Category: the book of sales Transactions

There is no Limit for the increase in Sales for delayed (Credit) Payment

Question :

If a man has a bag of sugar that is sold up front for 80 riyals, and the buyer request to buy it by paying later, so he sells it to him for 150 riyals to be paid later, is there a limit that the increase must stop at?

Answer:

The sale that is to be paid up front or paid later is legislated and there is no prohibition concerning it. The basic principle regarding prices is that there is no limit, regardless of whether it is regarding the sale that is made up front or for a delayed payment. The prices are left to the effects of supply and demand. However, the people should be merciful among themselves and they should practice leniency between them in matters of buying and selling. They should not seize opportunities to force each other into difficult circumstances in their dealings. The Prophet said:
"May Allah have mercy on a man who is lenient when he sells and when he buys."

If a person seizes the opportunity of hardship and his brother's severe need for what he possesses, and he cannot find it with anyone else or he finds it but the salesmen in the market have all marked up the prices seeking more profit and making it expensive, this is wrong. It is forbidden for the person who has a product, to sell it to the one who has an extreme need for it for more than the price of what is similar to it on the current value in an up front sale, and the price of what is similar to it for delayed payments in a deal of delayed payment. Whoever is present at the time of this transaction should help in assuring fairness and preventing injustice. Everyone must act according to his situation and his position that is befitting him from the matters of commanding the good and forbidding the evil. The pledged time at the time of buying and selling is that which limits the suitable price. Thus, every market has its price and every time has its price. Also, every situation of increased supply and limited supply, and limited demand and increased demand has its price.

Source:
The Permanent Committee
Fatawa Islamiyah, Vol. 4 Pages 358-359