CHAPTER TEN

Exchange Of Gold And Silver For Gold Or Silver With Or Without Currency Marking On Them.

CR (222) In this transaction for the validity of contract it is necessary to hand-over the amount of gold or silver involved in contract to the relevant party before the parties depart each other, otherwise, the deal is void. A partial hand-over is good only for that portion but not for the rest.

CR (223) If one sells gold or silver currencies in addition with some non-gold or silver goods and nothing would be handed over before the parties depart each other, the contract is only valid for the non-gold and silver and void for the gold and silver portions.

CR (224) If the parties leave together the place where the transaction was made before they hand-over anything to each other but they would hand-over them to each other before they depart, the contract will still be valid and effective.

CR (225) Handing over of gold and silver is necessary in buying and selling of these two substances in exchange for the same it is not necessary when a contract involving gold and silver would be in the form of settlement between the parties.

CR (226) The CR of the above form of transaction does not apply to today's currency notes like Iraqi Dinar or Indian rupees or dollars, etc., which are used these days in place of gold and silver which could be sold in exchange for one another even if no handing over would take place before the parties depart and also there is no zakat payable for these currencies.

CR (227) If one has loaned money to another person in the form of gold or silver and he then sells what he has loaned to the borrower in exchange for other currency and the currency available is handed over before the parties depart each other, there is no need for the buyer to formally take possession of what he owes to the other party.

CR (228) If 'A' sells to 'C' what 'B' owes to 'A' in exchange for some amount of a certain currency and takes possession of the currency from B and B authorizes C to take possession of what he owes to A, the validity of such contract on the basis of authorization for taking possession is objectionable, most probably it will not be valid until C takes possession of what he is supposed to receive and identifies it in the form of a certain piece of currency.

CR (229) If 'A' buys some specified dollars from 'B' in exchange for a certain amount of currency then sells it back to B or C before actually taking possession of the money; the second contract will not be valid. If he then takes possession after it and before departing, the first contract will be valid and then if he authorizes the second contract and gives possession to C the second also becomes valid and if A does not take possession at the first place before departing the relevant party both the first and second contracts will be void and invalid.

CR (230) If B owes some dollars to A and A asks B that the dollars that he owes should be payable by B to A in yens and B accepts, the deal will be valid and payable dollars become payable in yens even if there would be no actual handing-over. And the same CR would apply if instead of dollars some other kind of currency would be payable to A at the first place. The same is the CR if the currency would be Dinar and Dirham currencies.

CR (231) In a transaction of 'surf' (exchange of gold and silver) it is not necessary for the parties to give possession of the currency to other party even if one party may already have taken possession. It is not obligatory for the other party to do the same. If there is some gain in one of the properties before giving or taking possession the gain belongs to the first owner, not the one who will be taking possession.

CR (232) The impure coins in the form of Dirham or Dinar if still in circulation can lawfully be used and exchanged in transactions, regardless, the impurities would be known or unknown or whether the quantity of impurities were known or unknown. If such currencies would not be valid for circulation anymore, it will not be lawful to exchange them in transactions without informing the other party about their invalidity.

CR (233) It is lawful to change zinc coins and the like into their smaller denominators even with some extra amount on one side of the transaction. This, however, does not apply to gold and silver because it is exchanged by weight, thus, it cannot be exchanged with its smaller denominators with some extra amount on one side without adding some commodity other than gold to one side or to both.

CR (234) The amount of impurities existing in gold and silver coins is enough as an addition of a different goods that removes Riba from a transaction, provided, such impurities are not totally lost in substance and value in the state of being called impurities, not when separated. If both sides of the deal have impurities it is lawful to exchange them with extra on one side, the same CR applies if one side has impurities and the extra is on the side of the pure goods but not if it is on the side of the impure one.

CR (235) The objects decorated with gold can be sold in exchange for gold, provided, the substance of such objects is more than the quantity of decorative gold, otherwise, such exchange is not lawful, however, if sword is sold in exchange for sword and both have decorative gold and in one sword it would be more than the other sword still the deal is valid.

CR (236) The silver coated or gold-coated threads can lawfully be exchanged for silver or gold respectively, provided such threads weigh equal or more than silver or gold.

CR (237) If one buys silver for silver or gold for gold and takes possession before departing the other party and then finds it something other than silver or gold, like lead or copper, etc., the contract becomes void and he is not entitled to demand to change. If he finds only some are other than gold or silver the contract will also be void except for the silver or gold portion, in which case he can return all the commodity because of split in the deal.

If he finds it to be defective silver he will have the choice to return or demand compensation if returning is not possible, regardless, the commodities on both sides are of the same kind or different or getting compensation is before departing the other party or after.

CR (238) If one buys silver in exchange for silver or gold which he would pay after a certain period of time and after taking possession finds it to be something other than silver or gold, if it happens before departing the other party, the seller is allowed to change it, and if he takes possession before departing the contract will be valid, but if he finds it out something other than silver or gold after departing the other party, the contract will be void and changing the wrong material will not validate the deal. If he finds it out to be defective silver, according to a strong view the buyer has the choice to change, return or accept the wrong merchandise without asking for compensation, but he cannot annul the contract, regardless, the commodities are of the same kind or not that the defect is discovered after or before departing the other party.

CR (239) It is not lawful to buy gold or silver jewelry in exchange for gold or silver respectively with some extra quantity because of jewelry work; jewelry should be bought in exchange for something other than gold or silver or for less on one side with an addition of some other goods on other side to avoid Riba.

CR (240) If for example five Dinar of gold would be payable by A to B and B gets from A some silver tumans or rupees as payment of debt in several installments and the rate of exchange would also be different each time, the changing rates should be taken in consideration, and equal to the value of amount of silver recovered an amount of gold should be deducted from what A owes to B each time separately. If one receives ten rupees each month for three months and the rate of exchange in the first month would be one Dinar for 15 rupees, in the second month 1 Dinar for 21 rupees and in the third month 1 Dinar for 10 rupees, if in the first month he deducts two thirds of Dinar in the second month 5/6 of Dinar and one whole Dinar in the third month. If B receives those rupees as independent loans, then it will be a loan and what A owed to B remains payable, now if each of A and B considers what he has received from the other as payment for what he demands from him, it will be open to objection although because of a more clear view it is lawful.

On the other hand there would be no offense in settling the deal independently by relieving each other of debt obligation on the basis of what each one has received.

CR (241) If A borrows a certain amount of gold or silver or the dowry 'Mahr' of one's wife would be a certain amount of gold or silver payable in cash or to be paid after a certain period of time and then the rate of exchange changes, in such a case one would owe that amount of gold or silver and the change in the rate of exchange would have no effect.

CR (242) It is not lawful to sell a silver dollar for a silver dollar with the condition of getting one ring also made out of it, however, it is lawful to say, "make for me this ring and I will sell you one dollar for one dollar, this makes the sale a prize and gift for the making of the ring and it also is lawful to buy an ounce of silver in the form of jewelry for one ounce of silver not in jewelry form.

CR (243) If one sells ten Rupees for a gold dollar less 20 pennies the deal is valid, provided, the parties know the value of pennies in relation to a dollar.

CR (244) It is not lawful to sell jewelry made of gold and silver in equal amount in exchange for gold or silver. It would be sold either with some extra amount exchanged for either gold or silver or in exchange for a certain amount of both gold and silver or in exchange for some other commodity.