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Volume :10 Issue : 26 1995      Add To Cart                                                                    Download

‘Arbun (Earnest Money) Sale

Auther : Dr. Lashin Muhammad Al-Ghayati

Arbun (Earnest Money) Sale

Dr. Lashin Muhammad Al-Ghayati

Contracting in the form of ‘Arbun (earnest money) sale has become common in current transactions. Interpreters of law differ about the meaning and legal status of earnest money in the light of the currently applied laws and the legislation of the Islamic jurisprudence as well.

Lexically, ‘arbun means a part of the price paid in advance, provided it will be counted if the transaction was concluded, otherwise, it is not refundable. In Islamic jurisprudence, earnest money has the same previous meaning except that the two partners agree that in the case of not concluding the transaction the money will be the seller’s as a gift.

Purposes of ‘arbun:

  1. Protecting the right of both partners to give up the contract provided he should pay to the other partner the same amount agreed upon.
  2. Confirming and settling the contract through this executive step of ‘arbun which will be part of the whole price.

Legal Status of ‘arbun:

Some law interpreters consider it an impending conditional contract, so that no one of the two partners has the right to give up the transactions with an appointed period: others consider it a nullifying conditional contract, so that the contract will be immediately effective, the ownership is transferred to the buyer who must pay the full price. If he decided to cancel the contract he will lose the ‘arbun.

In Islamic jurisprudence:

Islamic jurisprudence classified ‘arbun sale into two types:

  1. Permitted ‘arbun sale, being free from risk and eating up others’ properties illegally. In this type, the amount paid in advance by the buyer will be counted part of the price in case of concluding the transaction, other wise he will refund it.
  2. Prohibited ‘arbun sale, which implies risk and taking others’ properties illegally. In this type the seller takes possession of the ‘arbun amount, the majority of Muslim jurists consider such a contract imperfect and null


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Nov 04, 2019

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