Is Withholding Payment a Sin If Services Were Not Fulfilled?

Answered by Shaykh Muhammad Carr

Question

I enrolled in a $3000 coaching program with a no-cancel/no-refund agreement in the intake form (which did not meet the contract requirements under local law). I paid for three weeks and then withdrew, citing my legal right to rescind the contract and ethical reasons (privacy breach on YouTube, misleading marketing, and emotional harm).

The coach claims that although I have a legal right to withdraw, I am still Islamically obligated to pay the full amount for the undelivered services and that withholding the remaining payment is sinful. Is this considered a sin in Islam, and if so, how can I rectify it?

Answer

In the Name of Allah, the Most Merciful and Compassionate.

Thank you for your question. May Allah protect you from all forms of harm.

The Prophet (May Allah bless him and give him peace) said in a Divine Narration (hadith qudsi)

“O My servants, I have forbidden oppression for Myself and have made it forbidden amongst you, so do not wrong one another.” [Muslim]

You are not Islamically obligated to pay for undelivered services if the intended benefit is compromised.

A Service Level Agreement (SLA) is considered a binding contract under Islamic Law. However, it may be terminated if an impediment or valid excuse arises that significantly impacts the service’s intended utility. In such cases, the affected party retains the right to dissolve the agreement. [See: Haytami, Tuhfat al-Muhtaj]

In the absence of any such impediment or excuse, the service provider is still encouraged to offer mutual rescission (iqala) if requested. Iqala refers to the mutual agreement between parties to cancel or rescind a contract, most commonly in commercial transactions and sales. [See: al-Fiqh al-Manhaji]

Termination of a Service Level Agreement

A Service Level Agreement (SLA) may be discontinued if a valid reason exists. Ibn Hajar al-Haytami states: When a valid excuse or legal impediment arises concerning the contracted item—if it occurs in the case of hiring a specific individual and entirely eliminates the intended benefit, the lease is rendered void. However, if the excuse or impediment (‘udhr) merely reduces the benefit in a way that affects the value of the hire, then the lessee has the option to either continue with the lease or terminate it. [See: Haytami, Tuhfat al-Muhtaj]

What Is Iqala?

In Islamic jurisprudence, iqala is when both parties agree to annul the agreement and return things to their original state, as if the contract had never occurred. This is often discussed in the context of sales, where the buyer and seller mutually agree to reverse the sale, returning the goods to the seller and the price to the buyer, but it applies to hire-lease agreements as well. The Prophet (May Allah bless him and grant him peace said,

“Whoever grants his Muslim brother a release from a sale, Allah will relieve him of his slip on the Day of Resurrection.” [Ahmad]

I pray this is of benefit and that Allah guides us all.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefited from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari‘a Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.