Chapter: Settlement (ṣulḥ)

A settlement is valid when concluded by anyone whose voluntary gifts are legally effective, whether the claim is acknowledged or denied. Thus, if the defendant admits owing the claimant a debt or a specific item and then settles for part of that debt or part of the claimed item, the transaction is a gift; it is only valid with the wording of a gift, not with the wording of settlement. If, on the other hand, he settles for a property other than the one claimed, the arrangement is a sale, valid even when expressed with the wording of settlement, and all the rulings of sale apply. Accordingly, when he settles a debt with a tangible item that shares with the debt the legal cause of ribā1, the consideration must be exchanged on the spot; but if the settlement is for something still owed in liability, it is void if they separate before delivery.

A settlement over a defect in the merchandise is valid; yet if the defect quickly disappears or is found never to have existed, the buyer may recover what he paid. Settlement is likewise permissible concerning a debt or an item whose exact amount cannot be determined. If one says, “Acknowledge the debt you owe me and I will give you such-and-such of it,” and the other acknowledges, the debt becomes binding on him, but he is not entitled to that promised portion.2

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If the defendant denies the claimant’s allegation, or remains silent because he is unaware of it,3 and they then effect a settlement, the settlement is valid: for him it is an absolution, while for the claimant it is a sale.