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Agreeing with a contractor to build and be paid after a certain period of time


A: It is permissible for a Muslim to agree with a contractor to build a house for 500,000 Riyals, for instance, which are paid in a fixed number of installments. If he pays the money in cash, it will be only 400,000 Riyals. This is not considered Riba; it is a form of sale on credit. It is permissible to sell cloth for ten Riyals on credit while it is worth nine Riyals only in cash. However, both parties should not part until they have agreed on the method of payment; whether it is less in cash or more in credit. (Part No. 14; Page No. 397) May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.


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