Is it permissible to take collateral for the prize money in a competition (*musabaqah*)?
Chapter on Guaranteed Salaf (Advance Payment) for a Specified Term
Al-Mughni
Book of Sales
Primary text
It is not permissible to take collateral for the prize money in a competition because it is considered a *Ja'alah* and its obligation is uncertain. Obligation is only established by one party winning the competition, which is an uncertain or non-presumed event. The ruling is based on the understanding that the prize is compensation for winning, not for work done, and the ability to win is not guaranteed.
Supporting text
Some of our companions suggest two possibilities depending on whether the competition is classified as a lease (*ijarah*) or a guarantee (*ja'alah*). If it is considered an *ijarah*, taking collateral is permitted. Al-Qadi suggested the classification depends on the presence of a licit third party (*muhallil*).