Earnest Money Sale Between Contemporary Need and Religious Prohibition: A Comparative Jurisprudential Study

Abstract

This research examines earnest money sale (ʿarbūn) as a contemporary financial transaction that has generated significant juristic debate. Some scholars permit it due to modern economic needs, while others prohibit it due to elements of uncertainty (gharar) or unjust gain. The study aims to define ʿarbūn, analyze its legality in Islamic jurisprudence, compare scholarly opinions, and explore its position in Libyan law. The researcher employs inductive, analytical, and comparative methodologies. ʿArbūn is defined as an advance payment made by the buyer: if the contract is completed, it is counted as part of the price; if the buyer withdraws, the seller keeps it. Scholarly opinions differ: Majority (Hanafi, Maliki, Shafi‘i, and some Hanbalis): prohibit it, citing hadith evidence and its resemblance to gharar or riba. Hanbalis and some early scholars: permit it, based on practices of companions, the principle that contracts are originally permissible, and practical necessity. The researcher concludes that ʿarbūn is permissible with conditions, including: (a fixed option period), being part of the price, and being concluded within a valid contract. From a legal perspective, ʿarbūn may indicate either confirmation of the contract or a right of withdrawal. Libyan law generally recognizes it as granting the right to withdraw unless otherwise agreed. The study also reviews legislative developments in Libya, including the 2016 amendment and its later annulment, highlighting the role of judicial interpretation in determining the parties’ intent. Conclusion: ʿArbūn is both legally and Islamically permissible under specific conditions and serves as an effective mechanism to ensure contractual seriousness and reduce fraudulent practices, provided it is properly regulated.