---
title: "What is Muzayadah (sale by auction)? | IslamicOpenFinance™"
description: "A sale in which buyers bid against each other and the asset goes to the highest bidder."
url: https://islamicopenfinance.com/glossary/muzayadah/
lang: en-GB
source: "IslamicOpenFinance"
---

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

Sale-based contracts

# Muzayadah (sale by auction)

A sale in which buyers bid against each other and the asset goes to the highest bidder.

Muzayadah is a sale by auction, in which prospective buyers bid against one another and the asset is sold to the highest bidder. Bank Negara Malaysia's compilation of Shariah resolutions defines it as a sale based on bidding or auction and, in a resolution on sukuk bidding methods, notes that contemporary scholars consider it permissible. Auctions appear in sukuk issuance, in the sale of pledged assets and in commodity platforms, so the bidding rules, the bids received and the award should all be recorded.

## Sources

- [Bank Negara Malaysia, Shariah Resolutions in Islamic Finance, second edition, 2010: glossary, bai\` muzayadah, and resolution on bidding methods](https://www.bnm.gov.my/documents/20124/9198675/shariah_resolutions_2nd_edition_EN.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

[**Musawamah** A negotiated sale in which the seller does not disclose its cost; the price is simply agreed between the parties.](https://islamicopenfinance.com/glossary/musawamah/) [**Rahn** A pledge: an asset held as collateral for a debt, which can be sold to repay it if the debtor defaults.](https://islamicopenfinance.com/glossary/rahn/) [**Sukuk** Certificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.](https://islamicopenfinance.com/glossary/sukuk/) [**Commodity murabaha** Interbank and treasury deals in which commodities are bought and sold on deferred payment to place or raise short-term funds.](https://islamicopenfinance.com/glossary/commodity-murabaha/)

**Sale-based contracts**

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

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