What is the ruling if the consideration (badal) in a currency exchange (Sarf) is destroyed after taking possession, and then its defect becomes known?

Chapter on Riba (Usury) and Exchange (Sarf)

Al-Mughni

Book of Sales

Book 12 · Issue 1 · Bab 3

Open in Qurani

Primary text

If the consideration in a Sarf contract is destroyed after both parties have taken possession, and subsequently, a defect in that consideration is discovered, the contract is dissolved (faskh). The existing item must be returned, and the value corresponding to the defect remains the liability of the party in whose possession the item was destroyed. This liability is settled by returning the equivalent value of the defect or its replacement value, provided both parties agree upon this. This applies whether the exchange was of the same genus or different genera. This ruling is mentioned by Ibn Aqil and is the position of Al-Shafi'i.

Supporting text

A narration from Ahmad permits taking the 'Arsh' (compensation for the defect). However, the primary ruling mentioned is superior, unless the parties are still present in the same sitting ('majlis') and the two considerations are of different species (genera).