Book of the Assignment of Debt (Ḥawālah)

Ḥawālah is a sound commercial arrangement that constitutes an exception to the general rule forbidding the exchange of one debt for another. This is based on the Prophet’s words—peace and blessings be upon him:

"The procrastination of a solvent debtor is injustice; and when any of you is referred to a solvent person, let him accept the referral."

Our discussion will consider its conditions and its legal effect.

Among its conditions:

• The jurists differ over whether the consent of the creditor (al-muḥāl) and the transferee (al-muḥāl ʿalayh) is required.
– Some, Mālik among them, require the creditor’s consent but not the transferee’s.
– Others require the consent of both parties.
– A third group dispense with the creditor’s consent and insist on the transferee’s—the view opposite to that of Mālik; this was held by Dāwūd.

Whoever views the transaction as a bilateral contract requires the consent of both sides. Whoever considers the transferee to take the debtor’s place vis-à-vis the creditor does not require his consent, just as no consent is sought from the debtor when the creditor simply demands his right without any assignment.

As for Dāwūd, his proof is the plain sense of the Prophet’s saying—peace and blessings be upon him:

"When one of you is referred to a solvent person, let him follow the referral."

The imperative, he argues, denotes obligation, while the transferee remains under the basic rule that his consent must be obtained.

• A further condition on which there is general agreement is that what the transferee owes must be of the same kind, amount, and description as what the transferor owes. Yet opinions divide here as well:
– Some allow this only with gold and silver, prohibiting it with foodstuffs. Those who prohibit it see it as tantamount to selling food before taking possession of it, for the creditor has effectively sold the food owed him by his debtor for food owed to that debtor before collecting it.
– Mālik permits such an assignment if both food debts arise from loans and the debt being assigned is already due. If either debt stems from a salam contract, it is not permissible unless both debts are immediately payable. According to Ibn al-Qāsim and other Mālikīs, it suffices that the debt conveyed by the assignment be due, with no further distinction. Al-Shāfiʿī draws no distinction at all, treating ḥawālah like a sale with respect to the borrower’s liability.
– Mālik’s special dispensation regarding loans rests on his view that selling a loan before taking possession is lawful.
– Abū Ḥanīfah, on the other hand, allows assignment involving foodstuffs, likening it to assignment with silver coin and treating the issue as an exception to established principles, just as ḥawālah with coin is. The underlying debate is whether an exceptional ruling may itself serve as a basis for analogy—a well-known discussion in legal theory.

According to Mālik, a valid ḥawālah must satisfy three conditions: