Debt and Loan: Settling a Debt Through an Unstated Gift and Adjusting for Currency Depreciation

Practical Laws of Islam as per the teachings of Imam Khamenei

Debt and Loan: Settling a Debt Through an Unstated Gift and Adjusting for Currency Depreciation

English:

Question #1745:

I gave my brother a loan. On moving to a new house, he gave me a carpet which I, in retrospect, mistook for a present. When I demanded the money back, he claimed that he had given me the carpet in settlement of the debt. Is he justified in his action, despite the fact that he didn’t inform me of his intention at the time?

If I don’t agree with him, should I return the carpet to him? And due to a decline in purchasing power of the currency, can I ask him to pay me back the debt plus an additional amount to make up the difference in the purchasing power of the currency?

Answer #1745:

For settling the loan, it is not sufficient to give a carpet or other things which are not of the same kind as the loan. As long as you do not consent to have the carpet in return for the loan, you should return it to him, as it still belongs to him. As to the decrease in purchasing power, you may demand compensation for it plus the original loan.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Debt and Loan