The Ruling of Bay' al-Wafa in Hanafi Jurisprudence and Its Contemporary Applications

Abstract

Bay' al-Wafa, also referred to as "Sale of Trust," "Sale of Transaction," or "Sale of Obedience," is when a person in need of money sells an asset, whether immovable or movable, which is fit for long-term retention, on the condition that the seller can repurchase it once the price is returned to the buyer. It is called "Sale of Wafa" because the buyer is bound to honor the condition. This type of sale is considered invalid by the majority of scholars from the Maliki, Hanbali, and earlier Hanafi and Shafi’i schools. Some Hanafis have allowed it with the condition, while others have forbidden the condition, permitting it only with a promise to honor it, provided the promise comes after the contract to ensure its validity. Those who permit it justify their view due to necessity. There is significant disagreement regarding the legitimacy of Bay' al-Wafa in Hanafi jurisprudence, with various theories being proposed. Some scholars have approved it as a form of collateral sale (rente), while others have declared it invalid due to its inclusion of a condition that contradicts the nature of the contract, and they argue that it is essentially equivalent to an interest-based loan, which is prohibited. This last theory has led to the codification of the invalidity of Bay' al-Wafa in the civil codes of Egypt, Jordan, and Syria. On the other hand, the civil codes of Iraq, Algeria, and Afghanistan have been influenced by the first theory, considering it a permissible possessory pledge. Consequently, later Hanafi scholars have permitted Bay' al-Wafa, relying on principles of necessity, public interest, and general Hadiths that emphasize the consideration of Muslim conditions in transactions. In this article, the evidence presented by those who argue for the invalidity, nullity, or composite nature of the Bay' al-Wafa contract, or who consider it a form of collateral, has been critiqued. Additionally, the legitimacy of Bay' al-Wafa as a sales contract is demonstrated by relying on general legal principles, such as: "Fulfill the contracts," "God has made sale lawful," "Except that it be a trade by mutual consent," and "The believers are bound by their conditions."