Is it valid to stipulate in a sale contract that the sold item itself shall serve as a pledge (rahn) for its price?
General Chapter
Al-Mughni
Book of Pledges (Collateral)
Primary text
Stipulating that the sold item serves as a pledge for its price within the sale contract is invalid, according to Ibn Hamid and the opinion of Al-Shafi'i, because the item pledged is not yet the property of the person stipulating the pledge at the time of the stipulation. This invalidity holds whether the condition is stipulated that the buyer takes possession and then pledges it, or pledges it before taking possession. A narration from Ahmad suggests that if the buyer withholds the sold item for the remaining price, the buyer is a usurper, and it does not become a pledge unless it was stipulated in the sale contract itself.
Supporting text
A contrary view exists based on the apparent meaning of the narration from Ahmad, suggesting the condition for pledging the item itself is valid because the sale is valid, therefore the pledge is valid. Arguments against validity include that the item is not owned, that sale implies payment from something other than the item while pledge implies payment from the item, and that sale implies immediate delivery of the item while pledging the item implies withholding delivery until the price is received, leading to contradictions in the rulings concerning liability (ضمان).