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Sunan Abi Dawud 3404 (Book 23, Hadith 79) #23694
Forbidden and Permitted Transactions in Islam

SUMMARY: The Prophet Muhammad (PBUH) forbade certain types of transactions and gave permission for another type.

Narrated Jabir b. 'Abd Allah : The Messenger of Allah forbade Muhaqalah, Muzabanah, mukhabarah, and mu'awanah. One of the two narrators from Hammad said the word mu'awamah, and other said: "selling many years ahead". The agreed version then goes: and Thunya, but gave license for 'araya.
حَدَّثَنَا أَحْمَدُ بْنُ حَنْبَلٍ، حَدَّثَنَا إِسْمَاعِيلُ، ح وَحَدَّثَنَا مُسَدَّدٌ، أَنَّ حَمَّادًا، وَعَبْدَ الْوَارِثِ، حَدَّثَاهُمْ كُلُّهُمْ، عَنْ أَيُّوبَ، عَنْ أَبِي الزُّبَيْرِ، - قَالَ عَنْ حَمَّادٍ، وَسَعِيدِ بْنِ مِينَاءَ، ثُمَّ اتَّفَقُوا - عَنْ جَابِرِ بْنِ عَبْدِ اللَّهِ، قَالَ نَهَى رَسُولُ اللَّهِ عَنِ الْمُحَاقَلَةِ وَالْمُزَابَنَةِ وَالْمُخَابَرَةِ وَالْمُعَاوَمَةِ - قَالَ عَنْ حَمَّادٍ وَقَالَ أَحَدُهُمَا وَالْمُعَاوَمَةِ وَقَالَ الآخَرُ بَيْعِ السِّنِينَ ثُمَّ اتَّفَقُوا - وَعَنِ الثُّنْيَا وَرَخَّصَ فِي الْعَرَايَا

TOPICS
transactions  *  license  *  muhaqalah  *  muzabanah  *  mukhabarah  *  muawanh  *  thunya  *  araya  *  muawanah

QUICK LESSONS:
Follow rules set by the Prophet Muhammad to ensure fairness and justice between parties involved in any transaction.

EXPLANATIONS:
This hadith is about the various types of transactions that are forbidden or permitted in Islam. The Prophet Muhammad (PBUH) forbade four types of transactions which are Muhaqalah (selling goods on credit with a deferred payment), Muzabanah (selling goods on credit with an immediate payment), Mukhabarah (renting out land or other property for a fixed amount of produce) and Mu'awanah (leasing out land or other property for a fixed amount). He also prohibited Thunya which is selling something without specifying the price but gave license to 'araya which is renting out land or other property for a fixed rent payable in money. These rules were set by the Prophet Muhammad to ensure fairness and justice between parties involved in any transaction.

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