Laws of Trade / How should one start one’s business?

If a contractor delays the work, will it be permissible to deduct money from the amount of money decided for the work?

Question 1: What do blessed Islamic scholars state on the following issue? We contract somebody to make furniture for our home. The period of completion is also decided i.e. he will make it and deliver it until such-and-such date. The amount of money is also decided i.e. this amount of money will be paid in advance and this amount of money will be paid during the work. Then, he delays the work for a few months. Now, can we deduct some amount of money from the amount of money decided for the work?

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

Answer: No, it is not permissible! It is a form of financial penalty and according to the teachings of Islam, financial penalty is not permissible. It is the opinion of Hanafi Islamic jurists. Therefore, this issue should be resolved with mutual understanding. Another solution to it is that you should ask him to return you your money and the deal should be cancelled with mutual consent.

وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم  صلَّی اللہ علیہ واٰلہٖ وسلَّم

Can a person decide the price of a commodity after buying it?

Question 2: What do blessed Islamic scholars state about the following issue? I get some commodities from the owner of a workshop or a factory and display them at my showroom and then I sell them out. After selling them, I decide the price of the commodity with the owner of the factory. Is it permissible to decide the price with him after selling out the product?

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

Answer: No, it is not permissible to do so since it is a principle of the blessed Shari’ah that it is necessary to know the price of the thing you are buying. There are points of wisdom of the laws and principles of Shari’ah. One of them is that no dispute should arise after that. The deal should be free from loss and harm for both the parties. Therefore, the method mentioned in the question is not permissible, and nor will the income of such a deal be Halal.

وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم  صلَّی اللہ علیہ واٰلہٖ وسلَّم

What do Islamic scholars say about the gifts which shopkeepers get from the company?

Question 3: What do blessed Islamic scholars state about the following issue? I have a shop of foam mattresses. My question is: Is it permissible to receive the gifts which the company gives (us) to promote its product?

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

Answer: There are different conditions in this question. Their rulings are as follows:

1.   It is permissible to receive a small gift which is given for publicity. For example, calendars are normally given to hang in the shops. It has company’s name on it which becomes the reason for its publicity. Sometimes, a small decorative piece that is kept on the table is given. It has the company’s name on it. It is given for the publicity of the company. Receiving such gifts is permissible.

2.   There is a gift which is given on selling the product. It means if a shopkeeper sells such-and-such a number of products, then he will get the gift. It is also permissible.

3.   There is also a gift which is given by the company on condition that the shopkeeper will only sell the products of their company, not that of other companies. If the shopkeeper does it, the company will give him the gift. It is a kind of bribe.

The gifts given to doctors in the form of different packages by pharmaceutical companies also fall into the category of the third condition.

If you want to stop selling the products of other companies on your own, you can do so. You are not bound to sell the products of every company or any particular company. If a company gives you a gift for selling its products, then there is no harm in it. However, if a gift is given by saying: ‘If you stop selling the products of other companies, you will get this gift’, then it will be regarded as a bribe and it is not permissible.

The above-mentioned answer is about a general practice. As for foam mattress shopkeepers, they have a dealership contract. Dealers deal with a single company only. They do not deal with any other brand. Since they have already chosen a company, only the first two conditions will occur in the asked situation.  صلَّی اللہ علیہ واٰلہٖ وسلَّم وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم

What do Islamic scholars say about making an agreement to give milk daily along with salary to labourer?

Question 4: What do blessed Islamic scholars state on the following issue?  If an agreement is made with a milkman in a way that he will get eight thousand rupees monthly and one litre milk daily as his salary, will it be permissible?

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

Answer: Yes, it will be permissible. There is no harm in it according to Shari’ah. An agreement is also usually made with the labourers - who are hired here - that they will be given food. If it has been agreed that the milkman will also get one litre milk, there is no harm in it either.  صلَّی اللہ علیہ واٰلہٖ وسلَّم وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم 

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Laws of Trade / How should one start one’s business?

The benefit of a business is not limited to the businessman who starts it, but rather it trickles down to others as well through his employees. A businessman becomes the source of income for many families. A businessman not only improves his financial condition by his business, but he also plays his role in the economic development of the country.

When a man starts a business, such thoughts come to his mind, ‘I have no experience of business’. ‘What will happen if I lose my money? ‘My life savings will be lost’. ‘If I start [a business] after getting a loan and it fails, it will take ages for me to pay it off, ‘etc.

These thoughts are similar to the thought of the one who before entering a contest starts thinking that he will lose. The solution to these thoughts and concerns may be sought in the lights of the following points

1.   First of all, decide on the nature of the business you want to do. If you have no experience, try to increase the ability required for this particular business to minimize the possibility of the loss. You can develop this ability in the following ways:

a.   Firstly, consult with the person who has the knowledge or experience of this business.

b.   Secondly, do learn the work for a few days or a few months. In this way, you will get two major benefits from it: (i) One of the benefits of doing business after learning it is that you can protect yourself to a great extent from being deceived. (ii) Another benefit of doing business after learning it is that you will be known to many people in the market as people hesitate to do business with a totally unknown person. Anyway, things will get easy for a person right from the very beginning if he starts his business after gaining sufficient experience. 

2.   Divide your money into three parts and then start your business with one part. ‘Do not put all your eggs in one basket’, as the proverb states.

3.   If you find it difficult to start a business alone, you can enter into a partnership with a friend or relative you trust in a Shari’ah-compliant way.

4.   Most of the time people start a business with great enthusiasm, but lose courage when they fail a bit. Remember! There is no shortcut to success. In order to succeed, one needs ability, patience and determination. These things lead to success. 

5.   The quality of product or service you offer should be better than your competitors. If the quality of the product is not good, advertisement alone cannot work; people may be deceived once but they will not buy the product again. On the contrary, if the product is of good standard and the service is satisfactory, your customers will advertise for you.

6.   Fix a reasonable price for your product.

I pray to Allah Almighty to give us Taufeeq to do business according to a Shari’ah-compliant way with good intentions. اٰمِیْن بِجَاہِ النَّبِیِّ الْاَمِیْن  صلَّی اللہ علیہ واٰلہٖ وسلَّم

 

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