---
title: "What is Musawamah? | IslamicOpenFinance™"
description: "A negotiated sale in which the seller does not disclose its cost; the price is simply agreed between the parties."
url: https://islamicopenfinance.com/glossary/musawamah/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sale-based contracts](https://islamicopenfinance.com/glossary/#sales)

Sale-based contracts

# Musawamah

A negotiated sale in which the seller does not disclose its cost; the price is simply agreed between the parties.

Musawamah is a sale in which the price is negotiated without the seller disclosing what the asset cost. Bank Negara Malaysia's tawarruq policy document describes it as a sale contract without disclosure of the asset cost. It differs from murabaha, where disclosure of cost and profit is essential, and it is often used when the cost is hard to determine or commercially sensitive.

## Sources

- [Bank Negara Malaysia, Tawarruq policy document, 2018: Glossary, musawamah](https://www.bnm.gov.my/documents/20124/938039/pd_reissuancetawarruq_dec2018.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Murabaha** A sale at cost plus an agreed, disclosed profit; the seller must own the asset first. Payment is often deferred in instalments.](https://islamicopenfinance.com/glossary/murabaha/) [**Tawarruq** Buying an asset on deferred payment and selling it to a third party for cash, to raise liquidity. Its organised form is contested.](https://islamicopenfinance.com/glossary/tawarruq/) [**Bay al-muajjal (deferred-payment sale)** A sale in which the goods are delivered now and the price is paid later, in one sum or in instalments.](https://islamicopenfinance.com/glossary/bay-muajjal/)

**Sale-based contracts**

1. [Murabaha](https://islamicopenfinance.com/glossary/murabaha/)
2. [Bay al-muajjal (deferred-payment sale)](https://islamicopenfinance.com/glossary/bay-muajjal/)
3. [Salam](https://islamicopenfinance.com/glossary/salam/)
4. [Istisna](https://islamicopenfinance.com/glossary/istisna/)
5. [Tawarruq](https://islamicopenfinance.com/glossary/tawarruq/)
6. [Bay al-sarf (currency exchange)](https://islamicopenfinance.com/glossary/bay-al-sarf/)
7. [Murabaha to the purchase orderer](https://islamicopenfinance.com/glossary/murabaha-purchase-orderer/)
8. [Hamish jiddiyyah (security deposit)](https://islamicopenfinance.com/glossary/hamish-jiddiyyah/)

[All 221 terms](https://islamicopenfinance.com/glossary/)