Loans, Tawarruq, discounting, financing of business : setting price conditional on period of payment

Fatawa Question

Salaam Alaykum Professor Kahf, I saw the question below and wanted your opinion. What kind of contract is this ? The query is, Mr. Z needs say Rs 500,000 as short term finance (say 6 months), for buying certain assets for business and offers Mr. X, 10 % of Mr. Z,'s sales (not profit) during the 6 months, as benefit. If there are no sales during this period, Mr. X will only get his 500,000 back. If there are any sales, he will get 10 % on the sale value as his incentive plus the 500,000 he financed. Is this Halal ? If not, what makes it Haram ? Hajara

Fatwa

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Publication Date

2009-02-10

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Prices

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-729680

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