A Party A borrows $100 from a Party B agreeing to pay 10 per cent interest on it after one year. Thus, value of this loan agreement between the two parties is $110. If Party B ‘sells’ this contract to another party for $110, would it be deemed Shari’a-repugnant as it carries $10 accruing from interest? The answer to this answer lies in the understanding of the ‘sale of the contract.’ As the underlying contract is Shari’a-repugnant (the interest-based contract), its sale is prohibited even if it is sold for its notional value.
It is true that if an earning is from a Shari’a-repugnant activity, its use as a price or payment for a Shari’a-compliant asset is acceptable, provided that there is no reference to the Shari’a-repugnant activity.
Thus, sale of poultry to George is acceptable,3 as long as he doesn’t disclose the source of his income and doesn’t make any reference to it. If he not only voluntarily discloses it but rather also emphasises on the source of his income, it is better not to sell him something halal.