A lawful sale contract: the essential conditions in Islamic finance

The basic conditions

Here are the points to check before concluding.

• The good is lawful and has recognised value.
• The seller already owns it or has the right to dispose of it.
• The good is described and can be delivered.
• The price is known and defined, not left open.
• Both parties accept without coercion or deceit.

Defects to avoid

Avoid deceit about quality, hiding a defect, selling a good not yet owned (except special contracts such as salam or istisna) and clauses that tie the sale to a loan with a benefit.

Put it in writing

Note the good, the price, the payment terms, the delivery date and the guarantee. A signed document protects both parties and matches the spirit of Quranic recommendations on writing down commitments. For a complex case, ask a qualified person.

Frequently asked

Can I sell a good I have not yet received?

In principle, you must own the good before selling it, except under specific contracts such as salam or istisna. Check the conditions of the particular case.

Read next

• What is riba? A simple definition and the reasons for the prohibition
• Riba al-fadl and riba an-nasi'a: the difference explained with examples
• Murabaha explained: buying on credit without interest
• Ijara: financing an asset through leasing, with or without final purchase