What is the argument of those who prohibit the two sales in one sale, which is installment sales? And what is the argument of those who permit it?

The questioner : A questioner says: What is the argument of those who prohibit the two sales in one sale, which is installment sales? And what is the argument of those who permit it? Please answer us, may Allah reward you.

The Shaykh : As for the argument of those who take an increase in exchange for installment sales, it is not the installment sale itself, but rather, naturally, the question intends taking an increase in exchange for installment sales. As for the installment sale, if it is at the cash price, this is recommended and better than the cash sale; because the merchant seller benefits in this case with a material gain and reward in the Hereafter; because it is established by authentic hadiths that lending two dirhams is equal to the charity of one dirham; meaning the loan is half of the charity. So if he gives charity with two dirhams, it is as if he gave charity, and if he lends two dirhams, it is as if he gave charity with one dirham; even though the two dirhams will return to him. Therefore, the installment sale is a preferred matter in the Shari'ah, but on the condition that it is at the cash price and that he does not exploit the need of the needy person who cannot pay the price of the need, whether the price is small or large. In this, there is cooperation among Muslims, cooperation between the rich and the poor or those of moderate means. And so, unfortunately, when it became a general custom that the installment sale is accompanied by an increase in the price, it is appropriate for the question to come in this general form: What is the argument of those who prohibit or forbid the installment sale? It does not mean the installment sale itself, but rather the increase that is usually associated with it. So I say: The arguments we have come across are divided into two categories:
A category of clear texts in the issue, and another category from which the prohibition of taking an increase is derived.
As for the first category: I recall now three hadiths:
The first hadith: It is his saying - peace and blessings be upon him - excuse me, his prohibition - peace and blessings be upon him - of two sales in one sale, as narrated by Imam Ahmad in his Musnad from the hadith of Sammak ibn Harb from Abdullah ibn Mas'ud (may Allah be pleased with him), who said: "The Messenger of Allah (peace and blessings be upon him) prohibited two sales in one sale." It was said to Sammak: What are two sales in one sale? He said: "That you say: I sell you this - meaning the item - for such and such in cash, and for such and such on credit."
The second hadith: The hadith of Abu Hurayrah in Musannaf Ibn Abi Shaybah and Sunan Abu Dawud, through his route from Abu Hurayrah (may Allah be pleased with him), who said: The Messenger of Allah (peace and blessings be upon him) said: , and this hadith has a corroborating narration stopping at Ibn Mas'ud, who said: "Two transactions in one transaction are usury," narrated by Ibn Abi Shaybah.
The third hadith: It is perhaps from the hadith, yes, of Amr ibn Shu'ayb from his father from his grandfather, who said: The Messenger of Allah (peace and blessings be upon him) said: , and the Imam of interpreters of hadith, who is Ibn al-Athir al-Jazari, explained this hadith in his book Ghareeb al-Hadith wa al-Athar; he said: "It is that you say: I sold you this for such and such in cash and for such and such on credit. He said: And that is two sales in one sale." This is the text of Ibn al-Athir in Ghareeb al-Hadith. On this basis, there may be other texts, but with the meaning of the prohibition of two sales in one sale, the hadith of Ibn Umar - also - with this meaning: "He prohibited two sales in one sale" in Musnad Ahmad and others.
The point: After it is established from the Prophet (peace and blessings be upon him) the prohibition of two sales in one sale, and it becomes clear from the narrator of the first hadith, Sammak ibn Harb, what is intended by two sales in one sale; as it was also explained by many of the scholars of the Salaf, such as Sufyan al-Thawri; after this clarification, we can say that those who interpret the prohibition mentioned in these hadiths of two sales in one sale in the form that the two sales are offered at the same time; that it is said - as came in the explanation -: I sell you this recorder for one hundred dinars or one hundred riyals in cash, or for one hundred and ten on installment, they say: This is what is prohibited. But if he says to the buyer in advance: This is one hundred and ten on installment; they say: It is permissible. And their argument - or rather their doubt in that! - is that they looked at the issue with a purely superficial view; because the hadith says: "That you say: I sell you for such and such in cash and for such and such on credit"; so if one of them is separated from the other, it is permissible. I say: This is a wretched superficiality - also.
And the argument of these people in this understanding, which we considered a formal superficial understanding, is that they said that the prohibition of two sales in one sale is when two prices are offered in which there is gharar (excessive uncertainty) and ignorance, and it is not known on which of the two prices they agreed! And this is a very weak argument; because reality indicates that they separate on a named price; either the cash price or the installment price, and that is very clear, especially according to the school of those who see the permissibility of bay' al-mu'atah (hand-to-hand sale).
Do you know here in the issue of sales and contracts that it is obligatory to have offer and acceptance, and some are satisfied with bay' al-mu'atah; meaning anything you want to buy, an offer and acceptance must explicitly take place between the seller and the buyer. But the others - including the Hanafis - are satisfied with what is called bay' al-mu'atah, and the truth is that this school is the correct one for two reasons: The first: That there is no condition of offer and acceptance in the Book or the Sunnah. And the other thing: It is what the scholars say in other than this occasion: "The language of reality is more eloquent than the language of speech," and in what we are now dealing with, the greatest proof of what we say; when a man comes to a car dealer, for example, he specifies a car and says: How much is this? He says to him: In cash, for example, twenty thousand riyals, on installment for twenty-five thousand. Reality will be one of two things; after bargaining, of course, and the price settling on a specific thing, let us assume it settled on what was requested; because some merchants have very fixed prices, he said: Twenty thousand in cash, it will not be twenty thousand not by a single fils, twenty-five thousand on installment, it will not be less. So let us assume the two prices ended at this. Then what will happen is the following: Either he pays the twenty thousand in cash, and in exchange takes the car and drives off; there was no offer and no acceptance. Or he says: By Allah, I have no money, so I want to pay you over time. They agree on what? On twenty-five thousand, and they specify such and such every month, every two months, according to what they agree on, and they write what they call these bills of exchange? Yes? And the buyer signs them and everything is done, and he took the car; there was no offer and no acceptance. Who says that in the first and second scenario there was gharar? There is no gharar, there is no ignorance, they separated on a complete and perfect clarity.
And on this occasion I say: Whoever says that offer and acceptance are obligatory restricts the mercy of Allah greatly and invalidates many contracts today. I mean, today the simplest forms that occur: you come to the fruit vendor or the vegetable seller: How much is the kilo? How much is a bunch of parsley? He tells you - for example -: A qirsh, you take it and walk away. Those people do not validate except what you say: I accepted, I agreed, and so on. You get on the bus, you take out the qirsh, you throw it in the box, and you do not agree with the driver on the price or anything. In foreign countries, Europe and others - for example - all goods are priced and weighed, and in the bazaar you put the price and take the goods, newspapers have known prices, in a box, you take a newspaper and throw what? The price and walk away. Where is this offer and acceptance? They hinder the interests of people; and therefore the most correct school in this issue is that mere bay' al-mu'atah is sufficient; because this - as we said earlier - "The language of reality is more eloquent than the language of speech."
So, regarding those who said that the prohibition mentioned in the hadith, meaning combining two matters, and that the cause is such and such; we say: First, this cause is incorrect because reality testifies that there is no ambiguity in the matter and no excessive uncertainty. Moreover, this cause is a speculative, juristic inference, and every opinion and every independent legal reasoning that contradicts an explicit text is rejected, as it is well known in their sayings: "When the report comes, the reasoning is void," "When the river of Allah comes, the river of Ma'qil is void," and "There is no independent legal reasoning in the place of an explicit text." Here, the explicit text regarding the cause is usury or interest, as stated in the second hadith: . Therefore, the cause is not the ambiguity of the price—whether it is the cash price or the price of what? Installments?—because the hadith states that the cause is the increase; taking the increase in exchange for the debt and patience with your Muslim brother. Furthermore, as we said, reality refutes this cause, because there is absolutely no ambiguity in it; that is, selling today on an installment basis does not involve any ambiguity whatsoever.
And when it becomes clear that the cause is usury or interest, another thing becomes clear to us from this second hadith. I want to point out that this hadith benefits us with a benefit we do not derive from the first hadith, and the first hadith benefits us with a benefit we do not derive from the other. By combining the texts, the truth becomes manifest and clear.
The first hadith explained to us the two sales in one sale, saying—as you heard—that one says: "I sell this to you for such and such in cash, and for such and such with an increase for deferment."
The second hadith indicates to us that the cause is usury or interest, not the ambiguity of the price, as those who permit taking an increase in exchange for installments claim. Then, this second hadith benefits us with a benefit that, without it, we would have understood from the first hadith and others that this contract is invalid. Why? Because the default ruling regarding prohibitions is invalidity. But the second hadith did not benefit us with invalidity; on the contrary, it indicated permissibility, but it invalidated the increase; because it said: ; . Therefore, the sale is valid, effective, and established, but if one takes the increase, one takes usury or interest. And if one takes the lesser amount, that is his right, and the sale is effective.
So, the second hadith benefits us with two important benefits: the first is that the sale is valid, contrary to what the principle of prohibition in the first hadith implies, and the second benefit is that the cause of the prohibition is not ambiguity, but rather usury or interest.
The third hadith aligns with the first hadith in the prohibition, but it benefits us by showing that an imam of the language scholars explained the prohibition and the impermissibility therein to be two sales in one sale. Thus, this hadith serves as a corroborating narration for the two previous hadiths.
This is what pertains to the first type of evidence, which is the evidence that explicitly states this issue.
We have inferential evidence; which is an induction of the objectives of the Shari'ah in its commands and its prohibitions. If I go to a merchant with this recorder and know that its cash price is one hundred dinars, and I say to him: "Lend me one hundred dinars for the sake of Allah." He says: "No, I am a man who works with my money, I invest in it; I am not willing. Do you want me to give you one hundred dinars or one hundred riyals on the condition that you pay me back one hundred and five?" This—and praise be to Allah—the Muslims are still in consensus that this is open usury or interest. But when you come to this merchant who has this recorder, its cash price is one hundred, and he says to you: "If you want to buy it on installments for one hundred and five; what is the difference between the two scenarios?" They answer us with the general text: . Fine; Allah has made selling lawful, is this absolute, or is it the lawful, permissible selling? There is no doubt that no one can interpret this verse in its absolute and comprehensive sense, meaning every sale. Every lawful sale, every sale that the Lawgiver has not prohibited, must be restricted. For example: "The Messenger of Allah (peace and blessings be upon him) prohibited selling with excessive uncertainty." So, for example, a man who owns sheep sells wool to a wool merchant; this is called selling with excessive uncertainty. If we prohibit it and he says to us: "My brother, , we sold and we bought." We say to him: This is a sale that the Lawgiver prohibited through the tongue of his Prophet; so it does not fall under the generality of His saying (Glorified and Exalted is He): .
So if they say that the difference between the first scenario and the second scenario is that this—my brother—is first of all a sale? We say to them: First of all: it is a prohibited sale; it was prohibited to have two sales in one sale. Second: here there is exploitation of the buyer's need, just as you exploit the debtor's need in the first case. In the first case, I said: "No, it is forbidden, I do not eat usury or interest"; for example, if he is a righteous man who does not eat usury or interest. But now, what are you eating? You are eating trade, trade of one hundred, whereas in exchange for charity to your Muslim brother it is one hundred and five. This is like that, except that here there is the medium of the sold item. These are formal matters that the Wise Lawgiver never considers in transactions; because we have learned from many, and very many, texts, and among the most important is the principle and rule established by the Messenger of Allah (peace and blessings be upon him) in his saying: .
So we know, for example, that the marriage of tahil is invalid despite the presence of the apparent conditions of the consent of the spouses, the consent of the wife's guardian, and the presence of witnesses. But despite the presence of these formalities without which a marriage contract cannot be valid, the Wise Lawgiver considered them void and of no value, and considered this marriage invalid. So, these formalities should not be a source of deception as long as the goal is making lawful what Allah has forbidden. Here, it is clear in the first scenario that we said: "No, I do not take these five," because these are in exchange for the debt. And these five are in exchange for what? In exchange for the sale? No, in exchange for the sale it is one hundred. And perhaps there is a placement of five or ten there, which does not concern us there; that is lawful. But the increase over the cash sale is not in exchange for the sale. This is certainly—and merchants know this better than us—that this increase is not in exchange for the sale, but rather in exchange for patience in paying off our Muslim brother. So, the fact that this means exists; this means never changes the ruling of this increase which the Messenger (peace be upon him) named as usury or interest. As for those who say it is permissible, they have no argument except what we mentioned, that it is a sale, and that the prohibition mentioned in the previous hadiths is either interpreted as being for the cause of ambiguity, but we have refuted this speculative and juristic cause with the cause explicitly stated in the Prophetic hadith first, and that reality indicates that there is no ambiguity in the price second, in the installment sales that take place today.
This is what I have on this issue.

The questioner : May Allah reward you with good.

The Shaykh : And beware of that.