Buyback Clause

CategoriesTrade, Business & All Things Money [558]

Fatwa ID: 04041

Answered by: Maulana Nabil Khan




Would a contract that allows the seller the opportunity to buy back be permissible? It could be formulated as:

"Buyer agrees to buy item X for $Y, but the seller has the right to buy item X back from the seller for $Y within one year of the sale."

Once again, is this permissible? Is it like joining two contracts? Is the "buy back" clause similar to a "future sale"?



بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم

In the name of Allah, the Most Gracious, the Most Merciful




If the Buyback clause has been inserted as a forcible condition of the sale, then it will not be valid and the Buyback will be considered an invalid condition which will be null and void. Therefore, the person does not need to sell back to the original owner.


However, if the Seller stated after the transaction that he would be willing to buy it back in the future without any obligation on the current purchases then this will be permissible.


In case one, it will be considered as 2 contradicting conditions in one transaction which is impermissible.


This condition is contrary to the rules of ownership since it restricts the owner from being free in the product. Once someone owns something they become the sole owner and have full right to do as they wish.[1]



Only Allah knows best

Written by Maulana Nabil Khan

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham





[1] وتمامه: لأن المواعيد قد تكون لازمة لحاجة الناس، وهو الصحيح كما فى الكافي والخانية (الدر المختار مع رد المحتار، ج٧ ص٥٤٧




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