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Ownership of Goods on Unpaid Invoices: Permissible Condition?

Answered as per Hanafi Fiqh by Muftionline.co.za

Q: Many companies state at the bottom of their invoice “goods remain the property of the above company until fully paid for” What is the status of the goods and is such a condition permissible?


A: According to Shariah, once a sale is concluded, ownership of the purchased commodity is transferred from the seller to the buyer. Thereafter, the buyer may do as he pleases with the purchased commodity. For the seller to attach the condition that he will remain the owner of the goods until paid for in full by the purchaser is impermissible and the condition will be invalid and a baatil in Shariah. Furthermore, this condition opposes the definition of a sale as well as the dictates of logic.

As far as it opposing the definition of a sale is concerned, then a sale refers to two parties giving each other wealth with an offer and acceptance (in this situation, the money for the goods). Hence, for the seller to thereafter say that the sale commodity still remains in his ownership means that no sale had taken place between the two parties, whereas both parties agree that a sale had been concluded between them.

As far as this condition opposing logic is concerned, then as the seller will receive payment in instalments, he will regard the wealth to be his and use it as he pleases. How is it then that the purchased commodity will not belong to the purchaser? Similarly, the purchased commodity will either be something that is perishable e.g. food items, or something that is non-perishable e.g. a fridge, clothing etc. If the sale takes place on perishable items, and the purchaser thereafter begins to sell the items, how can the seller still remain the owner of these perishable items that have been sold and are already consumed? This has no basis and meaning. Similarly, if the sale takes place on non-perishable items, then too when the purchaser is allowed to sell it, then it can no longer remain in the ownership of the seller. Remaining in the ownership of the seller will not allow the purchaser to sell the item as it does not belong to him, but is only an amaanat in his hand. The law of amaanat is that one is not allowed to sell it.

If one has to regard this sale to be similar to a sale wherein khiyaar-e-shart is reserved for the buyer or seller, then too this sale will not be correct. The reason is that in a sale wherein khiyaar-e-shart is reserved for the buyer or seller, the buyer does not acquire ownership of the sale commodity and is not permitted to sell the sale commodity until he confirms the sale, whereas in this case, both parties agree that the purchaser has purchased the sale commodity and can do with it as he pleases. Therefore, this proves that he has gained ownership of the purchased commodity.

In essence, when this condition is closely examined, one understands that it is not permissible to attach such a condition in a sale as it opposes the definition of a sale as well as the dictates of logic. Hence, this condition is invalid and baatil in Shariah.     

And Allah Ta’ala (الله تعالى) knows best.

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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