Question:
Can a retailer forfeit a deposit if the transaction is cancelled upon the request of the purchaser?
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
In principle, a transaction cannot be unilaterally cancelled. To rescind a purchase, both parties have to mutually agree to terminate the transaction.
Deposit is commonly referred to the amount forwarded in the beginning of a transaction to show one’s commitment to the transaction.
In terms of Sharī`ah, the above deposit is regarded as earnest money or a down payment and is a percentage of the total price.
In the event of a mutual rescindment of a transaction, the seller is obliged to return the deposit and cannot forfeit the right of the buyer. The deposit funds will remain a trust in the possession of the seller and must be given to buyer.
And Allah Ta’ālā Knows Best
(Mufti) Faraz Adam al-Mahmudi,
www.darulfiqh.com
