The Ruling on the Sale of Tawarruq (al-Wa'dah)
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The last question we are presenting from our brother's questions is about the ruling on the sale of tawarruq?
Answer: Tawarruq is a transaction known among the scholars, and there is scholarly disagreement among them regarding it. The correct view is that there is no harm in it. The transaction they call tawarruq, which the common people call al-wa'dah, is for a person to sell a commodity to someone in need for a known term. This buyer, after taking possession of it, sells it for cash to fulfill his need, whether for marriage, paying off a debt, building a residence, or something else. So Zayd, who is in need, comes to 'Amr, who is a merchant, and says to him: "I want a car, or I want bags of rice or sugar or such, sell it to me for a known term." He says: "Yes." They agree on a known price and known installments, and the sale is completed on that basis. This buyer, after taking possession of it and bringing it into his custody, disposes of it as he wishes, selling it for an immediate price to fulfill his need for marriage, paying off a debt, or something else.
However, errors occur on the part of these and those, and it is necessary to point them out; indeed, it is obligatory to point them out. We have pointed them out many times in this program and in others. The error is that the seller may sell what he does not have. A merchant may sell a car that is not in his possession, but is with other merchants or companies. He may sell bags of rice that he does not have, and after the sale, he goes to buy them. This is not permissible. The Prophet (peace and blessings be upon him) said:Sunan Ibn Majah 2187Hasan (Darussalam) And it is authentic from him (peace be upon him): Sunan Abi Dawud 3499Hasan li ghairih (Al-Albani) And Hakim ibn Hizam (may Allah be pleased with him) came to him and said:
So the result is that the seller may err and the buyer may err. The seller may sell what he does not have and then go to buy it, and this is not permissible. Rather, he does not sell a car, bags, raw materials, or such unless it is with him, in his custody, in his ownership, in his house, or in his shop. And the buyer in need is not allowed to sell either until he takes possession. He does not sell it to the one who sold it to him, nor does he sell it while it is with him. Rather, he takes possession of it and moves it to his house, or to the market, or to so-and-so's house, or so-and-so's shop, meaning: he moves it from the seller's house, from the seller's place, and then disposes of it after that. This is what is obligatory for this one and that one. If one of them sells before taking possession, that is what is not permissible, and it is what many people neglect, and the problem arises from this side. And success is from Allah. Yes.
The presenter: May Allah reward you with good. If there is an agreement, Your Eminence the Shaykh, between this seller and the one doing tawarruq, or the one in need of cash, that the ten [units] will be for thirteen or fifteen or something similar, do you see the permissibility of this?
The Shaykh: It does not harm. The agreement does not harm, but the sale is not completed until after that.
The presenter: The sale is not completed.
The Shaykh: Until after that, until after taking possession and custody. If he came and said, "I am .............."
Answer: Tawarruq is a transaction known among the scholars, and there is scholarly disagreement among them regarding it. The correct view is that there is no harm in it. The transaction they call tawarruq, which the common people call al-wa'dah, is for a person to sell a commodity to someone in need for a known term. This buyer, after taking possession of it, sells it for cash to fulfill his need, whether for marriage, paying off a debt, building a residence, or something else. So Zayd, who is in need, comes to 'Amr, who is a merchant, and says to him: "I want a car, or I want bags of rice or sugar or such, sell it to me for a known term." He says: "Yes." They agree on a known price and known installments, and the sale is completed on that basis. This buyer, after taking possession of it and bringing it into his custody, disposes of it as he wishes, selling it for an immediate price to fulfill his need for marriage, paying off a debt, or something else.
However, errors occur on the part of these and those, and it is necessary to point them out; indeed, it is obligatory to point them out. We have pointed them out many times in this program and in others. The error is that the seller may sell what he does not have. A merchant may sell a car that is not in his possession, but is with other merchants or companies. He may sell bags of rice that he does not have, and after the sale, he goes to buy them. This is not permissible. The Prophet (peace and blessings be upon him) said:
Do not sell what is not with you.
لا تبع ما ليس عندكfor the Messenger of Allah (ﷺ) forbade to sell the goods where they are bought until the tradesmen take them to their houses.
أنه نهى أن تباع السلع حيث تبتاع حتى يحوزها التجار إلى رحالهمO Messenger of Allah! A man comes to me wanting a commodity, so I sell it to him, then I go and buy it. He said: Do not sell what you do not have.
يا رسول الله! الرجل يأتيني يريد السلعة فأبيعها عليه ثم أذهب فأشتريها، قال: لا تبع ما ليس عندكSo the result is that the seller may err and the buyer may err. The seller may sell what he does not have and then go to buy it, and this is not permissible. Rather, he does not sell a car, bags, raw materials, or such unless it is with him, in his custody, in his ownership, in his house, or in his shop. And the buyer in need is not allowed to sell either until he takes possession. He does not sell it to the one who sold it to him, nor does he sell it while it is with him. Rather, he takes possession of it and moves it to his house, or to the market, or to so-and-so's house, or so-and-so's shop, meaning: he moves it from the seller's house, from the seller's place, and then disposes of it after that. This is what is obligatory for this one and that one. If one of them sells before taking possession, that is what is not permissible, and it is what many people neglect, and the problem arises from this side. And success is from Allah. Yes.
The presenter: May Allah reward you with good. If there is an agreement, Your Eminence the Shaykh, between this seller and the one doing tawarruq, or the one in need of cash, that the ten [units] will be for thirteen or fifteen or something similar, do you see the permissibility of this?
The Shaykh: It does not harm. The agreement does not harm, but the sale is not completed until after that.
The presenter: The sale is not completed.
The Shaykh: Until after that, until after taking possession and custody. If he came and said, "I am .............."
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.