Transacting with an increase over the original sale price in order to avoid interest

Question

Question: In our market the custom (‘urf) is that, regarding every wholesale commission agent, the labourer and artisan, who is also the seller, knows that he will not receive the price in cash. Moreover, each commission agent has his own way: one pays the price in cash after fifteen or twenty days, another gives some in cash and gives yarn in place of the rest, another gives everything in yarn. All these details are, by and large, roughly known to all the artisans about every commission agent.

Answer

The original price is due in cash, but instead of that cash he gives yarn, and gives the yarn with some difference from the market rate; then settling the transaction with this difference is also valid, not impermissible. And if money of this kind is received in the form of a partnership (shirka), that too is not impermissible.

Source: Fatawa Mahmudiyya

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