Sales III: Khiyar shart limits

By Mft. M. Saifur Rahman Nawhami
5 Zul Qa'dah, 1443 AH / 4 June 2022 CE

Wiqayah

Stipulating a right to cancel (khiyar shart) is valid in a sale for the seller and the buyer. Both1 have the right [to stipulate] three days or less. It is not [valid to stipulate] more [than three days] except that it will become valid if [the sale] is finalised within three days. Hence,2 If a person bought on [the condition] that if he does not pay within three days there is no sale, [the sale is] valid. [If he stipulates] to four days, it is not [valid]. Then if he pays within three days, it will be valid.

Key terms

Khiyar is a right due to which a qualified person is allowed to cancel a contract.
Khiyar shart is the right to cancel a contract within a given time due to it being stipulated during the formation of the contract by the buyer, seller, or both.
Khiyar naqd is the right to cancel a contract due to non-payment or refusing to make payment.
Iqalah is to cancel a contract by mutual agreement of both the contracting parties without either being obliged to do so.
Ijazah is the completion of the contract due to the party holding the right to cancel deciding to finalise the sale by dropping their right.

Key principles and maxims

A contract becomes binding after the acceptance of a valid offer.
A ruling which does not conform to qiyas (logic) cannot be extended to other cases.
The inclusion of an invalid clause invalidates the contract. Imam Zufar RH and our scholars in Iraq consider the contract invalid from the onset of the agreement. Imam Abu Hanifah RH and our scholars in the east including Imams Sarakhsi RH and Bazdawi RH, consider the contract invalid when the invalid clause takes effect. Prior to this the contract is deemed pending.
An iqalah will be deemed fasidah (invalid) if either of the party is obliged to cancel or required to contribute extra to cancel.

Hidayah

خِيَارُ الشَّرْطِ جَائِزٌ فِي الْبَيْعِ لِلْبَائِعِ وَالْمُشْتَرِي وَلَهُمَا الْخِيَارُ ثَلَاثَةَ أَيَّامٍ فَمَا دُونَهَا وَالْأَصْلُ فِيهِ مَا رُوِيَ: أَنَّ حِبَّانَ بْنَ مُنْقِذِ بْنِ عَمْرٍو الْأَنْصَارِيَّ - رَضِيَ اللَّهُ عَنْهُ - كَانَ يُغْبَنُ فِي الْبِيَاعَاتِ، فَقَالَ لَهُ النَّبِيُّ - عَلَيْهِ الصَّلَاةُ وَالسَّلَامُ - إذَا بَايَعْت فَقُلْ لَا خِلَابَةَ وَلِيَ الْخِيَارُ ثَلَاثَةَ أَيَّامٍ

Stipulating a right to cancel (khiyar shart) is valid in a sale for the seller and the buyer. Both3 have the right [to stipulate] three days or less.

The primary [evidence] in this matter is that which was reported about Hibban b. Munqiz b. Amr Ansari RA. He used to make losses in trades. So, the Prophet (PBUH) said to him, When you do a trade say, "There is no deception and I have the right [to cancel] in three days."

Stipulation limit

وَلَا يَجُوزُ أَكْثَرُ مِنْهَا عِنْدَ أَبِي حَنِيفَةَ وَهُوَ قَوْلُ زُفَرَ وَالشَّافِعِيِّ. وَقَالَا يَجُوزُ إذَا سَمَّى مُدَّةً مَعْلُومَةً لِحَدِيثِ ابْنِ عُمَرَ - رَضِيَ اللَّهُ عَنْهُمَا أَنَّهُ أَجَازَ الْخِيَارَ إلَى شَهْرَيْنِ؛ وَلِأَنَّ الْخِيَارَ إنَّمَا شُرِعَ لِلْحَاجَةِ إلَى التَّرَوِّي لِيَنْدَفِعَ الْغَبْنُ، وَقَدْ تَمَسُّ الْحَاجَةُ إلَى الْأَكْثَرِ فَصَارَ كَالتَّأْجِيلِ فِي الثَّمَنِ. وَلِأَبِي حَنِيفَةَ أَنَّ شَرْطَ الْخِيَارِ يُخَالِفُ مُقْتَضَى الْعَقْدِ وَهُوَ اللُّزُومُ، وَإِنَّمَا جَوَّزْنَاهُ بِخِلَافِ الْقِيَاسِ لِمَا رَوَيْنَاهُ مِنْ النَّصِّ، فَيُقْتَصَرُ عَلَى الْمُدَّةِ الْمَذْكُورَةِ فِيهِ وَانْتَفَتْ الزِّيَادَةُ

According to Imam Abu Hanifah RH, it is not permissible to have [khiyar shart lasting] more than [three days]. This is [also] the view of Imam Zufar RH and Imam Shafi’I RH.

[Imams Abu Yusuf RH and Muhammad RH] state that [khiyar shart of more than three days] is valid so long as a specific time is declared. This is due to the report regarding Ibn Umar RA that he allowed cancellation within two months. [Also] because the right was enacted due to the need to review [a trade] so that loss may be averted. Sometimes there is a need for more [than three days]. So, it is like deferred payment.4

According to Imam Abu Hanifah RH khiyar shart goes against the effect of a sale which is to bind.5 Indeed, we declared it to be allowed despite it being against qiyas (logic) due to what we reported from the nass (hadith) [relating to Hibban b. Munqiz RA]. Hence, the duration will be limited to that which was stated in [the hadith] and excess [beyond three days] will be negated.

The principle of fiqh is that in any case which does not conform to qiyas (logic), the ruling of it cannot be extended to other cases.

Imam Abu Hanifah RH and Imam Zufar RH do not allow khiyar shart beyond three days as the ruling in essence does not conform to qiyas. The purpose of a contract is to bind, and this goes against its very essence by making the contract non-binding. It is only allowed because of the narration of Hibban b. Munqiz. Hence, the ruling will be limited to only that which is allowed in the narration namely three days.

In contrast, Imam Muhammad considers khiyar shart as conforming to qiyas 6 and accepted market practice as highlighted by Imam Marghinani RH. Hence, he allows extending the ruling beyond three days so long as a date is specified. He provides the fatwa of Umar RA 7 in support of his stance. As for the three-day limit in the narration, he posits that it highlights an appropriate duration rather than a restrictive limit. This is somewhat aligned to the position of Imam Malik RH who does not place a maximum hard limit for khiyar shart, however, he does confine it to a reasonable limit based on the item being traded.

Imam Abu Yusuf RH is in between Imam Abu Hanifah RH and Imam Muhammad RH. He agrees with Imam Muhammad’s conclusion but not necessarily his logical reasoning. He agrees with Imam Abu Hanifah RH that khiyar shart does not conform to qiyas, but allows extending the right beyond three based on the report of Umar RA. A report of a faqih sahabi which goes against qiyas is elevated to marfu’ hukmi.8 In Hidayah it states Abdullah b. Umar which is an Oversight. Imam Sarakhsi in Mabsut reports via Umar RA. However, it should be noted that later scholars such as Allm. Zayla'i, Allm. Ibn Humam et al were unable to locate the source of Umar’s RA report beyond Mabsut. Nevertheless, Imam Yusuf considers this to be an exception and as such does not allow it to be extended beyond the scope of the khiyar.

The majority of the classical scholars state the view of Imam Abu Hanifah RH. Shaykh al-Islam Mufti Muhammad Taqi Usmani RH is a pioneer in the field of Islamic finance and among the foremost expert in the field in our time. He states in Fiqh al-Buyu9 that Imam Muhammad’s view is rajih (preponderant). Allah knows best.

Stipulation beyond the maximum

إلَّا أَنَّهُ إذَا أَجَازَ فِي الثَّلَاثِ جَازَ عِنْدَ أَبِي حَنِيفَةَ خِلَافًا لِزُفَرِ، هُوَ يَقُولُ: إنَّهُ انْعَقَدَ فَاسِدًا فَلَا يَنْقَلِبُ جَائِزًا. وَلَهُ أَنَّهُ أَسْقَطَ الْمُفْسِدَ قَبْلَ تَقَرُّرِهِ فَيَعُودُ جَائِزًا كَمَا إذَا بَاعَ بِالرَّقْمِ وَأَعْلَمَهُ فِي الْمَجْلِسِ. وَلِأَنَّ الْفَسَادَ بِاعْتِبَارِ الْيَوْمِ الرَّابِعِ، فَإِذَا أَجَازَ قَبْلَ ذَلِكَ لَمْ يَتَّصِلْ الْمُفْسِدُ بِالْعَقْدِ، وَلِهَذَا قِيلَ: إنَّ الْعَقْدَ يَفْسُدُ بِمُضِيِّ جُزْءٍ مِنْ الْيَوْمِ الرَّابِعِ، وَقِيلَ يَنْعَقِدُ فَاسِدًا ثُمَّ يَرْتَفِعُ الْفَسَادُ بِحَذْفِ الشَّرْطِ، وَهَذَا عَلَى الْوَجْهِ الْأَوَّلِ

[Stipulating more than three days for the right to cancel in a sale will invalidate the sale], except when [the sale] is finalised within three [days]. [In that case, the sale] will be valid according to Imam Abu Hanifah RH.

In contrast, Imam Zufar RH states [the sale will still be invalid] as that which was enacted as invalid then cannot be then changed to being valid.

According to [Imam Abu Hanifah RH], the invalidity was dropped before it could take effect 10 so it returned to being valid. [This is] like when [a cloth] is sold on the marked price [which the buyer was unaware] and he was informed [of the price] within the meeting. Because the invalidity is due to the fourth day, so when the sale was finalised before [the fourth], the invalidity did not attach to the deal. Hence, it is said that the sale becomes invalid with the passing of a part of the fourth day. [Alternatively], it could be said [the deal] was enacted as invalid, then the invalidity was removed by the removal of the stipulation. [This alternative] is based on the first explanation.

Note! In khiyar shart, this issue of stipulating beyond the three days only impacts Imams Abu Hanifah RH and Zufar RH as the others do not have a statutory maximum.

Stipulation by default

وَلَوْ اشْتَرَى عَلَى أَنَّهُ إنْ لَمْ يَنْقُدْ الثَّمَنَ إلَى ثَلَاثَةِ أَيَّامٍ فَلَا بَيْعَ بَيْنَهُمَا جَازَ. وَإِلَى أَرْبَعَةِ أَيَّامٍ لَا يَجُوزُ عِنْدَ أَبِي حَنِيفَةَ وَأَبِي يُوسُفَ. وَقَالَ مُحَمَّدٌ: يَجُوزُ إلَى أَرْبَعَةِ أَيَّامٍ أَوْ أَكْثَرَ، فَإِنْ نَقَدَ فِي الثَّلَاثِ جَازَ فِي قَوْلِهِمْ جَمِيعًا

If a person bought [an item with the stipulation] that if he does not pay within three days, there is no deal between them, [the deal] will be valid.

[If he extends the stipulation] to four days, it will not be allowed according to Imams Abu Hanifah RH and Abu Yusuf RH. Imam Muhammad RH states that it will be valid [to extend it to] four days or beyond.

Then if the payment is made within three days, [the deal] will be valid according to all their opinions.

Khiyar naqd is the right to cancel a contract due to non-payment or refusing to make payment. If one were to say, ‘If I don’t pay consider the sale cancelled’ and they don’t specify a time or are ambiguous about it, the sale will be invalid according to all. If they specify a time, our scholars have differed. Imam Abu Hanifah RH and Imam Muhammad RH consider this to be the same as khiyar shart, hence, they apply the same ruling. Imam Abu Yusuf RH considers it to be a separate type of khiyar so he does not apply the ruling of khiyar shart. Rather he analyses it independently. As there is no source which makes an exception to extend khiyar naqd beyond three days, he disallows the sale as per the argument presented by Imam Abu Hanifah RH. If khiyar naqd is time-specified and the buyer makes payment before three days pass, it is valid according to our three leading Imams.

وَالْأَصْلُ فِيهِ أَنَّ هَذَا فِي مَعْنَى اشْتِرَاطِ الْخِيَارِ إذْ الْحَاجَةُ مَسَّتْ إلَى الِانْفِسَاخِ عِنْدَ عَدَمِ النَّقْدِ تَحَرُّزًا عَنْ الْمُمَاطَلَةِ فِي الْفَسْخِ فَيَكُونُ مُلْحَقًا بِهِ. وَقَدْ مَرَّ أَبُو حَنِيفَةَ عَلَى أَصْلِهِ فِي الْمُلْحَقِ بِهِ، وَنَفَى الزِّيَادَةَ عَلَى الثَّلَاثِ وَكَذَا مُحَمَّدٌ فِي تَجْوِيزِ الزِّيَادَةِ. وَأَبُو يُوسُفَ أَخَذَ فِي الْأَصْلِ بِالْأَثَرِ. وَفِي هَذَا بِالْقِيَاسِ، وَفِي هَذِهِ الْمَسْأَلَةِ قِيَاسٌ آخَرُ وَإِلَيْهِ مَال زُفَرُ وَهُوَ أَنَّهُ بَيْعٌ شُرِطَ فِيهِ إقَالَةٌ فَاسِدَةٌ لِتَعَلُّقِهَا بِالشَّرْطِ، وَاشْتِرَاطُ الصَّحِيحِ مِنْهَا فِيهِ مُفْسِدٌ لِلْعَقْدِ، فَاشْتِرَاطُ الْفَاسِدِ أَوْلَى وَوَجْهُ الِاسْتِحْسَانِ مَا بَيَّنَّا.

The principle in this [case] is that [the right to cancel through defaulting payment (khiyar naqd)] is equivalent to khiyar shart. Because there is a need to cancel [the contract] in the case of non-payment to avoid prolonging cancellation. Hence, it is associated with [khiyar shart].

Imam Abu Hanifah RH has remained on his original [stance] on the extended case and has denied [validity for] more than three [days]. Similarly, Imam Muhammad RH [has maintained his stance] in allowing more [than three days]. Imam Abu Yusuf RH in the original case11 takes [his stance] due to the athar (narration)12 and in this13 [case he takes his stance based] on qiyas (logic).

In this case, there is another qiyas (logic) [to invalidate the deal]. Imam Zufar RH is inclined toward [this argument]. This is a deal which is stipulated with a mutual cancellation (iqalah) clause which is invalid as it is attached with a condition.14 Stipulating [a mutual cancellation clause] which is valid in this [case] will invalidate the sale. So, stipulating an invalid [mutual cancellation clause] is more [likely to invalidate the deal].

The case of istihsan15 is as we have [already mentioned].16

In principle (as per qiyas) khiyar naqd should make a contract invalid in any of the abovementioned cases. This is the view of Imam Zufar RH. He considers khiyar naqd as a form of iqalah (a mutual agreement to cancel without being obliged). By stipulating khiyar naqd in a sale, one is obliging cancellation, thus making this clause invalid and in turn the contract invalid. He argues that since adding a valid iqalah clause makes a sale invalid adding an invalid clause by stipulating more than three days khiyar naqd should most certainly invalidate the sale.

The stance of Imams Abu Hanifah RH, Abu Yusuf RH and Muhammad RH in allowing khiyar naqd when paid within three days is based on istihsan (wider effect) and not qiyas.