There is no question that there is an Islamically or sharia-compliant way of conducting business affairs, which we find in the Quran and Sunnah (Prophetic tradition). One of the first things we learn as muslims about the Prophet Muhammad (ﷺ) is that he was a trader, who was known for being consistently truthful and trustworthy in his business dealings, as well as his personal interaction with people. In fact, his first wife Khadijah (رضي الله عنها) proposed marriage and employment on the basis of the Prophet’s (ﷺ) outstanding character. And, Allah testifies to his character in the Quran:

وَإِنَّكَ لَعَلَىٰ خُلُقٍ عَظِيمٍ

And verily, you (O Muhammad SAW) are on an exalted standard of character. (Al-Qalam 68:4)

There are many examples in the Quran and Sunnah and the lives of the companions that testify to the obligation of being honest and transparent in our business dealings as muslims. The sad reality is that a very large percentage of muslims today (perhaps a majority) are the worst examples of such virtues. They cheat, lie and deceive, as though it’s part of normal business practice.

In fact, many muslim-owned businesses sell goods and services that are clearly haraam (prohibited), and this is probably the first matter we should address when it comes to Islamic business practices.

It is clearly forbidden to produce or sell products or services that Allah and His Messenger (ﷺ) have forbidden. So, one of the most important Islamic business practices is to refrain from selling what is clearly forbidden, as it is also detested (makrooh) to sell what Allah and His Messenger (ﷺ) have detested.

Some people believe that the prohibition is strictly in the consumption or use of the forbidden product or service.   Perhaps they are unaware that one the maxims of Sharia says that the road to what is prohibited is just as prohibited as the product/activity which is prohibited. This is based on the following verse in the Quran:

وَلَا تَعَاوَنُوا عَلَى الْإِثْمِ وَالْعُدْوَانِ ۚ وَاتَّقُوا اللَّهَ ۖ إِنَّ اللَّهَ شَدِيدُ الْعِقَابِ

And, do not help one another in sin and enmity/hostility. And fear Allah. Verily, Allah is Severe in punishment. (Al-Ma’idah 5:2)

The above verse clearly instructs us that we are not to help, encourage or make a way for one another to sin and transgress the bounds set by Allah and His Messenger (ﷺ). There should be no question that selling a product or service that is prohibited is in effect making it available for others to consume it or indulge in it.

The Prophet Muhammad (ﷺ) said:

“Verily Allah ta’ala has laid down religious obligations (fara’id), so do not neglect them; and He has set limits, so do not overstep them; and He has forbidden some things, so do not violate them; and He has remained silent about some things, out of compassion for you, not forgetfulness — so do not seek after them. A hasan hadeeth narrated by ad-Daraqutnee and others.”

If someone is not entirely convinced about the prohibition of producing or selling what is clearly prohibited (in addition to consumption/use), let him reflect on the following hadith from the Prophet (ﷺ):

“That which is lawful is clear and that which is unlawful is clear, and between the two of them are doubtful matters about which many people do not know. Thus he who avoids doubtful matters clears himself in regard to his religion and his honor, but he who falls into doubtful matters [eventually] falls into that which is unlawful, like the shepherd who pastures around a sanctuary, all but grazing therein. Truly every king has a sanctuary, and truly Allah’s sanctuary is His prohibitions. Truly in the body there is a morsel of flesh, which, if it be whole, all the body is whole, and which, if it is diseased, all of [the body] is diseased. Truly, it is the heart.”

One of the most despicable violations of Islamic business practices is tricking or deceiving people into believing the product or service being sold is permissible, while it is clearly prohibited. This is despicable in that it involves two levels of prohibition: the prohibition of the product or service, in addition to the prohibition of trickery or deception. And, if the intention is to make the prohibited permissible, it takes the person with such intention into a state of apostasy. Allah says in the Quran:

قَاتِلُوا الَّذِينَ لَا يُؤْمِنُونَ بِاللَّهِ وَلَا بِالْيَوْمِ الْآخِرِ وَلَا يُحَرِّمُونَ مَا حَرَّمَ اللَّهُ وَرَسُولُهُ

Fight those who do not believe in Allah or in the Last Day and who do not consider unlawful what Allah and His Messenger have made unlawful… (At-Tawbah 9:29)

With regard to deception and trickery, there is no question from the Quran and the Sunnah that it is a despicable practice.

Allah says in the Quran:

إِنَّ اللَّهَ لَا يُحِبُّ مَن كَانَ خَوَّانًا أَثِيمًا

Indeed, Allah loves not one who is a habitually sinful deceiver. (An-Nisa’ 4:107)

يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَكُونُوا مَعَ الصَّادِقِينَ

O you who believe! Be afraid of Allah, and be with those who are true (in words and deeds). (At-Tawbah 9:119)

Regarding honesty and truthfulness in business, Abu Huraira (a companion of the Prophet ﷺ) narrated that the Messenger of Allah (ﷺ) passed by a pile of food. He put his fingers in it and felt wetness. He said: ‘O owner of the food! What is this ?’ He replied: ‘It was rained upon O Messenger of Allah.‘ He said: ‘Why not put it on top of the food so the people can see it?’ Then he said: ‘Whoever cheats, he is not one of us.'”

Regarding the same matter of deception and trickery, the Prophet (ﷺ) also said:

“A Muslim is the brother of a Muslim: he does not oppress him, nor does he fail him, nor does he lie to him, nor does he hold him in contempt.”

We find that one of the most serious offenses related to trickery and deception is in the so-called area of Islamic finance or Islamic banking.   Many so-called Islamic financial institutions offer loans based on interest (Riba’), but they use contractual terminology such as profit or some other terminology in place of the term interest. So, they are actually engaging in a practice of disguising the prohibited with the permissible, which Allah refers to in the Quran:

الَّذِينَ يَأْكُلُونَ الرِّبَا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ۚ ذَٰلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا ۗ وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest. (Al-Baqarah 2:275)

The type of person mentioned in the above verse is someone who believes that you can make a profit from lending money, which is entirely prohibited in Islam because it takes advantage of those in need. It also has the very real potential to enslave them to those who have the ability to lend money, among other potentially evil outcomes related to charging interest.

According to Islamic law, a loan is an act of righteousness, and not a business transaction. So, those who have the ability to lend money, such as wealthy individuals or corporations, should do so to contribute to the betterment of others, and that is a very profitable transaction with Allah, who says:

مَّن ذَا الَّذِي يُقْرِضُ اللَّهَ قَرْضًا حَسَنًا فَيُضَاعِفَهُ لَهُ أَضْعَافًا كَثِيرَةً ۚ وَاللَّهُ يَقْبِضُ وَيَبْسُطُ وَإِلَيْهِ تُرْجَعُونَ

Who is he that will lend to Allah a goodly loan so that He may multiply it to him many times? And it is Allah that decreases or increases (your provisions), and unto Him you shall return. (Al-Baqarah 2:245)

In essence, Allah has made trading and commerce permissible, but prohibited any type of trade than can lead to harming and enslaving people. Allah says:

وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

But Allah has permitted trade and has forbidden interest. (Al-Baqarah 2:275)

Conducting business or commerce according to Islamic business practices (found in the Quran and the Sunnah) ensures that we earn a living without harming or inconveniencing another believer, to the extent that we should avoid selling the goods of a person whom we cannot fully represent, due to economic, cultural or other differences. The Prophet (ﷺ) said:

“A city dweller should not sell items for a desert dweller.”

A city dweller selling the goods of a desert dweller may inadvertently cause harm to the desert dweller because he does not fully understand or appreciate the needs of the desert dweller. [It is important to mention here that this business practice does not fall under the wajib (obligatory) category of Sharia. It is mustahab (highly recommended).]

Most of today’s muslims would jump at the opportunity to keep things unclear upfront in a business transaction in order to take advantage and manipulate the situation in their favor later. And, in accordance to the Quran and Sunnah, this is despicable practice.

The Sunnah also teaches that a business transaction/agreement is not completed until two people walk away from each other, at which point the transaction is considered sealed. The Prophet (ﷺ) said:

“Both parties in a business transaction have the right choice (to confirm or annul the deal) as long as they have not separated.”

Among the scholars of Sharia, there are generally five accepted pillars of trade, and they are as follows:

  1. The seller must be the owner of whatever he sells, he should have permission to sell what he is selling. He must also be a responsible person, and not foolish or immature.
  2. The buyer should be someone who is allowed to carry out transactions., meaning that he should not be an immature or foolish person who does not have permission to make deals.
  3. The goods intended for sale must be permissible (according to Sharia), pure (containing nothing harmful or unclean) and deliverable to the buyer, who must be aware of what is being delivered to him.
  4. There must be a verbal offer and acceptance, which involves a verbal request on the part of a buyer for the merchandise and a verbal response from the seller that he has such merchandise for sale.
  5. The business transaction is invalid without the mutual consent of both the buyer and the seller because the Prophet (ﷺ) said: “The business transaction is only by mutual satisfaction (or acceptance).”

There is much more to be said regarding Islamic business practices, as it is a fairly vast subject related to fiqh al-mu’amalaat (the jurisprudence of transactions), which cannot be covered adequately in this short commentary.

And Allah knows best…

Suleiman Anwar

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