Chapter on Transfer of Debt (hawāla)

The validity of a hawāla requires the consent of the transferor (muḥīl) and the transferee-creditor (muḥtal), but—according to the sounder position—not that of the drawee upon whom payment is placed (muḥāl ʿalayhi). A transfer is invalid when the drawee has no debt; some hold that it becomes valid if he expressly agrees.

A binding debt may be transferred, whether it concerns fungible goods (mithlī) and—on the sound view—non-fungible goods (mutaqawwim) as well, or the sale-price while an option of rescission is still running; in all such cases liability is fixed, according to the more reliable opinion.

The stronger position validates a mukātab’s transferring his master for the scheduled instalments (nujūm) of his manumission contract, but not the master’s transferring liability to the mukātab.

Knowledge of the debt being transferred and of the debt imposed on the drawee—in both amount and description—is a condition. According to one opinion, a transfer is also valid for, and against, the camels of blood-money.

According to the soundest view, the two debts must be identical in kind and amount, equally either payable on the spot or deferred, and alike in the soundness and any deficiency of their coinage.

Once the hawāla is concluded, the transferor is discharged from what he owed the transferee, and the drawee from what he owed the transferor; the transferee’s right now lies solely against the drawee. If recovery proves impossible because of insolvency, denial accompanied by an oath, or the like, the transferee may not revert to the transferor. Thus, if the drawee was already bankrupt when the transfer occurred and the transferee was unaware of it, he still has no recourse—though another view allows it if the transferor had stipulated the drawee’s solvency.

If the buyer refers the seller for the price and the sale is later rescinded on account of a defect in the item sold, the hawāla is void, according to the more apparent opinion. Conversely, if the seller refers the buyer for the price and thereafter grounds for rescission are found, the transfer is not voided according to the authoritative position of the school.

If someone sells a slave and then transfers the price, and afterwards the two contracting parties together with the transferee agree that the slave is in fact free—or this is established by testimony—the hawāla is nullified, even if the transferee denies their assertion. When no testimony exists, they both make him swear that he had no knowledge, after which he recovers the money from the buyer.

If the debtor says to the claimant, “I have appointed you as my agent to collect on my behalf,” and the claimant says, “Rather, you have transferred me (hawāla),” or if the debtor says, “By my words ‘I transferred you’ I meant agency,” and the claimant replies, “No, I meant a transfer,” the debtor is believed upon his oath—though in the second of these two cases another opinion exists. If, however, the debtor says, “I have transferred you,” and the addressee responds, “You merely appointed me as agent,” then the addressee is believed upon his oath.