Second category: it is not entered into for the sake of profit‐taking; rather, it is meant as an act of benevolence, and that is the loan.

Third category: this may legitimately be concluded for either purpose—
(I mean: with the intention of profit or with the intention of benevolence)—such as partnership, cancellation of sale (iqāla), and assignment at cost price (tawliya).

The scholars’ views on these categories may be summarized as follows:

• With respect to any transaction that is a sale for consideration, there is unanimous agreement that taking physical possession is a prerequisite. Every single commodity whose receipt is required is treated in this way by all the jurists.

• With respect to what is purely benevolent—namely the loan—there is likewise no disagreement that possession is not a condition for its sale; in other words, a man may sell the debt arising from a loan before he has actually received it.

Abū Ḥanīfah, however, made an exception within transactions for consideration for the bridal dower (mahr) and the khulʿ compensation, maintaining that both may be sold before possession is taken.

As for contracts that can fall under either benevolence or profit—tawliya, partnership, and iqāla—when they are effected as benevolent arrangements, and the iqāla or tawliya involves neither increase nor decrease, I know of no disagreement within the Mālikī school that they are permissible both before and after possession. Abū Ḥanīfah and al-Shāfiʿī, by contrast, ruled that partnership and tawliya are impermissible before possession, whereas iqāla is permissible in their view because, prior to possession, it amounts to a rescission of the sale, not a new sale.

Those who require possession in every exchange contract argue that all such contracts share the legal character of the sale that has been prohibited. Mālik, however, exempted tawliya, iqāla, and partnership on the basis of both transmitted evidence and legal reasoning.

As for the transmitted evidence, there is the mursal report of Saʿīd ibn al-Musayyib that the Messenger of Allah—peace and blessings be upon him—said:
“Whoever buys food must not sell it until he has received it—except in the case of a partnership, an assignment (tawliya), or a cancellation (iqāla).”

As for the legal reasoning: these transactions are intended as acts of benevolence, not profit, so long as no increase or decrease enters into them. Abū Ḥanīfah likewise excluded the dower, khulʿ, and reward contract (juʿl), because the consideration in these cases is not clearly identified when it is not a specific asset.

[Section Three: The distinction between foodstuffs sold by measure and those sold in bulk]

Regarding the requirement of possession for food sold in bulk, Mālik granted a dispensation and judged it permissible, and this was also the view of al-Awzāʿī. Abū Ḥanīfah and al-Shāfiʿī did not allow it, relying on the general wording of the ḥadīth that forbids selling food before possession is taken, for the avenue to usury exists both in bulk sales and in measured sales.

Among their proofs is the report from Ibn ʿUmar, who said:
“In the time of the Messenger of Allah—peace and blessings be upon him—we used to buy food in bulk, and he sent someone to instruct us to move it from the place where we had bought it to somewhere else before we resold it.”

Abū ʿUmar said: Even though Mālik did not transmit from Nāfiʿ in this report the mention of ‘in bulk,’ a number of transmitters have narrated it, and ʿAbd Allāh ibn ʿUmar and others rendered it sound; he is given precedence in preserving Nāfiʿ’s ḥadīth.