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Broker who also Takes Commission from Seller and Guarantees Goods

I own a brokerage firm to facilitate between buyers and Chinese factories where we receive commission from both parties. However, the buyer doesn`t know that we also collect a commission from the seller. What is the ruling of Sharia on this transaction?

Answer:

Praise be to Allah the Lord of the Worlds.

Based on the letter you sent, we {Iftaa` Department} understood that you don`t always succeed in concluding a deal between the buyer and seller or factory. Rather, you role is  contracting with the buyer to provide certain goods, which aren`t in your possession at the time of concluding the sale contract. However, the Messenger of Allah (PBUH) said, " Do not sell what you do not possess."{Abu Dawoud}. Hanafi jurists have permitted Istisna`-selling that which will be manufactured-but, they stated that the buyer decides, upon seeing the goods, whether to buy them or not.

We are of the view that, you should go about your business in one of two ways:

First: Introduce the importer to the factory or wholesaler who has the required goods and take a commission from the importer against that, or market the goods of the factory against a fair from the latter and bear no responsibility regarding the quality of the goods.

Second: Show samples of the goods to buyer and buy them on his behalf for the agreed price since you are authorized by the latter to do so. Then, you provide the buyer with the goods from the producer. This is defined as authorizer-authorized relation, which applies to all the Sharia obligations included in this contract. In addition, the money paid to you by the buyer is classified under the term Ju`alah(Conditional payment). Guaranteeing the goods is the responsibility of the authorized, not you, because he is entrusted with that.

I pray that Allah protect us from the unlawful transactions and those who undertake them. And Allah the Almighty knows best.

This answer was collected from the official government Iftaa Department of Jordan.

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