Another important issue in murabahah financing which has been subject of debate between the contemporary Shari‘ah Scholars is that the bank/financier cannot enter into an actual sale at the time when the client seeks murabahah financing from him, because the required commodity is not owned by the bank at this stage and, as explained earlier, one cannot sell a commodity not owned by him, nor can he effect a forward sale. He is, therefore, bound to purchase the commodity from the supplier, then he can sell it to the client after having its physical or constructive possession. On the other hand, if the client is not bound to purchase the commodity after the financier has purchased it from the supplier, the financier may be confronted with a situation where he has incurred huge expenses to acquire the commodity, but the client refuses to purchase it. The commodity may be of such a nature that it has no common demand in the market and is very difficult to dispose of. In this case the financier may suffer unbearable loss.
Solution to this problem is sought in the murabahah arrangement by asking the client to sign a promise to purchase the commodity when it is acquired by the financier. Instead of being a bilateral contract of forward sale, it is a unilateral promise from the client which binds himself and not the financier. Being a one-sided promise, it is distinguishable from the bilateral forward contract.
This solution is subjected to the objection that a unilateral promise creates a moral obligation but it cannot be enforced, according to Shari‘ah, by the courts of law. This leads us to the question whether or not a one-sided promise is enforceable in Shari‘ah. The general impression is that it is not, but before accepting this impression at its face value, we will have to examine it in the light of the original sources of Shari‘ah.
A thorough study of the relevant material in the books of Islamic jurisprudence would show that the fuqaha’ (the Muslim jurists) have different views on the subject. Their views may be summarized as follows:
1. Many of them are of the opinion that ‘fulfilling a promise’ is a noble quality and it is advisable for the promisor to observe it, and its violation is reproachable, but it is neither mandatory (wajib), nor enforceable through courts. This view is attributed to Imam Abu Hanifah, Imam al-Shafi’i, Imam Ahmad and to some Maliki Jurists.[3]
However as will be shown later, many Hanafi and Maliki and some Shafi’i’ jurists do not subscribe to this view.
2. A number of the Muslim jurists are of the view that fulfilling a promise is mandatory and a promisor is under moral as well as legal obligation to fulfil his promise. According to them, promise can be enforced through courts of law. This view is ascribed to Samurah ibn Jundub the well known companion of the Holy Prophet صلى الله عليه وسلم ,Umar ibn Abd al-Aziz, Hasan al-Basri, Sa’id ibn al-Ashwa’, Ishaq ibn Rahwaih and Imam al-Bukhari. [4]
The same is the view of some Maliki jurists, and it is preferred by Ibn al-‘Arabi and Ibn al-Shat, and endorsed by al-Ghazzali, the famous Shafi’i jurist, who says the promise is binding, if it is made in absolute terms. The same is the view of Ibn Shubrumah. [5]
The third view is presented by some Maliki jurists. They say that in normal conditions, promise is not binding, but if the promisor has caused the promise to incur some expenses or undertake some labor or liability on the basis of promise, it is mandatory on him to fulfil his promise for which he may be compelled by the courts. [6]
Some contemporary scholars have claimed that the jurists who have accepted the binding nature of a promise have done so only with regard to unilateral gifts or other voluntary payments, but none of them has accepted the binding nature of a promise to effect a bilateral commercial or monetary transaction. However, based on a close study, this notion does not seem to be correct, because the Maliki and Hanafi jurists have allowed ‘Bai’ bil wafa’ on the basis of binding promise. Bai’ bil wafa’ is a special kind of sale whereby the purchaser of an immovable property undertakes that whenever the seller will give him the price back, he will resell the house to him.
The question of validity of ‘Bai’bil wafa’ has already been discussed in detail in the first chapter while explaining the concept of house financing on the basis of ‘diminishing musharakah’. The gist of the discussion is that if repurchase by the seller is made a condition for the original sale, it is not a valid transaction, but if the parties have entered into the original sale unconditionally, but the seller has signed a separate and independent promise to repurchase the sold property, this promise will be binding on the promisor and enforceable through the courts. The binding nature of the promise in this case has been admitted by both Maliki and Hanafi jurists. [7]
Obviously, this promise does not relate to a gift. It is a promise to effect a sale in future. Still, the Maliki and Hanafi jurists have accepted it as binding on the promisor and enforceable through the courts. It is a clear proof of the fact that the jurists who hold the promises to be binding do not restrict it to the promises of gifts etc. The same principle is applicable, according to them, to the promises whereby the promisor undertakes to enter into a bilateral contract in future.
In fact, the Holy Qur’an and the Sunnah of the Holy Prophet صلى الله عليه وسلم are very particular about fulfilling promises. The Holy Qur’an says:
Imam Abu Bakr al-Jassas has said that this verse of the Holy Qur’an indicates that if one undertakes to do something, no matter whether it is a worship or a contract, it is obligatory on him to do It. [8]
The Holy Prophet صلى الله عليه وسلم is reported to have said:
This is only an example. There is a large number of injunctions in the ahadith of the Holy Prophet صلى الله عليه وسلم where it is ordained to fulfil the promises and it is clearly prohibited to back out, except for a valid reason.
Therefore, it is evident from these injunctions that fulfilling promise is obligatory. However, the question whether or not a promise is enforceable in courts depends on the nature of the promise. There are certainly some sorts of promises which cannot be enforced through courts. For example, at the time of engagement the parties promise to go through the marriage. These promises create a moral obligation, but obviously they cannot be enforced through courts of law. But in commercial dealings, where a party has given an absolute promise to sell or purchase something and the other party has incurred liabilities on that basis, there is no reason why such a promise should not be enforced. Therefore, on the basis of the clear injunctions of Islam, if the parties have agreed that this particular promise will be binding on the promisor, it will be enforceable.
This is not a question pertaining to murabahah alone. If promises are not enforceable in the commercial transactions, it may seriously jeopardize commercial activities. If somebody orders a trader to bring for him a certain commodity and promises to purchase it from him, on the basis of which the trader imports it from abroad by incurring huge expenses, how can it be allowed for the former to refuse to purchase it? There is nothing in the Holy Qur’an or Sunnah which prohibits the making of such promises enforceable.
It is on these grounds that the Islamic Fiqh Academy Jeddah has made the promises in commercial dealings binding on the promisor with the following conditions,
(a) It should be one-sided promise.
(b) The promise must have caused the promise to incur some liabilities.
© If the promise is to purchase something, the actual sale must take place at the appointed time by the exchange of offer and acceptance. Mere promise itself should not be taken as the concluded sale.
(d) If the promisor backs out of his promise, the court may force him either to purchase the commodity or pay actual damages to the seller. [10]
The actual damages will include the actual monetary loss suffered by him, but will not include the opportunity cost.
On this basis, it is allowed that the client promises to the financier that he will purchase the commodity after the latter acquires it from the supplier. This promise will be binding on him and may be enforced through courts in the manner explained above. This promise does not amount to actual sale. It will be simply a promise and the actual sale will take place after the commodity is acquired by the financier for which exchange of offer and acceptance will be necessary.
[3] See Umdat al-Qari, 12:121; Mirqat al-Mafatih, 4:653; al-Adhkar al-Nawawi, 282; Fat-h al-‘Ali al-Malik, 1:254. [4] See Sahih al-Bukhari, Kitab al-Shahadat, where this view is reported from the all the aforesaid jurists. [5] Al-Qurtubi, Al-Jami‘ li-Ahkam al-Qur’an, 18:29; Hashiyah ibn al-Shãt ‘ala Furuq al-Qarafi, 4:24; Al-Ghazzali, Ihya Ulum al-Din, 3:133; Ibn Hazm, al-Muhalla, 8:28 [6] Al-Furuq al-Qarafi, 4:25; Fat-h al-‘Ali al-Malik, 1:254. [7] Al-Hattab, Tahrir al-Kalam (Beirut, 1404 AH), 239. [8] Al-Jassas, Ahkam al-Qur’an, 3:420. [9] Sahih al-Bukhari, Kitab al Iman. [10] Resolution no. 2 and 3, Fifth Conference of the Islamic Fiqh Academy held in Kuwait, 1409 AH. See the academy’s journal no. 5, 2:1599.
