Conditions of the Contract of Sale

1) Ibn ‘Umar reported Allah’s Messenger (Sall Allah-o-alaihe wa sallam) as saying: “Both parties in a business transaction have the right to rescind it so long as they have not separated, except in transactions which have been made subject to the right of parties to rescind them.

Ibn ‘Umar reported Allah’s Messenger (Sall Allah-o-alaihe wa sallam) as saying: When two persons enter into a transaction, each of them has the right to rescind it so long as they are not separated and are together (at the place of transaction); or if one gives the other the right (to annul the transaction). But if one gives the other the option, the transaction is made on this condition (i.e. one has the right to rescind the transac­tion), it becomes binding. And if they are separated after they have made the bargain and none of them rescinded it, even then the trans­action is binding.

‘Abdullah b. ‘Umar reported Allah’s Messenger (Sall Allah-o-alaihe wa sallam) as saying: when two persons enter into a transaction, each of them has the right to annul it so long as they are not separated, or their transaction gives one another (as a condition) the right of annulling, and if their transaction has the right of annulling it the transaction becomes binding. Ibn Abi ‘Umar made this addition that Nafi’ said that whenever he (Ibn ‘Umar) entered into a transaction with a person with the intention of not breaking it, he walked a while and then returned to him.   

Hakim b. Hizam reported Allah’s Messenger (Sall Allah-o-alaihe wa sallam) as saying: Both parties in a business transaction have the right to rescind it so long as they have not separated and if they speak the truth and make everything clear they will be blessed in their transaction; but if they tell a lie and conceal anything the blessing on their transaction will be blotted out.

2) Yahya, the son of Jarir, reported: I heared Abu Dhara who men­tioned Abu Huraira saying that Allah’s Messenger (Sall Allah-o-alaihe wa sallam) said: “Two persons entering into a contract, should not separate from each other but with mutual consent.”

Source: Economic Teachings of Prophet Muhammad (peace be upon him): A Select Anthology of Hadith Literature on Economics, Muhammad Akram Khan. Republished with permission.