Islamic Trade Laws Principles

Islamic Trade Laws

Principles

• Based on Shariah, the Islamic law
• Aim to promote fairness, justice, and transparency in business transactions
• Guided by the Quran and the Hadith (sayings and actions of the Prophet Muhammad)

Prohibited Practices

• Riba (usury/interest): prohibited in all forms
• Gharar (uncertainty): unclear or misleading contracts
• Maysir (gambling): speculative transactions with uncertain outcomes
• Qimar (betting): transactions involving chance or speculation

Permitted Practices

• Bai' (sale): legitimate trade with clear agreements and mutual consent
• Ijarah (leasing): renting assets or services for a fixed period
• Mudarabah (partnership): profit-sharing agreements between partners
• Musharakah (joint venture): partnerships with shared ownership and risk

Contract Requirements

• Aqid (offer and acceptance): clear and explicit agreements
• Ijab (offer): seller's declaration to sell
• Qubul (acceptance): buyer's acceptance of the offer
• Sighah (formula of agreement): oral or written confirmation of the contract

Ethical Considerations

• Amanah (trust): honesty and transparency in business dealings
• Adl (justice): fairness and equality in transactions
• Ihsan (excellence): striving for excellence in business practices
• Taqwa (piety): God-consciousness and moral responsibility in business decisions

Islamic Trade Laws

• Islamic trade laws are based on Shariah, the Islamic law, and aim to promote fairness, justice, and transparency in business transactions.
• These laws are guided by the Quran and the Hadith (sayings and actions of the Prophet Muhammad).

Prohibited Practices

• Riba (usury/interest) is prohibited in all forms, as it is considered unfair and exploitative.
• Gharar (uncertainty) is prohibited, as unclear or misleading contracts are not allowed.
• Maysir (gambling) is prohibited, as speculative transactions with uncertain outcomes are not permitted.
• Qimar (betting) is prohibited, as transactions involving chance or speculation are not allowed.

Permitted Practices

• Bai' (sale) is permitted, as long as it involves legitimate trade with clear agreements and mutual consent.
• Ijarah (leasing) is permitted, as it allows for renting assets or services for a fixed period.
• Mudarabah (partnership) is permitted, as it involves profit-sharing agreements between partners.
• Musharakah (joint venture) is permitted, as it allows for partnerships with shared ownership and risk.

Contract Requirements

• Aqid (offer and acceptance) is required, involving clear and explicit agreements.
• Ijab (offer) must be made, which is the seller's declaration to sell.
• Qubul (acceptance) must be given, which is the buyer's acceptance of the offer.
• Sighah (formula of agreement) must be confirmed, either orally or in writing.

Ethical Considerations

• Amanah (trust) is essential, which involves honesty and transparency in business dealings.
• Adl (justice) must be upheld, which involves fairness and equality in transactions.
• Ihsan (excellence) should be strived for, which involves aiming for excellence in business practices.
• Taqwa (piety) should guide business decisions, which involves God-consciousness and moral responsibility.

Learn about the principles of Islamic trade laws, based on Shariah, and the prohibited practices in business transactions, including Riba, Gharar, Maysir, and Qimar.