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Khiyars-1

This document discusses Khiyars, which are options or rights of the buyer and seller to rescind a contract of sale in Islamic finance. It outlines five types of Khiyars: Khiyar e Shart which allows either party to rescind a sale within a specified period; Khiyar e Roiyyat which allows returning goods after inspection; Khiyar e Aib which makes the seller responsible for disclosing defects; Khiyar e Wasf which applies if goods differ from their specified quality; and Khiyar e Ghaban which applies if the price greatly exceeds market price. It also discusses Iqala, which is the mutual agreement of buyer and seller to

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Amrah Azhar
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117 views8 pages

Khiyars-1

This document discusses Khiyars, which are options or rights of the buyer and seller to rescind a contract of sale in Islamic finance. It outlines five types of Khiyars: Khiyar e Shart which allows either party to rescind a sale within a specified period; Khiyar e Roiyyat which allows returning goods after inspection; Khiyar e Aib which makes the seller responsible for disclosing defects; Khiyar e Wasf which applies if goods differ from their specified quality; and Khiyar e Ghaban which applies if the price greatly exceeds market price. It also discusses Iqala, which is the mutual agreement of buyer and seller to

Uploaded by

Amrah Azhar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Islamic Banking & Finance BS Accounting & Finance

KHIYARS
Khiyars Outline of the Presentation

 Khiyars
 Khiyar e Shart (Optional condition)
 Khiyar e Roiyyat (Option of investing goods)
 Khiyar e Aib (Option of defect)
 Khiyar e Wasf (Option of quality)
 Khiyar e Ghaban (Option of price)
Khiyar Types of Khiyars

 The term Khiyar refers to an option or right of the buyer and seller to rescind a contract of sale
 There are five Khiyars in a sale contract, which are as follows
 Khiyar e Shart (Optional condition)
 Khiyar e Roiyyat (Option of investing goods)
 Khiyar e Aib (Option of defect)
 Khiyar e Wasf (Option of quality)
 Khiyar e Ghaban (Option of price)
Khiyar Types of Khiyars

Khiyar e Shart (Optional condition)


 At the time of sale, buyer or seller can put a condition that either party has an option to rescind the
sale within the specified number of days (say 2 days). This is known as Khiyar e Shart

Khiyar e Roiyyat (Option of investing goods)


 Here the goods can be returned after inspection, if these are not up to the specification
 This applies automatically to all contracts
 Example: ‘A’ buys machine from ‘B’ without seeing. ‘A’ has the option to return machine after
inspection
Khiyar Types of Khiyars

Khiyar e Aib (Option of defect)


 It is the responsibility of the seller to supply the goods free of defect or point out the defects (if
any) to the buyer at the time of sale
 The seller is not allowed to hide the defects of the goods as it constitutes as fraud
 Where the goods can be returned if found defective is known as Khiyar e Roiyyat
 Prophet said: “He is not amongst us who indulges in fraud”
 The buyer has the right to return the goods in case where presence of a deficiency is considered as
a defect in the market practice and which depreciates the value of goods
Khiyar Types of Khiyars

Khiyar e Wasf (Option of quality)


 This option is available where the seller sells the goods by specifying a certain quality which is
absent in the goods
 Example: Auto transmission vehicle was specified but sold a manual transmission vehicle

Khiyar e Ghaban (Option of price)


 Where the seller sells the goods at the price which is far expensive than the market price and the
market price is not known to the buyer
 A buyer has the right to return the goods to the seller
Iqala Recession of Contract

Iqala (Recession of Contract)


 The mutual agreement/ consent between buyer and seller to rescind a contract is called Iqala
 At the time of execution of contract, the parties freely consent to rescind the contract i.e. each
party will give back the consideration received by it at the time of contract
 Neither buyer nor seller has the sole right to rescind the contract after its execution
 The price of the goods being returned under Iqala will remain unchanged
 The Holy Prophet said: “He who does Iqala (rescinding of the contract) with a Muslim who is not
happy with his transaction, Allah will forgive his sins on the Day of Judgment”
Islamic Banking & Finance BS Accounting & Finance

THANK YOU

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