Is it permissible for a seller to repurchase an item sold on credit for less than the agreed-upon deferred price?
Chapter on Selling the Musarrah (Animal with milk retained in udder)
Al-Mughni
Book of Sales
Primary text
It is impermissible for one who sold an item for a deferred price to buy it back for cash at a lesser amount. This is the position of the majority of scholars, narrated from Ibn Abbas, Aisha, Al-Hasan, Ibn Sirin, Al-Sha'bi, Al-Nukha'i, Abu Al-Zanad, Rabi'ah, Abd Al-Aziz bin Abi Salamah, Al-Thawri, Al-Awza'i, Malik, Ishaq, and the People of Opinion (Ahl Al-Ra'y). The definitive evidence is the severe denouncement by Aisha, peace be upon her, to the wife of Zayd ibn Arqam regarding such a transaction, stating it invalidated his Jihad unless he repented. This strong warning is taken as deriving from the Prophet, peace be upon him. Furthermore, this action constitutes a means leading to Riba (usury) by allowing the mechanism of selling high on credit to facilitate a lower cash sale later.
Supporting text
Al-Shafi'i permits this if the repurchase price is equal to or greater than the deferred price, arguing that if selling for the same price is permissible, then a lesser price should also be permitted since it is not a conduit to Riba. It is permitted if the item has depreciated due to damage or deterioration, as the reduction in price reflects the deficiency in the commodity rather than being a device for Riba.