What recourse does a party have if they discover a defect in the received currency item immediately after mutual possession in the contract meeting?
Chapter on Riba (Usury) and Exchange (Sarf)
Al-Mughni
Book of Sales
Primary text
If both parties exchange possession in the meeting and one party discovers a defect in what they received before separating, they have the right to demand the replacement (Badal). This applies whether the defect is of the same genus as the item or a different genus, because the contract was established upon the item as absolute and without defect. Therefore, the party can demand what the contract was made upon, similar to the subject matter of Salam (forward sale). If the recipient accepts the item with the defect, and the defect is of the same genus, it is permissible, like accepting a defective Salam item. If they choose to take the compensation for the defect (Arsh), it is permissible only if the two countervalues are of different genera; it is not permissible if they are of the same genus, as this leads to unequal exchange in matters requiring equality.
Supporting text
If they exchange possession and separate, and then a defect of the same genus is discovered, the first narration permits replacement, as supported by Al-Khallal and Al-Kharqi, and narrated from Al-Hasan and Qatada, and held by Abu Yusuf and Muhammad, and it is one opinion of Al-Shafi'i. The second narration denies this right, which is the position of Abu Bakr, the Madhhab of Abu Hanifa, and the second opinion of Al-Shafi'i, because possession is taken after separation, which is impermissible in currency exchange. If the first narration is followed, the initial possession validated the contract, and the second possession signifies the first. The replacement must be taken in the meeting session designated for rejection; if they separate without taking the replacement, the contract is voided. If only part of the received currency is defective and returned, under the first narration, the party is entitled to the replacement for the rest, whereas under the second narration, the contract is voided regarding the returned portion. There are two views regarding the validity of the contract for the portion not returned, dependent on the ruling on splitting the transaction, with no distinction based on whether the exchanged items are of the same genus or different genera.