What is the ruling when exchanging one type of currency for another (e.g., gold for silver) and a defect is discovered in the received currency on the same day?
Chapter on Riba (Usury) and Exchange (Sarf)
Al-Mughni
Book of Sales
Primary text
If one party to an exchange of specie for specie (like exchanging a specific Dinari for specific Dirhams) discovers a defect in what was received on the same day of the transaction, the buyer has the choice to return the defective item or accept it, provided the defect relates to something other than the item's essence or genus. The prevailing view in the school is that currencies become specific (ta'ayyun) through designation in the contract, thus ownership is established in the specific items exchanged. If the defect is an adulteration with a substance of a different genus (e.g., finding silver to be lead or copper, or the dinar to be counterfeit), the sale is void (batil). This aligns with the view of Ahmad and Al-Shafi'i.
Supporting text
If the defect is of the same genus (e.g., silver being tarnished or having the Sultan's stamp invalidated), the contract remains valid, and the buyer has the choice between keeping the item or canceling the contract and returning it, without recourse to a monetary substitute (badal), because the contract was established upon the specific item itself. If it is held that currency does not become specific by designation, then the buyer may take the substitute value because what was received was not the object of the contract, resembling a defect found in a Salam contract upon receipt. If the defect is only in a portion of the received currency, there are differing views on whether the entire transaction is voided or if the owner may return the defective part while keeping the sound part, based on differing opinions regarding splitting transactions.