Ethica Institute of Islamic Finance™

What compensation is the buyer entitled to if returning the item is not possible?

If returning the defective item becomes impracticable (e.g. partially eaten food in a restaurant) or impossible (e.g. appliance destroyed in fire by faulty electrics), then the buyer is entitled, at the seller’s discretion, to either:

1) a replacement; or

2) a monetary compensation, measured as the percentage of the total price of the item equivalent to the percentage that the defective portion would reduce the value of a similar item in the market, where the market item used for comparison would be the one with the lowest value (as measured during the time between the sale’s execution and the buyer’s possession).

The seller only compensates for the defect and its related damages, including those damages (and only those damages) necessary for the discovery of the defect (e.g. the defective power supply of a computer damages the central processing unit, but not the monitor; but the buyer accidentally breaks the monitor screen; the seller is only obligated to replace the power supply and the central processing unit, not the monitor).

7 Day Free Islamic Finance Course

Please enter your first name and email address to start receiving your CIFE™ lessons instantly!

We value your privacy. We will never rent, sell, or spam email addresses.

1,000+ scholar-approved answers and growing...

7 Day Free Islamic Finance Course

ASK AN ISLAMIC FINANCE QUESTION

SEARCH ISLAMIC FINANCE Q&As

What’s New at Ethica