Stipulating a penalty for late payment in purchase by instalment

The bank sold cars to three people for a sum to be paid later, namely twenty-three thousand, and I was told that the contract included a clause stating a penalty to be paid in the event of delay in payment. The monthly payment is 270 dinars i.e., my partners and I can pay off the money easily. Please advise us, may Allaah reward you.

Praise be to Allaah.

Firstly:

In this transaction it is essential for the bank to take full possession of the car in real terms, by buying it and taking possession of it; the bank should not merely be an intermediary between you and the owner of the car. Any failure to meet this condition means one of two things:

1-    That the bank is selling something that it does not own, which is haraam.

2-    That the bank is not really selling it, rather it is giving a loan with interest; it pays the company one hundred – for example – on your behalf, on condition that it will get 120 back from you in instalments. This is obviously riba.  Continue reading

What conditions should be met in order for the bank’s purchase scheme (muraabahah) to be considered permissible

My question is: how sound is the following transaction, what is the ruling on it, what is the ruling on someone who has already gotten involved in it and what should he do?
The details of this muraabahah purchase program (as it is called by the bank) are as follows:
1 – The buyer goes and gets a price list for the bank from the main supplier of the product (a car showroom or agency, for example), including a description of the car, its colour, features and price (100,000 riyals, for example).
2 – The buyer obtains a letter stating his salary, and fills out the required forms to have part of his salary deposited in the bank for the period agreed upon with the bank (for example, three years), to pay off the total cost which includes the basic price plus the bank’s profit (for example, 7%).
3 – The contract is drawn up, including the processing fees (1000 riyals for example) and is signed by the bank, the buyer and the witnesses.
4 – The bank issues a draft cheque payable to the showroom or agency (the supplier) for the value of the car as quoted in the price list referred to in #1 above.
5 – The buyer takes the cheque and gives it to the supplier, who then does all the paperwork needed to register the car in the name of the buyer and gives it to him.

Praise be to Allaah.

This transaction is haraam and is not permitted. Basically this transaction is a loan with interest, which is the essence of riba (usury), because the bank gives the buyer a cheque for 100,000 and takes payment for it in installments, adding interest and what they call processing fees.

Calling this a purchase does not make it permissible, because this deal is essentially a riba-based loan and not a sale or purchase. Also, the bank is not buying the car from the showroom or selling it to the buyer, rather it is giving him a cheque for that amount.  Continue reading

Appointing an agent to make a purchase, and the agent benefitting from the product bought

Can I be hired by a man to buy a car for him from another country in return for a set amount of money, knowing that the country from which the car will be bought imposes a tax on the purchaser if he is going to use the car in that country, but if he is going to take it to his own country, he can ask for the tax to be refunded after paying it, and the agent wants to take the amount paid in tax for himself without asking the permission of the one who appointed him?.

Praise be to Allaah.

This transaction may take two forms:

1 – If the man buys this car for you in return for a wage which will be given to him for doing this job. So he is your agent acting on your behalf in making this purchase. In that case it is not permissible for him to take anything but the wage that you have agreed upon. Any reduction in the price of the car, or taxes that are refunded, or gifts given to the agent because of this transaction, should all be given to you (the one who appointed him) unless you willingly let him have anything of that, because any rights connected to this contract belong to the one who appoints the agent.

Ibn Qudaamah said: Ahmad said, according to one of the reports narrated from him: If a man is given a garment to sell, and he does that, and the purchaser gives him a handkerchief, then the handkerchief belongs to the (original) owner of the garment. He said that because the reason why the handkerchief was given was the sale, and the handkerchief was in addition to the price paid, so anything extra that is given when the transaction is made is connected to it.  Continue reading

Is the value of trade goods based on the selling price or the purchase price?

When working out the zakaah on trade goods, is it based on the purchase price or the selling price?.

Praise be to Allaah.

The value of trade goods is worked out at the end of the year, based on the price for which the owner would sell them.

This is what is fair, for the value to be based on the selling price, which may be lower or higher than the purchase price, because at the end of the year, a person pays zakaah on the wealth that he has.

Ibn Qudaamah said in al-Mughni (4/249)

Whoever owns trade goods and one year has passed, and they reach the nisaab, should work out their value at the end of the year. If they reach the nisaab, he should pay zakaah, which is one-quarter of one-tenth of their value. End quote.  Continue reading

Turning off the cell phone during the Friday khutbah – does this come under the heading of idle action that invalidates the reward of Jumu’ah?

During the Friday khutbah, some brothers’ cell phones ring whilst the khateeb is delivering the khutbah on the minbar, and some of them have musical tones that are similar to the tunes of promiscuous songs. Those whose cell phones ring turn them off during the khutbah. Is this regarded as coming under the heading of idle action to which the Prophet (peace and blessings of Allaah be upon him) referred in his hadeeth? Does this mean that there is no Jumu’ah for the one who engages in idle action, and that the reward of Jumu’ah becomes like the reward for Zuhr only? We hope you can clarify this matter.

Praise be to Allaah.

Firstly:

Using musical tunes as the ring tones for cell phones is an evil action and is haraam, because the Prophet (peace and blessings of Allaah be upon him) forbade all musical instruments. See the answer to question no. 47407.

The one who forgets to turn off his cell phone during the Friday khutbah has to turn it off if it rings, even if the ring tone is permissible, because leaving it disturbs the khateeb and other worshippers, and distracts them from the obligation of listening to the khateeb.

We hope that switching it off does not come under the heading of idle talk that is forbidden during the Friday khutbah, which is referred to in the question. This is mentioned in the words of the Prophet (peace and blessings of Allaah be upon him), “but whoever touches the pebbles has engaged in an idle action.” Narrated by Muslim (857).

The hadeeth applies to the one who fiddles with something that distracts him from listening to the khutbah, such as a cell phone, a carpet and so on.

Al-Haafiz Ibn Hajar, in Fath al-Baari, commentary on hadeeth no (934), narrated that the majority of scholars said that the one who needs to enjoin something good or forbid something bad at the time of the khutbah may do so by gesturing.

Al-Nawawi said in Sharh Saheeh Muslim:

This hadeeth indicates that all kinds of speech are haraam during the khutbah. … Rather the way to do it if one wants to tell someone else not to speak is by gesturing to him to be quiet, if he will understand it. End quote.

Based on this, then a slight movement that is done for a good reason is acceptable and is not idle action, and there is nothing wrong with doing it during the Friday khutbah.  Continue reading

Is it permissible for him to complete the purchase when he can hear the call to prayer?

Sometimes when I’m in the market place and I am in a store and have chosen something and am at the checkout, the call to prayer is given. Is it permissible for me to complete the purchase or is that haraam?
Also, sometimes we are in the car and the muezzin has already given the call to prayer, and we stop at the grocery and my brother asks the shopkeeper to sell him something. Does this also come under the prohibition?.

Praise be to Allaah.

If that is the adhaan for Jumu‘ah prayer that comes after the khateeb has ascended the minbar, then it is haraam to buy and sell at that time, because Allah says (interpretation of the meaning): “O you who believe (Muslims)! When the call is proclaimed for the Salaah (prayer) on Friday (Jumu‘ah prayer), come to the remembrance of Allaah [Jumu‘ah religious talk (Khutbah) and Salaah (prayer)] and leave off business (and every other thing). That is better for you if you did but know!” [al-Jumu‘ah 62:9].

The words “O you who believe (Muslims)! When the call is proclaimed for the Salaah (prayer) on Friday (Jumu‘ah prayer), come to the remembrance of Allaah [Jumu‘ah religious talk (Khutbah) and Salaah (prayer)] and leave off business” mean: stop dealing with trade and come and listen to the khutbah and perform Jumu‘ah prayer in the mosque with the imam. This means that it is haraam to buy and sell after the second adhaan which comes when the khateeb sits on the minbar, until the prayer ends, unless there is a case of necessity which calls for buying or selling, such as buying water for the purpose of purification or a garment to cover one’s ‘awrah for prayer. End quote.

Fataawa al-Lajnah al-Daa’imah, 13/101-102 Continue reading