purchase your item for himself, he must clearly state so by saying: “This is my item, you can purchase it from me” or “I will purchase this item from you.” It is not permissible to do so without clearly stating this.

10. You sent the domestic servant to purchase goat meat. She comes back with beef. You have the choice of either accepting it or rejecting it. Similarly, if you send her to purchase potatoes and she comes back with bhindi (lady’s fingers – a vegetable) or anything else, it is not necessary for you to accept it. If you reject it, she will have to take it.

11. You asked her to purchase something worth R1 and she comes with R2 worth. You have the right to take R1 worth and give the extra back to her.

12. You sent two persons to purchase a certain item. It will be necessary for both of them to be present when purchasing the item. It is not permissible for only one person to purchase the item. If only one person purchases it, the validity of the transaction will be dependent on you. If you accept it, it will be valid.

13. You asked a person to purchase a goat, a cow or something else for you. This person did not purchase it himself but sent someone else. It will not be wâjib for you to accept what this third person purchases. You can accept it or reject it. However, if he himself purchases it for you, you will have to take it.


Dismissing A Wakil

1. The right to dismiss a wakîl remains with you all the time, e.g. you say to a person, “I need a goat. If you come across one, you must buy it for me.” Thereafter you stop him from purchasing it for you. He now has no right to purchase it for you. If he purchases it, it will be his responsibility. You do not have to take it.

2. You did not dismiss a wakîl yourself. Instead, you wrote him a letter or sent someone to inform him that he should not purchase the item for you. Even then, he will be dismissed. If you did not dismiss him yourself, but someone else went on his own and informed him that you have dismissed him and that he should not purchase the item, then he will be considered to be dismissed if two persons informed him of this or one reliable, religious person informed him of this. But if this was not so, he will not be dismissed. If he purchases the item, you will have to take it.

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