Fundamental Fiqh of Business, Investment & Trade

Answered according to Hanafi Fiqh by

Answered by Shaykh Yusuf Badat


Can you summarize for me the basics of Islamic business and trade rules.


Thank you/ Jazakumullahu Khayran for your question.

The following are major conditions for a valid transaction in the light of the Qur’an & Sunnah:

  • The offer and acceptance. The offer and acceptance can be conducted verbally, in writing or with gestures. A sale conducted without an offer and acceptance is therefore invalid.
  • The merchandise must be pure and lawful. It is therefore invalid to transact something that is unlawful (such as wine, pork etc.).
  • The merchandise or commodity must be definite which possesses legal value in exchange for something equivalent in value (called price).
  • The seller must own the merchandise. It is therefore invalid to transact something that one does not own.
  • The merchandise must be known. It is therefore invalid to transact something that is unknown, ambiguous or uncertain in a manner that leads to dispute and deception.
  • The merchandise must be in a position to be delivered. The sale of a bird in the air or fish in the water is void. It is also invalid, for example, to transact something that a third party has wrongfully appropriated when the seller is unable to take it back from him.
  • The seller should also beware of deception, which occurs when the owner of the merchandise knows something about the merchandise that the buyer does not know which, if the buyer knew it, he would not take the merchandise for the same price. It is obligatory for the seller to inform the buyer of it so that he takes the merchandise in full knowledge.
  • The seller should also beware of swearing false oaths to promote his merchandise.
  • The seller and the buyer must refrain from usury / interest (riba).

(Mukhtasar al Quduri)

And Allah Knows Best

This answer was collected from It’s an Islamic educational institute based in Canada. The questions are generally answered by Sheikh Yusuf Badat and Sheikh Omar Subedar.

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