Selling an item before taking possession of it
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Fatwa number ( 697 )
Q: If I have a sum of money, and a person comes to me and says, "I want you to give me a loan of one thousand riyals," and I say to him, "I will give you ten for thirteen riyals," meaning that I earn three riyals on every ten, and then he accepts that, and I go with him to the market and buy goods worth one thousand riyals, and sell them to the borrower for one thousand and three hundred riyals. Is this lawful or forbidden? Knowing that the sales contract was made before buying the goods.
A: Since the questioner mentioned that he sold money to a person before he owned it, and after selling it to him he went and bought it from the market, the contract in this form is not valid; because he sold what he does not own. And the Prophet (peace and blessings be upon him) said:Sunan Ibn Majah 2187Hasan (Darussalam) It was narrated by al-Tirmidhi and Ibn Majah and others.
Q: If I have a sum of money, and a person comes to me and says, "I want you to give me a loan of one thousand riyals," and I say to him, "I will give you ten for thirteen riyals," meaning that I earn three riyals on every ten, and then he accepts that, and I go with him to the market and buy goods worth one thousand riyals, and sell them to the borrower for one thousand and three hundred riyals. Is this lawful or forbidden? Knowing that the sales contract was made before buying the goods.
A: Since the questioner mentioned that he sold money to a person before he owned it, and after selling it to him he went and bought it from the market, the contract in this form is not valid; because he sold what he does not own. And the Prophet (peace and blessings be upon him) said:
Do not sell what is not with you.
لا تبع ما ليس عندك
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.