What is the ruling on selling what one does not own?

The Shaykh : Please go ahead.

The questioner : Selling what one does not own, meaning a man comes to a shop, takes an item from another shop, and sells it to the customer at a price higher than what it is sold for in... for example, is this permissible or not permissible in the Shari'ah?

The Shaykh : There is no doubt that this matter is not permissible in the Shari'ah, and it is something with which many merchants are afflicted in this time. It is when a person seeking a need comes to a merchant who thinks that the need is available with him, but it is not available, so he sells it to him at a price. He knows its price and goes to his neighbor and buys it there, for example, for five, and sells it to this seeker for six. This is a type of commercial transaction.
Another questioner: Peace be upon you.

The Shaykh : And upon you be peace. This can take on many forms in one way or many ways, and this is a miniature example: a person comes wanting to buy a certain book, and the book is known for its printing, its pages, its volumes, and so on. He comes to a bookstore and does not find it, and the shop owner does not say that the book is not available with him. He tells him it is in the warehouse. He is lying, and he only means that it is with his neighbor, for example, near or far. They agree on the price, and he goes to buy this merchandise from his neighbor for less than what he sold it for, naturally, because he wants to make a profit. So he falls into two violations. The first is a clear violation of his saying (peace and blessings be upon him) . So he sold what he did not have, because he went and brought the merchandise from his neighbor, near or far. The second violation is that the believers are sincere, and there is a hadith that is not hidden from any of you, if Allah wills, due to the frequent repetition of scholars and shaykhs of it in the ears of people, and it is, praise be to Allah, an authentic hadith: . So if religion is sincerity, then it is obligatory for this merchant, instead of falling into the first violation of selling what he does not have, to advise this seeker to buy this book in our example, and say to him, "By Allah, this book is not with me, but it is with my neighbor. Go and buy it from him." So he advises him, and he buys it from him at the price the merchant wanted to buy it for, then adds a profit for himself. In this case, he did not advise this Muslim, so he fell into two violations. The first violation is that he sold what he did not have, and the second violation is that he did not advise his Muslim brother.
Another questioner: Peace be upon you.

The Shaykh : And upon you be peace, and the mercy of Allah and His blessings. And often this type of dealing, which is selling what one does not have or buying what one does not own, becomes a cause and reason for creating discord between the seller and the buyer. We used to hear, a few years ago, when the value of gold would rise at times and fall at times, and there were gold bars with gold sellers, known for their weight and known for their price, but this price was subject to going down and up. So a bar or bars would be bought by one of the merchants by phone, then sold to a second, third, and fourth person, and finally, either the last buyer would become a millionaire of his time because the price rose, or he would be ruined in his time and go bankrupt, because they buy very large quantities, so the profit is that the price also rose a lot, or the loss is also multiplied. This is from the wisdom of his prohibition (peace and blessings be upon him) . And with the completion of this hadith, what came in the authentic collections from the hadith of 'Abdullah ibn 'Umar ibn al-Khattab (may Allah be pleased with him), who said: . So it is not permissible, for example, for a person to buy, say, tons of cement and iron, or buy a car or the like, and leave the purchased item in its place, and then sell the purchased item to someone else. This is not permissible, because first, it is a violation of this hadith, and especially with the hadith of Ibn 'Umar which clarifies that possession is necessary. And we do not go far; today, before I came to you about two hours ago, a person from al-Ta'if called me and asked the following question: A man sold his car to another, and the buyer paid the price but did not take delivery of the car. After two or three days, the seller reneged on the sale, knowing that he says he is a student of knowledge, knowing that the sale took place and the two parties separated, and he mentioned the authentic hadith: . The questioner says that the separation occurred, but the seller reneged. So we said in the answer: It is not permissible for this seller to renege, and he must deliver the car. This is the ruling of the Shari'ah regarding this seller. But the buyer has the right to demand the car, because it became his property, even if he did not take delivery of it. But here, a legal ruling applies from the perspective of taqwa (mindfulness of Allah), and not from the perspective of a fatwa, as the scholars say. The difference between a fatwa and taqwa is that a fatwa must be executed because it is an obligatory matter, whereas taqwa, you have the choice, as he (peace and blessings be upon him) said: . And in another hadith, but there is weakness in its chain, and it is not permissible to attribute it to the Prophet (peace and blessings be upon him) without clarifying the weakness of its chain, except that its meaning is acceptable and beautiful. He said in the hadith: . This is the precaution. This hadith, with this beautiful Arabic composition, its chain is weak according to the scholars of hadith, but I said that its meaning is beautiful and very beautiful, and there is something that corroborates the correctness of its meaning in the authentic hadith, which is the hadith of al-Nu'man ibn Bashir (may Allah be pleased with them both), who said: The Messenger of Allah (peace and blessings be upon him) said: to the end of the hadith. Also, the hadith narrated by al-Tirmidhi and others from al-Hasan ibn 'Ali ibn Abi Talib (may Allah be pleased with them both), that the Messenger of Allah (peace and blessings be upon him) said: . So we said to this questioner from al-Ta'if that the seller must deliver the car to the buyer. But if the buyer wants to be kind to the seller, as long as the seller reneged, he must have regretted that he sold. So here we remind him, meaning we remind the buyer of his saying (peace and blessings be upon him): . This is a man who sold and regretted, as if he stumbled. So accept his reneging and do not force him to deliver the car to you, even if this is your right. This is a judgment and a fatwa, and this seller is forced to deliver the car to the buyer, and it is necessary. But if this buyer wants to be generous and to do a favor to this reneging seller, the outcome of his matter is that Allah (Mighty and Majestic) on the Day of Resurrection will pardon, meaning He will forgive his stumble on the Day of Resurrection, and He will not hold him accountable for what he may have stumbled into of legal violations in this worldly life. So his saying (peace and blessings be upon him): . This is a methodology in Islamic trade, which, unfortunately, most merchants today have turned away from, as they deal in transactions that violate the Shari'ah. For this reason, the people of knowledge say that every person who practices a profession must be knowledgeable about the rulings that confront it or surround it, so that he can distinguish the halal from the haram in it, so that he does not fall into legal violations without knowing or realizing. And upon you be peace. So Professor Abu Islam has opened the door for questions for you, so bring what you have.

The questioner : .

The Shaykh : Please proceed.