Honesty in buying and selling

My father has sole agency rights of a Malaysian company in Pakistan. That means he works as a broker and only he can import goods in Pakistan from that company.

My father imports, gets possession of product and sells. But some customer asks for the whole container, so he acts as a broker between the company and buyer. The company allows in the contract that whatever price my father sells above the price of the company, the price above will be the commission of my father. I just read a similar hadis of Sahih Al bukhari which allows this.
Hadis:
Ibn ‘Abbaas said: There is nothing wrong with saying, “Sell this garment and whatever there is above such and such a price is yours.”
But the question is can my father pretend to the buyer that it is the company price that he is quoting to him so that there is no place for bargain?

In the name of Allah, the most Beneficent, the most Merciful.

Answer

It is one of the etiquettes of buying and selling that the seller must give full and truthful information. The Prophet of Allah Sallallahu Alahi Wasalam said “All merchants are resurrected on the Day of Judgement as sinners, except for those who feared Allah, treated their customers well, and were truthful.” (Sunan Tirmizi p.230 v.1)

The following situation if undertaken by your father will amount to deception. The Prophet of Allah Sallallahu Alahi Wasalam has said; “Whoever bears arms against us is not one of us and whoever cheats us is not one of us.” (Sahih Muslim p.70 v.1)

Once the Prophet of Allah Sallallahu Alahi Wasalam passed by a pile of food in the market. He put his hand inside it and felt dampness although the surface was dry. He Sallallahu Alahi Wasalam said; “O owner of the food, what is this?” The Man side; “It was damaged by rain, O Prophet of Allah.” He said; “Why didn’t you put the rain damaged food on top so that people could see it! Whoever cheats us is not one of us.” (Sahih Muslim p.70 v.1)

The following is the ruling on taking commission.

In a situation where the commission is fixed, such as when the broker sells a car and charges £100 for the brokering service, then this is permissible.

Imam Bukhari (RA) has formed a chapter in his Sahih entitled ‘Chapter regarding the commission of brokerage’ in which he states: Ibn Sirin, Ata’, Ibrahim and Al-Hasan did not think that there was anything wrong in a broker receiving a commission.  Saaiduna Ibn Abbas Radiallahu Anhu said “There is nothing wrong in one saying, “Sell this garment and whatever you receive above such-and-such amount is yours.”   (Sahih Bukhari p.303 v.1)

As for those situations where the broker takes a certain percentage from the sale i.e. where the commission is not fixed, there are differences of opinions.  In the Hanafi Fiqh, it is considered permissible.  Even though the commission of the broker was initially unknown, when the item was sold the amount became clear, thus no ambiguity remains.  (Taqrir Tirmizi p.59 v.1)

Only Allah Knows Best

Mohammed Tosir Miah

Darul Ifta Birmingham