Date : 17-09-2012

Question :

It is known that Islamic banks oblige their clients to sign what is called "Promise to purchase" before they buy the commodity from the first seller. Is this  considered a condition that the bank binds the client with regardless of whether it is called a promise or a contract? This is since the client can`t back down on the transaction and may face legal accountability. However, this contradicts with the conditions of sale transaction in which the purchaser may back down. Based on this, is this "Promise to purchase"  merely a trick to make the unlawful lawful?


The Answer :

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.


In most Islamic banks, Murabaha contract doesn`t oblige a client to complete the transaction before signing the contract of sale. Rather, it is a means to inform the client that in case he backed down on completing the transaction, the bank will sell the commodity and he will be liable for any losses. If the client accepted this condition, then there is no sin in it, no risk or uncertainty and no tricks to make the unlawful lawful. The evidence on this is that the Messenger of Allah (PBUH) said: "Muslims are on (i.e. stick to) their conditions." {Related by Abu Dawoud}.


Mostly, the bank manages to sell the commodity without any loss. Rather, it would have stipulated right of cancellation (3 days according to the Shafie doctrine) in case the client backed down on the transaction. In fact, this is among the solutions which Sharia brought to facilitate for the people. A promise which binds one party doesn`t mean completion of sale transaction before the commodity is possessed by client.


Resolution No. (40-41, 2/5, 3/5) issued by the International Islamic Academy states: "The promise made by either the client or the bank is religiously binding, unless there is an excuse, and legally binding if  conditioned on something and resulted in expenses. In this case, the client either fulfils his "Promise to purchase" or makes compensation for any damages resulting from his non-fulfillment of promise without excuse." 


Sharia standard No. (8,4/2, P.96) issued by a group of specialists in the Fiqh of transactions states: "The establishment/bank is entitled to receive compensation from the client in case he backed down on the deal. The latter should also pay any costs or expenses endured by the establishment/bank." And Allah the Almighty knows the best.