Khiyar al-ghabn (option of fraud in price)

Ghabn in language is shortfall, and to cheat a person in a sale; the technical meaning is drawn from the lexical one, so for Ibn Najim it is a shortfall in the price in sale and purchase, and the like of it in the counter-value of the other exchange contracts: if the defrauded is the buyer it means part of the price meets nothing of the goods because the price exceeds the highest valuation of the experts, and if the seller then the shortfall in the price is real. ¹ Ghabn has effect in many places where the ruling hangs on it expressly or as one of the causes: riba exchanges between goods of one genus, hoarding, and forbidden sales such as najsh, meeting the caravans, the townsman's sale for the desert-dweller, the musarrah and like forms of actual deceit, selling over another's sale, the sale to the trusting buyer, sales of trust, and verbal deceit joined with ghabn; Ibn Qudama made ghabn the pivot of three options: meeting the caravans when one buys from them or sells to them with ghabn, the najsh sale where someone raises the goods' price working for the seller's benefit without intending to buy, and the mustarsil, which is of the essence of the ghabn options since no deceit is aimed at him, it is rather an incidental betrayal by the seller after the buyer trusted him, left bargaining and took refuge with him, so the seller cast him into ghabn. ² The schools in brief: the Hanafis give the defrauded no option unless he was deceived, on the preponderant view, or the ghabn fell on a minor; the Malikis in one view give the option to the defrauded absolutely or if he is a mustarsil toward his seller; the Hanbalis restrict it to the defrauded mustarsil. ² The ghabn for which return is made by law is the gross one, and every unqualified mention in the field of return is carried to it; its meaning for the Hanafis, the preponderant Maliki view and one Hanbali view is that the measure of estimating it is the traders' custom, and the measure was made the valuers' assessment because they are the reference in defects and whatever needs expert knowledge in transactions; the second view of the Malikis and Hanbalis makes one third the criterion, and a third Maliki view makes it more than a third. ³ The option of ghabn requires the defrauded to have been ignorant of falling into ghabn at the contract, and on this the hadith of Habban ibn Munqidh was cited, by which some holders of the option argued and which contains the stipulation of no cheating; if he knew of the ghabn and went ahead with the contract he has no option, having brought it on himself as though he had willingly dropped his right. ³ Its effect when trust and ghabn beyond the customary are proved is the choice between annulment and confirmation free of charge; if the defrauded keeps the goods he may not claim the arsh, which here is the amount of the ghabn. ³ On the Hanafi view as contained in the Majalla the option of ghabn joined with deceit lapses by the goods perishing, being consumed, changed or newly defective, the attachment of another's right counting as consumption; by silence and dealing after knowledge of the ghabn, an owner's dealing such as offering the goods for sale; and by the death of the defrauded, whose claim does not pass to the heir, while the deceiver's death does not prevent it. ³⁴ The Hanafis, Shafiis and Hanbalis see no option of ghabn in the bargaining sale, and likewise the Malikis on the preponderant view; the Malikis and Hanbalis restricted the ghabn option to the mustarsil. ⁴ The transmission differs on the Maliki side over the bare ghabn option and the preponderant is their denial; Ibn Abd al-Salam argued for the well-known school position, the binding of the contract with bare ghabn, from the hadith of buying Jabir's camel: the Prophet bargained for one dirham and he refused, then it is established that he sold for five uqiyya keeping its back to Medina, so the first price against the second was ghabn, and had there been an option the Prophet would not have gone ahead. ⁴ In the Hanafi school there are three transmissions on gross ghabn bare of deceit in the bargaining sale: no return for it at all; the right of return established for it absolutely; and return established for it only when joined with deceit, meaning an option only for the deceived defrauded, which is preponderant with them. ⁴ The Malikis define the mustarsil as the one who surrenders to his seller; for the Hanbalis he is the one ignorant of the goods' value who is not skilled in trading, and the operative trait is inexperience in trading, since ignorance of the goods' value is the state of every defrauded person and prior knowledge of the ghabn drops the option; the Hanbalis have another definition from Ahmad, that he is the one who cannot bargain, or in another wording who does not bargain, and Ibn Qudama said the knowledgeable one who would have known had he paused has no option if he hastened and was defrauded. ⁴⁵ Khalil of the Malikis states there is no return for ghabn even against custom, which is the well-known view of the school though a view of return exists, and slight ghabn binds the contract with no return by agreement; Ibn Rushd recorded in the Muqaddimat that the rule of ghabn varies with the sale: in the bargaining sale there is no standing against ghabn, while in the istinama and istirsal sale standing against ghabn is obligatory by consensus for the saying of the Prophet's governor "the ghabn of the mustarsil is wrongdoing", a hadith transmitted by al-Tabarani from Abu Umama with the wording "the ghabn of the mustarsil is unlawful" and recorded by al-Haythami who weakened it for Musa ibn Umayr al-A'ma in its chain; al-Khattab said that a person of knowledge of the value of what he bought who falls into ghabn by error has no return, while one who knew the value and paid above it is like a donor or one acting for a purpose, and no plea is heard. ⁵ The Hanbalis affirm the ghabn option for the mustarsil alone on the preponderant view of the school, one of the issues Ibn Taymiyya chose among the disputed questions of Ahmad's school, since the ghabn befell him for ignorance of the goods unlike the non-mustarsil who entered with insight and is analogised to najsh and meeting the caravans; a transmission recorded by Ibn Abi Musa with the wording "it was said" makes the ghabn binding on the mustarsil too, because a shortfall of the goods' value while the goods are sound does not bar the binding of the contract, like the sale to a non-mustarsil and like slight ghabn. ⁶ The Malikis affirm the option of a minor's ghabn when a guardian or agent is defrauded on behalf of the minor or the principal to avert harm from them, and some schools resorted to voiding the contract containing their ghabn; article 356 of the Majalla states that where ghabn alone occurs in an orphan's property the sale is invalid, and the property of the waqf and the public treasury take the same rule; the option stands in the contract of purchase by agreement of the Maliki jurists, some restricting it to it and permitting a sale with ghabn by the boy or the one acting for another, since sale removes ownership so ghabn is not realised in it. ⁶ Its effect on the preponderant Maliki view is rescission of the sale while the goods stand; if they are lost there is no rescission and recourse is made to completing the price, while where return remains possible it is the recourse. ⁶ This option lapses by dealing in the goods and by their perishing or loss; if the goods are lost the principal and the ward recover from the buyer the amount of the favour and ghabn, and if recovery from him is impossible they recover from the seller, who is the agent or guardian; and if the agent or guardian bought with ghabn and the purchased goods are lost, they recover from the seller the amount of the ghabn, then from the buyer, who is the agent or guardian, if that fails; the recovery is not limited to a third but covers whatever falls short of the value or exceeds it clearly, which Ibn Arafa deemed correct and which is what the transmissions of the Mudawwana require. ⁶⁷