Circumstances in Which One Has a Right to Cancel a Transaction

The right to cancel a transaction is called Khiyar. The seller and the buyer can cancel a transaction in the following eleven cases:
(i) If the parties to the transaction have not parted from each other, though they may have left the place of agreement. This is called Khiyarul majlis.
(ii) If the buyer or the seller has been cheated in a sale transaction, or in any other sort of deal, either of the parties has been deceived, they have a right to call off the deal. This is called Khiyar of Ghabn. This Khiyar stems from the fact that each side in any deal wishes to ensure that he does not receive less than what he has given, and if he has been cheated, he should have the right to back out. But if one has in mind that if he is given less than what he has delivered, or is paid less than what he deserves, he will ask for the difference, he should first demand the difference before cancelling the deal.
(iii) If while entering into a transaction, it is agreed that up to a stipulated time, one or both the parties will be entitled to cancel the transaction. This is called Khiyarush Shart.
(iv) If one of the parties presents his commodity as better than it actually is, and thereby attracts the buyer, or makes him more enthusiastic about it. This is called Khiyar tadlis.
(v) If one of the parties to the transaction stipulates that the other would perform a certain job, and that condition is not fulfilled. Or if it is stipulated that the commodity will be of particular quality, and the commodity supplied may be lacking in that quality. In these cases, the party which laid the condition can cancel the transaction. This is called Khiyar takhallufish shart.
(vi) If the commodity supplied is defective. This is called Khiyarul 'aib.
(vii) If it transpires that a quality of the commodity under transaction is the property of a third person. In that case, if the owner of that part is not willing to sell it, the buyer can cancel the transaction, or can claim back from the seller the replacement of that part, if he has already paid for it. This is called Khiyarush shirkat.
(viii) If the owner describes certain qualities of his commodity which the buyer has not seen, and then the buyer realises that the commodity is not as it was described, the buyer can rescind the deal. Similarly, if the buyer may have seen the commodity sometimes back, and purchases it thinking that the qualities it had then will be still existing, and if he finds that those qualities have disappeared, he has a right to cancel the deal.
(ix) If the buyer does not pay for the commodity he has bought for three days, and the seller has not yet handed over to him the commodity, the seller can cancel the transaction. But this is in the circumstance when the seller had agreed to allow him time for deferred payment, without fixing the period. And if the seller had not at all agreed on deferred payment, he can cancel the transaction at once, without any delay. And if he had allowed him more than three days' credit, then the seller cannot rescind the deal before the termination of three days. If the commodity is perishable, like fruits, which would perish or decay if left for one day, and the buyer without any prior condition, does not pay till nightfall, the seller can cancel the transaction. This is called Khiyarut ta'khir.
(x) A person who buys an animal, can cancel the transaction within three days. And if a person sold his commodity in exchange for an animal, he can also cancel the transaction within three days. This is called Khiyarul haywan.
(xi) If the seller is unable to deliver possession of the thing sold by him, like, if the horse sold by him runs away and disappears, he can cancel the transaction. This is called Khiyarut ta'azzurit taslim.
If a buyer does not know the price of the commodity, or was unconcerned about it at the time of purchase, and buys the thing for higher than usual price, he can cancel the transaction if the difference of price is substantial, and if the difference is established at the time of abrogation. Otherwise, the buyer cannot cancel the deal. Similarly, if the seller does not know the price of the commodity, or was headless about it at the time of selling, and sells the thing at a cheaper price, he can cancel the deal if the difference is substantial and if other conditions mentioned above obtain. In a transaction of "Conditional sale", for example, a house worth $2000 is sold for $1000, and it is agreed that if the seller returns the money within a stipulated period, he can cancel the transaction, the transaction is in order, provided that the buyer and the seller had genuine intention of purchase and sale.
In a transaction of "Conditional sale", if the seller is sure that even if he did not return the money within the stipulated time, the buyer will return the property to him, the transaction is in order. However, if he does not return the money within the stipulated time, he is not entitled to demand the return of the property from the buyer. And if the buyer dies, he (the seller) cannot demand the return of the property from his heirs. If a person mixes inferior tea with superior tea, and sells it as a superior tea, the buyer can cancel the transaction.
If a buyer finds out that the thing purchased by him is defective, like, if he purchases an animal and finds that (after purchasing it) it is blind of an eye, and this defect existed before the transaction was made, but he was not aware of it, he can cancel the transaction and return the animal to the seller. And if it is not possible to return it, for example, if some change has taken place in it, or it has been used in such a manner that it cannot be returned, the difference between the value of the sound property and the defective property should be assessed, and the buyer should get refund in that proportion of the amount paid by him to the seller. For example, he has purchased something for $4 and finds out that it is defective. Now the price of the thing in perfect, faultless state is $8 and that of deficient is $6, the difference between these two prices will be assessed at 25%. The buyer will be paid 25% of what he actually paid, and that will be one dollar.
If a seller comes to know that what he received in exchange for his property is defective, and that defect was present in it before the transaction, but he was not aware of it, he can cancel the transaction, and can return it to its owner. And if he cannot return it due to change or disposal having taken place, he can obtain the difference between the faultless and the defective thing, according to the above mentioned rule.
If a defect takes place in the property after concluding the transaction, but before delivering it, the buyer can cancel the transaction. Similarly, if some defect is found in what is taken in exchange for the property, after concluding the transaction but before delivering it, the seller can cancel the transaction. But if both sides wish to settle by taking the difference between the prices, it is permissible, if returning of the articles involved is not possible.
If a person comes to know about the defect after concluding the transaction, it is necessary for him to cancel the transaction at once; and if he delays for unusually long time, he cannot cancel the transaction. Of course, various circumstances must be taken into consideration for the delay. If a person comes to know about the defect in a commodity after purchasing it, he can cancel the transaction even if the seller is not present. And the same order applies to all transactions involving the options.
In the following four cases the buyer cannot cancel the transaction because of defect in the property purchased by him, nor can he claim the difference between the prices:
(i) If at the time of purchasing the property, he is aware of the defect in it.
(ii) If he does not object to the defect in the property.
(iii) If at the time of concluding the contract, he says: "Even if the property has a defect I will neither return it nor claim the difference between the prices".
(iv) If at the time of concluding the contract, the seller says: "I sell this property with whatever defect it may have". But, if he specifies a defect and says: "I am selling this property with this defect", and it transpires later that it has some other defect as well, which he did not mention, the buyer can return the property due to that defect, and if he cannot return it, he can take the difference between the prices.
If a buyer knows that there is a defect in the property, and after taking possession of it another defect appears in it, he cannot cancel the transaction, but he can take the difference between the prices of the defective and the faultless property. But, if he purchases a defective animal, and before the expiry of the period of Khiyar (i.e. option to cancel a transaction) which is three days, another defect appears in the animal, the buyer can return it, even if he may have taken delivery of it. And if only the buyer was given the option to cancel the deal within a fixed period, and another defect appears in the animal during that period, the buyer can cancel the transaction, even if he may have taken delivery of the animal. If a person owns some property which he himself has not seen, but another person has described its particular to him, and he mentions the same particulars to the buyer and sells the property to him. Later on, he learns after selling that the property was better than what he knew about it, he can cancel the transaction.