´It was narrated from 'Amr bin Shu'aib, from his father, from his grandfather that :` the Prophet (ﷺ) forbade the deal involving earnest money. (Hasan)Abu 'Abdullah said: Earnest money refers to when a man buys an animal for one hundred Dinar, then he gives the seller two Dinar in advance and says: "If I do not buy the animal, then the two Dinar are yours." And it was said that it refers, and Allah knows best, to when a man buys something, and gives the seller a Dirham or less or more, and says: "If I take it (all well and good), and if I do not, then the Dirham is yours."
Hadith Referenceسنن ابن ماجه / كتاب التجارات / 2193
Hadith Gradingالألبانی:ضعيف | زبیر علی زئی:حسن
Hadith Takhrij«تفرد بہ ابن ماجہ ، ( تحفة الأشراف : 8727 ) ، وقد أخرجہ : موطا امام مالک/البیوع 1 ( 1 ) مسند احمد ( 2/ 183 ) ( ضعیف ) » ( سند میں حبیب کاتب مالک اور عبد اللہ أسلمی دونوں ضعیف راوی ہیں )
1؎: Bay‘ ‘Arboon: That is, at the time of sale, a specific amount given by the buyer to the seller, which the seller takes in exchange for selling his goods to the buyer, and in common parlance, this is called "advance payment" (bay‘anah). The hadith related to this in this chapter is weak. Among the scholars, the form of advance payment in which, if the buyer does not purchase the goods, the amount given as advance becomes the property of the seller and he will not return it to the buyer, is considered impermissible by Malik, Shafi‘i, and Abu Hanifah. Imam Ahmad holds the validity of this sale. His evidence is the narration of ‘Umar radi Allahu anhu, while the hadith of ‘Abdullah ibn ‘Amr ibn al-‘As is weak. And by unanimous agreement, according to the evidence of sound analogy (qiyas), it is also correct that if the buyer dislikes the goods, there is no harm in him returning the goods and giving something along with it. By analogy to this situation, the form of not returning the advance payment will be valid. Imam Ahmad says that this advance payment is of the same meaning. It should be clear that the amount of advance payment is not being received by the seller without compensation, because here this amount is kept in exchange for waiting for the sold item, and this item will remain as it is until the buyer purchases it, and during this period, it will not be possible to negotiate sale and purchase with another person. The Majma‘ al-Fiqh al-Islami, Makkah Mukarramah, issued a resolution regarding this sale in Muharram (1414) Hijri, that if the buyer does not purchase the goods from the seller, the seller will become the owner of the advance payment. The council has stated the permissibility of this sale in the case where the waiting period is specified, and that the amount of advance payment, in the event of the sale being finalized, will be counted as part of the price, and if the buyer does not purchase the goods, then this amount will be the right of the seller. (See: Tawdhih al-Ahkam min Bulugh al-Maram, authored by Shaykh ‘Abdullah ibn ‘Abd al-Rahman al-Bassam, 4/293)
Explanation & Benefits
Maulana Ataullah Sajid
Benefit: Amir San‘ani rahimahullah, in Subul al-Salam, the commentary of Bulugh al-Maram, writes regarding this sale:
“There is a difference of opinion among the jurists regarding the permissibility of this sale. Imam Malik and Imam Shafi‘i rahimahumallah have declared it invalid due to the hadith prohibiting it, and also because it contains an unlawful condition and deception. And this is included in consuming someone’s wealth unlawfully.”
This opinion appears to be correct, because in the case of the sale being annulled, the seller receives an amount for which he does not provide the buyer with any goods or benefit. And it is not permissible to take someone’s wealth without compensation. Furthermore, returning a sale is a virtuous act. (See, Hadith: 2199) And the condition of earnest money (bay‘anah) is stipulated so that the buyer does not return the purchased item; this is an avoidance of virtue, which cannot be considered commendable.
Source: Commentary on Sunan Ibn Mājah by Mawlānā ‘Atā’ullāh Sājid, Page: 2193
Narrated ['Amr bin Shu'aib on his father's authority from his grandfather (RA)]: Allah's Messenger (ﷺ) forbade the type of transaction in which a security deposit was paid. [Reported by Malik, who said, "It reached me (with mentioning its chain of narrators) on the authority of 'Amr bin Shu'aib that..." i.e., the aforesaid Hadith].