Question

Salam Mufti , Hope you are well.

My question is regarding mobile phone contracts. I was looking to take a mobile phone contract and had some doubts in regard to whether its halal or haram. I have seen online fatwa from one site generically speak of late payment fees as being haraam and also some cancellation fees being haram so I was reading the terms and conditions of my contract with the network provider to see if it could be haraam.

I am a bit confused. I have added to this email the relevant information about the contract and would appreciate it if you could take a second to read it and tel me whether it is permissible or not.

It’s strange because I have NEVER heard any scholar say mobile phone contracts could be haraam but they ALL charge late payment fees. This is also the case with your wifi bill, electricity, gas bill, water bill, or any other bill that you pay monthly. If these are haraam, are Muslims only able to pay in a pay-as-you-go way?? Like I would be pretty confident MOST/IF NOT ALL scholars have monthly phone contracts??! So maybe I’ve misunderstood fatwa online.

P.S Please note I am not looking for generic answer but more in relation to my circumstances with this phone contract. ALL phone contracts will be the same.

Answer

Late payment fees are unlawful as they fall within the prohibition of interest (riba). Stipulating such a term within a contract will render the contract unlawful and invalid. Therefore, it is unlawful to stipulate such a term within a contract and also unlawful to pay or receive these extra amounts.

There is however, a practical issue with this which is that many contemporary contracts, including essential contracts like electricity, gas, phones etc. include a late payment term and avoiding all such contracts would be near impossible or at the very least place a person in great difficulty.

Shari‘ah provides discretion in these types of difficult situations under the framework of ‘public predicament’ (‘umum al-balwa). Contemporary scholars such as Mufti Taqi have considered a person excused if they enter into a contract that stipulates late payment fees, provided that one is certain that they will make all payments on time and not incur any late payment charge.

For this reason, we would consider it permissible for a person to enter into such a contract provided the contract does not violate any other shar‘i principle and the individual makes all payments on time.

Fiqh al-buyu‘ 1:463

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel