Kasad al-nuqud (when money stops circulating or changes in value)

كساد النقود وتغيّر قيمتها

When a sale or loan is made in copper coins (fulus) or in dirhams mostly of base metal, and they stop circulating, disappear, or rise or fall in value before payment, the Hanafi masters differ over what is owed. Ibn Abidin in Radd al-Muhtar sets out Abu Hanifa's view that the sale is void when the coin stops circulating, Abu Yusuf's view that their value on the day of sale or loan is owed, on which fatwa is given, and Muhammad's view of their value on the last day people dealt in them; he holds that the dispute concerns only fulus and mostly-base dirhams, not pure gold and silver, and refers to his treatise Tanbih al-Ruqud fi Ahkam al-Nuqud.

Summary

In the Book of Sales of Radd al-Muhtar, Ibn Abidin has a section he calls "important, on the rules for money when it stops circulating, disappears, rises or falls in value", and says it is a frequent occurrence. ¹ The case: a man buys with copper coins (fulus) or with dirhams mostly of base metal, or borrows them, and their state changes before he pays. ¹

Terms

Kasad is when people stop dealing in the currency in all lands; if it is abandoned only in some, the sale is not void, but the coin becomes defective if it no longer passes in their land, and the seller has the option. ¹ Inqita', disappearance, is, as in al-Hidaya, when it is not found in the market even if found with money-changers and in houses; many books treat it like kasad. ¹ Rise and fall are when it still passes but its value changes. ¹ The 'adali are dirhams with some base metal, and the Tabari and Yazidi dirhams are mostly of base metal and so count like fulus, as he reports from al-Binaya and Ghayat al-Bayan. ¹

The Hanafi masters' views

He reports from Ghayat al-Bayan, from Abu al-Hasan, that the report from Abu Hanifa does not vary on a loan of fulus that stop circulating: the borrower owes their like; and that Abu Yusuf extended the rule on fulus by analogy to mostly-base dirhams. ¹ Ibn Abidin holds that the author's statement in the section on loans, that one who borrows current fulus that then stop circulating owes their like in the now-uncurrent coin, rests on the Imam's view. ¹

Pure gold and silver

Ibn Abidin states that the dispute concerns only fulus and mostly-base dirhams; he had seen no one state the rule for pure dirhams or dirhams with little alloy, and holds that there should be no dispute that a sale is not void when they stop circulating and that the buyer owes their like whether they stop circulating, disappear, fall or rise, because they are a price by nature and abandoning them does not end that, as with a hundred specified gold pieces or a hundred European riyals. ¹ For a full account he refers to his treatise Tanbih al-Ruqud fi Ahkam al-Nuqud. ¹

His discussion with the commentator

Ibn Abidin objects to the commentator's statement that their value in gold is owed, since their fungibility has not ended and one does not turn to value; and holds that the sultan's ban on using them in future does not prevent a ruling on what was owed in them in the past. ¹ He explains why the buyer is not made to pay their value in the new coinage: current silver is valued above uncurrent silver, so if ten uncurrent pieces are worth nine current ones, requiring nine would involve riba and requiring ten would harm the buyer; hence the commentator required their value in gold, which Ibn Abidin discusses. ¹

The custom of his time

He notes that there remains the case of purchases made in piastres (qurush), "as is the custom of our time", which he treats shortly after. ¹ Money in the law has a general entry: nuqud.

Opinions on the question

The question: What does the buyer or borrower owe if the copper coins stop circulating or change in value before payment?

First opinion · Sunni tradition (the museum's frame) · Sunni, Hanafi: Abu Yusuf's later view, the view for fatwaMain reference

the debtor owes their value in dirhams on the day of sale or of the loan, with no difference between kasad, disappearance, rise and fall; Ibn Abidin reports from al-Bazzaziyya, al-Dhakhira and al-Khulasa that fatwa is given on it, and says that since many authoritative books state this it must be relied on in fatwa and in court; he had seen no one give fatwa on the Imam's view. ¹

More opinions (2)

Sunni tradition (the museum's frame) · Sunni, Hanafi: Abu Hanifa's viewMain reference

if they stop circulating before delivery the sale is void, and the buyer must return the goods if they still exist, or their like or value if destroyed; if they rise or fall he owes only the same coins, which was also Abu Yusuf's first view. The voidness is explained by the fact that mostly-base dirhams are a price only by convention; when people stop using them the convention lapses and the sale is left without a price. ¹

Sunni tradition (the museum's frame) · Sunni, Hanafi: Muhammad ibn al-Hasan's viewMain reference

he owes their value at the end of their circulation, the last day people dealt in them, as reported from Ghayat al-Bayan and al-Dhakhira. ¹

Bay' al-istijrar (sale on running account)

Bay' al-istijrar is taking what one needs from a trader bit by bit, such as lentils, salt, oil or bread, as custom has it, and settling the account later. Ibn Abidin in Radd al-Muhtar reports al-Qunya's ruling that it is valid though it looks like a sale of what no longer exists, and the objections of the author of al-Nahr and of al-Hamawi; he himself holds that the question rests on istihsan, and distinguishes goods whose price is known at the time of taking from goods whose price is not.