MUSAWAMA, MURABAHA, MUWAD'A & TAWLIYA.

If transaction between two parties is made with no regard to the capital involved in the commodity the deal is called MUSAWAMA. If it is made with regard to the capital, if payment is more than capital, the transaction is called Murabaha, if payment is less than capital, the transaction is called Muwada'a, and if payment is equal to the capital the transaction is called 'Tawliyah'.

CR (196) In all the last three cases it is necessary to mention the price in full details; i.e. if one says I sell this commodity to you in exchange for the amount of money invested in it plus or minus one dollar or nothing else, the transaction will not be valid until the amount invested is specifically mentioned with addition, deduction or none of the two.

CR (197) If the seller says I sell this commodity to you for $100 plus 10% discount the contract will be valid if the buyer can figure out what it means, apparently, even if he cannot figure out then, but would do so later that it means $110 or $90 still the contract will be valid.

CR (198) If in case of Murabaha the seller has bought the commodity to be paid for after a certain period of time he must inform the buyer about it, if the buyer is not informed he has the choice to return the commodity or keep it for the same price.

CR (199) If one buys a number of things in a wholesale deal for a certain amount of money he is not allowed to sell by pricing each piece in a Murabaha transaction unless the buyer is informed about the wholesale transaction.

CR (200) If it is discovered that the seller has not been true about the capital i.e. 10% profit, in fact, is 20% in this case the buyer has the choice to annul the contract or approve it the way it stands.

CR (201) If one buys a certain commodity for a certain price: say $100 and does nothing to it the $100 is the capital and he can inform a buyer about it, but if he does something to it like renting it, etc., he can add the rent to the capital and say to a buyer I sell it to you in exchange for the capital plus what it has gained.

CR (202) If one's own labor is involved in a commodity for which he deserves payment he is not allowed to add his own labor's money to the capital. He must say the capital is so and so, my labor so and so plus such and such amount of profit.