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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Dear questioner, thank you very much for having confidence in us, and we hope our efforts, which are purely for Allah's Sake, meet your expectations.
Responding to the question, Dr. Monzer Kahf, Scholar in Islamic Economics & Financial Expert, states the following:
"In sale contracts, the parties are completely free to determine the price as long as it is freely agreed upon with no vagueness, ambiguity, cheating, fraud and other deceptive behavior on the part of either party.
Further, the Shari'ah prohibits any increment in loan (This is Riba), an increment in the price is not an increment in a loan. Hence, the Shari'ah does not eliminate the consideration of time value of money, in the meaning that you value your cash on hand more that cash promised to be received at a future date.
This obviously is the equivalent of either requiring higher price in a sale with deferred payment or Riba-based transaction. What is prohibited is when the time value of money is made an ingredient in a lending relationship.
In lending, you give cash (or in fact any other quantity of a commodity that is perfectly substitutable such as one ton of wheat of given quality for one ton of wheat of the same quality) and get cash back, there is a sacrifice, no doubt it, but it is not a measurable sacrifice that matches the benefit the borrower gets. Both the sacrifice and the benefit cannot be known with certainty and both are speculative. The Shari'ah does not accept to put a price tag on something speculative and unknown. That is why this recognized sacrifice is left to Allah to reward, as mentioned in authentic Sayings.
Accordingly, while it is permissible to make a credit sale contract at a higher price than the price one would have accepted for a cash sale. You may not make the sale at a cash price and then add the would be price differential to the amount of debt that resulted from the sale, because this is an increment in a debt, not the price of an item.
By the same token, a sale contract must be definite. It cannot be such that the price is either 100 if you the purchaser pay within 3 days and 110 if she pays in 60 day. This is called "two sales in one" that is clearly prohibited by the Prophet (peace and blessing be upon him)."
If you have any further questions, please don't hesitate to write back!
May Allah guide you to the straight path, and guide you to that which pleases Him, Amen.
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