Options to Terminate Due to Breach of Trust (Trust-Based Options) — practice questions

Correct answer: A. Clauses 2/1 and 2/2: Khiyar al-Taghrir is the buyer’s right to revoke where the seller or a colluding party inaccurately describes the item so that the buyer pays more than the market price. Examples include deliberate misinformation on cost in Murabahah, Tawliyah or Hatitah sales, phantom bidding in auctions (Najsh), false statements that the item meets the buyer’s needs or is unavailable elsewhere, and deceptive announcements of company performance. Painting, counterfeit labels and cosmetic additives are deceptive conduct (Tadlis) under Clause 3/3.

Correct answer: C. Clauses 2/3 and 2/4: The deceived buyer may revoke and return the item within a customarily acceptable period. The option lapses if the item is destroyed or consumed by the buyer before the deception is discovered, if an impediment prevents return, or if the buyer fails to return it despite being able to do so. On lapse, the seller is entitled to the full price and the buyer to no refund. Where the item is returned, the seller bears the expenses of returning it to the place of sale.

Correct answer: D. Clauses 3/1 and 3/2: Khiyar al-Tadlis is the buyer’s option to revoke where the seller or a colluding party, by conduct, portrays the item as better than its actual condition. The deception must result from the seller’s conduct or instructions, not from circumstances beyond his control; the buyer must be unaware of it; and it must be continuing, so that if the item’s condition improves to at least the original specification before revocation, the buyer has no right to revoke.