Article & fatwaHigh trust

Bay' al-wafa — the SALE WITH RIGHT OF REDEMPTION

Bay' al-wafa — the SALE WITH RIGHT OF REDEMPTION — is the contract on which a genuine OIC-level resolution draws the riba line explicitly, and it is the closest structural cousin of bay' al-'inah already in this corpus. Its shape is simple: you sell an asset to a financier on the condition that whenever you return the price, he returns the asset. A primary source states the ruling directly — the International Islamic Fiqh Academy (the OIC's collective-ijtihad body), in Resolution No. 66 (4/7) of its 7th session (Jeddah, 7-12 Dhu al-Qi'dah 1412h / 9-14 May 1992), defines it as 'The sale of a commodity on the condition that any time the seller returns the price, the purchaser returns to him the object of the sale' and then rules: 'This type of sale is in fact a loan which generates a benefit; therefore, it is a fraudulent practice of Riba, and is considered invalid by the majority of scholars.' The resolution's own conclusion is blunt: 'This contract is not permissible in Shariah.' An independent industry encyclopaedia describes the same contract — 'A sale (bay') in which the seller has the right, as stipulated in the contract, to repurchase the underlying property' — and reports the same majority verdict ('Bay' al-wafa is viewed by the majority of jurists (fuqaha) as impermissible'), while recording the live minority: 'contemporary East Asian jurists are of the opinion that this type of sale is permissible under Islamic jurisprudence, where it has been used as the shari'a foundation to develop products for Islamic capital markets.' What makes bay' al-wafa the sharpest case in this cluster is that the riba link is not reasoned by this site — the OIC Academy itself names the contract 'a loan which generates a benefit', which is the classical definition of riba, because the financier holds and USES the asset for the life of the arrangement while his money is guaranteed back in full: a loan that returns a benefit. (International Islamic Fiqh Academy Resolution 66(4/7) cross-read with the Fincyclopedia Islamic-finance entry)

What this source says

Bay' al-wafa — the sale with the right of redemption — is the contract this corpus's long march through the sale-based instruments finally reaches where a top-tier body draws the riba line in its own words, not by inference. Its structure is disarmingly simple. You own an asset and you need cash. You sell the asset to a financier, but the contract carries a condition: whenever you return the price he paid, he must return the asset to you. In the meantime he holds it — and, in the classic form, he uses it, drawing its rent or its produce. On the surface it is two sales, a sale now and a repurchase later, each at the same price. Look at the cashflows, though, and a different shape appears: money goes from the financier to you today, the same money comes back to him whenever you redeem, and in between he has had the free use of your asset. That is not the profile of a trade. It is the profile of a secured loan on which the lender collects the asset's usufruct as his return — which is exactly why bay' al-wafa is the closest structural cousin of bay' al-'inah, the contested double-sale this corpus already documents, and why it belongs in the same family of contracts whose NAME says 'sale' while their CASHFLOWS say 'loan with a return'. What sets this entry apart from its siblings is the quality of the source that judges it. For most contested contracts this corpus has had to cross-read encyclopaedias and journal papers and reason carefully about where the riba sits. Here a primary body speaks directly. The International Islamic Fiqh Academy — the collective-ijtihad institution of the Organisation of Islamic Cooperation, whose resolutions are among the most authoritative contemporary Sunni pronouncements — took up bay' al-wafa in Resolution No. 66 (4/7) at its 7th session in Jeddah, held 7-12 Dhu al-Qi'dah 1412h (9-14 May 1992). It first fixes the definition so there is no ambiguity about what is being ruled on: 'The sale of a commodity on the condition that any time the seller returns the price, the purchaser returns to him the object of the sale.' Then it renders the ruling, and it does the site's work for it: 'This type of sale is in fact a loan which generates a benefit; therefore, it is a fraudulent practice of Riba, and is considered invalid by the majority of scholars.' Read that sentence slowly, because every clause is load-bearing. 'A loan which generates a benefit' is not this site's characterisation — it is the Academy's, and it is the textbook definition of riba: qard (a loan) that jarra naf'an (draws a benefit) to the lender. The benefit here is the financier's use of the asset while his capital sits safely guaranteed against return at par. Because the money comes back in full and the asset's usufruct is the extra, the transaction 'generates a benefit' on top of a returned loan — the precise thing the riba prohibition forbids. The Academy's conclusion is a single unadorned line: 'This contract is not permissible in Shariah.' An independent source describes the very same contract and reaches the very same majority verdict, which is what makes the reading trustworthy rather than a single body's opinion. The Fincyclopedia Islamic-finance entry defines bay' al-wafa as 'A sale (bay') in which the seller has the right, as stipulated in the contract, to repurchase the underlying property' — the same structure the Academy named — and reports the mainstream position in almost the Academy's terms: 'Bay' al-wafa is viewed by the majority of jurists (fuqaha) as impermissible.' Two genuinely different sources, a primary OIC resolution and an industry encyclopaedia, converging on the same identity and the same majority ruling. But the honest picture is not unanimity, and the second source is where this entry records the live disagreement rather than flattening it. The same encyclopaedia notes: 'contemporary East Asian jurists are of the opinion that this type of sale is permissible under Islamic jurisprudence, where it has been used as the shari'a foundation to develop products for Islamic capital markets.' This is not a footnote. It is the reason bay' al-wafa matters commercially: a minority of modern jurists, concentrated in East Asia, have revived the contract and built tradable Islamic capital-market instruments on it. So the map is a genuine split — the OIC Fiqh Academy and the majority of classical jurists holding it an impermissible loan-with-benefit and therefore riba, and a contemporary minority permitting it and financing real products through it. This corpus does not adjudicate between qualified scholars, and it does not here. What it can say, on the strength of a primary resolution cross-read with an independent encyclopaedia, is threefold and no more: that a body as authoritative as the OIC Islamic Fiqh Academy has ruled bay' al-wafa 'a loan which generates a benefit' and therefore 'not permissible in Shariah'; that this is the majority position; and that a contemporary East-Asian minority permits it and has built capital-market products on it. For a reader trying to keep money halal, that is the practical takeaway: a 'sale' you enter only so you can 'buy it back' at the same price while the other party uses your asset is, on the majority and OIC view, a loan wearing a sale's clothes — the same lesson bay' al-'inah, tawarruq and bay' al-dayn have each taught from a different angle. If a product invokes bay' al-wafa, the honest question is the one this corpus keeps returning to: once the two sales are stripped away, is anything being exchanged except money now for the same money later plus the lender's use of the asset in between? If not, the name does not save it — and the highest contemporary collective body has said so in as many words.

Wording inside quotation marks is quoted from the source. The rest is this notebook’s summary of it — read the original before relying on it.

Provenance

Compiled from: Compiled from two genuinely different sources cross-read 2026-07-07, every load-bearing quote verified verbatim: [1] the International Islamic Fiqh Academy (iifa-aifi.org), 'Bay al-Wafa (Selling with Repurchase Right)', Resolution No. 66 (4/7) of the 7th session (Jeddah, 7-12 Dhu al-Qi'dah 1412h / 9-14 May 1992) — a PRIMARY OIC collective-ijtihad resolution — for the definition ('The sale of a commodity on the condition that any time the seller returns the price, the purchaser returns to him the object of the sale'), the riba ruling ('This type of sale is in fact a loan which generates a benefit; therefore, it is a fraudulent practice of Riba, and is considered invalid by the majority of scholars'), and the conclusion ('This contract is not permissible in Shariah'); fetched, then re-fetched with a tightened prompt that returned the SAME wording character-for-character. And [2] Fincyclopedia, 'Bay al-Wafa' (fincyclopedia.net), an independent Islamic-finance encyclopaedia, for the definition ('A sale (bay') in which the seller has the right, as stipulated in the contract, to repurchase the underlying property'), the majority view ('Bay' al-wafa is viewed by the majority of jurists (fuqaha) as impermissible'), and the live minority ('contemporary East Asian jurists are of the opinion that this type of sale is permissible under Islamic jurisprudence, where it has been used as the shari'a foundation to develop products for Islamic capital markets'). The IDENTITY (sale-with-repurchase-right), the OIC ruling (loan-generating-benefit = riba = not permissible), the MAJORITY-impermissible verdict, and the East-Asian MINORITY who permit it and build capital-market products on it are the load-bearing facts; the riba link is DIRECTLY SOURCED — the resolution itself names the contract 'a loan which generates a benefit'. Cross-confirmed
Source: PRIMARY RESOLUTION -- definition ('The sale of a commodity on the condition that any time the seller returns the price, the purchaser returns to him the object of the sale'), riba ruling ('This type of sale is in fact a loan which generates a benefit; therefore, it is a fraudulent practice of Riba, and is considered invalid by the majority of scholars'), and conclusion ('This contract is not permissible in Shariah') -- verbatim from [1] the International Islamic Fiqh Academy (OIC), 'Bay al-Wafa (Selling with Repurchase Right)', Resolution No. 66 (4/7), 7th session, Jeddah, 7-12 Dhu al-Qi'dah 1412h / 9-14 May 1992 (https://iifa-aifi.org/en/32448.html), fetched and read 2026-07-07, then re-fetched with a tightened prompt that returned the same 'loan which generates a benefit' / 'fraudulent practice of Riba' / 'not permissible in Shariah' wording character-for-character. INDEPENDENT CROSS-READ -- definition ('A sale (bay') in which the seller has the right, as stipulated in the contract, to repurchase the underlying property'), majority verdict ('Bay' al-wafa is viewed by the majority of jurists (fuqaha) as impermissible'), and live minority ('contemporary East Asian jurists are of the opinion that this type of sale is permissible under Islamic jurisprudence, where it has been used as the shari'a foundation to develop products for Islamic capital markets') -- verbatim from [2] Fincyclopedia, 'Bay al-Wafa' (https://fincyclopedia.net/islamic-finance/b/bay-al-wafa), fetched and read 2026-07-07. Two genuinely DIFFERENT sources cross-read -- a PRIMARY OIC collective-ijtihad resolution + an independent Islamic-finance encyclopaedia -- converging on the same identity (sale-with-repurchase-right) and the same majority ruling (impermissible / a loan that draws benefit = riba), with the encyclopaedia additionally recording the contemporary East-Asian minority who permit it. The riba link is DIRECTLY SOURCED (the Academy's own words 'a loan which generates a benefit'), not a reasoned inference. The 'closest cousin of bay' al-'inah' framing and the cross-references to the corpus's other contested contracts are the site's own structural map, reasoned from the verbatim material and clearly framed as such. DELIBERATELY NOT asserted because it appears in NEITHER fetched source verbatim: the specific madhab breakdown (Maliki/Hanbali/earlier-Hanafi-Shafi'i invalid vs later-Hanafi permit on necessity/maslaha) that surfaced only in WebSearch summaries.
School / basis: Comparative / contract-law with a PRIMARY OIC ruling (bay' al-wafa = the SALE WITH RIGHT OF REDEMPTION: the seller sells an asset on condition he may redeem it whenever he returns the price, the buyer holding and using the asset meanwhile -- structurally the closest cousin of bay' al-'inah in this corpus). PRIMARY RESOLUTION cross-read: the International Islamic Fiqh Academy (OIC), Resolution No. 66 (4/7), 7th session, Jeddah, 7-12 Dhu al-Qi'dah 1412h / 9-14 May 1992, defines it -- 'The sale of a commodity on the condition that any time the seller returns the price, the purchaser returns to him the object of the sale' -- and rules -- 'This type of sale is in fact a loan which generates a benefit; therefore, it is a fraudulent practice of Riba, and is considered invalid by the majority of scholars' -- concluding 'This contract is not permissible in Shariah' [source 1, IIFA]. INDEPENDENT CROSS-READ: 'A sale (bay') in which the seller has the right, as stipulated in the contract, to repurchase the underlying property' and 'Bay' al-wafa is viewed by the majority of jurists (fuqaha) as impermissible' [source 2, Fincyclopedia]. LIVE MINORITY (the disagreement, not flattened): 'contemporary East Asian jurists are of the opinion that this type of sale is permissible under Islamic jurisprudence, where it has been used as the shari'a foundation to develop products for Islamic capital markets' [source 2]. Load-bearing for THIS site: the RIBA LINK is DIRECTLY SOURCED, not reasoned -- the OIC Academy itself calls the contract 'a loan which generates a benefit', the classical definition of riba (qard jarra manfa'ah), because the financier's capital returns at par while he takes the asset's usufruct in between. DELIBERATELY NOT asserted, per the no-fabrication rule: (a) the specific madhab breakdown reported only in WebSearch summaries -- 'Maliki, Hanbali, and earlier Hanafi and Shafi'i hold it invalid while later Hanafis permitted it on necessity/maslaha grounds' -- was NOT verified verbatim in either fetched source, so this entry claims only the sources' verbatim 'majority of scholars/jurists' + the 'contemporary East Asian jurists' minority, and does NOT attribute the ruling to named schools beyond that; (b) no Qur'an verse or hadith collection/number; (c) no AAOIFI/SAC-BNM resolution (the OIC/IIFA resolution IS read directly here, but no OTHER body's resolution is claimed); (d) no named-scholar ruling beyond the sources' verbatim wording, and no market/AUM/named-product/named-bank figure. The 'closest cousin of bay' al-'inah' framing and the 'inah/tawarruq/bay'-al-dayn cross-references are the site's OWN structural map, reasoned from the verbatim material and clearly framed as such -- not source quotes.
Original: https://iifa-aifi.org/en/32448.html
Captured: 2026-07-07
Added: 2026-07-07
Trust: Primary or near-primary source with a stable public URL.

Compiler’s note

First DEDICATED BAY' AL-WAFA (sale with right of redemption) entry, and the corpus's first article anchored on a genuine PRIMARY OIC / International Islamic Fiqh Academy RESOLUTION read verbatim -- the exact source type prior runs repeatedly named as a wanted-but-elusive lever ('a fetchable-verbatim AAOIFI/OIC/SAC-BNM primary resolution ... prior runs hit 403s'). This run found IIFA's English resolution page fetchable and took it. Grep-confirmed before writing: `ls content/articles | grep -iE "wafa|redemption|repurchase"` returned NOTHING -- no existing entry, no duplication ('urf already has its own entry, so this run did NOT take the previously-named 'urf-vs-shart lever, which would overlap). WHY BAY' AL-WAFA NOW: the previous run (bay' al-dayn, articles 63->64) named 'bay' al-wafa (sale with right of redemption, a near-relative of 'inah)' as an explicit next lever alongside a 'fetchable-verbatim AAOIFI/OIC/SAC-BNM primary resolution' -- bay' al-wafa satisfies BOTH at once. It is cleanly DISTINCT from every existing entry and is the closest structural cousin of the existing bay' al-'inah entry (both are sale/repurchase loops whose net effect is a loan), sitting naturally beside 'inah, tawarruq and bay' al-dayn in the substance-over-form cluster. VERIFICATION: every load-bearing quote verified BY ME 2026-07-07, verbatim, across TWO genuinely different sources -- [1] the IIFA resolution page (iifa-aifi.org/en/32448.html) fetched then RE-fetched with a tightened prompt, both returning the definition, the 'a loan which generates a benefit; therefore ... a fraudulent practice of Riba ... invalid by the majority of scholars' ruling, and the 'This contract is not permissible in Shariah' conclusion character-for-character, plus the Resolution number 66(4/7) and 7th-session Jeddah 1412h/1992 date; [2] the Fincyclopedia entry (fincyclopedia.net/islamic-finance/b/bay-al-wafa) confirming the repurchase-right definition, the 'majority of jurists (fuqaha) ... impermissible' verdict, and the 'contemporary East Asian jurists ... permissible ... shari'a foundation to develop products for Islamic capital markets' minority. Both fetched as plain HTML via WebFetch. THE RIBA LINK IS DIRECTLY SOURCED, NOT REASONED: the OIC Academy itself labels the contract 'a loan which generates a benefit' -- the classical definition of riba (qard jarra manfa'ah) -- so the objection is the resolution's own words, not the site's inference. TRUST 'high' (a numbered, dated PRIMARY OIC collective-ijtihad resolution verified verbatim via two fetches, cross-read with an independent encyclopaedia reaching the same majority verdict -- the strongest source pairing in the corpus so far; the sole caveat is that the resolution was read in the IIFA site's English translation, not the original Arabic). DELIBERATELY DROPPED / NOT ASSERTED per the no-fabrication rule: (a) the specific madhab breakdown -- 'Maliki, Hanbali, and earlier Hanafi and Shafi'i schools hold it invalid; later Hanafi scholars permitted it on necessity/public-interest grounds' -- appeared ONLY in the WebSearch summary, was NOT verified verbatim in either fetched page, and is therefore NOT asserted; this entry claims only the sources' verbatim 'majority of scholars/jurists (impermissible)' and 'contemporary East Asian jurists (permissible)'; (b) any Qur'an verse or hadith collection/number; (c) any OTHER body's resolution (AAOIFI/SAC-BNM) -- only the IIFA/OIC resolution is read directly; (d) any named-scholar ruling beyond the verbatim wording, and any market/AUM/named-product/named-bank figure. The 'closest cousin of bay' al-'inah / same substance-over-form lesson' framing and the 'inah/tawarruq/bay'-al-dayn cross-references are the site's OWN structural map, reasoned from the verbatim material and clearly framed as such -- not dressed up as source quotes. FRESHNESS-HONEST: all claims are definitional/doctrinal or verbatim source quotes (incl. a 1992 resolution correctly dated as such); no dated NEWS claim is made. JSON-only per the established article convention (content/articles/*.json feed app/lib/corpus.ts via readdirSync + the /corpus stats badge + Phase-2 retrieval; NOT rendered as individual routed cards), so no SourceCard/route/href added and internal-link integrity is unaffected. Articles 64->65. NEXT natural candidate for a future run: 'URF-vs-SHART (custom vs stipulated condition -- 'urf has an entry but the shart contrast does not), or ANOTHER fetchable-verbatim IIFA/OIC resolution now that the IIFA English resolution index is confirmed reachable (e.g. a resolution on a specific named contract), each still needing its own two-source-verifiable pair. PUNCH-LIST FULLY TICKED; this entry advances the sole live corpus lever AND unlocks the primary-OIC-resolution source seam prior runs kept missing.

Topics

islamic-financeislamic-contract-lawbay-al-wafabai-al-wafabay-al-wafaasale-with-right-of-redemptionsale-with-repurchase-rightrepurchaseredemptionbuy-backloan-that-draws-benefitqard-jarra-manfaahloan-which-generates-a-benefitiifainternational-islamic-fiqh-academyoicfiqh-academy-resolutionresolution-66primary-resolutionmajority-impermissiblecontested-contractscholarly-disagreementeast-asian-juristslater-hanafiislamic-capital-marketusufructcollateralmoney-for-moneyribainterestsubstance-over-formjudge-by-cashflowshiyallegal-stratagemdistinct-from-bay-al-inahdistinct-from-tawarruqdistinct-from-bay-al-daynmuamalat

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