Understanding Islamic Finance - Doha Academy of Tertiary Studies

250 Understanding Islamic FinanceIf a seller has furnished a personal surety, the latter will be liable to deliver the goods ifthe former fails to do so. If revocation of the contract is required, only the seller is authorizedto revoke and not the surety; only the price paid will be taken in that case. The seller can,with the permission of the purchaser, shift the liability to the transferee on the basis ofHawalah, subject to acceptance by the latter. The liability of the surety or the transferee willautomatically cease if the contract of Bai‘ Salam is rescinded. As a result, the pledge willalso be released.10.6 DISPOSING OF THE GOODS PURCHASED ON SALAMFirst, the Salam buyer cannot sell the commodity onward before taking its delivery. There isa difference of opinion among Muslim jurists regarding the legality of selling the purchasedgoods in a Salam contract prior to taking delivery. The majority maintain that the Salampurchaser is not allowed to enjoy ownership rights nor he has the right of disposal of suchgoods until he has received them. 27 Therefore, the seller cannot resell an item, even at cost,cannot contract its transference and cannot make it partnership capital. These jurists relyon the tradition reported by Abu Daud and Ibn Majah: “Whoever makes Salam should nottransfer it to others”. 28 It is argued that in this Hadith, it is clear that the buyer should notexchange the subject matter of Salam with any person. However, this is a weak tradition, aspointed out by Hafiz Ibn Hajar. 29 Therefore, it cannot be the basis for any ruling. As indicatedearlier, Salam is an exception and the basis on which a person purchases a commodityon Salam can be invoked for selling that commodity onward; from here we derive thepermission for Parallel Salam for disposal of the commodity.Therefore, many jurists have given some relaxation. Ibn Taymiyah and Ibn al-Qayyimmaintained that there is no legal problem in exchanging the subject matter of Salam beforetaking possession. If it is sold to a third party, it may be at the same price, a higher price ora lower price. However, if it is sold to the seller himself, it should be at the same price or alower price but not at a higher price. Companion Ibn Abbas (Gbpwh) and Imam Ahmad havethe same view on the issue. This is also the Maliki view. However, they also disapprove ofreselling the subject matter of Salam before taking possession if it is a foodstuff. 30The contemporary position of Muslim scholars is also divergent. Shaikh Nazih Hammad,for instance, maintains that it is permissible to resell Salam goods before taking possession,as maintained by Ibn Taymiyah and Ibn al-Qayyim, because there is no text from the Qur’ānor Sunnah, Ijma‘a or Qiyās to prohibit this. On the contrary, the texts as well as the Qiyāsconvey its legality. 31 This view has also been backed by some other scholars. On theother hand, many scholars have maintained that it is illegal to resell anything before takingpossession of it. 32It seems logical to take into consideration the opinion of those who uphold the legality ofreselling Salam before taking possession, since there is no genuine text to prohibit that and as27 Ibn Abideen, n.d., 4, p. 209; al-Buhuti, Kashshaf al-Qina, 3, p. 293; Al-Kasani, 1400 AH, 5, p. 214; Ibn Qudama, 1367 AH, 4,p. 334.28 Abu Daud, 1952, 2, p. 247.29 Among its narrators is one person named Atiah, rejected by Muhaddiseen; see, Ibn Hajar, 1998, 3, No. 1203, p. 69.30 Ibn Rushd, 1950, 2, p. 231.31 Majalla Majma‘ al-Fiqh al-Islami, No. 9, 3, pp. 628–629.32 Majalla Majma‘ al-Fiqh al-Islami, No. 9, 3, pp. 643–654.