How can I make my wardrobe business Shari’ah compliant?

Question:

I own a business selling made to measure wardrobe doors. The customer provides me with specification of the doors. We agree a price. And customer pays, then I forward specification of the doors  to a third party company whom manufacture the doors and deliver direct to my customer. Is this shariah compliant, if not how do I make this shariah compliant?

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Selling something which one does not possess is generally not permissible in Sharī`ah except in the following two sales:
1)    Salam (forward sale)
2)    Istiṣnā` (Manufacturing contract)

A business of selling made to measure wardrobes is conceptually an ‘istiṣnā’ (manufacturing) contract.  The following points must be kept in mind when contracting an ‘istiṣnā’ agreement:

1. The specifications of the product to be manufactured must be clearly stated.
2. The price must be fixed when formulating the agreement.  The payment does not need to be made in full on spot.  The payment may be deferred partially or completely.
3. A specific date of delivery does not need to be stipulated.  An estimate date of delivery or a maximum date of delivery may be suggested.
4. Before the manufacturing work has begun, any party can cancel the contract after giving notice to the other.  Once the manufacturer has begun constructing a product, the contract cannot be cancelled unilaterally.
5. The manufacturer is responsible for sourcing the parts and raw material when manufacturing the product.

However, a supplier who has been given an order and cannot manufacturer something himself may enter into an istiṣnā’ agreement with another manufacturer.  In essence, he would be contracting two different Istiṣnā’ agreements; one as a customer and the other as a supplier.  This is known as Parallel Istiṣnā’.
For such an agreement, you may continue as you are doing with the additional following points and adjustments:

1. The agreement between yourself and your customer must be independent from the agreement between yourself and the manufacturing company.
2. If the manufacturing company from which you order from fails to meet its obligations, you are still obliged to meet your obligations to the customer.
3. You must bear the costs of the delivery from the manufacturer to the customer.

Thus, your business in essence is a Parallel ‘istiṣnā’ business which will be permissible considering the above adjustments and points.
And Allah Ta’ālā Knows Best
Mufti Faraz Adam 
www.darulfiqh.com