Is an agent permitted to purchase property for more than its market value or more than the price set by the principal?
General Chapter
Al-Mughni
Book of Agency
Primary text
The agent is prohibited from purchasing for more than the market price or more than the price stipulated by the principal. If the agent buys for more than the market price or the stipulated price by an amount not typically overlooked in trade transactions, the transaction is treated as if the agent lacked authorization to purchase.
Supporting text
A narration from Ahmad suggests the purchase is invalid, and the agent must guarantee the excess price paid. The reasoning is that while a sale below market value might be permissible with a guarantee, purchasing above market value is not treated the same way. The extent of the guarantee is debated, resting between the difference from the market price or the difference considering the margin of normal trade fluctuation.