Cost-Plus Financing with the Condition that Option of Cancellation is offered in the First Contarct

Abstract

The paper discusses the condition of the option of cancellation in the trading contract, when the seller stipulates it as a condition in the cost-plus financing contract at the time of buying a commodity that is potentially profitable. This condition means the ability to give back the sold commodity, if the cost-plus financing contract is not accomplished. The author tried to verify the Shari’ah-based principles that are valid for establishing the ruling of this condition, while showing the effect of this condition on the trading contract and the possibility of cancelling the condition after displaying the commodity to a potential buyer.