Fatwa: # 29955
Category: Business Matters
Country: United Kingdom
Date: 8th December 2018

Title

Is this contract Shariah compliant?

Question

Assalamu Alaikum

I work for a feed company as a manager. the company recently wanted to Open another shop in a neighbouring town. however they offered me the ffg proposal:

I should open the business in my personal capacity and should buy the goods from them at 6% reduction in price. I will then mark up not more than 8%. however they will pay the rent for the shop.I will bear all other expenses. also 1 can only stock their feed (like an agent) but 1 can stock other products that they do not manufacture.

Is this contract fine to go into? jazakallah

Answer

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

As-salaamu `alaykum wa-ramatullahi wa-barakatuh.

It is advisable for you to pay your own rent. The company may facilitate the rental by selling you the feed at an even cheaper rate, for example 5% reduction instead of 6%. The mutual agreement falls in a category of a promise. You will be morally bound to abide by the promise.[1]

And Allah Ta`ala Knows Best.

Hussein Muhammad.

Student Darul Iftaa

Arusha, Tanzania

Checked and Approved by:

Mufti Ebrahim Desai.

_________


[1]{وَأَوْفُوا بِالْعَهْدِ إِنَّ الْعَهْدَ كَانَ مَسْئُولًا} [الإسراء: 34]

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