What is the Sharia ruling on the amount paid as a penalty clause by the seller after retracting the sale of a plot of land?
If the preliminary contract is a promise to sell and buy, and the seller defaults, causing harm to the buyer, then the buyer has the right to compensation for the actual damage incurred.
However, if it is a sales contract with its conditions and pillars, then it is a binding contract, and the seller does not have the right to revoke it except with the buyer's consent. Therefore, what is called a "penalty clause" that obligates the seller to pay a sum of money for his retraction is invalid, as he does not have the right to retract, and the buyer only has the option of taking the purchased item or releasing the seller (from the contract). In the case of release, the buyer cannot take more than the original price.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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