Ethica Institute of Islamic Finance™

Is it valid to cancel a contract due to the low or defective quality of the product?

Products found to be of low or defective quality (such that their quality is below what is purported to be the case or what is customarily considered acceptable, and its usefulness is negatively affected thereby) are returnable (immediately upon discovery of the unsatisfactory quality) within a specified amount of time after delivery, assuming the low or defective quality existed at the time of the transaction but was not disclosed.

“Discovery of unsatisfactory quality” means that the item is seen (e.g. land), and if necessary, used (e.g. car) or consumed (e.g. food), in a manner customary to it before determining its quality. If the defect is not immediately discernible without use (e.g. operation of a new vehicle over long distances in hot weather), the seller is still obligated to compensate the buyer for the defect.

Qualitative or quantitative misrepresentation of any aspect of a good or service is impermissible and constitutes fraud, grounds for the aggrieved party to rescind the agreement at any time. The buyer, nevertheless, still has the choice of whether or not to accept the defective item. If the buyer decides to keep the item as it is, the buyer is not thereby entitled to a compensatory discount, though it is still permissible for the seller to offer a discount.

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