Saturday, 24 September 2016

What is Bai Muajjal?

Bai Muajjal is the Arabic equivalent of "Sale on differed payment basis". The deferred payment becomes a debt payable by the buyer in lump sum or in installments  as may be agreed between the two parties. In Bai Muajjal, all those items can be sold on deferred payment basis which come under the definition of tangible goods where quality does not make a difference but the intrinsic vale does. Those assets do not come under definition of capital where quality can be compensated for by the price and Shariah scholars have an "ijmah" (Consensus) that demanding a high price in deferred payment in such a case is permissible.
The following are the condition of valid Bai Muajjal:

1. The price to be paid must be agreed and fixed at the time of deal. It may include any amount of profit agreed between the parties.
2. Complete/ total possession of the object in question must be given to the buyer, while the defrred price is to be treated as a debt due from him.
3. Once the price is fixed, it cannot be decreased in case of earlier payment nor can it be increased in case of default.
4. If the commodity is sold on installment, the seller may put a condition on the buyer that if he fails to pay any installment on its due date, the remaining installments will become due immediately.

No comments:

Post a Comment