An Arabic term that denotes “bargaining sale”. It is a type of sale (ba’i) in which the seller and buyer negotiate the terms (especially the price- thaman) of the subject-matter, i.e., the commodity to be traded without any preconditions. Unlike non-negotiated price sales (such as murabaha, wadhe’eah, etc), the seller is neither required nor obliged to reveal to the buyer the actual cost of the underlying commodity. In other words, the profit margin of this sale is concealed by the seller who usually seeks to sell at the highest price possible. In turn, the buyer attempts to secure the lowest price possible. And henceforth comes musawamah or bargaining.

In this respect, it is worth noting that bargaining sale and bargain sale have entirely different meanings. Bargain sale implies the sale of an asset for less than its fair market value for various considerations (charitable contribution, necessity, etc).