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Ruling when Traders Ask the Management of a Factory to Sell them Goods for which there is a Local Agent

Answered according to Shafi'i Fiqh by Darul Iftaa Jordan
Traders purchase goods from local and international markets and exert tremendous efforts to promote them and provide after sale services. Others go to the main factory (Local or abroad) or the local importer and make different attempts which I will mention seeking the ruling of Sharia on each in order for my fellow traders and I to adhere to the teachings of Sharia in this regard. 1-The external supplier or the factory-foreign or domestic-agreed with a local trader to be the sole local agent in his country and the latter does his duty in terms of promotion, providing after-sale services and the necessary maintenance. A-My question, here, is when a local trader contacts the foreign supplier or factory and asks them to sell him that same commodity and stop selling it to the local agent under any excuse. B-A local trader contacts the foreign supplier or the factory and asks to be sold the same commodity under a different name or brand while keeping the local agent of that same commodity. In other words, the same commodity is to be sold in the market under its original name through the local agent and under other names through another trader. C- In any of the two aforementioned cases and aiming to cause harm to the local agent, the local trader seeks to pave the way for the factory to increase the price of the commodity or push the local agent to order greater quantities of that commodity although the market may not be in need for that. D-In all cases: The act of going to the factory owner or the foreign supplier in the first, second or third case could cause the local agent to experience different levels of stress. 2-The external supplier and the factory-foreign or domestic-agree with a local trader to be the sole agent in his country, but the former fails to promote the commodity, provide after-sale service and maintenance. Is it permissible for the traders to contact the owner of the factory in order to be either the agents of the original commodity itself or under other names. 3-All these questions fall into two parts: The goods are essential to the ordinary consumer. They comprise of foodstuffs, home appliances, electric appliances or machines and the like. "Allah's Messenger (Blessings and peace be upon him) forbade one to bid against another (to raise the price); that someone sell (his product) by canceling the sale of his brother."[Agreed upon] apply on all the aforementioned? Does this Hadith indicate prohibition selling a product by cancelling the sale of his brother or the Messenger (Blessings and peace be upon him) is just calling for enjoying good manners?

Answer:

All perfect praise be to Allah, The Lord of The Worlds. May His peace and blessings be upon our Prophet Muhammad and upon all of his family and companions.

In principle, people should deal with each other based on the Prophetic saying, "There should be neither harming nor reciprocating harm" {Musnad Ahmad, V.1:313}. Whatever causes harm to others is prohibited; however, lawful harm is like when a bankrupt person sells his property to settle a debt. Here, the harm is unavoidable and the harm inflicted on a debtor because of not affording to pay it off is more deserving than inflicting harm on the creditor.

Some matters might seem apparently permissible; however, they should be avoided if they cause harm to others. For example, if someone constructs a high building blocking the sun and the wind from his neighbor, this doesn`t forbid him to build on his own land. However, if his intention is to inflict harm on his neighbor, then he is considered sinful.

Here, the following prophetic narration applies. It states: "Wabisa b. Ma'bad reported God’s Messenger as saying, “Have you come to ask about righteousness and sin, Wabisa?” When he replied that he had, he joined his fingers and striking his breast with them said, “Ask yourself for a decision, ask your heart for a decision (saying it three times). Righteousness is that with which the soul is tranquil and the heart is tranquil, but sin is that which rouses suspicion in the soul and is perplexing in the breast, even if people give you a decision in its favour.” {Musnad Ahmad, V.4:228}. Amongst the meanings of this Hadith is that a person shouldn`t do to others what he dislikes to be done to him. As for the fatwa delivered by a Mufti, it depends on the apparent meaning and what is dictated by the rules of Sharia. 

On this basis, we answer the aforementioned questions as follows:

1(A). There is no sin in purchasing the same commodity that the factory had sold to the first importer because, here, what is bought isn`t the first product but one similar to it. This is similar to the person who imports a certain kind of rice that is also imported by someone else. Thus, purchasing a new issue of that product isn`t cancelling the sale of another trader, which is forbidden by the above Hadith.

As for asking the factory or supplier to cease selling the product to the first importer, this isn`t permissible as it inflicts harm on the latter. The evidence on this is that the Messenger of Allah (Blessings and peace be upon him) said: "There should be neither harming nor reciprocating harm." {Musnad Ahmad, V.1:313}. However, if there is a lawful justification for this, such that the first importer brings defective products and sells them as intact, then it is allowed to ask the factory or supplier to stop supplying him with that product, but they must be provided for the market without any defects.

1(B)-This is permissible because goods look alike whether they come from the same factory or different factories. Experts alone and some consumers are the ones able to differentiate between products. In addition, one who manufactures a certain product doesn`t have the right to ban others from manufacturing it so long as he had invented it and was granted the right of exclusive ownership for a certain period. Consequently, none has the right to ban the same factory from producing that commodity. Cheating is selling a defective commodity as intact. This is reflected in the following Hadith: "It is narrated on the authority of Abu Huraira that the Messenger of Allah (Blessings and peace be upon him) happened to pass by a heap of eatables (corn). He thrust his hand in that (heap) and his fingers were moistened. He said to the owner of that heap of eatables (corn): What is this? He replied: Messenger of Allah, these have been drenched by rainfall. He (the Holy Prophet) remarked: Why did you not place this (the drenched part of the heap) over other eatables so that the people could see it? He who deceives is not of me (is not my follower). {Related by Muslim}.

1(C)-It is well known that the price of a commodity depends on people`s desire to have it and this is affected by many factors; the more the agricultural and industrial product, the less the price, and this is to the benefit of the consumer.

This is the principle; however, if a person adopted a certain method to cause others to suffer loss, which is different from a drop in the price that a trader had set for his goods, then this is impermissible.

2-The answer to this question is derived from the earlier answers. Thus, if it is permissible to ask for purchasing similar goods without a certain reason, it is more deserving for this to be permissible.

3(A)-There is no difference in this regard between foodstuffs and other products. However, it is forbidden to monopolize essential foodstuffs. i.e it is forbidden to hoard them till their price rises. In the event of monopoly, it is the duty of the state and the traders to import these products to break this monopoly. Narrated Ma'mar bin 'Abdullah (RA): Allah's Messenger (Blessings and peace be upon him) said: "None withholds goods till the price rises but a sinner." [Reported by Muslim]. Moreover, breaking monopoly is relieving people of their trouble.

4(C)-The Prophetic Hadiths are about buying  and selling a certain commodity. It is like when a person buys a car and someone tells him to terminate the contract of sale because he has a similar car that he would sell for a lower price or he told the seller to terminate the sale and he would buy it from him for a higher price.

However, the above questions aren`t about one commodity; rather, they are about a certain kind of goods and commodities where the competitor wants to buy what another has bought or wants to sell what another has sold without terminating the contract of sale with the seller or the buyer.

We reiterate, here, that it is forbidden to cause harm to others, be they traders or consumers. Also, selling a certain commodity on exclusive basis leads to increasing its price and harming the consumers. Similarly, selling a commodity below cost harms the trader that sells that same commodity. And Allah the Almighty knows best.

 

 

 

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

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