Terms Of Sale

Question

I intend to sell my business, which is now established and profitable, for 20 million. Would it be permissible to sell the business on the following terms:

From the 20 million, 6 million is payable upfront. I received an offer for 2 million upfront. I am willing to accept this offer on the basis that the buyer pays me the remaining 18 million as he profits from the business. Once the 20 million is reached, the buyer will then be recognized as the owner.

Mufti Abdul Kader Fazlani · Accepted Answer

The correct procedure of finalizing a business transaction is that one should not have any ambiguity in it. By you stating, “Make sure you pay me the remainder as you profit from my business ” is ambiguous. The correct way is that you should tell him to pay you the two million upfront and then stipulate specifically how much he should pay you every month, for example, one million every month. In this way, there will be no ambiguity in the transaction and it will also determine precisely how many months the buyer has to pay for the outstanding balance.

Furthermore, we advise that you should draw up a written sales agreement so that everything is recorded in writing so as to avoid disputes which may arise in the future. Allah Ta’ala states in the Quraan Majeed:

“O you who believe! When you contract a debt for a fixed period, write it down.”

Furthermore, we advise that you should draw up a written sales agreement so that everything is recorded in writing so as to avoid disputes which may arise in the future. Allah Ta’ala states in the Quraan Majeed:

“O you who believe! When you contract a debt for a fixed period, write it down.”

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