Murabaha Vehicle Sale and Installment Payment Agreement

This is a sale of a vehicle, not a loan of money. No interest is charged. The Total Sale Price is fixed on the day of signing and does not increase for any reason, including late payment.

1. Parties and date

This Murabaha Vehicle Sale and Installment Payment Agreement (the “Agreement”) is entered into on , 20 (the “Effective Date”) between:

Seller (legal name):

Seller address:

Seller phone / email:

Buyer (legal name):

Buyer address:

Buyer phone / email:

Buyer driver licence number (last 4 digits only):

Co-Buyer, if any (legal name):

A Co-Buyer signs as a joint purchaser and is jointly and severally liable for the whole obligation, with the same rights as the Buyer. If there is no Co-Buyer, write “None.”

Seller and Buyer (and Co-Buyer, if any) are together the “Parties.” Bysmillah is not a Party to this Agreement. Section 22 describes its role.

1.1 Language of the transaction

The language in which this transaction was principally negotiated is: .

If negotiations were conducted principally in a language other than English for which California law requires a translated contract, the Seller shall provide the Buyer with a written translation of this Agreement in that language before signing, and shall attach it. Failure to do so may entitle the Buyer to rescind.

Interpreter or translator used? Yes / No. Name and relationship to the Parties:

1.2 Electronic records and signatures

The Parties consent to conduct this transaction by electronic means and to sign electronically. Each Party confirms they are able to access, download, and retain electronic copies, and may request a paper copy at no charge. Consent may be withdrawn for future documents by written notice.

2. The vehicle

The Seller sells and the Buyer purchases the following motor vehicle (the “Vehicle”):

The Vehicle’s condition, known defects, odometer statement, smog certification, and recall status are recorded in the Vehicle Condition, As-Is and Odometer Disclosure signed by both Parties, which is incorporated into this Agreement by reference.

3. Seller’s ownership — the basis of this sale

The Seller represents and warrants that, as of the Effective Date, the Seller is the sole legal and registered owner of the Vehicle, holds it free of any undisclosed lien, security interest, or claim, and has borne the risks of ownership of the Vehicle prior to this sale.

This representation is a material condition of the Agreement. The Buyer is purchasing an asset the Seller genuinely owns, not receiving an advance of money. If this representation is untrue, the Buyer may rescind this Agreement and recover all amounts paid.

4. Nature of the transaction

The Parties intend and agree that this Agreement is a bona fide sale of goods on deferred payment terms, and not a loan, forbearance, or extension of money. The difference between the cash price and the Total Sale Price is a time-price differential forming part of the price of the Vehicle. It is not interest, and no sum of money is lent by the Seller to the Buyer at any time.

The Seller has not offered the Buyer a cash advance, and the Buyer has not requested one. The Buyer’s obligation arises solely from the purchase of the Vehicle.

The characterisation in this section is what keeps the transaction outside lending and usury rules. It only holds if the transaction is genuinely conducted as a sale. If the Seller ever advances cash, or sells a vehicle they do not own, the protection is lost.

5. Cost and markup disclosure

Because this is a Murabaha (cost-plus) sale, the Seller must disclose the cost of the Vehicle and the markup separately. The Seller discloses the following, and warrants the figures are true:

Where the Seller cannot reliably establish the cost basis — for example, an older vehicle owned for many years with undocumented expenditure — the Parties may instead complete this sale as a Musawama (negotiated-price sale) by striking rows A to C and agreeing the cash price at row D and the Total Sale Price at row F. The Seller must tell the Buyer, in writing, that cost is not being disclosed and why.

6. Price limits

6.1 Markup ceiling

The markup at row E shall not exceed % of the cash price per year of the term. The platform default ceiling is fifteen percent (15%) per year of term unless a lower figure is agreed.

This limit exists for two reasons. It keeps the pricing within what a court would regard as a genuine sale rather than disguised lending, and it prevents exploitative pricing of a buyer who has few alternatives.

6.2 No balloon payment

The final installment shall not exceed one hundred and ten percent (110%) of a regular installment. Payments shall otherwise be equal. A large final payment is prohibited, because the Buyer has no refinancing route in this structure.

6.3 No rolled-in debt

The Total Sale Price relates solely to this Vehicle. No prior debt, negative equity from a trade-in, unpaid balance from another transaction, or amount owed to any third party may be added to it.

6.4 No additional fees

The Seller shall charge no arrangement fee, origination fee, documentation fee, processing fee, or administration fee of any kind. The disclosed markup is the Seller’s entire compensation. Only genuine third-party costs actually paid — such as DMV fees or smog certification — may be passed through, at cost, with receipts.

7. The price is fixed

The Total Sale Price stated at row F is fixed as of the Effective Date. It shall not be increased, recalculated, indexed, or added to for any reason whatsoever, including but not limited to late payment, extension of the term, rescheduling, hardship accommodation, or the passage of time.

No interest, service charge, finance charge, or rate of return accrues on the Deferred Balance. The Seller’s entire profit on this transaction is the disclosed markup at row E, which is already included in the Total Sale Price.

8. Payment terms

The full payment schedule is set out in Schedule A. The sum of all scheduled installments plus the down payment equals the Total Sale Price exactly. If the two do not reconcile, the Total Sale Price governs and the final installment is adjusted downward.

The Buyer pays the Seller directly. Payments are not made to, held by, or routed through Bysmillah.

8.1 Records and payoff statements

• The Seller shall issue a receipt for every payment received, within seven (7) days.
• The Seller shall maintain a running record showing each payment, the date received, and the remaining balance.
• On written request, and not more than once per calendar quarter without charge, the Seller shall provide the Buyer with a written payoff statement showing the exact amount required to settle in full, valid for at least fifteen (15) days.
• Payment is complete when funds are received by the Seller. The Buyer should retain proof of every payment.
• If the Seller fails to provide a payoff statement within fourteen (14) days of a written request, the Buyer may rely on their own payment records, and the Seller may not claim a late charge for any period of that delay.

9. Title and lien

On the Effective Date, and on receipt of the down payment, the Seller shall transfer title to the Vehicle to the Buyer, and the Buyer shall be recorded with the California Department of Motor Vehicles as the registered owner. The Parties shall sign a Bill of Sale evidencing the transfer.

At the same time, the Seller shall be recorded with the DMV as the legal owner of the Vehicle. That entry is the Seller’s security and it remains in place until the Total Sale Price is paid in full. The Seller shall also file the DMV release of liability within the period required by law.

Within ten (10) days of receiving the final payment, the Seller shall release the legal owner interest and deliver to the Buyer all documents required for the Buyer to be recorded as sole owner, together with a written statement that the Agreement is satisfied in full.

To protect the Buyer if the Seller cannot be reached at payoff, the Seller shall at signing complete the Lien Release Escrow and Limited Power of Attorney (document 12).

If the legal owner entry is not properly recorded with the DMV, the Seller has no enforceable security and no right to recover the Vehicle. This step is not optional and must be completed at signing, not later.

10. Security interest

The Buyer grants the Seller a purchase-money security interest in the Vehicle, together with all accessories, attachments, replacement parts, and the proceeds of any insurance policy covering it, to secure payment of the Deferred Balance and performance of this Agreement. The terms of that security interest are set out in the separate Security Agreement signed by the Parties.

11. Buyer’s obligations while the balance is outstanding

• Maintain the Vehicle in reasonable operating condition and not permit it to deteriorate beyond ordinary wear.
• Keep the Vehicle registered and lawfully operated in California.
• Pay all fuel, maintenance, repairs, registration, tolls, parking citations, traffic fines, and taxes arising after the Effective Date.
• Not sell, transfer, pledge, rent, or permanently remove the Vehicle from the State of California without the Seller’s prior written consent.
• Not allow any other lien or encumbrance to attach to the Vehicle.
• Notify the Seller within five (5) days of any accident, theft, total loss, impoundment, or change of the Buyer’s address.

12. Insurance

The Buyer shall, at the Buyer’s expense, maintain continuous comprehensive and collision insurance on the Vehicle for not less than its actual cash value, together with the liability coverage required by California law, for the entire period any balance remains outstanding. The Seller shall be named as lienholder and loss payee.

12.1 Limits on replacement coverage

If coverage lapses, the Seller shall first give the Buyer written notice and fifteen (15) days to restore it. Only if the Buyer fails to do so may the Seller obtain replacement coverage, and then only subject to all of the following:

• The Seller may recover only the actual documented premium paid, with a receipt, and may add no charge, commission, or markup of any kind.
• The coverage must be no broader than this Agreement requires and must not duplicate coverage the Buyer already holds.
• The Buyer may replace it with their own policy at any time, and the Seller shall promptly pass on any unearned premium refunded to the Seller.
• Any such premium is a documented cost, not profit, and does not increase the Total Sale Price.

13. Total loss or destruction of the vehicle

If the Vehicle is stolen and not recovered, or is destroyed or declared a total loss, insurance proceeds shall be applied first to the outstanding Deferred Balance. Any surplus belongs to the Buyer.

If the proceeds are insufficient, the Seller shall waive the unearned portion of the markup before claiming any shortfall, calculated as the markup attributable to the remaining unexpired term. The Parties shall then reschedule any remaining shortfall in good faith under Section 15, and the Seller is encouraged to waive it entirely where the Buyer maintained the required insurance and the shortfall arises only from depreciation.

The Buyer is not relieved of the obligation to pay by the loss of the Vehicle, except to the extent the loss results from a defect the Seller knew of and failed to disclose.

14. Late payment

A payment is late if it is not received within days of its due date (the “Grace Period”). The Grace Period shall be not less than ten (10) days.

If a payment remains unpaid after the Grace Period, the Buyer shall pay a late charge of $ per occurrence, capped at $ per month and at % of the missed installment.

The Seller shall not retain any part of the late charge. The entire amount shall be remitted to the charitable organisation nominated in the Late Payment Charity Undertaking signed by the Buyer. The Seller shall keep records of remittance and provide them to the Buyer on request.

Separately from the late charge, the Seller may recover documented, out-of-pocket costs actually incurred as a result of the Buyer’s delay — for example a returned-payment bank fee. The Seller may retain such documented costs, which are reimbursement and not profit. The Seller may not charge for its own time or inconvenience.

15. Hardship and rescheduling

If the Buyer experiences genuine financial hardship — including job loss, illness, injury, or a substantial fall in income — the Buyer may request rescheduling by written notice to the Seller.

The Parties may agree to extend the term, reduce the installment amount, or grant a temporary payment holiday. Any rescheduling shall be recorded in a written amendment signed by both Parties.

Rescheduling shall not increase the Total Sale Price, and no fee may be charged for granting it. Extending time in exchange for additional money is precisely what this Agreement is structured to avoid.

The Seller is encouraged, but not obliged, to grant reasonable forbearance before exercising remedies.

16. Events of default

Each of the following is an event of default:

• A payment remains unpaid more than thirty (30) days after its due date and no rescheduling has been agreed.
• The Buyer allows required insurance to lapse and does not restore it within fifteen (15) days of written notice.
• The Buyer sells, transfers, pledges, hides, or permanently removes the Vehicle from California without consent.
• The Buyer made a materially false statement in applying for or entering into this Agreement.
• The Vehicle is seized, impounded for more than thirty (30) days, or subjected to a lien the Buyer does not clear.

For the avoidance of doubt, none of the following is an event of default: a single late payment cured within the Grace Period; a good-faith dispute about the amount owed while the undisputed portion continues to be paid; or a request for rescheduling made before a payment falls thirty days overdue.

17. Notice of default and right to cure

The Seller shall not exercise any remedy, and shall not take possession of the Vehicle, unless the Seller has first delivered a written Notice of Default and Right to Cure in the form of document 10 and the Buyer has failed to cure within the period stated in that notice, which shall be not less than fifteen (15) days.

The Buyer may cure a monetary default by paying all overdue installments plus any documented costs. On cure, this Agreement continues in full force as if no default had occurred, and the Buyer may cure more than once.

The Seller shall not install, use, or activate any device that remotely disables or tracks the Vehicle without the Buyer’s separate written consent and compliance with applicable law.

18. Remedies and fair reconciliation

If a default is not cured, the Seller may take possession of the Vehicle in accordance with California law. The Seller may not breach the peace, may not use or threaten force, and may not take the Vehicle from a locked or enclosed space without consent or a court order.

After taking possession, the Seller shall give the Buyer a written post-repossession notice in the form of document 10, Part B, stating where the Vehicle is held, what is owed, the deadline to redeem or reinstate, and the intended manner of sale. The Seller shall not sell the Vehicle before that deadline expires.

The Seller shall then sell the Vehicle in a commercially reasonable manner and shall apply the proceeds in the following order:

• First, documented costs of recovery, storage, reconditioning, and sale.
• Second, the outstanding Deferred Balance.
• Third, any surplus is paid to the Buyer within thirty (30) days.

If the proceeds are insufficient, the Buyer remains liable for the shortfall — but the Seller shall first waive the unearned portion of the disclosed markup, calculated as the markup attributable to the remaining unexpired term. The Seller shall provide the Buyer with a written accounting showing the sale price obtained, the costs deducted, the markup waived, and the resulting balance.

Personal property found in the Vehicle shall be inventoried and returned to the Buyer at no charge. The Seller shall not condition its return on payment.

19. Voluntary surrender and mutual unwind

The Buyer may at any time offer to surrender the Vehicle voluntarily. If the Seller accepts, the Vehicle shall be sold and the proceeds reconciled exactly as set out in Section 18, including the waiver of unearned markup and the return of any surplus to the Buyer.

The Seller shall not retain payments already made as though they were rent. This Agreement is a sale. Every amount the Buyer has paid is credited against the Total Sale Price and must be accounted for on any unwind. A structure in which the Buyer routinely returns the Vehicle and forfeits all payments is a lease in substance and is expressly not what the Parties intend or agree.

20. Early settlement

The Buyer may pay the outstanding balance in full, or make additional payments, at any time without penalty, charge, or notice.

The Seller may, at the Seller’s sole discretion, reduce the amount payable on early settlement by waiving part of the unearned markup. Such a reduction is a voluntary act of the Seller. It is not promised, calculated, or made binding by this Agreement, and the Buyer has no contractual right to it.

21. Death, incapacity and succession

• If the Buyer dies or becomes incapacitated, the obligation continues against the Buyer’s estate. The estate, or a person entitled to the Vehicle, may continue the payments on the same terms, and the Seller shall not treat the death itself as an event of default.
• If the Seller dies or becomes incapacitated, the Seller’s successor takes the benefit of this Agreement subject to all of its terms, including the obligation to release the legal owner interest at payoff.
• The Lien Release Escrow and Limited Power of Attorney (document 12) is intended to allow the lien to be released at payoff even if the Seller or the Seller’s successor cannot be located.
• The Seller shall notify the Buyer in writing of any change in who is entitled to receive payments. Until properly notified, the Buyer may continue paying the last notified recipient and such payment discharges the obligation.

22. Role of Bysmillah

Bysmillah introduced the Parties and supplied the form of this Agreement. Bysmillah is not a party to this sale. It is not the seller, buyer, lender, creditor, broker, agent, guarantor, or insurer of either Party.

• Bysmillah does not own the Vehicle and takes no title to it at any time.
• Bysmillah does not lend money and advances no funds.
• Bysmillah does not receive, hold, or transmit payments between the Parties.
• Bysmillah does not guarantee that the Buyer will pay or that the Seller will perform.
• Bysmillah gives no legal, tax, financial, or investment advice, and no warranty as to the Vehicle.
• Bysmillah supplies standard forms only. It does not advise either Party on whether a form suits their situation and does not complete the forms on their behalf.

Each Party is responsible for its own decision to enter into this Agreement and is advised to seek independent legal advice before signing.

23. Vehicle condition

The Buyer has inspected the Vehicle, or has knowingly declined the opportunity to do so, and accepts it in its present condition, subject only to the defects and history disclosed in the Vehicle Condition, As-Is and Odometer Disclosure.

Where the Seller is a private individual and not a licensed dealer, the Vehicle is sold as-is, and the Seller makes no warranty of merchantability or fitness for any particular purpose, except that the Seller warrants that no known material defect and no known odometer discrepancy has been concealed. Nothing in this Agreement waives any right the Buyer has under California law that cannot lawfully be waived.

The Seller shall provide a valid smog certification where California law requires one on transfer, at the Seller’s expense unless the Parties agree otherwise in writing and the law permits it.

24. Dispute resolution

The Parties shall first attempt to resolve any dispute by direct discussion in good faith. If unresolved after thirty (30) days, the Parties shall attempt mediation, which may include mediation before a mutually acceptable community or religious authority, before commencing proceedings.

Mediation is a step, not a bar. Nothing in this Section prevents either Party from seeking urgent relief from a court, from filing in small claims court where the amount is within that court’s jurisdiction, or from exercising any right that would be lost by delay.

25. General

• Governing law: the laws of the State of California. Venue: the county of the Buyer’s residence.
• Entire agreement: this Agreement, together with its Schedules and the documents it incorporates by reference, is the whole agreement between the Parties and replaces all prior discussions and oral understandings.
• Amendment: only by written instrument signed by both Parties.
• Severability: if any provision is unenforceable, the remainder continues in effect.
• No waiver: the Seller’s acceptance of a late payment, or forbearance on any occasion, does not waive the right to require timely payment afterwards.
• Notices: in writing, to the addresses stated in Section 1, by personal delivery, mail, or email with confirmation of receipt. Each Party shall keep their contact details current.
• Assignment: the Buyer may not assign this Agreement. The Seller may not assign or sell the Deferred Balance to a third party without the Buyer’s written consent, and may not sell it at a discount to its face value.
• Counterparts: this Agreement may be signed in counterparts, each of which is an original.
• Copies: each Party shall receive a fully signed copy of this Agreement and of every document it incorporates, at the time of signing.
• Survival: the obligations to account, to release the lien, and to return any surplus survive termination.

26. Signatures

Each Party confirms that they have read this Agreement, understand it, have received a copy of every document it refers to, have had the opportunity to obtain independent advice, and enter into it voluntarily.

Seller signature: Date:

Print name:

Buyer signature: Date:

Print name:

Co-Buyer signature (if any): Date:

Print name:

Schedule A — Payment schedule

Complete one row per installment. The final row must bring the cumulative total to exactly the Total Sale Price.

Schedule B — Amounts confirmed