Maliks Muwatta Book 36, Hadith Number 38E.

Yahya said that he heard Malik say, “If a man buys a garment which has a defect, a burn or something else, which the seller knows about and that is testified against him or he confirms it, and the man who has bought it causes a new tear which decreases the price of the garment, and then he learns about the original defect, he can return it to the seller and he is not liable for his tearing it.

“If a man buys a garment which has a defect of a burn or flaw, and the one who sold it to him claims that he did not know about it, and the buyer has cut the garment or dyed it, then the buyer has an option. If he wishes, he can have a reduction according to what the burn or flaw detracts from the price of the garment and he can keep the garment, or if he wishes to pay damages for what the cutting or dyeing has decreased of the price of the garment and return it, he can do so.

“If the buyer has dyed the garment with a dye which increases the value, the buyer has an option. If he wishes, he has a reduction from the price of the garment according to what the defect diminishes or if he wishes to become a partner with the one who sold the garment he does so. The price of the garment with a burn or flaw is looked at. If the price is ten dirhams, and the amount by which the dyeing increased the value is five dirhams, then they are partners in the garment, each according to his share. In this reckoning is the amount by which the dyeing increases the price of the garment.”