CHAPTER 7

ELEMENTS OF A VALID SALE

A valid sale has four essential elements

1. Contract or Transaction (Aqd)

1.1 Offer & acceptance (Ijab-o-Qobool)
The term "Offer" means that one person proposes to either
sell his commodity to another person or buy from him and
"Acceptance" means that the person who has been offered
gives his approval of the proposal. Offer and acceptance are
always done in past tense e.g. "I have sold" or "I have
purchased" etc. There are two ways of doing it:

i) Oral/Verbal (Qauli)
By saying or expressing. The offer (Ijaab) and Acceptance
(Qabool) should be communicated orally/verbally between
the parties in such a manner that the transaction is executed
spontaneously. E.g. one can say “I have sold” but one cannot
say “I shall sell to you”.

ii) Implied (Isharaa)

By indicating. This of two types.

a) Credit Sale (Istijrar)

Example settlement of the bill at the end of the month.

b) Hand to Hand Sale (Taati)

Exchange of Money with goods without uttering Ijab-o-
Qabool for procedure adopted in various supermarkets
and departmental stores.
92 Meezan Bank’s Guide to Islamic Banking

1.2 Buyer & Seller (Muta'aqiain)

Both must be:

i) Sane: Should be mentally sound at the time of making

contract.

ii) Mature: Should be adult, however, in case of minor, he

must understand the nature of the transaction.

1.3 Conditions of contract (Sharaet-e-Aqd)

1.3.1 Sale must be non-contingent.
The delivery of the sold commodity to the buyer must be
certain and should not depend on a contingency or chance.
For example, 'A' sells his stolen car to 'B' who purchases it
in the hope that he will manage to recover it. The sale is void.

(a) Unconditional contract

The sale must be unconditional. For example 'A' buys a car
from 'B' with a condition that ‘B’ will employ his son in his
firm. The sale is conditional and hence invalid.

(b) Under reasonable conditions

The conditions of sale should not go against the contract for
instance, 'A' tells 'B' to deliver the goods within a month, the
sale is valid.

(c) Under unreasonable condition but in market practice

If a sale is under unreasonable condition but is in market
practice and not against the teachings of Quran and sunnah,
the sale is valid. For eg. 'A' buys a refrigerator from 'B' with
a condition that 'B' undertakes its free service for 2 years.
The condition being recognized as a part of the transaction,
is valid and the sale is lawful in Shariah.
 Chapter # 07: Elements of a Valid Sale 93

(d) Sale must be immediate

The sale must be immediate and absolute. Thus a sale
attributed to a future date or a sale contingent on a future
event is void. If the parties wish to affect a valid sale, they
will have to affect it afresh when the future date comes or
the contingent event actually occurs.

For example, 'A' says to 'B' on the first of January: "I sell my
car to you on the first of February". The sale is void, because
it is attributed to a future date." Similarly, if 'A' says to 'B': "If
x party wins the elections, my car stands sold to you", the
sale is void because it is contingent on a future event, which
may or may not occur However, in some specific cases, promise
to sell on a future date, may be allowed.

2. Goods for Sale or subject matter (Mabee’)

The following conditions regarding subject mater must be fulfilled:

2.1 Existence
The subject matter of sale must exist at the time of sale. Thus,
a thing which has not yet come into existence or which can not
be delivered/possessed now cannot be sold. If a non-existent
thing has been sold, even with mutual consent, the sale is void
according to shari'ah. Eg. 'A' sells the unborn calf of his cow to
'B'. The sale is void. This rule does not apply in Bai Salam and Bai
Istisna.

2.2 Valuable
The subject of sale must be a property of value. Thus a thing
having no value according to the usage of trade such as a leaf or
a stone on a roadside cannot be sold or purchased.
94 Meezan Bank’s Guide to Islamic Banking

2.3 Usable
The subject of sale should not be a thing which is not used except
for a haram purpose, like pork, wine etc.

2.4 Capable of ownership/title

The subject matter should not be anything, which is not capable
of ownership/title, for example, sea or sky.

2.5 Capable of delivery/possession

Sale of any thing that due to non existence is not capable of being
delivered is void. For instance, a chair which is not yet prepared
cannot be delivered or possessed since it does not exist.

2.6 Specific and quantified

The subject matter of sale must be specifically known and
identified either by pointing out the asset or by detailed
specification that can distinguish it from other things, which are
not sold. For instance, there is a building comprising of a number
of apartments built in the same pattern. 'A', the owner of the
building says to 'B', "I sell one of these apartments to you"; 'B'
accepts the offer. The sale is void unless the apartment intended
to be sold is specifically identified or pointed out to the buyer.

2.7 Seller must have title and risk

The subject matter of sale must be in the ownership of the seller
at the time of sale. Thus what is not owned by the seller cannot
be sold. If he sells something before acquiring its ownership and
risk, the sale is void. For example, 'A' sells to 'B' a car which is
presently owned by 'C' but 'A' is hopeful that he will buy it from
'C' and shall deliver it to 'B' subsequently. The sale is void, because
the car was not owned by 'A' at the time of sale. The speculation
in shares without acquiring ownership and risk is another example.
 Chapter # 07: Elements of a Valid Sale 95

3. Price (Thaman)
3.1 Quantified (Maloom)
The measuring unit of the price should be known e.g. currency etc.

3.2 Specified & certain (Muta'aiyan)

For a sale to be valid, the price should be ascertained and specified
such as the total amount in rupees etc. If the price is uncertain,
the sale is void. For example, 'A' says to 'B': "If you pay within
a month, the price is Rs.50/- but if you pay after two months,
the price is Rs 55/- 'B' agrees. The price in this case is uncertain
and therefore the sale is void unless anyone of the two alternatives
is agreed upon by the parties at the time of sale.

4. Delivery or possession (Qabza)

The subject of sale must be in the physical or constructive
possession of the seller when he sells it to another person.

4.1 Physical (Haqiqi)

For example, 'A' has purchased a car from 'B'. 'B' has not yet delivered
it to 'A' or to his agent. Therefore, 'A' cannot sell the car to 'C'. If "A"
sells it before taking its delivery from 'B', the sale is void.

4.2 Constructive (Hukmi)

"Constructive possession" means a situation where the possessor
has not taken the physical delivery of the commodity, yet the
commodity has come into his ownership and all the rights and
liabilities of the commodity are passed on to him, including the
risk of its destruction. For example, 'A' has purchased a car from
'B', 'B' after identifying the car has placed it in a garage to which
'A' has free access and 'B' has allowed him to take the delivery
from that place whenever he wishes. Thus the risk of the car has
passed on to 'A'. The car is in the constructive possession of 'A'.
If 'A' sells the car to 'C' without acquiring physical possession,
the sale is valid.
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Valid Sale
(Bai Sahih)

Sold good Delivery or possession

Contract or Price (Qabza)
transaction or subject only in respect of
matter (Thaman) movable goods, not
(Aqd) 1 (mub’e) 2 3 4
immovable

Offer & Acceptance Buyer & Seller Conditions of Quantified Physical

Contract Existable (Maloom) (Haqiqi)
(Ijab-o-Qobool) (Muta’ aquadeen) (Sharaet-e-Aqd)
1.1 1.2 1.3 2.1 3.1 4.1

Oral Implied Mature Sale must Sale must be immediate Valuable Specific & certain Constructive
(Qauli) (Isharaa) (If minor, must be non- Not deferred to future (eg not a (Muta’ aiyan) (Hukmi)
(in past (in past Sane understand nature contingent (eg property must pass on stone or (eg possession of
tense) tense) of transaction) sale date not on future (eg currency etc.) documents or keys
1.1.i 1.1.ii 1.2.i 1.3.1 date leaf)
1.2.ii 1.3(d) 2.2 3.2 of a car) 4.2

Credit Sate Cash Sale Under unreasonable Usable

(Istijirar) (Taati) Unconditional Under condition but in market (eg not a
(eg settlement at the (eg as in reasonable practice
Meezan Bank’s Guide to Islamic Banking

contract pig or
end of the month) Super markets) conditions (eg. waranty of 1 year on alcohol)
1.1.ii(a) 1.1.ii(b) 1.3(a) 1.3(b) sale of fridge) 1.3(c) 2.3

Capable of
ownership/title
(eg not sea/sky) 2.4

Capable of delivery / possession

(eg unconstructed flat having no base)
2.5

Specific & quantified 2.6

Seller must have Title & Risk

2.7