The increase in exchange for delaying payment
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The first question of Fatwa No. ( 18706 )
Q1: I bought sheep feed on behalf of one of the associations, and I paid part of the amount, with the rest due in installments for a specific date. However, the owners of the association stipulated in the contract with me that if I delayed, they would increase the debt by an amount of 5%. So, is the increase stipulated by the owners of the
association, if I delay, considered riba? Knowing that they call the increase a compensation for delaying payment .
A1: This condition is invalid; because it is from the riba of the pre-Islamic age of ignorance, since the debt increases with them whenever the payment is delayed. Therefore, this sale is invalid from its origin. It is obligatory to leave it and stay away from it; for Allah the Exalted said:[Al-Baqarah 2:275] , and this is from riba.
Q1: I bought sheep feed on behalf of one of the associations, and I paid part of the amount, with the rest due in installments for a specific date. However, the owners of the association stipulated in the contract with me that if I delayed, they would increase the debt by an amount of 5%. So, is the increase stipulated by the owners of the
association, if I delay, considered riba? Knowing that they call the increase a compensation for delaying payment .
A1: This condition is invalid; because it is from the riba of the pre-Islamic age of ignorance, since the debt increases with them whenever the payment is delayed. Therefore, this sale is invalid from its origin. It is obligatory to leave it and stay away from it; for Allah the Exalted said:
But Allah has permitted trade and has forbidden interest
وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.