THE BASIC RULES OF THE MUDARABAHA

1. In Existence - The subject needed to be existent at time of sale. Consequently,

something that does not exist at the time of sale cannot be sold and its non-existence
renders the contract null and void.
2. Ownership - The subject matter should be the possession, either real or
constructive, of the seller at the time of sale. If he sells something he has not acquired
himself, the transaction becomes invalid.
3. In Possession - The subject matter of sale must be in the physical or constructive
hands of the seller when it is sold to another party. Constructive ownership implies a
circumstance in which the possessor has not taken care of the actual distribution of the
goods and has passed on to him all the rights and responsibilities of the goods,
including the possibility of their destruction.
4. Same “Majlis” - Sales must be instant and full. Consequently, a sale attributed to a
future date or a sale based on a future event is invalid. If the parties want to make a
legitimate sale, they may have to do so again when the future date arrives or when the
contigency happens.
5. Value - The subject matter should be the worth of the land. Thus, products without
value cannot be sold or purchased.
6. Use of Asset - The subject matter of sale should not be used for a non-Islamic
reason.
7. Identifiable - Specifically, the subject matter of the sale must be understood and
defined to the purchaser. For example, 'A' owner of an apartment says to 'B' that he's
going to sell an apartment to 'B.' Now the sale is invalid since the apartment to be sold
is not explicitly listed or identified to the purchaser.
8. Delivery - The delivery of the merchandise sold to the customer must be assured
and should not depend on contingency or chance.
9. Price - Price certainty is a required requirement for the legitimacy of the
transaction. If the price is uncertain, the sale will be void.
10. Unconditional - Sales must be unconditional. Conditional selling is void unless
the provision is accepted as part of the contract according to the use of exchange.

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