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The question

What is the ruling on an institution entering into a Murabaha contract to purchase building materials for an employee, and is it sufficient for the contract to be concluded with the merchant, or must the materials be moved to another location, and is it permissible for the employee to ask the merchant to hold onto the money until prices decrease?

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Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

The image of Murabaha sale is that the client agrees with an institution to purchase a specific commodity for them, and the institution promises to sell it to the client for a profit after acquiring ownership and possession of the commodity. Murabaha is not a loan unless it is invalid due to financing the client without purchasing the commodity.

Correct Murabaha is conducted through the following steps: 1. Informing the institution of the desired commodity. 2. The institution purchasing and acquiring ownership of the commodity. 3. The institution possessing and transporting the commodity before selling it to the client. 4. Selling the commodity to the client after its possession and acquisition. 5. After the client purchases the commodity, they may use it or sell it to obtain cash, provided that they sell it to a party unrelated to the institution or the original merchant, and that they sell it themselves without authorizing the institution.

The institution must take possession of the commodity and transport it before selling it, as stated in the Hadiths: "So if you buy a sale, do not sell it until you take possession of it," and "He [the Prophet] forbade commodities from being sold where they are bought until merchants take possession of them and move them to their own places," and "Whoever buys food, let him not sell it until he has received it in full."

There is no relationship between the client and the original merchant of building materials, so it is not permissible for the client to request keeping the money from the merchant until prices drop. If the price is high, the client can wait for it to drop and then submit a Murabaha request.

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

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Where this answer came from
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Ftawy
Original fatwa ID
18806
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.
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