Aspects Of Islamic Faith - 100: Exchanging Goods Of The Same Kind

Islamic Perspectives - Muslim Journals

Arab News & Information - By Adil Salahi

Islam is very strict in forbidding usury in any type or form. The Qur'an makes this very clear in several places. The Prophet (peace be upon him) has added very clear warnings against usurious transactions of any type. The reason for such strictness is that usury is, in essence, a transaction that seeks to increase the usurer's wealth by exploiting the need of people who find themselves in desperate circumstances.

In business transactions there are many ways by which one party tries to exploit the need of the other, dictating terms that are unfair. Islamic legislation makes clear that fairness must be maintained in all deals. In fact, when two parties make a loan agreement, the Qur'an makes clear that the debtor should write down the terms of the agreement. The reason is that the debtor is the weaker party. If the creditor writes down the terms, he may impose some difficulty on the debtor whose need for the loan may prevent him from protesting. By giving the debtor the right to specify the terms, Islam seeks to prevent hardship. The debtor is ordered to maintain the fear of God as he writes the terms, and to ensure that the other party gets their full rights. A person who gives his Muslim brother a loan to alleviate his hardship stands to earn generous reward from God.

Islam also takes precautionary measures to prevent circumventing the strict prohibition of usury. Consider the following Hadith in which Abu Hurayrah quotes the Prophet as saying: "Do not sell gold for gold, or silver for silver, unless both quantities are absolutely equal. You may sell gold for silver, or silver for gold, as you please." (Related by Al-Bukhari).

The Prophet mentions gold and silver, which were the currencies people used at the time and which were the main articles by which usurious transactions were conducted. The Hadith tells us that any exchange of any type that may be usurious must be of equal amounts. Other Hadiths also specify that the exchange must be physical and on the spot. All these conditions are imposed as precaution against usury. What is also important to note is that the quality of the articles exchanged, or the manufacture added, are not taken into account. Thus, if the quality of the two amounts of silver or gold being exchanged is different, with one known to be of better quality than the other, no variance in price is allowed. The person with the higher quality gold or silver cannot ask to exchange 100 grams for 120 grams of the lower quality type. This applies to bullion gold and silver in the same way as it applies to manufactured ones.

If the exchange is gold for silver, then the price may be agreed by the two parties as they think is fair. However, the exchange must take place on the spot. Thus, 100 grams of gold may be exchanged for 300 grams of silver, or more or less, as the market value of each type dictates. Once the terms agreed, the exchange should take place on the spot.

If the sale does not involve anything that lends itself to usury, then the two parties may agree whatever terms they wish, with regard to delivery and payment. Thus, if we are buying clothes or furniture for money, then terms of payment may be decided as we wish.

 

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