The Deposit between Jurisprudential Foundations and Contemporary Transactions

Abstract

The ‘urbun (down payment) contract refers to the sale of a commodity whereby the buyer pays an amount of money to the seller on the basis that, if the buyer proceeds with the purchase, the amount is counted as part of the price; however, if the buyer withdraws from the purchase, the amount is retained by the seller. Classical and contemporary jurists have differed regarding its legal ruling: the majority of jurists from the Hanafi, Maliki, and Shafi‘i schools hold that it is impermissible, while the Hanbali school deems it permissible.
The reason for this divergence lies in their differing assessments of the Hadith prohibiting bay‘ al-‘urbun. Those who considered the Hadith authentic adhered to it and prohibited the ‘urbun sale; those who did not deem the Hadith established relied on the general foundational principle that transactions are originally permissible.
Among contemporary scholars who upheld the majority view of prohibition are Imam al-Shawkani, Dr. al-Siddiq al-Dharir, Shaykh Ali al-Salus, and Shaykh Muhammad al-Mukhtar al-Salami. This is also the position adopted by the Libyan Dar al-Ifta. Conversely, those who favored permissibility—conditional upon specifying the duration of the ‘urbun—include Dr. Wahbah al-Zuhayli, Dr. ‘Abd Allah bin Mani‘, and Dr. Rafiq al-Masri, and this view was adopted by the International Islamic Fiqh Academy and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
Some contemporary scholars have proposed that, in cases where the buyer withdraws from completing the transaction, the seller should resell the commodity to a third party and compensate only his actual loss from the ‘urbun amount received, returning any remaining balance to the original contracting party. This approach aims to avoid juristic disagreement and to eliminate any suspicion of wrongful consumption of others’ wealth.
Civil laws in most Arab countries—including Libya—permit the use of the ‘urbun, while Sudanese law prohibits it. Consequently, many institutions in Libya employ the ‘urbun in their contracts to ensure the seriousness of their clients, given the absence of legal restrictions and the existence of a valid juristic opinion permitting its use.