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Islamic Law of Transaction - Legitimacy, Meaning, and Conditions of Sale in Islam
In Islamic law, a sale (bayʿ) means exchanging one item for another. The Arabic word bayʿ is used for both buying and selling, as mentioned in the Qur’an in verses [12:20] and [2:102].
The word bayʿ comes from the Arabic word bāʿ, meaning “arm,” because people stretch out their arms to give or receive items during a transaction. Another explanation is that people used to shake hands after completing a deal. Because of this, another Arabic word for a sale agreement is ṣafqa, which literally means “a handshake.”
Sales and trade are lawful and permitted in Islam. Their legitimacy is supported by the Qur’an, the Sunnah (teachings and traditions of Prophet Muhammad ﷺ), and the consensus (ijmāʿ) of Islamic jurists.
The Qur’an clearly allows trade and commercial transactions. Allah says: “But Allah has permitted trade” [2:275]. The Qur’an also encourages proper commercial dealings by stating: “But take witnesses whenever you make a commercial contract” [2:282]. Another verse says: “But let there be among you trade by mutual consent” [4:29]. Allah also says: “It is no crime for you to seek the bounty of your Lord” [2:198], which means that earning through lawful trade and business is permissible.
According to the Hanafi School jurists, a sale is the exchange of a lawful and owned item (māl) for another item in a beneficial and specific manner. This definition excludes exchanges that bring no real benefit, such as swapping one identical coin for another identical coin. It also excludes worthless or prohibited items, such as dead animals or dust, because they are not considered valuable in Islamic law.
The Hanafi jurists also explained that a commodity or property (māl) must be something desirable and capable of being stored for future use. An object can be recognised as property if people generally see it as useful and valuable.
Mustafa Al-Zarqa criticised this definition and suggested a broader meaning. He defined property as any identifiable object that has material value to people.
Based on the Hanafi view, services and simple rights are not usually considered commodities because they are not physical objects that can be stored. However, the majority of Islamic jurists (fuqahāʾ) consider services and rights capable of ownership because the real benefit of physical property often comes from its use (usufruct).
Al-Nawawi defined a sale as the exchange of one owned item for another together with the transfer of ownership from one person to another.
Similarly, Ibn Qudamah defined a sale as an exchange that not only transfers ownership, but also allows the new owner to take possession of the item.
In all cases, a sale in Islamic law must be based on a contract that includes an offer (ījāb) and an acceptance (qabūl) between the parties involved.
Case Scenario: Valid and Invalid Sales in Islamic Law
Ahmad sells his bicycle to Bilal for RM500. Ahmad legally owns the bicycle, while Bilal owns the money. Ahmad offers to sell the bicycle, and Bilal accepts the offer. After payment, Bilal takes possession of the bicycle. This is a valid sale because there is lawful ownership, benefit, mutual consent, offer and acceptance, transfer of ownership, and delivery of the item.
In another example, Sarah pays a tutor for online teaching services. According to the Hanafi jurists, services may not be treated as commodities because they are not physical objects that can be stored. However, the majority of Islamic scholars allow such transactions because the service provides recognised value and benefit.
On the other hand, if Ahmad exchanges one RM10 note for another identical RM10 note without any added value or benefit, it is not regarded as a proper sale because there is no meaningful exchange. Likewise, selling worthless or prohibited items, such as a dead animal or dust, would also be invalid because such items are not recognised as valuable property in Islamic law.
In Islamic law, a sale (bayʿ) means exchanging one item for another. The Arabic word bayʿ is used for both buying and selling, as mentioned in the Qur’an in verses [12:20] and [2:102].
The word bayʿ comes from the Arabic word bāʿ, meaning “arm,” because people stretch out their arms to give or receive items during a transaction. Another explanation is that people used to shake hands after completing a deal. Because of this, another Arabic word for a sale agreement is ṣafqa, which literally means “a handshake.”
Sales and trade are lawful and permitted in Islam. Their legitimacy is supported by the Qur’an, the Sunnah (teachings and traditions of Prophet Muhammad ﷺ), and the consensus (ijmāʿ) of Islamic jurists.
The Qur’an clearly allows trade and commercial transactions. Allah says: “But Allah has permitted trade” [2:275]. The Qur’an also encourages proper commercial dealings by stating: “But take witnesses whenever you make a commercial contract” [2:282]. Another verse says: “But let there be among you trade by mutual consent” [4:29]. Allah also says: “It is no crime for you to seek the bounty of your Lord” [2:198], which means that earning through lawful trade and business is permissible.
According to the Hanafi School jurists, a sale is the exchange of a lawful and owned item (māl) for another item in a beneficial and specific manner. This definition excludes exchanges that bring no real benefit, such as swapping one identical coin for another identical coin. It also excludes worthless or prohibited items, such as dead animals or dust, because they are not considered valuable in Islamic law.
The Hanafi jurists also explained that a commodity or property (māl) must be something desirable and capable of being stored for future use. An object can be recognised as property if people generally see it as useful and valuable.
Mustafa Al-Zarqa criticised this definition and suggested a broader meaning. He defined property as any identifiable object that has material value to people.
Based on the Hanafi view, services and simple rights are not usually considered commodities because they are not physical objects that can be stored. However, the majority of Islamic jurists (fuqahāʾ) consider services and rights capable of ownership because the real benefit of physical property often comes from its use (usufruct).
Al-Nawawi defined a sale as the exchange of one owned item for another together with the transfer of ownership from one person to another.
Similarly, Ibn Qudamah defined a sale as an exchange that not only transfers ownership, but also allows the new owner to take possession of the item.
In all cases, a sale in Islamic law must be based on a contract that includes an offer (ījāb) and an acceptance (qabūl) between the parties involved.
Case Scenario: Valid and Invalid Sales in Islamic Law
Ahmad sells his bicycle to Bilal for RM500. Ahmad legally owns the bicycle, while Bilal owns the money. Ahmad offers to sell the bicycle, and Bilal accepts the offer. After payment, Bilal takes possession of the bicycle. This is a valid sale because there is lawful ownership, benefit, mutual consent, offer and acceptance, transfer of ownership, and delivery of the item.
In another example, Sarah pays a tutor for online teaching services. According to the Hanafi jurists, services may not be treated as commodities because they are not physical objects that can be stored. However, the majority of Islamic scholars allow such transactions because the service provides recognised value and benefit.
On the other hand, if Ahmad exchanges one RM10 note for another identical RM10 note without any added value or benefit, it is not regarded as a proper sale because there is no meaningful exchange. Likewise, selling worthless or prohibited items, such as a dead animal or dust, would also be invalid because such items are not recognised as valuable property in Islamic law.
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