Sale with a deferred price that is higher than the immediate price
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Fatwa number ( 16609 ):
Q: We are a major agricultural company operating in the field of supplying agricultural goods, such as fertilizers, seeds, and machinery, among other things. We sell these to farmers, usually under deferred payment sale contracts, where the price of the goods becomes due 120 days after delivery. Recently, institutions and brother farmers have repeatedly delayed paying the company’s receivables for the goods, for various reasons. The delay extends to twice the agreed deferred period, resulting in losses for the company. Additionally, the company itself is forced to delay paying for its purchases from foreign suppliers, who do not hesitate to impose financial penalty sanctions on the company. To avoid repeating losses that harm the company’s financial position and its ability to continue, the company is considering implementing a deferred sale system and asks first about its religious ruling, which is as follows: First: The company sets the sale price in the contract for each time period, such that the price is, for example, 100 riyals for a good if paid after 3 months, or 110 riyals if paid after 4 months, or 120 riyals if paid after 5 months. This is to be clear in the deferred sale contract with customers, so that the price of the good for the period in which payment is made is applied. Second: Is it permissible for the company, as a precaution against delay, to receive the price of the goods by setting a specific deferred price, such as 100 riyals for the good,
to be paid after 12 months, provided that the company indicates in the sale contract that if the customer pays within only 6 months of receiving the goods, the company will give him a discount (or apply another pricing structure such that the price of the good is only 90 riyals).
A: There is no harm in selling with a deferred price that is higher than the immediate price, but the price must be known in amount, and the term must be known and specified at the time of the sale contract. As for what was mentioned in the question: that the company sets different values for different terms in a single sale, and the contract is not finalized on one of them, this is an invalid sale; because the term is not specified in the contract, and because it resembles the riba of the pre-Islamic age of ignorance; for whenever the first term came due and was not paid, they increased the money and increased the term.
Q: We are a major agricultural company operating in the field of supplying agricultural goods, such as fertilizers, seeds, and machinery, among other things. We sell these to farmers, usually under deferred payment sale contracts, where the price of the goods becomes due 120 days after delivery. Recently, institutions and brother farmers have repeatedly delayed paying the company’s receivables for the goods, for various reasons. The delay extends to twice the agreed deferred period, resulting in losses for the company. Additionally, the company itself is forced to delay paying for its purchases from foreign suppliers, who do not hesitate to impose financial penalty sanctions on the company. To avoid repeating losses that harm the company’s financial position and its ability to continue, the company is considering implementing a deferred sale system and asks first about its religious ruling, which is as follows: First: The company sets the sale price in the contract for each time period, such that the price is, for example, 100 riyals for a good if paid after 3 months, or 110 riyals if paid after 4 months, or 120 riyals if paid after 5 months. This is to be clear in the deferred sale contract with customers, so that the price of the good for the period in which payment is made is applied. Second: Is it permissible for the company, as a precaution against delay, to receive the price of the goods by setting a specific deferred price, such as 100 riyals for the good,
to be paid after 12 months, provided that the company indicates in the sale contract that if the customer pays within only 6 months of receiving the goods, the company will give him a discount (or apply another pricing structure such that the price of the good is only 90 riyals).
A: There is no harm in selling with a deferred price that is higher than the immediate price, but the price must be known in amount, and the term must be known and specified at the time of the sale contract. As for what was mentioned in the question: that the company sets different values for different terms in a single sale, and the contract is not finalized on one of them, this is an invalid sale; because the term is not specified in the contract, and because it resembles the riba of the pre-Islamic age of ignorance; for whenever the first term came due and was not paid, they increased the money and increased the term.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.