Financial Transactions:

Allah (SWT) says: “O you who believe, do not consume each other’s property illicitly - only mutually acceptable transactions are permitted.” (IV: 29) Allah (SWT) also says: “However, Allah permits commerce, and prohibits usury.” (II: 275)

Concise verses, detailed traditions (hadith) and extensive personal juristic opinions have dealt with the most delicate affairs of selling and buying and whatever is related to property and finance. Islamic Law details all this in the books of jurisprudence (fiqh). A glance at the book of al-Imam al-Shafi’i “Al-Umm” summarized by al-Muzni shows you the following chapters regarding transactions.

1.     Transactions permitted or prohibited by Allah (SWT).

2.     The option of the parties of the transaction to cancel it unless they have parted.

3.     Usury.

4.     Bartering meat for meat.

5.     Bartering meat for an animal.

6.     The selling of fruits.

7.     It is not permissible to sell unripe fruits.

8.     Muhaqalah (sale of grains while still in growth) and Muzabanah (a contract of barter in dates: the sale of fresh dates for dried dates by measure. In this case the dried dates are measured while the fresh ones are still uncut.)

9.     Al-‘Araya (a contract of barter in dates, e.g., bartering dried dates for fresh dates still uncut.)

10.  The sale of al-Musarrat (a sheep that is not milked and whose teats are bound with a rag so that milk accumulates in its udder).

11.  Rejection because of a defect.

12.  Sale on condition of freedom from defects.

13.  Sale of a female slave.

14.  Murabahah (resale with a stated profit).

15.  A man sells something on credit and then buys it for less than its price.

16. Controversy between the parties of the transaction and if each of them says: “I will not pay before I receive.”

17.  Invalid sale.

18.  Al-Gharar (Risky sale: the sale of what is not present, e.g, fish not fished yet.)

19.  Sale of unborn animals; sale of al-Mulamasah and Munabadhah (aleatory contracts whose value to either or both of the parties depends on chance or future events); the purchase by a blind person.

20.  Sale for unknown price; Najash (raising up the price without intending to buy the goods).

21.  Urbanite’s sale for Nomadic and the prohibition of buying the goods before the seller has known the price in the market, for this may involve risk.

22.  Non-interest-bearing loan.

23.  The disposal of the minor’s property by his guardian.

24.  The sale of what is permissible to sell or impermissible to sell.

25.  Al-Salam (payment in advance: selling something described and receiving its price in advance).

26.  Sales in which Salam is impermissible.

27.  Price-fixing.

28.  Increase in non-interest-bearing loan, and being exact in measuring and weighing.

29.  Mortgage.

30.  Controversy between the mortgagee and the mortgagor.

31.  The mortgagee’s benefiting by the mortgaged property.

32.  Mortgage of shared property.

33.  Mortgage of land.

34. The conditions that render the mortgage invalid and those which do not, etc.

35.  The guarantee of the mortgage.

The book of bankruptcy includes the following chapters:

1.     The debt owed by or to the deceased.

2.     The permissibility of imprisoning a debtor.

3.     Interdiction.

4.     Arbitration; Reconciliation.

5.     Bill of exchange.

6.     bail.

7.     Partnership.

8.     Power of attorney.

9.     Acknowledgement.

10.  Recognition of rights and borrowed things.

11.  A heir recognized by another heir.

The book of simple loan.

The book of usurpation.

The book of pre-emption; loans; Musaqat (crop sharing contact over the lease of a plantation), rental, Muzara‘ah (temporary sharecropping contract).

The book of gifts, charity and Waqf (endowments).

The book of inheritance, which is a large and very elaborate field.

The book of wills.

The book of deposits.

The book of booties including many chapters.

The book of charity including many chapters.

We have only mentioned the titles of a few books and chapters. The details are very copious and can cope with all new types of contracts and transactions throughout the ages.

Islamic Law deals in similar comprehensive details with the marital relation between man and woman, divorce, suckling, fosterage, etc., and the rights and duties of all parties in the books of fiqh. So, all the special and public relationships among the members of the Muslim community as well as the non-Muslim communities are detailed reflecting equity and justice for all.