The meaning of the Prophet’s ﷺ saying: “الذهب بالذهب والفضة بالفضة . . .”
The meaning of the Prophet’s ﷺ saying: “Gold for gold, and silver for silver, (exchanged) like for like and hand to hand.”
is that when a person sells gold for gold, two things are necessary in it:
First: they must be alike, or equal in weight.
Second: it is given with one hand and received with the other, meaning that it is taken into possession before the two parties separate.
An example of this is: a man sold one mithqal of gold (approximately one and a half dirhams) for one mithqal of gold and took possession of it before the sitting ended, and gave possession to the other party. This sale is valid, and the hadith is acted upon: “they must be alike and hand to hand.”
An example of an invalid sale is: a man sold one and a half mithqal of gold for one and a quarter mithqal of gold. This sale is not valid, because there is no equality; rather, one is one and a half mithqal while the other is one and a quarter mithqal, so the condition of being alike was not met. Therefore this is not correct; it is called riba al-fadl. If a trader sells one mithqal of gold for one mithqal of gold but delays the handing over, that is, he gives one mithqal of gold to the other party but receives its counter-value after a period of time, even if the delay is only one hour, this is also not correct, because it is not hand to hand. Likewise, regarding the part of the hadith “silver for silver,” we say: when silver is sold for silver, both of these conditions must also be present in it:
First condition: they must be equal in weight.
Second condition: possession must be taken before the two parties separate.
An example of this is: one mithqal of silver is sold for one mithqal of silver and each party gives possession to the other within the same sitting; this sale is valid, because in it the hadith is acted upon that it be like for like and hand to hand. An example of an invalid sale is: one and a half mithqal of silver is sold for one and a quarter mithqal of silver and it is hand to hand; here this sale is not valid, because there is no equality. Or a sale of one mithqal of silver for one mithqal is made, but if possession is not given to even one of the parties during the contract sitting and it is delayed, this sale is also not valid, because it is not hand to hand.
In summary: when gold is sold for gold, two things are necessary in it: first, equality in weight, and second, giving possession to each other during the contract sitting. When silver is being sold for silver, both of these conditions must also be present in it: equality in weight and giving possession to each other during the contract sitting. This is the explicit meaning (manṭūq, the speaker’s intended meaning) of this hadith as well as its implied meaning (mafhūm, that which is consistent with the words).
