Search
Generic filters
Filter by Categories
Accounting
Banking

Islamic Finance




Ba’i al-Mustarsel


Arabic (بيع المسترسل) for a case of sale (ba’i) in which the buyer doesn’t haggle over the price (i.e., takes it as a given). The buyer acts in such a manner based on a specific positive trait in the seller such as trust, straightforwardness, reliability, etc. Ba’i al-mustarsel may also involve a buyer who is unaware of the actual price of an item in a way that enables the seller to exploit his lack of knowledge, i.e., information asymmetry, by increasing the price above the prevailing market price. The “unsuspecting” buyer will be willing to buy at the price quoted by the seller. As such, the sale is said to be associated with al-ghubn (al-ghaban).

Ba’i al-mustarsel may also refer to a sale transaction in which an unknowledgeable farmer brings his produce to the market and sells it at a price lower than the prevailing price. This sale suffers from information asymmetry which the seller, unaware of market conditions, is blamed for.

Based on ijtihad, ba’i al-mustarsel is viewed by shari’a scholars either as an ordinary contract of sale, and as such is subject to the general rules of contracts (regardless of al-ghubn it is associated with) or as a distinct contract of sale, like ba’i al-najash and talaqqi al-rukban, and hence is subject to specific rules and precepts and produces its own legal effects and considerations. In the first view, the contract is still binding (lazim), irrespective of any price discrepancies. Al-mustarsel, accordingly, has no khiyar (option) to return the object of sale and recover the price. In the second view, a contract that is associated with istirsal (unawareness of the actual price) involves a great amount of ghubn and exploitation (to which al-mustarsel or the unknowledgeable party is exposed). In this respect, some fuqaha opined that ghubn al-mustarsel is tantamount to riba, and therefore, it is haram or forbidden by shari’a. The second opinion gets more traction among shari’a scholars.

Ba’i al-mustarsel is also known as ba’i al-isti’man or ba’i al-istislam.



ABC
The last three decades have witnessed the modern rebirth of Islamic finance both in terms of literature and practice. Islamic banks and ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*