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Are auctions permitted? When are they disliked?

Answered according to Shafi'i Fiqh by Qibla.com

Answered by Shaykh Amjad Rasheed

Are auctions permitted? When are they disliked?

Answer:
In the Name of Allah, Most Gracious, Most Merciful

Definition of Auction

An auction is when the seller offers his merchandise to a group of people, beginning with a certain price on the agreement that whoever pays more than this price and bids higher than the others will become the owner of the merchandise. This purpose of this form [of trade] is to make people desirous of buying [the merchandise].

Transfer of Ownership

One should note, however, that ownership of the merchandise is not transferred by the mere settling of the price. Rather, a spoken offer and acceptance must take place [between the buyer and the seller]. It is also permissible to follow the [weaker] position in our school that [ownership is transferred] when the buyer gives the known price to the seller without a verbal offer or acceptance.

When the price settles, the sale is not binding on either [the buyer or the seller]. Rather, each has the option of conducting the sale or abandoning it.

Forbidden Bidding

What is forbidden in auctions is for an attendee to bid up the price not because he wants to buy the merchandise but to make someone else pay a higher price. This is what is forbidden.

Amjad Rasheed

[Translated by Sidi Hamza Karamali]

 

السؤال : هل يجوز بيعُ المزايدة ؟ ومتى يكره ؟ الجواب : المراد ببيع المزايدة : أن يعرض البائعُ سلعته على جماعة من الناس يبتدأ بسعر ما على أن من يدفع أكثر من هذا السعر ويزيد على صاحبه تكون السلعة له ، وتقع هذه الصورة لترغيب الناس بالشراء ، لكن لا ينعقد البيع بمجرد استقرار الثمن بل لا بدَّ من جريان صيغة الإيجاب والقبول ، وتصح فيها المعاطاةُ على قول يجوز تقليده وهي أن يدفع المشتري الثمن المعلوم للبائع دون صيغة ، وإذا استقر الثمنُ عند أحدهم فلا يلزمه الشراءُ بل له الخيارُ بين أن يشتري أو يترك ذلك . والمحرم في بيع المزايدة هو النجشُ كما في الحديث وهو أن يزيد أحد الحاضرين في الثمن دون رغبة في الشراء بل ليوقع غيره في الثمن الأعلى فهذا هو المحرم .

 

This answer was indexed from Qibla.com, which used to have a repository of Islamic Q&A answered by various scholars. The website is no longer in existence. It has now been transformed into a learning portal with paid Islamic course offering under the brand of Kiflayn.

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