The Difference Between a Contract of Benevolence and a Permissible Contract

Question:
The Shaykh, what is the difference between our saying “a seated contract” and “a defective contract”? And is it correct to say that every defective contract is a seated contract, but not every seated contract is a defective contract?

Answer:
A contract of benevolence (irfaq) is one whose purpose is solely to do good; its aim is not worldly gain. It is a contract intended for the reward of Allah, with no worldly desire behind it, such as a loan. The intention behind a loan is the reward from Allah the Exalted, not worldly profit. As for a permissible contract (ja'iz), it is one where both parties have the right to rescind it, or where one party has the right to rescind it without the other’s consent. This is the ja'iz contract: the one where a party can rescind it without the other’s consent. As for a binding contract (lazim), it is one where neither party has the right to rescind it except with the other’s consent, such as a sale, a lease, and other similar contracts.