An example of murabahah: a person buys a car for one hundred thousand, then someone comes to him and says, “I want you to make a profit from me, so sell it to me with a profit of ten thousand.” He replies, “I have sold it to you.” This is murabahah. Or he may say, “Sell it to me with a profit of one tenth,” in which case it will be one hundred and ten thousand. Thus, murabahah may be based on a percentage or on a specified amount.

An example of muwadha'ah is the reverse of murabahah. He may say, “I bought it for one hundred, and I will deduct ten percent for you,” or he may say, “One tenth,” in which case it will be ninety.

His statement, “In all of them, the buyer must know the original cost,” means that if you sell it by way of tawliyah, the buyer must know the original cost. If he does not know it, it becomes unknown, and one of the conditions for a valid sale is knowledge of the price.

The apparent meaning of the author’s words is that this applies even if the seller is known to be engaged in trade and is trusted in what he paid for it: the buyer must still know the original cost. Thus, if someone came to me and said, “I bought this land from you at its original cost,” and I said, “I have sold it to you,” while the buyer does not know the amount of the original cost, the sale would not be valid, because the price is unknown; and one of the conditions of a sale is that the price be known.

The view that it is permissible may be derived from the permissibility of selling something for the same price at which a particular person sold it, when that person is known to be shrewd in selling and buying—the buyer in that case being the seller in the second issue.

For example: I bought a piece of land for one hundred thousand riyals, and I am someone who deals in land and is not taken advantage of in such transactions. Then a man comes to me and says, “Sell me the land that you bought at its original cost.” I say, “I have sold it to you,” while he does not know