Ash-Shaykh Abdul-Muhsin al-Abbaad hafidaho-Allah, said:
ولا يلزم أن يكون موجوداً وقت العقد، ولكنه عند حلول الأجل حيث يكون غالباً وجوده، فإنه يجوز فيه السلم
“And it is not necessary for it (i.e product) to be available when performing the contract. However, it is (necessary to be present) at its fixed due date upon that it will most likely be available. Therefore, it becomes permissible therein to carry out the transaction of as-salaam . ”
[Sharh Sunan Abu Dawud (#395)]
AbdulFattaah Bin Uthman
The Lajnah ad-Da’imah stated:
“As-Salam (payment in advance) which is a kind of sale will be valid with seven conditions, which are:
- First: Salam can be affected in those commodities whose quality and quantity can be specified exactly.
- Second: The quality of the commodity (intended to be purchased through salam) shall be fully specified leaving no ambiguity which may lead to dispute.
- Third: If the quantity of the commodity is quantified in weights according to the usage of its traders, its weight must be determined, and if it is quantified through measures, its exact measure must be known.
- Fourth: The exact date and place of delivery must be specified in the contract.
- Fifth: The commodity should be commonly available and present at the time and place of delivery.
- Sixth: The price shall be paid in advance at the session of concluding the contract.
- Seventh: The contract shall be concluded on the basis of guarantee on the part of the seller… “
AbdulFattaah Bin Uthman
Shaykh Muhammad Ibn Hizaam was asked:
ماحكم أخذ مال من المشتري مقدماً لتوفير سلعة لا يملكها البائع في ذلك الوقت علماً أنه سيتم توفير السلعة من مال المشتري مع مال من البائع ؟
What is the ruling on taking money from the customer in advance for ordering a product that the seller doesn’t possess at that time while bearing in mind that the order for the product will be carried out by using some of the money of the customer and some of the money from the seller?
إن قدمه حتى يحجز له ذلك الأمر ولم يتم البيع ولم يتعاقدا على البيع ، إنما قدم له مالا حتى يضمن أن يبيع للمشتري فقط لا يبيعه لشخصٍ آخر ولم يتعاقدا على بيع فلابأس في ذلك
If he puts money forward in an advance:
• merely to reserve it for him;
• while the transaction has not yet been finalized since he only puts money forward in advance so that the seller may sell it to him only and not to sell it to anyone else;
• while they haven’t yet finalized the purchase, then there is no harm in that.
وأما إن أعطاه بنية الشراء والبيع ولم يَملكه بعد فلاتصح هذه الصورة إلا على صورة بيع السَلم وبيع السلم المشروع المجمع عليه صورته أن يُقدم المال كاملاً في مجلس العقد على أن يُعطيه سلعة معينة موصوفة وصفاً دقيقاً إلى أجلٍ معلوم فيجعلونه على هذه الصفة حتى يخرجوا من النهي
As for if he were to give money in advance with the intention of purchasing it despite the seller not yet possessing the product, then this type of transaction is invalid, except if it is done in the form of as-salaam which is legislated upon the consensus of the scholar. And [note that] its method is by giving the full amount at the time of contract upon the basis that he (i.e the seller) provides him a specific product with a detailed description along with a deadline that is known (between both parties). Therefore, they should carry out the transaction in this method so they may remove themselves from falling into the prohibition.
وإلا دخلوا في نهيه صلى الله عليه وسلم أنه نهى عن بيع مالايملك وهو الآن يبيعه الشيء قبل تملكه ونهى عن ربح مالم يضمن وهو الآن سيربح في شيء لم يدخل في ضمانه والله المستعان .
Or else they would fall under the prohibition of the Prophet sallahu alayhi wa salam prohibiting selling what you don’t own. And he will be selling something that which he doesn’t own and He sallahu alayhi wa salam prohibited profit from what you can’t guarantee, yet [it is known] he will be profiting from something which he can’t guarantee, and Allah’s aid is sought.
إن أعطاه مثلاً من باب التعاون معه حتى يشتري السلعة ويوفرها لم يعقد البيع على ذلك فلابأس ، وأما إذا كان ملزما بأن يبيع له فلايصح يدخل في باب ( كل قرضٍ جر نفعاً فهو ربا) وهو الآن أقرضه مقابل أن يبيع له ولايبيع لغيره يُخشى أن يدخل في ذلك .
And if he were to give him from the angle of merely cooperating with him (i.e as a loan) so he may purchase the product and supply it while no contract has been made for it, then there is no harm. And as for if it (i.e the loan) necessitates that he sells it to him, then it is not valid since it will fall under the prohibition of ‘giving a loan for an additional benefit’ while he has given him a loan on the condition he sells it to him and not to sell it to anyone else. Therefore, it is feared that this (i.e dealing) falls under that (the aforementioned prohibition).
[Fataawa Ash-Shaykh Muhammad bin Hizaam (April 3, 2016)]
Also The Lajnah ad-Da’imah was asked the following question:
A customer asked me to sell him a large quantity of commodities. However, I do not have enough money to meet his demand of this commodity. Therefore, I asked him to give me half of the price in order to save it for him. Is this committing a kind of Gharar sale (fraudulent transaction where details about the sold item are unknown or uncertain)? Can I ask him to pay `Urbun (down payment sale) as a guarantee for buying this commodity in order not to bear the loss if he refuses to take the commodity? What is the valid `Urbun?
If you are a deputy (i.e broker) for him in buying the commodity he wants, it will be permissible for you to take the whole price of the commodity or part of it from the person who asked you to buy it on his behalf. In this case, you have to buy it according to the specifications and requirements he determined for you. This is not a kind of selling because you do not possess the commodity at the time of deputation. It is also not a Salam sale (sale with advance payment) as the Salam is a contract for a defined commodity that should be tangible in order for it to be defined. Moreover, this commodity should be delivered at a fixed time in the future provided that the full price should be given to the seller at the time of signing the contract. But if you agree to sell him this commodity and then you buy it, then this transaction will be invalid. This is because one is not permitted to sell what he does not possess. Therefore, it is not permissible for you to hold a contract with him, take any portion of the price or receive `Urbun before possessing this commodity. `Urbun sale is permissible for he who sells what he possesses. In `Urbun sale, the buyer gives the seller or his deputy (i.e broker) a sum of money which is lesser than the price of the commodity after signing the sale contract as a guarantee for selling in order for it not to be sold to another person due to them not paying the price. If the buyer takes the commodity, `Urbun will be regarded as a portion of the price. But if he does not take the commodity, the seller will be permitted not to give the `Urbun back to the buyer.
A Side Note: In the above scenario where the person doesn’t own the product requested from him, he has one of the following cases:
1. The customer requests from him to purchase something on his behalf upon the condition he will be given a wage for his brokerage, which is permissible.
2. He works as a representative or as a broker for the company supplying the products wherein he is allowed to purchase at wholesale price and then sell for retail price.
3. He accepts a down payment only to reserve the product for the customer and to provide it for him without finalizing and binding the contract of sale. This means that if the customer changes his mind, he is entitled to be given his money back. And, if anything were to happen to the product before the completion of the contract, then the customer won’t be liable for it. This is contrary to a scenario where the person selling the product has it under his possession and owns it since he is allowed to finalize the sale contract. And if the customer changes his mind afterwards, the seller can keep the down payment to him.
4. He makes a sale of as-salaam with the customer notifying him that he doesn’t possess the product but that he be able to provide it to you on this and that date with this and that description along with the condition that the whole amount is paid for at the time of contract. And it is not permissible for him to just take a lump sum of the money in this scenario.
The Lajnah ad-Da’imah was asked the following question:
We make a contract with some companies and firms upon importing goods to them after a specified period; two months or more. These goods are accurately described and determined, but they are not under our ownership at the time the contract is concluded. After signing the contract, we import the goods from places where they are available. What is the ruling on the following cases:
1- If we do not get any money at the time of concluding the contract.
2- If we get part of the money, knowing that it is customary that the sum of money is not completely paid at the time the contract is concluded.
3- If we receive the entire sum while making the contract.
What is the ruling in these cases if the contract is concluded as `Aqd Istisna` (a contract to have something made or done)?
Selling goods that are predetermined by specified descriptions on credit is a type of Salam sale (sale with advance payment) which is Mashru` (Islamically permissible), on condition that the price is completely paid in the meeting during which the contract is concluded, because if the whole price is not paid, this will be a form of selling a debt for another, which is Haram (prohibited) by Ijma` (consensus of scholars).
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.
The Permanent Committee for Scholarly Research and Ifta’
AbdulFattaah Bin Uthman