Buying and Selling: Ruling on Conditional Revocation and Financial Compensation in Sale Contracts

Practical Laws of Islam as per the teachings of Imam Khamenei

Buying and Selling: Ruling on Conditional Revocation and Financial Compensation in Sale Contracts

English:

Question #1525:

At the time of concluding a contract, both parties agreed that neither shall rescind the contract. It was further agreed that if the buyer changed his mind as to going ahead with the deal, he would forgo the down payment he had made to the vendor. For his part, the vendor agreed that in the event of a change of heart, he would return the down payment to the buyer plus an extra amount in return for the loss sustained by him. Is the mentioned stipulation of the right of revocation or bilateral revocation by them correct? And is it ḥalāl for both the parties to have a right to the money they may have made in the process?

Answer #1525:

The condition you have just mentioned is not regarded as a stipulation of the right of revocation or bilateral revocation, rather it is stipulating the payment of an amount for changing one’s mind regarding going ahead with the deal. Such a condition is not binding and, therefore, of no significance merely due to being mentioned in the initial sale papers and signing them, that is unless it is incorporated in the sale contract or the contract is based on such a condition. If this has been the case, the deal is valid and should, therefore, be honoured. There is no harm in having the money made in this way at one’s disposal.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Buying and Selling