Laws Regarding Advance Payment Contract

2121. If a person purchases a commodity by way of advance payment, he is not entitled, until the expiry of the stipulated period of delivery, to sell it to anyone.

Nevertheless, there is no harm in selling it to any person after the expiry of the stipulated period, even if he may not have taken possession of it yet. However, it is Makrooh to sell cereals like wheat and barley, and other commodities, before taking its possession.

There are six conditions of Advance Payment Contract

2120. Advanced payment contract consist of six conditions:

First: The characteristic, due to which the price of a commodity may vary, should be specified. However, it is not necessary to be very precise, it will be sufficient if the people say that ‘its particulars are known’. Therefore, the advanced payment contract is void in case of bread, meat, hide of animals and the likes of them as their characteristics cannot be specified.