Wednesday, October 22, 2008

Part 1, The Islamic Rules of Trade

Due to the current global financial crisis there is increasing interest in the Islamic Economic System, the most comprehensive book on this topic is 'The Economic System of Islam' by Sheikh Taqiuddin an-Nabhani. However as people have many questions relating to the Islamic rules of trade we will be posting related extracts from the draft translation of the Fiqh masterpiece 'The Islamic Personality, Volume 2' by Sheikh Taqiuddin an-Nabhani.


Trade linguistically is exchange in an unrestricted manner, and it is opposite to purchase. Trade is also used for purchase, just as purchase is used for trade. So it is said he (ba’a) from him meaning he bought it, and they (shara) to them meaning they sold it so each of them is used for the other and the connotation specifies the meaning. As for trade in the Shar’a, it is exchanging property for property by placing in possession and being placed in possession via the way of mutual agreement. Trade is permitted by the Book and Sunnah. Allah (swt) said:

وأحلّ الله البيع
“Allah permitted trade” [Translation of the meaning of the Qur'an 2:275]

And He (swt) said:

وأشهِدوا إذا تبايعتم
“And take witnesses when you trade” [Translation of the meaning of the Qur'an 2:282]


إلاّ أن تكون تجارة عن تراضٍ منكم
“Except if it is trade of mutual agreement among you” [Translation of the meaning of the Qur'an 4:29].

And he (saw) said:

البيِّعان بالخيار ما لم يتفرَّقا
“The two traders have an option as long as they do not separate” (narrated by Al-Bukhari).

And Rufa’ah narrated

رفاعة أنه خرج مع النبي صلى الله عليه وسلم إلى المصلى فرأى الناس يتبايعون فقال: يا معشر التجار. فاستجابوا لرسول الله صلى الله عليه وسلم ورفعوا أعناقهم وأبصارهم إليه، فقال: إن التجار يُبعثون يوم القيامة فُجّاراً إلاّ من صَدَق
“That he left with the Prophet (saw) to the place of prayer and he saw people trading, so he said: O group of traders. So they responded to the Messenger of Allah (saw) and lifted their necks and eyes to him. He said: ‘Verily, traders will be resurrected as wicked persons (fujjar) on the Day of Judgement except the one who fears Allah, is righteous and give charity.” [narrated by At-Tirmidhi].

He also narrated via the way of Abu Said from the Prophet (saw) that he said:

التاجر الصدوق الأمين مع النبيين والصديقين والشهداء
“The sincere trustworthy trader is together with the Prophets, sincere persons (siddeeq) and witnesses (shuhada).”

It is a condition for the trader that there exists offer and acceptance by words indicating each one of them or what stands in the place of words like the signs of the mute person. Writing is considered from speech. As for practical trade like where the buyer takes the good and pays its price like buying bread, books, postal stamps and the like, it is looked into. If it is a good with a well-known price in the market without bargaining therein then the action indicates offer and acceptance so it is considered trade and it is what the fuqaha term trade of mutual taking. Whereas if the price of the good is not defined in the market and needs bargaining, then the trade of mutual taking is not valid therein because the action does not indicate offer and acceptance as it is possible for disputes to enter therein. This is opposite to what transactions must be since transactions must be of a form preventing disputes. So this trade of mutual taking is not considered trading due to the absence of the clear statement upon offer and acceptance. Accordingly this clarifies that since offer and acceptance are conditions of the validity of the trade, it is necessary for them to occur by words indicating them or an sign indicating them with a decisive indication not carrying (any possibility) other than the two together with the absence of dispute.

Trade is accomplished in other that what is measured, weighed or counted merely upon finishing the contract, and taking possession is not a condition to conclude the trade therein. If the sold thing spoils before its possession is taken, this is in the responsibility of the buyer and not the responsibility of the seller like the buying of the house, animal, car and what is similar to that which is not measured, weighed or counted. This is because of the Messenger (saw) saying:

الخَراج بالضمان
“The expenditure is with the responsibility” (narrated by Abu Dawud).

The increase in this trade is for the buyer so its surety is upon him. So if he bought an animal and did not take possession of it then it give birth, its child is for the buyer not the seller. And (also) due to what ibn Umar narrated:

هو لك يا عبدالله بن عمر، فاصنع به ما شئت
“That the Prophet said when a cale camel was born belonging to Umar. The Prophet (saw) said to him: Sell it to me so Umar said: It is for you, O Messenger of Allah, and he bought it. Then he said: It is for you, O Abdullah bin Umar, so do with it as you please” [narrated by Al-Bukhari].

Disposition occurred therein before its possession was taken so it is excluded because it is not measured, weighed or counted. However if the trade occurs upon (something) measured, weighed or counted, the trade is not completed except upon taking possession of the sold thing so if the sold thing spoils before its possession is taken, then it is from the property of the seller. This is because the Prophet (saw) prohibited the sale of foodstuff before its possession is taken, and due to his (saw) statement:

من ابتاع طعاماً فلا يبيعه حتى يستوفيه
“Whoever buys foodstuff, let him not sell until its full due is given” (narrated by Al-Bukhari).

And Muslim narrated from ibn Umar who said:

كنا نشتري الطعام من الركبان جزافاً فنهانا رسول الله صلى الله عليه وسلم أن نبيعه حتى ننقله من مكانه
“We used to purchase foodstuff from mounted riders, buying and selling by guessing, and the Messenger of Allah (saw) prohibited us from selling it until we transferred it from its place.”

This indicates that the sold thing is in the responsibility of the seller. Were it to enter the responsibility of the buyer, it will be permitted for him to sell it and dispose it just like after taking its possession. So when he prohibited its sale before taking possession, he had prohibited disposal of it meaning that his ownership in it is not completed so it is in the responsibility of the seller, not the buyer. Accordingly even though the prohibition came regarding foodstuff, foodstuff is not free of being measured, weighed or counted. So the prohibition is placed upon measured, weighed and counted foodstuff so the prohibition covers selling everything measured, weighed or counted until its possession is taken whether it is foodstuff or not since it came in some ahadith stating the measured thing, some stating the merchandise and some stating a thing. Muslim narrated that the Prophet (saw) said:

من اشترى طعاماً فلا يبيعه حتى يكتاله
“Whoever buys foodstuff should not sell it until he measures it.”

And it is narrated from Hakeem bin Hazam who said:

إذا اشتريتَ شيئاً فلا تبعه حتى تقبضه
“I said: O Messenger of Allah, I purchase goods so what is allowed to me of them and what is forbidden? He said: If you purchase something, do not sell it until you take possession” (narrated by Ahmad).

It is narrated from Zayd bin Thabit:

أن النبي صلى الله عليه وسلم نهى أن تُباع السلع حيث تُبتاع حتى يحوزها التجار إلى رحالهم
“That the Prophet (saw) prohibited selling goods when they are bought until traders gather them to their mounts” (narrated by Abu Dawud).

And Ahmad narrated that the Prophet (saw) said:

من اشترى طعاماً بكيل أو وزن فلا يبيعه حتى يقبضه
“Whoever buys foodstuff by measure or weight, he should not sell it until he takes possession.”

All these ahadith indicate the generality of things measured, weighed or counted with the evidence of excluding things not measured, weighed or counted by the hadith of ibn Umar wherein it was mentioned that he i.e. the Messenger of Allah (saw) bought from Umar a camel and his gifting it to Abdullah bin Umar before taking its possession. So taking possession is not a condition therein contrary to measured, weighed and counted things where taking possession by the buyer of the sold thing is a condition for completing the sale. The taking possession considered taking possession by the Shar’a differs according to the difference of things. The taking possession of each thing is by confining it, so if it is measured and weighed then its taking possession is by measuring or weighing it due to what Al-Bukhari narrated that the Messenger of Allah (saw) who said:

إذا بعتَ فكِل وإذا ابتعتَ فاكتَل
“When you buy then measure and when you sell, measure.”

And from Uthman who said:

كنت أبتاع التمر من بطن من اليهود يقال لهم بنو قينقاع وأبيعه بربح، فبلغ ذلك النبي صلى الله عليه وسلم فقال: يا عثمان إذا ابتعتَ فاكتَل وإذا بعت فكِل
“I used to buy dates from a tribe of Jews who were called: Banu Qaynuqa. I would buy with profit. This reached the Messenger of Allah (saw) who said: ‘O Uthman, when you buy then measure and when you sell then measure.”

Whereas if the sold thing was dirhams and dinars, then taking possession is by hand. If it is clothes then it is by moving them. If it were animals then its taking possession is by walking it from its place. And if it is from that which is not moved or transferred like the house and land, then its taking possession is by vacating between it and its buyer without any obstacle between them. This is because the word taking possession is a word with a deduced definition so if there came no Shar’i text upon it then its reality is considered what an indication to the people is. Taking possession is allowed before or after paying the price because delivery is from the contract’s requirements so whenever it exists after the contract then its reality has occurred. Similarly, taking possession of the price and taking possession of one of the two does not depend upon the other.

Everything forbidden for man, trading it is also forbidden

There are things which Allah (swt) forbade like eating carrion meat, like drinking alcohol, like owning idols, like acquiring statues, like manufacturing paintings. For all these things, there came Shari’ah texts of ayaat and ahadith forbidding them. Whatever Allah (swt) forbade for the slaves from things that the Shari’ah text prohibitted, whether He (swt) forbade eating or drinking other than that, then selling these things became haram due to their price being forbidden. It is narrated from Jabir that he heard the Messenger of Allah (saw) saying:

إن الله حرّم بيع الخمر والمَيْتة والخنزير والأصنام. فقيل: يا رسول الله أرأيت شحوم المَيْتة فإنه يُطلى بها السفن ويُدهن بها الجلود ويَستصبح بها الناس؟ فقال: لا، هو حرام. ثم قال رسول الله صلى الله عليه وسلم عند ذلك: قاتل الله اليهود، إن الله لمّا حرّم شحومها جَملوه ثم باعوه فأكلوا ثمنه
“Verily Allah and His Messenger forbade selling alcohol, carrion, pig and idols. It was said: O Messenger of Allah, what about the grease of carrion because ships are anointed with it, skins are greased and people light themselves a lamp with it? He said: No, it is haram. Then the Messenger of Allah (saw) said regarding that: May Allah perish the Jews. When Allah forbade its grease, they embellished then sold it and ate its price. When Allah forbade for a people eating something, He forbade its price for them.”

This Shari’ah text in forbidding is not reasoned nor does there exist another text which reasons it. Hence it remains unrestricted without being reasoned. So it is not said the reason in forbidding it is the absence of an allowed benefit, so as to conclude from there that if there was an allowed benefit it would be permitted because the absence of reasoning is clear in the text. Nor is it possible to understand from it that it is reasoned. Therefore selling what is forbidden upon the slaves is forbidden whether there is within it an allowed benefit or not. Accordingly it is forbidden to sell idols and crosses, and it is forbidden to sell statues if they are statues of something with life like the human being or animal. And it is forbidden to sell paintings drawn by hand if it is a painting of something with life like a human being or animal.

To be continued...


Anonymous said...


I have a question regarding
"... the Prophet (saw) prohibited the sale of foodstuff before its possession is taken, and due to his (saw) statement:

من ابتاع طعاماً فلا يبيعه حتى يستوفيه
“Whoever buys foodstuff, let him not sell until its full due is given” (narrated by Al-Bukhari)."

I work in a Halal Fast Food shop and the shop owners, who are Muslims, require us, the employees at the till, to first collect the money and then ask the cook to prepare the burgers and fries. The owner wants us to do so because sometimes you have customers who change their mind at the end and don't want to buy the burger anymore, and so the burger cannot be sold anymore as the steaks/meat cannot be placed back inside the freezer. This practice is standard in fast foods, coffee shops and the likes.


Anonymous said...

Dear brother,

According to the reality you have presented, you prepare the food after you recieve the money
which is similar to selling something which you dont own. Selling that which one does not own and that whose ownership has not been accomplished is forbidden due to the ahadith concerning that. The ahadith came generally including all sales of that which is not owned or whose ownership is not completed.

However these general evidences have been specified in other than the sale of advance credit. As for advance credit sale, the Shar’a has excluded it from the prohibition and permitted it. He (saw) said:

من أسلَم فليسلمْ في كيل معلوم ووزن معلوم إلى أجل معلوم
“Whoever pays in advance for something, then he should for a specific measure and a specific weight and for a specific period” (narrated by Al-Bukhari).

The advance credit sale is a category of sale which is contracted according to what a sale is contracted, and by the word “salam” and “salaf”. And it is (also) said “aslam” and “aslaf”. The same conditions are considered as in a sale. The transaction of people in salam and tasleef takes place because they are in need of it particularly the farmers and traders. The owners of crops and fruits need expenditure for themselves and upon it to complete what these crops and fruits require of work. Money could become scarce such that they do not have it, so they sell their produce before it emerges for an advance price which he takes possession of immediately in the contract session (majlis al-‘aqd) upon the condition of delivering the good to the buyer when the imposed period falls due. The traders would sell the goods not with them for a specific period which they would determine, and they take possession of the price immediately in the contract session upon condition of delivering the good when the imposed period becomes due.The permissibility of advance credit sale is established by the Sunnah. It is narrated from ibn Abbas (ra) who said:

Anonymous said...

من أسلف فليسلف في كيل معلوم ووزن معلوم إلى أجل معلوم
“The Prophet (saw) came to Madinah and they would pay in advance for fruits for one or two years so he said: Whoever pays in advance, let him pay in advance for a specific measure and specific weight for a specific period” (narrated by Muslim).

As for where Advance credit sale can be applied, Upon returning to the texts we find that Salam is permitted in everything that is measured and weighed just as it is permitted in everything counted. As for permitting it in what is measured and weighed, this is due to what is established in the hadith of ibn Abbas. The Messenger of Allah (saw) said:

من أسلف فليسلف في ثمن معلوم ووزن معلوم إلى أجل معلموم
“Whoever pays in advance in dates let him pay in advance for a known price and a known weight

for a specified periodThis indicates that the money which is delivered is in what is measured and weighted. As for its permissibility in the counted (things), the Ijma'a has contracted upon the Salam in foodstuff being allowed.This indicates that foodstuff is permitted. Foodstuff is not devoid of being measured, weighed or counted so the rule is related to all that foodstuff which is measured, weighed or counted just like taking possession is related to it in its being of that which needs taking possession of and just as it is related to riba of excess (riba al-fadhl) in its being riba if there is excess in the measure or weight or count, However it is necessary that the things paid for in advance are exact in description like Jurani wheat, Birni dates, Egyptian cotton, Indian silk, Turkish figs and exact in measurement or weight like a Syrian sa’a, an Iraqi pound and the kilo and litre i.e. it is necessary that the measure or weight be known and described.

Just as it is obligatory for the category for which the advance is paid be known, similarly the sale must be for a period and it must be a known period.

As you explained in your situation, you sell something on advance credit sale where some one pays before you prepare the food for him, wherein the food product is of a known entity and category with known measures(weight/count/size), then this is allowed