10/12/2020

Islamic Banking & Finance BS Accounting & Finance

KHIYARS

Rehan Waheed

Khiyars Outline of the Presentation

 Khiyar
 Khiyar e Shart (Optional Condition)
 Khiyar e Roiyyat (Option of investing goods)
 Khiyar e Aib (Option of defect)
 Khiyar e Wasf (Option of quality)
 Khiyar e Ghaban (Option of price)

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Khiyars Khiyar & Its Types

Khiyar (Option)
 The term Khiyar refers to an option or right of the buyer and seller to rescind a contract of sale
 There are five Khiyars in a sale contract, which are as follows
 Khiyar e Shart (Optional Condition)
 Khiyar e Roiyyat (Option of investing goods)
 Khiyar e Aib (Option of defect)
 Khiyar e Wasf (Option of quality)
 Khiyar e Ghaban (Option of price)

Khiyars Types of Khiyars

Khiyar e Shart (Optional Condition)

 At the time of sale, buyer or seller can put a condition that either party has an option to rescind
the sale within the specified number of days (say 2 days). This is known as Khiyar e Shart

Khiyar e Roiyyat (Option of investing goods)

 Here the goods can be returned after inspection, if these are not up to the specification
 This applies automatically to all contracts
Example: ‘A’ buys machine from ‘B’ without seeing. ‘A’ has the option to return machine after
inspection

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Khiyars Types of Khiyars

 Khiyar e Aib (Option of defect)

 It is the responsibility of the seller to supply the goods free of defect or point out the defects (if any)
to the buyer at the time of sale
 The seller is not allowed to hide the defects of the goods as it constitutes as fraud
 Where the goods can be returned if found defective is known as Khiyar e Roiyyat
 The Holy Prophet ‫ ﷺ‬said: “He is not amongst us who indulges in fraud.”
 The buyer has the right to return the goods in case where presence of a deficiency is considered as a
defect in the market practice and which depreciates the value of goods

Khiyars Types of Khiyars

Khiyar e Wasf (Option of quality)

 This option is available where the seller sells the goods by specifying a certain quality which is
absent in the goods
Example: Auto transmission vehicle was specified but sold a manual transmission vehicle

Khiyar e Ghaban (Option of price)

 Where the seller sells the goods at the price which is far expensive than the market price and the
market price is not known to the buyer
 A buyer has the right to return the goods to the seller

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Khiyars Iqala (Resession of Contract)

Iqala
 The mutual agreement/ consent between buyer and seller to rescind a contract is called Iqala
 At the time of execution of contract, the parties freely consent to rescind the contract i.e. each
party will give back the consideration received by it at the time of contract
 Neither buyer nor seller has the sole right to rescind the contract after its execution
 The price of the goods being returned under Iqala will remain unchanged
 The Holy Prophet ‫ ﷺ‬said: “He who does Iqala (rescinding of the contract) with a Muslim who is not
happy with his transaction, Allah will forgive his sins on the Day of Judgment.”

Khiyars BS Accounting & Finance