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If a buyer and seller agree on a purchase, and the buyer makes a down payment, then later on he changes his mind and decides not to buy, does the seller have the right to keep the down payment and not return it to the purchaser?.

Praise be to Allah.

Yes, he has the right to do that. This was done by ‘Umar

ibn al-Khattaab, and this is the view of Imam Ahmad (may Allaah have mercy

on him).

Shaykh Ibn Baaz (may Allaah have mercy on him) said:

There is nothing wrong

with keeping the down payment, according to the more correct of the two

scholarly opinions, if the seller and buyer had agreed to that and the sale

had not been completed.

Fataawa li’l-Tijjaar wa Rijaal al-A’maal,

p. 49

It says in Fataawa al-Lajnah al-Daa’imah, 13/133:

Making down payments is permissible; that is when the buyer

gives the seller or his agent a sum of money that is less than the price of

the goods, after the agreement is made, to guarantee that he will get the

goods and no one else will take them, and when the goods are delivered, this

down payment is to be regarded as part of the price. If he does not then buy

the goods, the seller may take the down payment and keep it, and the

transaction is valid, whether he stipulated a time for payment of the rest

of the price or not. The seller has the right to ask the purchaser to pay

the rest of the price once the transaction has been completed and the goods

have been handed over. The fact that making down payments is permissible is

indicated by the fact that ‘Umar ibn al-Khattaab (may Allaah be pleased with

him) did that. Imam Ahmad said concerning making down payments: There is

nothing wrong with it. And it was narrated that Ibn ‘Umar (may Allaah be

pleased with him) regarded it as permissible. Sa’eed ibn al-Musayyib and Ibn

Sireen said: There is nothing wrong returning the product if he did not like

it and giving something with it. With regard to the hadeeth that was

narrated from the Prophet (peace and blessings of Allaah be upon him),

saying that he forbade making down payments, this is a da’eef (weak) hadeeth

which was classed as such by Imam Ahmad and others, and it cannot be taken

as evidence.

Source: IslamQA (Sheikh Muhammed Salih Al-Munajjid)
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