Subject : Sale Contract whereby Seller Takes the Non-Refundable Deposit
Fatwa Number : 3442
Date : 16-12-2018
Classified : Transactions & Marketing
Fatwa Type : Search Fatawaa

Question :

What is the ruling on the sale contract of a plot of land in which it is stipulated that the seller take the non-refundable deposit?

The Answer :

Praise be to Allah, the Lord of the worlds.

The preliminary sale contract of the aforementioned plot shows that the non-refundable deposit was agreed on upon concluding the contract itself. However, in case the buyer revoked the deal, scholars have opted for two different opinions: The Hanafie and the Shafie jurists have considered this form impermissible based on the following Hadith: "The Messenger of Allah, may Allah bless him and grant him peace, forbade transactions in which non-refundable deposits were paid."{Ibn Majah}.

Whereas, the Hanbali jurists have considered it permissible based on the following Hadith: "Nafi` Ibn Al-Harith has bought a building in Makkah from Safawan Bin Umaiah, to be used as a prison, under the condition that if Omar Bin Alkhatab approved of that then the sale transaction is concluded, but if he didn`t then Safwan takes four hundred dinars{Non-refundable deposit}." Nonetheless, Ahmad Bin Hanbal considered this Hadith weak. Resolution No. (76/3/85) of the Islamic Fiqh Assembly, session 8, has considered this type of sale permissible if it is confined to a certain period, the deposit is considered part of the price in case the deal was concluded, and the seller gets the deposit if the buyer backed down on deal.

In addition, article (107) of the Jordan Civil Code permitted this type of sale.

We, the General Iftaa` Department, opt for considering this type of sale "Non-refundable deposit sale transaction" permissible, where the deposit paid by the buyer is considered part of the commodity`s price in case the sale was concluded, or else the seller gets the deposit if the buyer backed down on deal. This is provided that both parties agree on a certain deadline. This sale transaction goes under what is called "Stipulated right of cancellation." And Allah knows best.



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