the guardian of an orphan’s or a mentally incapacitated person’s property, for this would be a gratuitous disposition and he has no right to make it.
To sum up: it is permissible to conclude a settlement over an admitted right with something of the same kind, provided (1) the party against whom the right is established would not have refused to discharge it had there been no settlement, and (2) the claimant is legally competent to make a gift. When these two conditions are met, the settlement is lawful, for it then counts as a voluntary waiver: a person may relinquish part of what is his just as he may take it in full. The Prophet, peace and blessings be upon him, interceded with the creditors of Jābir, may Allah be pleased with him, asking them to reduce the amount they were owed.
The second category of reconciliation that follows an admission is to settle the right with something of a different kind. Thus, if a defendant acknowledges a debt or the ownership of a particular item and then the two parties agree that the claimant will take compensation of another sort, the ruling varies with the nature of that compensation. If he exchanges cash for other cash of the same kind, the rules of ṣarf (currency exchange) apply. If he exchanges cash for something other than cash, the agreement is a sale governed by the rulings on sale. If the compensation is a benefit—such as residence in his house—the arrangement is a lease subject to the rulings on hire. And if he settles a non-cash item for other property, it is likewise a sale.
- Reconciliation following a denial: this occurs when one person claims from another a specific item