- Published on
Islamic Contract – Legality of Bay’ al-Istijrār
1. General Legality of Istijrār
Explanation
In general:
Muslim jurists agree on the permissibility of istijrār,
based on:
✅ the price is known to both contracting parties.
What Is Istijrār?
Istijrār refers to:
a continuous supply arrangement where a buyer repeatedly takes goods from a seller over time with periodic settlement of payment.
It is commonly used in:
Example of Permissible Istijrār
A restaurant regularly purchases:
Example With Figures
Week 1
50 bags rice at RM80 each
50 \times 80 = 4{,}000
50 \times 80 = 4{,}000
Week 2
60 bags rice at RM82 each
60 \times 82 = 4{,}920
60 \times 82 = 4{,}920
Total Month-End Payment
4{,}000 + 4{,}920 = 8{,}920
4{,}000 + 4{,}920 = 8{,}920
Result
✅ Permissible because:
2. Position of the Shāfi‘ī School
Majority Shāfi‘ī View
The majority of the Shāfi‘ī School:
❌ do not generally recognise:
sale by conduct (bay‘ al-mu‘āṭāh)
without:
What Does This Mean?
According to the majority Shāfi‘īs:
Example
A customer enters grocery shop:
Majority Shāfi‘ī Concern
Because:
Some Shāfi‘ī Scholars Were More Flexible
Certain Shāfi‘ī scholars such as:
sale by conduct (bay‘ al-mu‘āṭāh).
Especially where:
3. Position of the Mālikī School
Mālikī View
The Mālikī School generally:
✅ allows istijrār.
However:
Thus:
Example
A bakery regularly takes:
Mālikī Analysis
The act of:
✅ contractual formation.
4. Unknown Price Issue in Istijrār
Main Sharī‘ah Concern
Jurists differ regarding:
permissibility of istijrār when the price is unknown at the time goods are taken.
Why Is This Important?
Islamic commercial law generally requires:
✅ certainty of price (thaman).
Uncertainty regarding price may create:
❌ gharar (excessive uncertainty).
Example of Problematic Situation
A retailer continuously takes:
Only later:
Juristic Concern
At the time goods are taken:
❌ price remains uncertain.
This may lead to:
Majority Position
Most jurists:
❌ do not allow sales with unknown prices.
They rely on:
Minority Position
Some Hanafi and Hanbali jurists:
✅ allow reliance on:
Example of Permissible Market-Based Practice
A petrol station continuously receives:
5. Important Sharī‘ah Principles in Istijrār
Principle 1
Sale Contracts Are Generally Permissible
Based on:
Principle 2
Mutual Consent Is Required
Contracting parties must genuinely consent.
Principle 3
Price Certainty Is Important
Islamic law generally requires:
✅ known price;
✅ known obligations.
Principle 4
Excessive Uncertainty (
Gharar
) Must Be Avoided
Unknown prices may invalidate sales.
Principle 5
Commercial Custom (
‘Urf
) May Be Considered
Some jurists allow flexibility where:
Overall Conclusion
Istijrār is generally:
✅ permissible in Islamic law,
particularly when:
avoiding uncertainty and ensuring fairness in commercial transactions.
1. General Legality of Istijrār
Explanation
In general:
Muslim jurists agree on the permissibility of istijrār,
based on:
- the general permissibility of sale contracts in Islamic law.
✅ the price is known to both contracting parties.
What Is Istijrār?
Istijrār refers to:
a continuous supply arrangement where a buyer repeatedly takes goods from a seller over time with periodic settlement of payment.
It is commonly used in:
- wholesale supply;
- retail supply;
- trade financing;
- import-export transactions.
Example of Permissible Istijrār
A restaurant regularly purchases:
- rice from supplier.
- quantity and price are specified.
- payment is settled collectively.
Example With Figures
Week 1
50 bags rice at RM80 each
50 \times 80 = 4{,}000
50 \times 80 = 4{,}000
Week 2
60 bags rice at RM82 each
60 \times 82 = 4{,}920
60 \times 82 = 4{,}920
Total Month-End Payment
4{,}000 + 4{,}920 = 8{,}920
4{,}000 + 4{,}920 = 8{,}920
Result
✅ Permissible because:
- goods known;
- prices known;
- obligations clear.
2. Position of the Shāfi‘ī School
Majority Shāfi‘ī View
The majority of the Shāfi‘ī School:
❌ do not generally recognise:
sale by conduct (bay‘ al-mu‘āṭāh)
without:
- explicit offer (ijāb);
- explicit acceptance (qabūl).
What Does This Mean?
According to the majority Shāfi‘īs:
- every sale transaction should contain:
- expressed offer;
- expressed acceptance.
- merely taking goods and paying later without verbal/formal contract may be insufficient.
Example
A customer enters grocery shop:
- takes bread daily;
- no formal agreement;
- pays at month-end.
Majority Shāfi‘ī Concern
Because:
- no explicit sale contract formed each time,
they may regard:
❌ the transaction as problematic.
Some Shāfi‘ī Scholars Were More Flexible
Certain Shāfi‘ī scholars such as:
- al-Ghazālī;
- Ibn Surayj
sale by conduct (bay‘ al-mu‘āṭāh).
Especially where:
- customary practice clearly indicates mutual consent.
3. Position of the Mālikī School
Mālikī View
The Mālikī School generally:
✅ allows istijrār.
However:
- the contract begins:
Thus:
- taking possession itself signifies contractual consent.
Example
A bakery regularly takes:
- flour supplies from wholesaler.
- simply collects flour;
- records quantities;
- pays later.
Mālikī Analysis
The act of:
- taking the flour
✅ contractual formation.
4. Unknown Price Issue in Istijrār
Main Sharī‘ah Concern
Jurists differ regarding:
permissibility of istijrār when the price is unknown at the time goods are taken.
Why Is This Important?
Islamic commercial law generally requires:
✅ certainty of price (thaman).
Uncertainty regarding price may create:
❌ gharar (excessive uncertainty).
Example of Problematic Situation
A retailer continuously takes:
- beverages from supplier.
- exact price;
- pricing formula;
- market benchmark
Only later:
- parties negotiate total amount.
Juristic Concern
At the time goods are taken:
❌ price remains uncertain.
This may lead to:
- disputes;
- unfairness;
- unlawful consumption of wealth.
Majority Position
Most jurists:
❌ do not allow sales with unknown prices.
They rely on:
- Qur’ānic prohibition against unlawful appropriation of wealth;
- prohibition of gharar;
- requirement of certainty in contracts.
Minority Position
Some Hanafi and Hanbali jurists:
✅ allow reliance on:
- prevailing market price;
- commercial custom (‘urf);
- public need.
- market prices are stable and commonly known.
Example of Permissible Market-Based Practice
A petrol station continuously receives:
- fuel supply.
- publicly displayed;
- commercially standardised.
- some jurists tolerate deferred reconciliation using prevailing market rates.
5. Important Sharī‘ah Principles in Istijrār
Principle 1
Sale Contracts Are Generally Permissible
Based on:
- general permissibility of trade in Islam.
Principle 2
Mutual Consent Is Required
Contracting parties must genuinely consent.
Principle 3
Price Certainty Is Important
Islamic law generally requires:
✅ known price;
✅ known obligations.
Principle 4
Excessive Uncertainty (
Gharar
) Must Be Avoided
Unknown prices may invalidate sales.
Principle 5
Commercial Custom (
‘Urf
) May Be Considered
Some jurists allow flexibility where:
- stable market practices exist;
- public need is widespread.
Overall Conclusion
Istijrār is generally:
✅ permissible in Islamic law,
particularly when:
- goods are known;
- prices are known;
- contractual obligations are clear.
- jurists differ regarding:
- sale by conduct (bay‘ al-mu‘āṭāh);
- unknown pricing;
- deferred settlement structures.
avoiding uncertainty and ensuring fairness in commercial transactions.
0 Comments