Is it permissible to compensate for damages caused by delayed payment in sales contracts, such as the seller missing investment opportunities, provided there is a guarantee that is only acted upon after the actual occurrence of the damage and for its real value only?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
It is not permissible to stipulate a penalty clause or a financial fine for late payment in a sale, because it is an interest-based condition. A penalty clause is permissible in financial contracts except for those in which the primary obligation is a debt, as this falls under explicit usury. This differs from a penalty clause in other rights and obligations—excluding debt—for compensation for actual damage; there is no harm in that.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/192873
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- Ftawy
- Original fatwa ID
- 192873
- 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