Islam demands a certain type of behaviour from the economic agents – the consumers and the producers. The behaviour prescribed for the economic units of the society are so devised as to lead to a happy state of affairs, which is the ultimate goal of Islam.
An Islamic market is characterized by certain norms that take care of the interests of both the buyer and the seller. There are a number of rules of ethical discipline in Islamic commercial transactions without which business contract would be regarded as lacking perfection in the light of the code of good manners, decency and ethical excellence. Some of these tenets are as follows:
1. Keenness to Earn Legitimate (Halal) Earnings Islam places great emphasis on the code of lawful and unlawful in business transactions. Many Qur’anic verses disapprove the wrongful taking of the property.
Says the Holy Qur’an: Do not devour one another’s property wrongfully, nor throw it before the judges in order to devour a portion of other’s property sinfully and knowingly. (2:188)
Do not devour another’s property wrongfully – unless it be by trade based on mutual consent. (4:29)
The above verses prohibit the believers in no uncertain terms to devour the property of others by illegal means. The Prophet (sws) endorsed the importance of legitimate ways of earning in the following words: Asked ‘what form of gain is the best? [the Prophet] said, ‘A man’s work with his hands, and every legitimate sale’. (Ahmad, No: 1576)
From the above it is clear that a Muslim trader must be determined to earn only through legitimate means. He should not only avoid illegitimate means in earning his provisions and livelihood but also distance himself from matters dubious and doubtful.
The Prophet (sws) is also reported to have said: Leave what makes you doubt for things that do not make you doubt. (Tirmidhi, No: 2442)
Things legitimate and illegitimate are clearly defined in Islam and, in between them, are doubtful things, which should be avoided. A true Muslim businessman should be wary of the doubtful things in order to keep himself clear in regard to his faith and his honour because one who falls into doubtful matters is sure to fall into that which is unlawful (Haram).
A tradition of the Prophet (sws) states: A time will come upon the people when one will not care as to how he gets his money whether legally or illegally. (Bukhari, No: 1941)
Fear Allah and give up what remains of your demand for usury if you are indeed believers
1. RIBA
Foremost among the unacceptable business practices strongly condemned in Islam is Riba. Riba (interest), by definition, is the extra sum the moneylender charges from the borrower for deferred payment. Islam has forbidden all forms of Riba since it involves both oppression and exploitation. Islam strictly forbids this form of tyrannical dealings and condemns it in severe terms. The Holy Qur’an says: Allah has permitted trading and forbidden Riba (usury). (2:275)
Devour not Riba doubled and re-doubled. (3:130) It further states: O you who believe! fear Allah and give up what remains of your demand for usury if you are indeed believers. If you do it not, take notice of war from Allah and his Apostle: but if you turn back you shall have your capital sums; deal not unjustly and you shall not be dealt with unjustly. (2:278)
The Sunnah is equally emphatic in denouncing Riba. The Prophet (sws) is reported to have said: May Allah send down His curse on the one who devours Riba and the one who pays it and on the two witnesses and on the person writing it. (Ahmad, No: 624)
These and many other verses of the Qur’an and traditions of the Prophet (sws) clearly demonstrate that all those business transactions which involve interest in one form or other, are unlawful in the sight of Islam. According to the Qur’anic teachings there is a clear distinction between genuine business profits and interest; while the former is recommended and desirable, the latter is hated and undesirable.
3. Trade through Mutual Consent Mutual consent between the parties is a necessary condition for the validity of a business transaction. It, therefore, follows that a sale under coercion is not acceptable in Islam.
A sale transaction is to be regarded as legal only if it is made through the mutual consent of the parties concerned. Taking advantage of someone’s plight and charging high price is also a form of pecuniary exploitation and as such forbidden in Islam. The Holy Qur’an says: O you who believe! eat not up your property among yourselves in vanities: but let there be amongst you traffic and trade by mutual goodwill: nor kill [or destroy] yourselves: for verily Allah has been to you Most Merciful. (4:29) Thus two key elements of general theory of contract are endorsed emphatically in these verses: mutual consent and gainful exchange. One can also find importance of mutual consent for legality of a business deal. The Prophet (sws) is reported to have said: A sale is a sale only if it is made through mutual consent. (Ibn Majah, No: 2176)
An Islamic market is characterized by certain norms that take care of the interests of both the buyer and the seller. There are a number of rules of ethical discipline in Islamic commercial transactions without which business contract would be regarded as lacking perfection in the light of the code of good manners, decency and ethical excellence. Some of these tenets are as follows:
1. Keenness to Earn Legitimate (Halal) Earnings Islam places great emphasis on the code of lawful and unlawful in business transactions. Many Qur’anic verses disapprove the wrongful taking of the property.
Says the Holy Qur’an: Do not devour one another’s property wrongfully, nor throw it before the judges in order to devour a portion of other’s property sinfully and knowingly. (2:188)
Do not devour another’s property wrongfully – unless it be by trade based on mutual consent. (4:29)
The above verses prohibit the believers in no uncertain terms to devour the property of others by illegal means. The Prophet (sws) endorsed the importance of legitimate ways of earning in the following words: Asked ‘what form of gain is the best? [the Prophet] said, ‘A man’s work with his hands, and every legitimate sale’. (Ahmad, No: 1576)
From the above it is clear that a Muslim trader must be determined to earn only through legitimate means. He should not only avoid illegitimate means in earning his provisions and livelihood but also distance himself from matters dubious and doubtful.
The Prophet (sws) is also reported to have said: Leave what makes you doubt for things that do not make you doubt. (Tirmidhi, No: 2442)
Things legitimate and illegitimate are clearly defined in Islam and, in between them, are doubtful things, which should be avoided. A true Muslim businessman should be wary of the doubtful things in order to keep himself clear in regard to his faith and his honour because one who falls into doubtful matters is sure to fall into that which is unlawful (Haram).
A tradition of the Prophet (sws) states: A time will come upon the people when one will not care as to how he gets his money whether legally or illegally. (Bukhari, No: 1941)
Fear Allah and give up what remains of your demand for usury if you are indeed believers
1. RIBA
Foremost among the unacceptable business practices strongly condemned in Islam is Riba. Riba (interest), by definition, is the extra sum the moneylender charges from the borrower for deferred payment. Islam has forbidden all forms of Riba since it involves both oppression and exploitation. Islam strictly forbids this form of tyrannical dealings and condemns it in severe terms. The Holy Qur’an says: Allah has permitted trading and forbidden Riba (usury). (2:275)
Devour not Riba doubled and re-doubled. (3:130) It further states: O you who believe! fear Allah and give up what remains of your demand for usury if you are indeed believers. If you do it not, take notice of war from Allah and his Apostle: but if you turn back you shall have your capital sums; deal not unjustly and you shall not be dealt with unjustly. (2:278)
The Sunnah is equally emphatic in denouncing Riba. The Prophet (sws) is reported to have said: May Allah send down His curse on the one who devours Riba and the one who pays it and on the two witnesses and on the person writing it. (Ahmad, No: 624)
These and many other verses of the Qur’an and traditions of the Prophet (sws) clearly demonstrate that all those business transactions which involve interest in one form or other, are unlawful in the sight of Islam. According to the Qur’anic teachings there is a clear distinction between genuine business profits and interest; while the former is recommended and desirable, the latter is hated and undesirable.
3. Trade through Mutual Consent Mutual consent between the parties is a necessary condition for the validity of a business transaction. It, therefore, follows that a sale under coercion is not acceptable in Islam.
A sale transaction is to be regarded as legal only if it is made through the mutual consent of the parties concerned. Taking advantage of someone’s plight and charging high price is also a form of pecuniary exploitation and as such forbidden in Islam. The Holy Qur’an says: O you who believe! eat not up your property among yourselves in vanities: but let there be amongst you traffic and trade by mutual goodwill: nor kill [or destroy] yourselves: for verily Allah has been to you Most Merciful. (4:29) Thus two key elements of general theory of contract are endorsed emphatically in these verses: mutual consent and gainful exchange. One can also find importance of mutual consent for legality of a business deal. The Prophet (sws) is reported to have said: A sale is a sale only if it is made through mutual consent. (Ibn Majah, No: 2176)
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