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Bay Al-Urbun is one of the Islamic muamalat instruments. This type of trading
practices known as advance payment or referred to as the `down payment` required on
someone when to buy a particular type of goods usually valued higher price. In conventional
derivatives market, a person who intends to buy an asset is allowed to pay a sum of money as
an advance in the amount specified by the seller. With the payment is made the seller is
bound to deal with it in an agreed period and cannot sell the assets to someone else during
that period. Payments made to actually give the buyer a right, but not the obligation in this
transaction. Such of contract is called as an option.

Meaning of Bay Al-Urbun
Meaning of Bay Al-Urbun, Al-Bay () or purchase in language terms is to convert
an item to an item. Word bay taken from al-Ba` meaning fathom. This is because each of the
contracting parties to fathom extends (reaching out) to take and give. Perhaps each party
served (yubayi`) when his hands with one another and on the basis of that bay (sale) is also
called as `safaqah` which means clapping. Al-Zuhaili, 1995: the case of 361 beliefs that in
terms of terminology, Hanafi defines transaction as an exchange of property with a property
in a particular manner. Or change a favoured with something else that is also favoured in a
certain way that is beneficial to the offering and the performance.
While Ibn Qudamah also defines that, sales as the converting property to gives the
property possession as on the basis to accept the ownership. Meanwhile, Imam al-Nawawi
defines bay with the purpose of changing the property to the property to give possession. (al-
Zuhaili 1995: the case of 360) The word `urbun` linguistic meaning Taslif or taqdim, which
advances (Ibn Manzur 1990: case 284)` or `arabun` Urbun` contains the same purpose. (Al-
Misri 2005: case 174) It is also defined as a down payment or advances. (Al-Zuhaili 2005:
the case of 461) Bay al-urbun meant is when someone buys a product, then he makes the
payment to the seller is part of the price of one dirham or more calculations or if both proceed
on the contract, the deposit will become part of the price of goods and if the sale contract
does not proceed, the deposit would be the right vendor. (al-Zuhaili 2005: case 462)
According to Imam al-Nawawi, al-urbun means someone is buying something and he gave a
few dirhams and said; `if the transaction is perfect between us, then the payment is to be part

of the price of the goods and if otherwise, then it is counted as a gift for you. (al-Nawawi (tt):
case 367).
The bay defines by Imam Malik that Al-Urbun with purpose when someone buys a
man or a woman or rent a mount, then the buyer said to the seller; I will give you some dinar
or dirham on the agreement that if I take the purchase of goods or use a mount it, then the
money is considered as part of the payment for goods or rides, and if I do not take items or
mounts so, then the money that I gave to without you I have nothing. (al-Baji 1984: case
158). Moreover, Majma al-Fiqh Al-Islami on 21 to 27 June 1993 in Bandar Seri Begawan,
Brunei Darussalam has decided that meant Bay Al-Urbun are buying an item with a payment
of a sum of money by the buyer to the seller estimates that if trading is to continue, then the
deposit is counted as part of the price of the goods and if the transaction does not proceed,
then the deposit will be right to the seller. Based on some of the meaning that has been given,
it appears that, in principle, Bay Al-Urbun contains several features (Ab Ab Mumin. Ghani &
Fadillah Mansor 2006; case 143) as follows;
a) The Purchaser has the right to decide whether or not to buy a certain period of time,
but it is not the obligation to buy.
b) The Seller will have no right to sell to any other buyer, even if offered a higher
price and it is obliged to wait in a period that was promised to have received a cash
c) The price of goods has been agreed upon. This can be seen based on their
agreement that if the buying and selling process is completed, then the payment is
considered to be part of the price of goods.
d) There is a period agreed by both sides to ensure the purchase of goods takes place
or not. Thus, for a transaction list as Al-Urbun contract, then the four characteristics
must be met. On the other hand if the four features are not met, then the transaction is
considered to be excluded from the category of Bay Al-Urbun.


Practice of Bay Al-Urbun
Bay Al-Urbun is sale contract which a small part of the price is paid as down
payment/deposit, by the buyer, which the main objective for remaining price is to exchange
in a future date. In the case the buyer perform the contract, that means the amount of
Urbun will be a part of the price, but if the buyer did not execute the sale , he will loss the
down payment, which is considered a gift to the seller.
Nowadays, bay Al-Urbun can be applied on a contract of sale and purchase and lease
commodity / property (assets). It can also be applied to the activities of buying and selling
shares / securities. Bay Al-Urbun can be applied on muamalat and murabahah.
It also can be applied in various forms of contract either in the past or the present.
Principle explicitly bay Al-Urbun has been accepted by scholars to be applied in various
forms of contracts carried out in the past, not only limited to the cash sale only, but also
includes Al-Salam contract, Al-Ijarah and more.
Bay Al-Urbun stand for amount which cannot be returned in case the buyer cancel to
purchase the good, on the other hand the down payment show us the intention of the buyer to
purchase the asset and is typically toward goods that will be delivered at a later date .The
form will indicates the basic structure of bay Al-Urbun which is practiced in Islam banks,
although there are different practice which many banks use for bay Al-Urbun:-
This is a simple Bay Al-Urbun structure
1- Make down payment
2- Deliver asset.
3- Pay remaining purchase price
The Urbun or down payment is part of the total price which agreed between the two
parties (seller and buyer), but if the buyer does not take the delivery asset there is no
refundable to him.
Let is simplify the steps which mention in above:-
1- Buyer and seller agree on a price and the buyer pays a down payment or urbun,
for example he has to pay 15% of the total purchase price. In this contract two

things must be specified and agreed by each party (the asset and the delivery

2- In the time of agreed delivery date, the seller delivers the asset to the buyer, at
same time the buyer collects it from the seller.

3- When the buyer delivered the asset, after ensure and check the asset, the buyer
must pay the remaining balance of the purchase price. For example if he pays 15%
of the original purchase price as Urbun or down payment, the amount he has to
pay is 75%.

Urbun principle is derived from the concept of Bay Al-Urbun or principle advances to
a sale where the seller will accept deposits from buyers. However, if the transaction is
cancelled, the deposit will not be returned and treated as grants.
Examples and Applications:
When a person makes booking rooms at a hotel in advance and included the
payment of a deposit of RM100 and at the last minute, the order had to be cancelled
due to specified reasons. Deposit payments made will be returned to the individual
and to grant to the owners of the hotel.
Application Bay Al-Urbun is uruf happens in capital markets activities in Malaysia
and the world muamalat usually practiced in daily transactions. Advance payment
(Bay Al-Urbun) has become a necessity these days as it becomes collateral and
guarantees to ensure that the goods ordered are taken by the party ordered. This uruf
is true in general uruf debate on jurisprudence, as it may include activities muamalat
society in the world dedicated to the people without any geographical boundaries.


Bay Al Urbun: The Differentiation View of Scholars
Debate on Bay Al-Urbun contract in market economy obviously show that al-ijtihad
concept theologian' it is need in unravelling all problem which arose in present era because
problems nowadays so modern and world on the other hand require to something that new.
What could be seen here is, despite Islamic law is still however fiqh on the other hand can
vary with current situation. This show that Islamic teachings which were brought by our
noble reverence Rasulullah s.a.w very suitable with all aspects in fact teaching brought by the
Rasulullah may be practised in every time and pass over from Rasulullah time itself. This
show that the Islam is perfect after prophet's death and Islamic teachings can also practise in
all aspects in fact rough thick and thin even.
Generally, there is theologian's agreement in certain aspects about al-urbun bay,
however at the same time exist conflict among them from corner others. Conflict and the real
theologian difference more converging to situation where buyer cancels the desire to continue
purchase transaction. Implication from the transaction cancellation can causes earnest money
was contributed will become property seller, whereas buyer does not get any benefit from
money that was paid.
Based on theologian discussion' on al-urbun bay theologian majority' not necessitate
al-urbun bay transaction due to availability element like eat other people's property by
useless and contain gharar element. In fact in bay urbun have two terms that are damaged
namely condition giving advance money to sellers and second condition restore trade if do
not like. Therefore al-urbun bay trade is invalid based on 'Amr ibn Syu'aib:
"Nabi Sallallahu alaihi gosh salutation prohibit urbun trade".
(Abu Daud's hadith)
Previous ulama not like-minded on al-urbun bay necessity because if deposit money
that administered by buyer considered gone and become property seller when buyer cancel
the purchase desire. Among scholar that do not allows al-urbun bay transaction and consider
it is invalid is Syafie's scholar, Maliki, and some Hanbali sect theologian. Mazhab Hanafi on
the other hand considers this transaction as damaged and fasid.
But the Hanbali scholar has a different view of the case bay 'al-urbun this transaction
requires bay' al-urbun. Permissibility bay urbun for Hanbali view on the grounds that there is

a history of this contract has been practiced by the companions and tabi'in. Among them is as
narrated from Nafi 'ibn al-Harith (amil to Umar at Makkah) that he had bought a house from
the Umayyad to safwan bin Umar al-Khattab in 4000 the price of silver, and he put a
condition on Safwan if Umar wanted the house bought and if Umar did not want the money
that belonged to Safwan.
Based on the opinions of scholars, contemporary, they prefer to require contracts bay
'al-urbun. In the analysis and the comparison made by al-Qaradawi said that the hadith does
not require bay 'al-hadith urbun is weak, but from observation al-Qaradawi stated that the
case bay' al-urbun should be based upon rational and appropriate at the time now and not out
of the principles laid down by the sharia and give more facilities to the Muslims.
Mustafa al-Zarqa state uses bay 'al-urbun in modern trade now and support the use of
bay' al-urbun accepted by custom and law. This is because the bay 'al-urbun is useful contract
which can be used to facilitate participation in the transaction or to ensure that the seller does
not change his mind after making a contract. However, if the seller requires compensation for
potential losses due to a contract made to the business insurance needs are more obvious at
present. This is because, the seller has the goods or the manufacturer has the purpose to sell
and had to wait until the buyer confirms the contract may result in the seller will lose the
opportunity to sell goods at a higher price. But in the case of bay 'al-urbun, not be construed
as damages because the contract was made is based on the requirements of the sellers
According to al-Maqdisi of the Hanbali school holds that gharar in the contract bay
'al-urbun the relevant time period is equal khiyar conditions. Therefore, the contract bay 'al-
urbun is valid and should be on the side of the law. If seen through the eyes of the meaning
khiyar conditions Abu Hanifa, Zufar, and Syafi'e say it cannot be more than three days.
Based on tradition that do Habban bin Munqidh in the sales. S.a.w Prophet said:
"If you trade, say there is no hoax (Khilabah), and bear with me for three days"
While Abu Hanifah and scholars Hanbali say that time khiyar is by agreement
between the contracting parties, even if it is more than three days, this is due khiyar enacted
to give time and opportunity to talk, which sometimes is not sufficient for three days.
Limitation is in the hadith Hibbaan is sufficient for him by Allah's rules an adequate for
someone who is not necessarily sufficient for others. Therefore, this restriction shall not

prevent the increase in the time mentioned. Meanwhile, according to Maliki scholar khiyar
required by the require rate. It varies according to different circumstances. For example, for
the fruit cannot be done khiyar more than one day. The clothes and the cattle for three days,
lands far more than three days, and house and so on for a month. This is because the concept
is to test khiyar goods sold and the ability to test is different according to the difference of
goods sold in order to fulfil the contract requirements. Khiyar period begins as soon as the
contract occurred.
Thus, some view and opinion of the scholars regarding the permissibility of bay al-
urbun that thinks it falls within the category of prohibited transaction, while another part
requires it. Each had an argument and the reasons for each opinion they presented.

As the conclusion, Bay Al-Urbun is the type of trading practice and also one of the Islamic
muamalat instruments. Bay Al-Urbun known as advance payment or `down payment`
required on someone when to buy a particular type of goods usually valued higher price.
Some of the scholar that is Syafies scholar, Maliki scholar and some of the Hanbali
theologian that did not allows Bay Al-Urbun transaction and also consider it is invalid. This
is because Bay Al-Urbun deposit money that administered by buyer considered one and
become property seller when buyer cancel the purchase desire. Otherwise, Hanbali scholar is
accepted the use of Bay Al-Urbun. Although in Malaysia mostly we follow the Syafies
scholar Mahzab, but many of the muamalat instrument ways we used the other scholar ways.
Bay Al-Urbun also used in Malaysia muamalat instrument. This shows that, in Malaysia we
also use other scholar opinion in our daily muamalat instruments.