Chapter Four
Transaction Interest (Ribā)
(A) Selling things measured by weight and measure(ing vessel)
In general, it is valid to sell absolutely any commodity in exchange for something of another type, whether the two exchanged things are seen, measured by weight or estimated using other measures, with differentiation (differences in value or quality) or without it. Also, it is generally allowed to sell a commodity for a similar one if the two exchanged things are both measured by weight or by measure(ing vessel) and are not gold or silver, with differentiation (differences in value or quality) or without it, except in situations involving interest (ribā), as follows:
1046. It is not allowed to sell two things of the same type if they are measured by weight or measure(ing vessel) with excess in one of them over the other, whether the sale is for cash or for a postponed payment, and whether both are measured by weight, such as selling twenty kilos of wheat for twenty two kilos of wheat; or if they are measured by measure(ing vessel), such as if selling two modds of wheat for one and a half modd of wheat; or if one of them is measured by weight and the other by measure(ing vessel), such as if selling him one modd of wheat that weighs in some countries fifteen kilos for twenty kilos of wheat. An example of Nasi’ah (postponed-payment) sale is if a person sells twenty kilos of wheat for twenty-five kilos of wheat postponed for one month.
1047. The excess in question in the above is any additional description which has value – it is either an asset-type (‘ayniyyah) excess, which is the material addition that is of the same type as the sold items; or from other types, such as wheat, books, money and the like that are external and seen; or a consequence-type (hokmiyyah) excess, which is like rights or work or delay for one month as in the previous example (no. 1046), in which case if the delay is considered an advantage for one of them over the other and hence a consequence-type excess, it will make it a forbidden interest.
1048. It is an obligatory precaution not to exchange, with postponed payment, different types of commodities that are measured by weight or by measure (measuring vessel), whether they are equal in amount, such as selling one hundred kilos wheat for one hundred kilos rice postponed for one month, or if they are unequal in amount, such as selling one hundred kilos rice for one hundred and twenty kilos of wheat postponed for one month.
1049. It is an obligatory precaution not to sell, as a postponed-payment sale, goods that are of the same type that are measured by numbers with asset-type excess, such as selling twenty apples for fifteen apples postponed for one month.
1050. If the amount of the weighed goods differ in the two states of wetness and dryness, such as in grapes and raisins or unripe and ripe dates, it is not allowed to sell the wet for the dry when there is differentiation (differences in value or quality), even if when in considering the differentiation (differences in value or quality) it is observed the amount of the wet that is going to be reduced when it dries out so as to make it equal to the dry; it is allowed to do so, in cash, when they are similar, although recommended to abstain from it.
1051. The commonly used banknotes (paper money) is regarded as measured by numbers, so it is not forbidden to sell them for each other with differences in denomination and type, both for cash and for postponed payment (Nasi’ah), such as selling GB pounds for French francs. It is also allowed to sell these banknotes when they are similar in type, for cash with differences in denomination. However, selling them for postponed payment is to be abstained from as an obligatory precaution.
1052. It is forbidden – as an obligatory precaution – to conduct transactions with interest between father and son, husband and wife, non-Muslim and Muslim. In addition, the thimmī (i.e. the non-Muslim living as a citizen of a Muslim country) is not allowed, like the Muslim, to enter into interest-bearing transactions. But if a person disobeyed and dealt in interest, he is allowed to take the excess from the other person if it is allowed in the latter’s shari’ah, otherwise it is not allowed to take it without his acceptance; this is also the ruling regarding dealing with any person who allows it in his religious and legal obligations.
1053. It is possible to get rid of the interest by adding something else to one of the two exchanged items or both of them from their type, as follows:
a- When similar items sold, as cash sale, with differentiation (differences in value or quality), the seller can add something of another type to the part in deficit, intending that this added thing is to compensate for the excess amount in the other, such as if he sells for cash twenty kilos of wheat and one book for twenty five kilos of wheat.
b- When selling similar items, for cash or postponed payment, even with differentiation (differences in value or quality), he can, for example, sell twenty kilos of wheat and one book for thirty kilos wheat and two books, provided that their intention is making the book for the thirty kilos of wheat and the two books for the twenty, or vice versa. The rule here is: the added thing to each part is for the sold item or the price in the second part. The same example may be used to get rid of the interest in cash selling: that they intend to have the book in the shortfall part for the two books and the excess amount in the other part.
But in both situations in (b), the intention of selling the book for the wheat must be serious – in fact their involvement in such transaction must be due to a commonly-accepted compelling reason that secures the serious intention and that excuses them from deviating into the obscurity (shobhah).
1054. Interest transaction is invalid if it is made by someone who knows the prohibition of interest, in which case he cannot own the interest money, nor is able to dispose of it: he must return to whom he got it from, as detailed in no. 1052 above.
However, someone who is ignorant of the interest prohibition – as a ruling or issue – can own what he has earned by interest; he is not obliged to return it to the party he got it from, but he must give up such transactions as soon he has knowledge of the prohibition.
(B) Exchange sale (bay’ as-sarf)
1055. The term 'exchange sale' refers to the sale of the two precious metals gold and silver because of their characteristics as gold or silver, not their other characteristic as money or jewellery, whether made into coins or not, used in commercial exchange or not, or sold by weight or numbers.
1056. It is not allowed to sell gold for gold, nor silver for silver, with excess in one of them over the other, even if the one with a shortfall is jewellery, whether as a cash sale or postponed-payment sale. Also it is not allowed to sell one for the other – i.e. gold for silver and vice versa – with or without excess, if the sale is postponed (Nasi’ah), however, if it is a cash sale, it is absolutely allowed.
1057. It is allowed to sell gold money for parts of it, such as selling the Rashadi lira for two halves of it, or four quarters of it, even if the weight of the parts together is more or less than the weight of the one whole piece, since it seems that this is regarded as measured by numbers not by weight, so there is no harm in selling it with differentiation (differences in value or quality).
1058. In exchange selling, handing over the exchanged assets must be done before leaving the contracting meeting, whether when selling gold or silver for similar or the other commodities; so if the contracting parties leave the meeting without completing the hand-over, the sale is invalidated. However, handing over (itself) is not obligatory on any of the two parties, even if the other party did hand over to him, i.e. each one of them may cause the invalidation of the sale by abstaining from handing over.
1059. The exchange handing-over condition is exclusive to selling; if the exchange of the two exchanged assets is done by mutual agreement (solh), handing over then (when establishing the solh sale) is not obligatory.
1060. It is allowed to sell one of the two monies – gold or silver – for its type with excess if an additional thing that has appreciable value is included with the other, even if its value is much less than the excess which exists in the other, provided that serious intention is present is such transaction, such as if someone sells ten gold English pounds plus a certain book for fifteen gold Rashādi liras. The element of serious intention is conditional as mentioned.
1061. The additional amount of copper added in making gold money into coins, which is known as ‘cheating’ (i.e. 'alloying'), although acceptable and necessary industrially, is not valid as an additional thing that justifies the excess in the other money that is of similar type, in a way in which the contracting parties regard the excess here as the amount of copper inside these liras or pounds, since the copper has little value, in addition to the lack of seriousness in including it as an additional thing.
1062. It is not allowed to sell one of the two metals that is made into jewellery for more money than would normally be paid for items of a similar type, even if it is a postponed-payment sale for the items of similar type, with the intention that the excess is for the goldsmithing/workmanship. It is also not allowed to sell one gram, for example, of pure gold for one gram of ‘cheated’alloyed/debased (impure) gold on the condition that is made into a ring, even if the intention is that the goldsmith's work will be paid for by the excess in the pure gold over the impure gold. However, he can ask the goldsmith to make a ring, for example, and the reward (jo‘ālah) of that work and its payment is to sell him a gram of pure gold for a gram of impure gold, provided that the intention is serious.
1063. It is allowed to sell a gram, for example, of one of the two metals for a ring, for example, of the same type, since the goldsmith's work in the other is not an interest excess.
1064. It is not allowed to forge currencies, banknotes and coins, used in our time within the common international currency system, nor is it allowed to use them, whether selling or buying, but it is obligatory to confront whoever does that and to forbid them to do this wrong (evil) with all means that succeed in refraining them from doing so, according to the explanations in the part relating to enjoining others to do what is good and forbidding them from doing what is wrong (evil). It is also obligatory to make the ignorant know of this prohibition and to stop them from behaving according to their ignorance even if they are excused. The same ruling applies to gold or silver money – although dealing with these is rare.