The Sales Contract-ppt
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Transcript of The Sales Contract-ppt
Lecture OutlinesSale Contractعقد البيع
Definitionالتعريف
Pillars/Constituentsاألركان
Conditionsالشروط
Effectsاآلثار
Optionsالخيارات
Classification/Typesالتصنيف
Dissolutionاالنحالل/االنتهاء
DEFINITIONLiteral Meaning
Technical Meaning
From an Arabic word ‘ba ‘a’ means to buy
1. Exchanging one form of money for another, in which the parties exchange their ownerships accordingly/
2. Subject Matters of sales can be in form of:
1. Money vs money = Bay’ al-Sarf
2. Money vs property = Bay’ al-Mutlaq
3. Money/Property vs usufruct = Al-Ijarah
4. Property vs Property = Bay’ al-Muqayadah (Barter)
PILLARS OF CONTRACTPillars of Contract/Constituents of Sales ContractPillars of Contract/Constituents of Sales Contract
Contracting Parties
Offeree
Subject Matter
and Consideration
Offeror
Format
Al-Qabul
Al-Ijab
Al-Jumhur
Al-Hanafiyyah
PILLARS OF CONTRACT (cont’d)1. ISSUES RELATED TO CONTRACTING PARTIES• Eligibility:
• Full capacity ? / Without capacity ?• Deficient capacity: discerning child, foolish (السفيه)• Ownership:• Agency Issue
2. ISSUES RELATED TO SUBJECT MATTER AND CONSIDERATION• Legally recognized and acceptable• Specified and defined in a way to prevent ambiguity• Existent / Non-existent subject matter? Or deliverable?
3. ISSUES RELATED TO FORMAT• Gestures , signals?• Written?• Place of Contract (Majlis?)
CONDITIONS OF CONTRACT(According to al-Hanafiyyah)
Conclusion
االنعقادValidity
الصحةExecution
النفاذBindingness
اللزوم
Null / Void
الباطلInvalid
الفاسد/الباطل Suspended
الموقوفDissoluble / Nonbinding
غير الالزم
1. The contract2. Contractors3. Object of
Contract4. Place of
Contract
1. General Condition
2. Specific Condition
1. Ownership of the object
1. Existence of Option (Khiyar)
CONDITIONS OF CONTRACT(According to al-Jumhur)
Conclusion
االنعقادValidity
الصحةExecution
النفاذBindingness
اللزوم
Null/Void
الباطلInvalid
الفاسدSuspended
الموقوفDissoluble
غير الالزم1. The contract2. Contractors3. Object of Contract4. Place of Contract
1. Ownership of the object
1. Availability of Option (Khiyar)
EFFECTS OF CONTRACT
Specific General
The purpose of a particular contract e.g. transfer of ownership in sale, ownership of usufruct in leasing and so forth.
• Effective rights and obligations
• Binding rights and obligations
DISSOLUTION OF CONTRACT(How to dissolve a contract?)
1. Having elements that could render the contract null and void.
2. The practice of options and choices
3. Revocation by mutual consent ( اإلقالة )
4. Expiration: The period of contract or the contract is fully executed and performed
5. Death: Al-Ijarah (al-Hanafiyyah), Al-Rahn, Al-Kafalah, Al-Shirkah, Al-Wakalah, Al-Muzaracah, Al-Musaqah.
6. The suspended (الموقوف) contract is not approved/endorsed by its owner
TYPES OF SALES CONTRACT
FORBIDDEN SALES CONTRACT
VALID SALES CONTRACT
UNILATERAL CONTRACT
BILATERAL CONTRACT
Gift (Hadiah/Hibah
Off set of the debt (Ibra’
Will (Wasiyyah)
Endowment (Waqf
Loan (Qard
Contract of Exchange
Contract of Partnership
Contract of Security
Bay’ al-Amanah
Bay’ al-Salam
Bay’ al-Istisna’
Bay’ Al-Ijarah
Bay’ al-Sarf
Bay’ al-Jizaf
Capital Partnership (al-Inan/al-Mufawadhah)
Credit Partnership (al-Wujuh)
Labour Partnership (Al-A;mal/al-abdan)
Silent Partnership (Mudharabah)
INELIGIBILITY OF CONTRACTING
PARTIES
LANGUAGE OF CONTRACT
OBJECTS OF SALES
DESCRIPTION, CONDITION OR LEGAL
PROHIBITION
CLASSIFICATION OF CONTRACT
Sale of Insane Sale of non-discerning young child Sale of blind person Sale of Coerced person Sale of uncommissioned agent Sale of a person under legal supervision Sale of a person who needs to sell property due to
transgression
Physical Exchange Sales Sales by correspondence or messenger Sale of mute persons by means of an understood
signal/writing Sale with a party who is absent from the contract session Sales where the offer and acceptance do not correspond Non-consummated sales
Sale of Non-Existence objects Sale of Undeliverable Goods Differed Sale of debts Excessive Gharar Sales Sale of Impure/ tainted Objects Sale of water Sale of unknown objects Sale of absent/unseen objects Sale of un-received items Sale of fruits and vegetables
Down payment sales Same item resale Sale with riba elements Sale with a forbidden price Sale by a city dweller Meeting caravans outside the city Price hiking Auctions Sale during the call of Juma’at prayer Sale of grapes to wine maker Sale of mother without the child Replacing the sale of another A sale with conditions Combining a sale with one of these contracts in one
agreement.
(Some examples)
(Some examples)
BAY’ AL-AMANAH (TRUST SALES)
Manufacturer Retailer Customer
RM 10 RM 10+5
Manufacturer Retailer Customer
RM 10 RM 10-5
Manufacturer Retailer Customer
RM 10 RM 10
Some of the conditions may also applied to Al-
Tawliyyah and Al-Wadiah Sales
BAY’ AL-SALAM(FORWARD
SALES)
The sale of a deferred item in exchange for an immediate
price
Retailer CustomerRM
10,000CASH
GOOD-FUTURE
BAY’ AL-ISTISNA’(COMMISION TO MANUFACTURE)
A contract commissioning a worker to manufacture an item
Customer ManufacturerFUTURE
PAYMENT
ORDER GOOD-FUTURE RECEIPT
What are the differences between Forward Sales to Commission to Manufacture Sales?
BAY’ AL-IJARAH
A contract over desirable, known, permissible, and accessible usufruct,
in exchange for a known compensation
Lessee LessorKNOWN
COMPENSATION
OWNERSHIP OF USUFRUCT
BAY’ AL-MUSAWAMAH
A normal type of sale in which the parties agreed
upon price without disclosure of the original
price of an object
Buyer SellerRM
BAY’ AL-SARF
The exchange of one monetary form for another in the same or different genera; (i.e Gold for gold, silver for silver, gold for silver, silver for gold,
etc – according to the hadith)
BAY’ AL-JIZAF
Gross Sale or purchasing a large quantity of goods. In
which the amount is unknown in detail
Seller Buyer
GROSS QUANTITY OBJECT
UNKNOWN AMOUNT
Seller Buyer
CURRENCY EXCHANGE
BAY’ AL-MULAMASAH
Sale by touch. A person purchased an object by
touching it without opening it or seeing it or examining it.
(Contains element of Gharar)
BAY’ AL-MUNABAZAHSale by object of sale-
throwing at commodity of sale.
(Contains element of Gharar)Eg: One man throws the cloth
he sell towards another person and the sale is
confirmed, even though the person may not have touched
it or seen it.
Mr. A is a buyer for the book since he is the one
who touches it.
Mr. B is a buyer for the briefcase since he is the
one who catches it.
Mr. C also buyer for another briefcase for catching it.
BAY’ AL-HASAH
The contract concluded by the buyer throwing stone or
pebbles towards the merchandise, the one hit by
the pebble becoming the object sold.
(Contains element of Gharar)
BAY’ AL-GHARAR
Any sale by deceiving the opposite party. A sale
incorporating risk that affects one or more parties and may result loss of the property. It is then an uncertainty on the
existence of the object.
In selling, gharar may appear in:
1.unknown existence sale2.unknown measure sale
3.undeliverable sale
Mr. Globe is a buyer of the cow since his pebble hits it.
BAY’ATANI FI BAY’AH WAHIDAH
A contract of sale in which:•a seller offers to sell for a certain price on cash but for a
higher price on credit.•a seller sells merchandise for a certain price on cash with
the condition that the buyer will sell it back to him at a higher price on credit.
ISSUE: Uncertain Price
I sold you for RM 100 cash or RM 150 in
deferredI accept
ISSUE: May exist exploitation and uncertain situation of the
2nd sale
I have sold you my house on the condition that you sell your car to
me.I accept
Hanafis: Defective (suspended) unless if the confusion is resolvedShafiis + Hanbalis: Invalid – the existence of gharar
Malik: Valid – the sale contains options for the buyer
BAY’ AL-DAYN (Sale of Liabilities)
Liabilities: Price, compensation, wages, indemnity, etc.
Contemporary practice in IF: The sale of payable right or receivable debt either to the debtor himself, or to any third party. This type of sale is
usually for immediate payment or for deferred payment.
To the liable person / debtor
To a third party
With deferred price
(Sale of debt for debt)
Immediate monetary compensation
All jurist: Prohibited and
invalid sale w/h to the debtor or 3rd
party
Majority: Valid, considered as gift
Zahiri: Invalid due to gharar
Hanafis & Zahiri : Not concluded
Shafiis: Valid selling confirmed debt at
maturityHanbali: Invalid
Malikis: Valid with 8 conditions
All jurist: Valid sale
BAY’ AL-’INAH
Same item /object sale
Seller Buyer
SAME OBJECT RESALE
“Customer”“Bank“
Mr A sells an object for deferred price to Miss C
Mr A buyback the object for cash price from Miss C
BAY’ AL-URBUN
Down payment Sale: Advance payment of some portions of the price of sale to the seller.
Agreement: If the sale is executed, the portion applies to the actual price, if the sale is not executed it is considered as a gift
from the buyer.
Majority: The above contract is invalid
Hanafis: DefectiveExistence of Gharar in terms of the
price of the object
BAY’ AL-TAQSIT(Installment
Sales)Selling an object for immediate
delivery with a deferred price – paid in installment with greater than its
cash price.
BAY’ AL-ISTIJRAR(Supply Sale)
A sales contract in which a person agrees to pay in lump sum in
advance and receives the commodities gradually in
instilment
A contract whereby the supplier agrees to supply a particular
product on an ongoing basis, e.g. monthly, at an agreed price and an
agreed mode of payment.
Valid – The contract is specified in the contract session and no ignorance in
terms of object and price.
I sold you for RM 100 cash or RM 150 in
installmentsI accept
ISSUE
Seller Buyer
Object: Gradual delivery
Payment: Cash/Lump sum/Any mode
Wa ilalliqa’Thank you for listening and attending the class….
Wassalamualaikum Warahmatullah
