Q 2: The following transaction is usually carried out among desert dwellers in
A person may sell sheep or camels to another on credit at a price (Part No. 13; Page No. 193) higher than their current market price and demand payment within three years or more. The seller stipulates to share profits with the purchaser after the latter had pays off his debt. Even more, if the purchaser fails to repay his debt during the specified period, the seller takes his sheep back and the purchaser pays for the cost of fodder and grazing during this period. If the purchaser manages to pay his debt, he shares the remaining production with the seller. It is worth mentioning that the purchaser uses the production to pay up his debt. Is this transaction lawful?
This sale is unlawful, because it combines two contracts; a contract of sale and a partnership contract. Thus, it falls under the prohibited category of
double sales. It is also unlawful because it is conditional on the gain of profit. Both reasons invalidate the sale, which also entails eating up money unjustly because if the purchaser fails to pay off the required debt, he will not be able to refund the money he has spent on fodder and grazing.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.