Principles of Trading in Islam

Brother, we are Indonesian people, who get used to practice the madzhab of Imam Ash Shafi’i, thus, we should consequently perform his guidance below:

مَنْ أَرَادَ الدُّنْيَا فَعَلَيهِ بِالعِلْمِ، وَمَنْ أَرَادَ الآخِرَةَ فَعَلَيهِ بِالعِلْمِ

“Whoever desires the worldly benefits, shall be knowledgeable, and whoever desires the benefits in the Hereafter, also shall be knowledgeable.”

A very beautiful advice that deserves to be written with golden ink. What will happen to us if we do things, either in religious or worldly affairs, without sufficient knowledge?

In religious affairs, doing things without knowledge will sink us into committing innovations. And in worldly affairs, we may perform unlawful things, which will plunge us into doom.

Long before that, Caliph Umar Ibn Khattab -may Allah be pleased with him- had given his advice to all muslims:

اَ يَتَّجِرُ فِي سُوْقِنَا إِلاَّ مَنْ فَقُهَ وَإِلاَّ أَكَلَ الرِّبَا. ذكره ابن عبد البر بهذا اللفظ.
ورواه مالك والترمذي بلفظ: لاَ يَبِعْ فِي سُوْقِنَا إِلاَّ مَنْ قَدْ تَفَقَّهَ فِي الدِّينِ. حسنه الألباني

“None should trade in our markets but the knowledgeable one, because if not, he’ll certainly will consume usury.” (This statement with such text has been cited by Ibn Abdil Bar Al Maliki)

And this statement also was narrated by Imam Malik and Imam At Tirmidhi with a slight textual difference: “None should trade in our market but those who have sufficient religious knowledge.” (Classed hasan by Al Albani).

Imam Al Qurthuby Al Maliki explained: “One who’s not knowing about the laws of trading, although his deeds are not prevented, doesn’t deserve to be fully trusted in managing his wealth. That is because he can not differ the unlawful from the lawful trading, a forbidden from a legal transaction. Also he is susceptible to do practices of usury and other forbidden transactions. This is also applied for infidels who live in Islamic countries.” (Ahkaamul Qur’an, by Imam Al Qurthuby Al Maaliky 5/29)

THE BASIC LAW FOR ALL TRANSACTIONS IS LEGAL

Interactional relationship between men, whether it is in accordance with sharia or not, is unlimited. Every place and period has it’s own distinct form and model of interactions among them that is different to other place and time period. Hence, it is not a wise thing to confine and limit that form of interaction to a specific form. That is why there is no indication that confine the interactions among men in Islamic shari’a. This is an evident fact, and be known to every one who understands Islamic shari’a, even just a bit of it.

One of the proof is a principle in Islamic jurisprudence that states:

الأصل في الأشياء الإباحة، حتى يدل الدليل على التحريم

“The original (basic) law for every things is permitted, unless there is indication that shows the forbidden state of it.”

This principle is supported by some indications from the Qur’an And sunnah, among it is the decree of Allah the Exalted:

هُوَ الَّذِي خَلَقَ لَكُم مَّا فِي الْأَرْضِ جَمِيعًا ثُمَّ اسْتَوَىٰ إِلَى السَّمَاءِ فَسَوَّاهُنَّ سَبْعَ سَمَاوَاتٍ وَهُوَ بِكُلِّ شَيْءٍ عَلِيمٌ

“It is He Who created for you all that is on earth and then turned above and fashioned it into seven heavens. He knows all things.” (QS Al Baqara/The Cow: 29)

And the saying of the messenger of Allah -peace and prayer of Allah be upon him-:

أنتم أعلم بأمر دنياكم. رواه مسلم

“You’re more knowledgeable about your worldly affairs.” (Narrated by Muslim).

As for indication that specifically related to trading, is the decree of Allah the Exalted:

وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبا

“Even though Allah has made buying and selling lawful, and interest unlawful.” (QS Al Baqara/The Cow: 275)

And the messenger of Allah -peace and prayer of Allah be upon him- also said,

إذا تبايع الرجلان فكل واحد منهما بالخيار ما لم يتفرقا وكانا جميعا

“If two men are doing transaction, each of them has the right to choose, as long as they are not yet separated, and still together (in one place).” (Narrated by Al Bukhary no: 4917, and Muslim no: 1531, from a hadith narrated by Ibn Umar -may Allah be pleased with him)

عن رافع بن خديج قال: قيل يا رسول الله! أي الكسب أطيب؟ قال: عمل الرجل بيده وكل بيع مبرور. رواه أحمد والطبراني والحاكم وصححه الألباني

“From Rafi’ Ibn Khadij, he said:” It is said (to the messenger of Allah- peace and prayer of Allah be upon him-) O Messenger of Allah! What income is the best? He replied, “An income from the work of one own hand, and every righteous trading.” (Narrated by Ahmad, At Thabrany, Al Halim, and classed sahih by Sheikh Al Albani. There are also plenty hadith that have similar content to this hadith).

Scholars have also agreed that trading is a lawful job, and this agreement has became a well known part of Islamic sharia. One of the proof is that every scholar who wrote about Islamic jurisprudence or, hadith, always make a specific chapter to discuss various problems regarding trading.

Based on these indications, the scholars stated that the basic law for all trading is legal and lawful, as long as it doesn’t transgress the limitations of sharia.

CAUSES THAT MAKE A FORM OF TRADING CONSIDERED AS ILLEGAL

If it is already understood that the basic law of every trading is legal, next step that supposed to be taken is to recognize the causes that can change that legal state to illegal one in Islam. Because such causes are actually limited, different to the legal trading, which is unlimited in number.

Imam Ibn Rushud Al Maliki said, “If you study about the various causes that make a form of trading become unlawful, you’ll find that those causes are summarized in four things:

• The traded commodity is an unlawful (forbidden) goods.
• The trading contains usury in it.
• The trading contains unclarity (gharar).
• The trading contains requirements that can cause usury and unclarity to be emerged.

These are the most prominent things that cause a form of trading to be illegal or unlawful. (See: Bidayatul Mujtahid 2/102)

Details of the factors above need a distinct and deep explanation, thus to discuss it also take a longer time.

The four factors mentioned by Ibn Rushud above are causes that make forms of trading containing it to be forbidden.

There are also other factors that make a form of trading become unlawful, and are included in term: external factors. Among it are:

(1) Time

It is forbidden for a muslim to trade after the calling of Friday prayer (the second adhan) has been announced. This rule is based on the decree of Allah the Exalted:

يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا نُودِيَ لِلصَّلَاةِ مِن يَوْمِ الْجُمُعَةِ فَاسْعَوْا إِلَىٰ ذِكْرِ اللَّهِ وَذَرُوا الْبَيْعَ ذَٰلِكُمْ خَيْرٌ لَّكُمْ إِن كُنتُمْ تَعْلَمُونَ

“Believers, when the call for Prayer is made on Friday, hasten to the remembrance of Allah and give up all trading. That is better for you, if you only knew.” (Qs. Al Jum’ah/The friday prayer: 9)

(2). Forgery

It is known that forgery is forbidden in Islam, in every single thing, And if the forgery occurred in the trading contract, it causes the trading to be unlawful.

البيعان بالخيار ما لم يتفرقا، فإن صدقا وبينا بورك لهما في بيعهما، وإن كذبا وكتما محقت بركة بيعهما. متفق عليه

“The two parties to a transaction have the option (of canceling it) until they part. If they are honest and disclose any defects, their transaction will be blessed, but if they lie and conceal defects the blessing will be erased.” (Muttafaqun ‘alaih)

In another hadith, the Messenger of Allah said:

من غشنا فليس منا

“Whoever fools us, is not a part of us.” (Narrated by Muslim)

(3). Creating loss to other people

عن أبي هريرة رضي الله عنه قال: قال رسول الله صلى الله عليه و سلم: لا تحاسدوا ولا تناجشوا ولا تباغضوا ولا تدابروا ولا يبع بعضكم على بيع بعض وكونوا عباد الله إخوانا، المسلم أخو المسلم لا يظلمه ولا يخذله ولا يحقره. متفق عليه

“From Abu Huraira -may Allah be pleased with him-, he said: The messenger of Allah -peace and prayer of Allah be upon him- said: Do not envy one another, do not raise the bargain of goods (without any intention to buy it), do not hate one another, do not plan mischief to each other, do not take over the buying of some of you, and be brothers! A muslim is a brother to other muslim, he doesn’t oppress his brother, doesn’t let him be violated by other, and doesn’t mock him.” (Muttafaqun ‘alayh)

Among the forms of trading that causes loss to other people are:

• Hoarding of goods

Among the practice of this principle is to forbid the hoarding of necessities of society, as stated by the Messenger of Allah -peace and prayer of Allah be upon him:

من احتكر فهو خاطئ. رواه مسلم وغيره.

“Whoever hoards is a sinner.” (Narrated by Muslim)

• Stepping over the bargain or selling of muslim fellows

لا تلقوا الركبان ولا يبع بعضكم على بيع بعض ولا تناجشوا ولا يبع حاضر لباد. رواه البخاري ومسلم

“Do not hinder the villagers who bring their goods (to the market), and some of you shouldn’t step over the selling of the other, and do not raise the bargain of a thing (without any intention to buy it), and the city dwellers shouldn’t sell the goods of the villagers.” (Narrated by Bukhari and Muslim)

• Brokering

عن جابر بن عبد الله رضي الله عنه قال قال رسول الله صلى الله عليه و سلم : لا يبع حاضر لباد دعوا الناس يرزق الله بعضهم من بعض. رواه مسلم

“From Jabir Ibn Abdillah -may Allah be pleased with him-, he said: The messenger of Allah -peace and prayer of Allah be upon him- said, “The city dwellers shouldn’t sell the goods of the villagers, and let the people, some of them are given sustenance by Allah from the others.” (Narrated by Muslim).

To be continued