Selling goods at a price that includes a condition that if payment is made early, a discount is deducted from the price
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Q: I am a seller who sells goods at a price of 18 riyals per unit, on the condition that the value is paid within six months. A person came to me and offered to distribute these goods and pay me the value in cash at a price of 12 riyals per unit, while he sells on credit at a price of 18 riyals. After eight months, I asked him to increase his distribution, but he said he could not because the majority of customers delay payment and he does not have liquidity to expand further, as most customers want to buy on credit. So I told him, "I will give you these new customers on credit for six months at a price of 15 riyals per unit, meaning we will share the profit, which is six riyals. And if you make the payment before the six months are up, I will deduct from you for each month..."
...fifty halalas; because the increase is three riyals for six months. I used to supply him with the goods, some on credit, giving him a check for the value of each installment due after six months, and some in cash, which is settled within a few days. Is the method of selling on credit as described forbidden or lawful? May Allah reward you with the best reward.
A: Selling in this form, which is the condition of a discount if payment is made early and no discount if it is not, is not a valid sale; because it is a sale with two terms, one of which is lower than the other, and it is not known which one will occur, which causes ignorance regarding the price. As for the issue of "put it down and pay early" (du' wa ajil) which is well-known among scholars, it has conditions, the most important of which are: that there is no prior agreement between the two parties, and that there is no third party. The situation asked about is a condition agreed upon between the two parties at the time of the contract, so it is not valid in this case.
...fifty halalas; because the increase is three riyals for six months. I used to supply him with the goods, some on credit, giving him a check for the value of each installment due after six months, and some in cash, which is settled within a few days. Is the method of selling on credit as described forbidden or lawful? May Allah reward you with the best reward.
A: Selling in this form, which is the condition of a discount if payment is made early and no discount if it is not, is not a valid sale; because it is a sale with two terms, one of which is lower than the other, and it is not known which one will occur, which causes ignorance regarding the price. As for the issue of "put it down and pay early" (du' wa ajil) which is well-known among scholars, it has conditions, the most important of which are: that there is no prior agreement between the two parties, and that there is no third party. The situation asked about is a condition agreed upon between the two parties at the time of the contract, so it is not valid in this case.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.