Salam And Parallel Salam - Appendix B (The Shariah Basis for the Standard)

Transcription

1. Shari ’ah Standard No. (10): Salam and Parallel Salam Appendix (B) The Shari’ah Basis for the Standard Permissibility of Salam A contract of Salam derives its permissibility from the Qur`an, the Sunnah and Ijma’ (consensus (consensus of Fuqaha Fuqaha). ). On the level of the Qur`an, Allah, the Almighty, says: {“O ye who believe! When you deal with each other, in transactions involving future obligations in a fixed period time, reduce them to writing”}. writing”} (2) Ibn Abbas said: “I declare that a Salaf (Salam) contract in which the commodity is guaranteed for future delivery has been permitted by Allah” and then he read: {“O ye who believe! When you deal with each other, in transactions involving future obligations in a fixed period time, reduce them to writing”} writing”}.. It is reported that Ibn Abbas said: “This verse is a revelation for the particular purpose of making Salam permissible.”(3) On the level of Sunnah, Ibn Abbas is reported to have said: “The Prophet (peace be upon him) has came to Medina and found that people were selling dates for deferred delivery after a duration of one or two years on a Salam basis. The Prophet (peace be upon him) said: ‘Whoever pays for dates on a deferred delivery basis (Salam) should do so on the basis of a specified scale and weight’”. weight’”. In another text of the Hadith the Prophet (peace be upon him) said: “Whoever pays on a deferred delivery basis should do so on the basis of a specified scale, weight and date of delivery”. delivery” (4) The scholars are unanimous on the permissibility of a Salam contract. Ibn Mundhir said that the scholars agreed that a Salam contract -i.e, a contract (2) [Al-Baqarah (The Cow): 282]. (3) See: Ibn Al-Jawzi, “Zad Al-Masir Fi ’Ilm Al-Tafsir” [1: 336]; and Ibn Kathir, “Tafsir AlQur`an Al-’Azim” [1: 496]. (4) The Hadith has been related by Al-Bukhari, Muslim and others. See: “Sahih AlBukhari” [2: 781], Damascus: Dar Al-Qalam edition; and “Sahih Muslim” [3: 1226], Beirut: Dar Al-Fikr edition. 284
2. Shari ’ah Standard No. (10): Salam and Parallel Salam in which a person sells to his fellow man a specific and determined thing by weight or measure for a future defined date of delivery—is permissible.(5) Wisdom of Making Salam Permissible The wisdom of making Salam permissible lies in the fact that Salam facilitates a type of financing for people in need of it. In particular, farmers, market gardeners and merchants, among others, need working capital for their businesses and for their living expenses in order to operate. Hence, Salam is made permissible so that these businesses may benefit from it. The buyer may benefit from its permissibility as well, by acquiring the commodity at a price below the market price. Similarly, a contract of Salam responds to the needs of a large number of business enterprises at different levels, ranging from small and mediumsized enterprises to conglomerates that are involved in agricultural and industrial production or trade and the like. In order for these businesses to be productive, they need working capital in the form of either cash or assets. Hence, Salam has provided an investment opportunity in the form of financing of the working capital for trade. It also covers the demands of those in need of liquidity, as long as they are able to fulfill the orders they receive in return at the due date. Although the contract of Salam is commonly used by agricultural businesses, its permissibility is not, however, confined to these fields. It can also be used in other investment opportunities, such as industry or trade. The contract of Salam also meets immediate needs for liquidity. This is because it gives the seller flexibility in using the sale proceeds (before the commodity is delivered), and the opportunity to arrange for the countervalue (al-Muslam Fihi) and its delivery to the buyer at the date of delivery. Subject Matter of a Salam Contract ■ The basis for the permissibility of presenting usufruct as capital in a Salam contract is the view of the Maliki scholars. This is regarded as immediate receipt of the capital based on the Shari’ah maxim that says: (5) Ibn Al-Mundhir, “Al-Ijma’” (P. 54); and Ibn Qudamah; “Al-Mughni” [6: 385], Cairo: Matba’at Hajar edition. 285
3. Shari ’ah Standard No. (10): Salam and Parallel Salam “Taking possession of part of a thing is like taking possession of the whole thing”.(6) Hence, this is not a sale of debt (because the buyer has received control over the usufruct).(7) ■ The basis for the requirement that the capital of Salam must be known to the two parties is that a Salam contract is one of the exchange contracts in which the consideration need to be known so as to remove any uncertainty.(8) ■ The basis for the requirement that the capital must be paid at the conclusion of a Salam contract is the saying of the Prophet (peace be upon him): “Whoever pays on a deferred delivery basis should do so on the basis of specifying the scale” scale”.(9) The Taslif or Islaf means payment in advance. Salam was so named because the capital must be paid in advance. If payment is delayed, the transaction is not called Salam.(10) Again, any delay in payment of the capital and dispersal of the parties renders the transaction a sale of debt for debt(11) which is prohibited, and the scholars agreed on its prohibition. Ibn Rushd said: “As for sale of debt for debt, Muslim scholars are unanimous regarding its prohibition”.(12) ■ The basis for it not being permitted that a debt be capital in Salam is because this would render the transaction a form of sale of debt and this is prohibited by the Shari’ah. ■ The basis for the impermissibility of Salam where the subject matter is a specific and identified thing is the Hadith stating that “A man came (6) Al-Dardir, “Al-Sharh Al-Saghir” [4: 347]. (7) Al-Buhuti, “Sharh Muntaha Al-Iradat” [2: 37]. (8) Al-Qadi Abdul-Wahhab, “Al-Ma’unah” [2: 987]; Ibn Juzay, “Al-Qawanin Al-Fiqhiyyah” (P. 202); Al-Kasani, “Bada`i’ Al-Sana`i’” [5: 301]; Ibn Qudamah, “Al-Mughni” [6: 411]; and Al-Shirazi, “Al-Muhadhdhab” [1: 300]. (9) The Hadith has been related by Al-Bukhari, Muslim and others: “Sahih Al-Bukhari” [2: 781], Damascus: Dar Al-Qalam edition; and “Sahih Muslim” [3: 1226], Beirut: Dar Al-Fikr edition. (10) Ibn Qudamah, “Al-Mughni” “Al-Mughni”,, [6: 408] (11) See: Al-Kasani, “Bada`i’ Al-Sana`i’” [5: 202]; Ibn Rushd (the grandson) “Bidayat AlMujtahid Wa Nihayat Al-Muqtasid” [2: 205], Beirut, Dar Al-Qalam edition; Al-Qadi Abdul-Wahhab, “Al-Ma’unah” [2: 988]; and Al-Zayla’i, “Tabyin Al-Haqa’iq Sharh Kanz Al-Daqa’iq” [4: 117]. (12) Ibn Rushd, “Bidayat Al-Mujtahid” [2: 150]. 286
4. Shari ’ah Standard No. (10): Salam and Parallel Salam to the Prophet (peace be upon him) and said; ‘The kin of so and so from the Jews had embraced Islam. However, they are hungry and I am afraid they may become apostates’. The Prophet (peace be upon him) asked the people around him; ‘Who has something (money)?’ One Jew said; ‘I have so and so (he mentioned a sum of money), may be he said; ‘I have three hundred dinars and I will pay such and such price for the products of the farm of the kin of so and so’. The Prophet (peace be upon him) said: ‘(buy) With such and such price to be delivered after such and such period, but not for the products of the kin of so and so’” so’”.(13) Again, if a Salam contract is concluded for providing products from a specific farm, there might not be products from this farm at the time of delivery, and this leads to Gharar (uncertainty). ■ The basis for the requirement that the subject-matter of Salam be commonly available under normal circumstances where it is required is to remove uncertainty and to ensure that the seller will be able to deliver it at the date of delivery. Changes to a Salam Contract ■ The basis for the impermissibility of selling the subject-matter of Salam before taking possession of it is because such an action is a form of sale of debts which is not permissible. ■ The basis for the impermissibility of substituting the subject-matter of Salam with a commodity, the price of which is higher than the prevalent market value of the subject-matter of Salam at the date of delivery is to deter the buyer from making a compound profit on one deal. ■ The basis for the permissibility of the termination of a Salam by agreement (Iqalah) is because the Prophet (peace be upon him) has encouraged Iqalah in general and Salam is not an exception from this concession. Salam is also a form of sale and since sale contracts admit Iqalah, so too does a Salam contract. Again, Iqalah is actually (13) The Hadith has been related by Ibn Majah and Abu Dawud. See: “Sunan Ibn Majah” [2: 765-766]; and “Sunan Abu Dawud” [3: 744]. Al-Shawkani said: “There is an unknown narrator in the chain of transmission of this Hadith. This is because Abu Dawud narrated it through Muhammad Ibn Kathir from Sufyan from Abu Ishaq from a Najrani man from Ibn Umar. Therefore, the Hadith is not of a strong authority. See: “Nayl Al-Awtar” [5: 345-346]. 287
5. Shari ’ah Standard No. (10): Salam and Parallel Salam permitted for the sale of tangible goods in consideration of the need of contracting parties to be able to deal with regret and a desire to withdraw from the contract. In the case of Salam, the possibility that the parties may regret concluding the transactions is greater than in the sale of tangible goods because Salam is a low cost form of sale for which permissibility of Iqalah is easily applicable in Salam.(14) Delivery of al-Muslam Fihi The basis for not allowing penalty clauses in Salam is because al-Muslam Fihi is considered to be a debt; and it is not permitted to stipulate payment in excess of the principal amount of debts. Parallel Salam ■ The basis for the permissibility of Parallel Salam is that it represents two Salam deals that are separable from each other despite the fact that the descriptions of the subject-matter in the two contracts are similar. However, the contract does not lead to two sales in one, which is impermissible. ■ The basis for the impermissibility of tradeable Salam Sukuk is because trading with such Sukuk is a form of sale of debt which is prohibited. (14) See: Al-Kasani, “Bada`i’ Al-Sana`i’” [5: 214]. 288