Is it permissible, Islamically, for a construction company to confiscate all advance payments and due installments, in addition to 20% of the total contract value as compensation, if the buyer withdraws from purchasing a house by installments?
The contract as described is not permissible due to the presence of jahalah (uncertainty), (risk/deception), and the unlawful acquisition of wealth (akl al-mal bil-). This is because the value of the down payment and the installments due are unknown. The penalty clause ( jazai) is intended to compensate for actual damages, not as a means to seize the down payment. A penalty clause is valid and considered permissible unless there is a legitimate Shariah excuse, or if it is excessive by common custom and intended as a financial threat. In such cases, fairness and justice must be observed, and the assessment of this matter, in case of dispute, is referred to the Shariah judge.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/169477
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 169477
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy