A man borrowed one thousand dollars from another and stipulated that he would repay him in Jordanian dinars at the exchange rate of the day of borrowing; is this permissible?

The questioner : May Allah reward you with good. A man borrowed one thousand dollars from another, but when he borrowed the thousand dollars, the brother said, "I want you to pay me back in Jordanian dinars." It is well known that one thousand dollars is approximately seven hundred Jordanian dinars. Is this matter permissible in the form you described?

The Shaykh : He stipulated that he would pay him in Jordanian dinars?

The questioner : Yes, in Jordanian dinars.

The Shaykh : I mean, for example, the dollars were worth, as you said, seven hundred dinars. So does that mean he pays him seven hundred dinars, or does it mean he pays him the value of the dollars on the day of repayment, whether it is less or more?

The questioner : No, right now he is binding himself to the seven hundred dinars and will pay them to him at the time of repayment, whether the dollar goes down or up. He is obligated to pay the seven hundred dinars.

The Shaykh : And at that time, the dollars were worth seven hundred dinars on the day of delivery, the delivery of the lender to the borrower, the day of borrowing.

The questioner : Allah knows best. The dollar might have gone up or down.

The Shaykh : No, that happens later. Right now, one person gave another a good loan of one hundred dollars. This hundred dollars now has its value. Well, this value later may go down or up. So when he stipulated repayment in Jordanian dinars at the same value as the dollars on the day the loan was delivered?

The questioner : No, at the same value as the dollars on the day. Yes, yes, that is how it is.

The Shaykh : Yes, that is how it is. And did the lending man agree to this condition?

The questioner : Yes, he agreed.

The Shaykh : And were they keeping in mind the possibility of rising or falling? I do not think so.

The questioner : Yes, without a doubt, O Shaykh. Any person knows this is the state of currency; it may go up and it may go down.

The Shaykh : If it is with this condition and they are keeping it in mind, then it is according to their conditions. But such a thing should not be done because it opens the door to dispute between the lender and the borrower. Suppose now I lent you one thousand dollars. On the day I lent it to you, the thousand dollars was worth, for example, eight hundred dinars. So you stipulated on me to repay eight hundred dinars. Is that the situation?

The questioner : Yes.

The Shaykh : The dollar went up. The dollar against the dinar, meaning the thousand dollars is worth... I am not reassured by this repayment that you will pay me, even though you stipulated it on me. And the reverse is the reverse: the dinar may decrease, as happened with our dinar, and with the Iraqi dinar, and the Syrian pound, and so on. So the purpose of this explanation is the following: any condition that is placed and there is a high probability that it will be a cause of causing a dispute between the parties, then it should not be placed. We take this from matters of the Shari'ah that are explicitly stated, of course, but not in this specific detail; rather, the similar is measured by the similar and the like by the like. For example, and he prohibited leasing the land, but he permitted leasing the land. And the meaning of this is that what is prohibited is one thing and what is permitted is another. And leasing the land is one of the issues in which the scholars differed in the past, and the disagreement continued to the present era. That is because the hadiths coming regarding leasing the land appear to contradict and conflict with each other. There are explicit hadiths that the Prophet (peace and blessings be upon him) and there are also explicit hadiths on the contrary that he permitted leasing the land for gold and silver. As there are also authentic and very famous hadiths that the Prophet (peace and blessings be upon him), when he opened Khaybar by force and dealt with the Jews so that they would remain there working in the land, and for them was the half and for the Messenger (peace be upon him) was the half. So this agreement, the Khaybar transaction, meets with the permission of the Messenger (peace be upon him) to lease the land for gold or silver. But all these texts, on the surface, conflict and contradict his prohibition (may Allah pray upon him and grant him peace) of leasing the land absolutely. Then other authentic hadiths came which help to reconcile these conflicting texts. The hadith in "al-Sahihayn" that they used to lease the land based on what is in the water channels and the canals. So what happened was that the party who stipulated, and here now is the point, the party who stipulated, the owner of the land, and that is the one on the water channels, would imagine that the crop, whether it was wheat or barley, would be more and its ears fuller and so on. So things would turn out contrary to what was estimated, and this condition would become a cause of causing a dispute between the owner of the land and the lessee of the land. He would say, for example, "No, I did not estimate it like this, and I am not like this, I am not like this, I will not pay." Hadiths came to say, and as is said today, to put the dots on the letters, that the Prophet (peace and blessings be upon him) permitted leasing the land for a third or a quarter, not for the water channels and the canals and the ditches, because there is no gharar (excessive uncertainty in a contract) there, no ignorance; a third, a quarter, a half, and so on. Whereas there, there is gharar (excessive uncertainty in a contract), there is ignorance. And therefore this type of sharecropping is what the Messenger (peace be upon him) prohibited. As for a limited portion, as we mentioned earlier, and as the transaction of the Messenger (peace be upon him) with the Jews in Khaybar went, the half for them and the half for him (peace be upon him), from here we can take that such a condition should not be done, but rather the dollar itself that he received is delivered to him, or its value on the day he wants to deliver it. This is the answer.

The questioner : May Allah reward you with good. You answered, O Shaykh, another question, which is, for example, if you gave me one thousand dollars and now purchasing dollars is not available, and I want to repay only with the current value of the dollar?

The Shaykh : It is well known, and this is from the revelation that is not present with the people of revelation!

The questioner : And in many cases, a person borrows in dollars and they do not talk about how he will repay him in dollars.

The Shaykh : So the answer is the answer.

The questioner : So the repayment at the time of repayment is at the market price.

The Shaykh : Yes, if he wants to repay in dinars, it is at the market price. -And upon you be peace and the mercy of Allah and His blessings. Welcome, greetings -

The questioner : May Allah reward you with good.

The Shaykh : May Allah preserve you. How are you?