A type of sale (ba’i) in which a lender sells a commodity to a borrower for more than its market price, or a borrower sells a commodity to a lender for lower than its market price. The implicit objective of the parties is a disguised benefit (excess amount) from the underlying loan. In other words, it appears to be valid, but actually involves a ruse (hilah) to pay and receive riba. The majority of fuqaha (jumhur) consider the sale invalid, while the Hanafi school of thought held varying opinions (permissible, non-commendable, and impermissible) as to validity.
This sale is known in Arabic as bai al-muamalah (or ba’i al-mua’amalah). It also has other names, according to different schools of thought, including ba’i al-thunya, ba’i al-uhdah, ba’i al-amanah, and ba’i al-wafa.
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