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Ruling on General Tawarq

Answered according to Shafi'i Fiqh by Darul Iftaa Jordan
Some persons buy cars, or estates from people in return for high prices in delayed payment. The owner is paid a high price through a delayed cheque, then the buyer sells that commodity instantly for a lower price. These persons keep dealing in such transactions until they become famous amongst people. What is the ruling of Sharia` as regards this type of transaction?

Answer:
All perfect praise be to Allah The Lord of The Worlds; and may His blessings and peace be upon our Prophet Mohammad and upon all his Family and Companions. Islamic Sharia has legislated sales to achieve the interests of people and meet their needs. They are based on clear foundations and controlled rules, which are alienated from all suspicious matters and eating up people`s money unjustly. A Muslim should avoid suspicious and aleatory transactions, and never be a slave to materialistic profit. The Messenger of Allah (PBUH) said, "What is lawful is clear and what is unlawful is clear, but between them are certain doubtful things which many people do not know. So he who guards against doubtful things keeps his religion and his honour blameless. But he who falls into doubtful things falls into that which is unlawful, just as a shepherd who grazes his cattle in the vicinity of a pasture declared prohibited (by the king); he is likely to stray into the pasture. Mind you, every king has a protected pasture and Allah's involved limits is that which He has declared unlawful. Verily, there is a piece of flesh in the body, if it is healthy, the whole body is healthy, and if it is corrupt, the whole body is corrupt. Verily, it is the heart." Muslim jurists call this issue “Tawarq”, for example, when someone buys a car or a piece of land in return for a hundred dinars in delayed payment, then he resells that commodity instantly for eighty dinars. In fact, Muslim jurists have largely differed as regards this form of transaction/sale. However, they differed on the special and simple type of Tawarq resorted to by some individuals to meet a pressing need. Muslim jurists weren`t acquainted with Tawarq in the manner mentioned above and they wouldn`t approve that this transaction spreads on a large scale and becomes a suspicious profession adopted by some people for making substantial amounts of money. The norm as far as selling and buying are concerned is that the seller seeks to sell for the highest price and the buyer seeks to buy for the lowest price; therefore, bargaining was normal; whereas, the transactions prevailing in the market nowadays contradict this. Muslim jurists have stated that every transaction involving any form of Riba(interest/usury) is discouraged. Umar Bin Abdulaziz(May Allah have mercy on his soul) said: “ Tawarq is the brother of Riba “. Ibn Hajar(May Allah have mercy on his soul) said: “ A sale is discouraged if it involves the sale of `Eenah, which is to buy a commodity from a person on the premise of paying him later on and then selling it to him immediately for a lower price provided he pays in cash now. The same ruling applies to every suspicious sale(lawful/unlawful) such as resorting to tricks in order to make a sale look lawful. “{Tohfat Al-Mohtajj 4/323}. Those who deal in such doubtful transactions instead of dealing in what is clearly lawful must fear Allah The Almighty Who has allowed sales in order for their outcomes and blessings to be divided amongst all human beings. None adherence to the rulings of Sharia concerning sales will have disastrous consequences on the community and the economy as well. And Allah knows best.

This answer was collected from the official government Iftaa Department of Jordan.

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