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Consignment Sale

Question

Is it permissible to sell goods on consignment? What transaction is this in shari’at?

Answer

It will not be permissible to sell goods on consignment because in this type of transaction there is generally a condition that if the consignee fails to sell all the goods or part of it, then he will cancel the sale of those goods and return them to the consignor. To put such a condition in a transaction of sale is not permissible. 

An alternative to make this permissible is that the consignor tells the consignee that these are my goods which must be sold for an X amount, whatever you sell, a certain amount of percentage of the sale will be your commission. If it is done in this way, then it will be permissible as in this case, the person selling the goods will in effect, be an agent selling goods on behalf of the owner on a commission basis.

Checked and Approved By:

Mufti Muhammed Saeed Motara Saheb D.B.

References

والبيع بشرط الإقالة الصحيحة باطل فشرط الإقالة الفاسدة أولى 
تبيين الحقائق، كتاب البيوع،ج ٤،ص ١٦،مكتبة امدادية ملتان 

و ) لا ( بيع بشرط ) عطف على إلى النيروز يعني الأصل الجامع في فساد العقد بسبب شرط ( لا يقتضيه العقد ولا يلائمه وفيه نفع لأحدهما أو…. 
رد المحتار، كتاب البيوع،ج ٥،ص ٨٤،ايج ايم سعد 

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Darul Ifta - Darul Uloom Azaadville - Madrasah Arabia Islamia