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Stats: 17,517 members, 69,821 Topics, 15,481 Comments. Date: Jun 26 2019, 10:48 am

Rufai Oladimeji
Lagos State University
English
100Level, Nigeria.
Question

We are about to obtain a "Biscuit
Distribution Agency". We have to
make a Deposit with them for a
Year which is a mandatory
requirement. In addition to sales
commission, they will pay us 1%
interest for the above mentioned
deposit on a monthly basis which
will be given to us by way of Goods.
What are we supposed to do with
these GOODS? To what extent this
AGREEMENT is Sharia Compliant?

Answer

Praise be to Allah.
Firstly:
There is nothing wrong with
undertaking to distribute goods in
return for commission. This comes
under the heading of agency in
return for payment. The agent is a
trustee who is only liable if there is
transgression or negligence on his
part, and it is not permissible to
stipulate that he be liable, because
this is contrary to his being a
trustee.
It is permissible to take a sum of
money from the agent as a surety
to be used in the event of any
transgression or negligence on his
part, on condition that this surety
not be used; rather it should be
kept for its owner or may be
invested between both parties on
the basis of an Islamically
acceptable contract, such as
mudaarabah (profit-sharing).
The reason why it is haraam to use
it is that if the company uses it, it
will be using it when it is liable for
it and will return it to its owner if
there is no transgression or
negligence on his part. This comes
under the rulings on loans; a loan is
wealth that may be used but it or
its equivalent must be returned.
It is not permissible to make a loan
conditional upon a business contract
such as buying or selling, renting, or
acting as an agent in return for a
fee, because the Prophet (blessings
and peace of Allah be upon him)
forbade sales combined with loans
(two deals in one). Narrated by at-
Tirmidhi (1234), Abu Daawood
(3504) and an-Nasaa’i (4611);
classed as saheeh by at-Tirmidhi,
Ibn ‘Abd al-Barr and al-Albaani.
It says in al-Ma‘aayeer ash-
Shar‘iyyah (p, 134) regarding
indication of serious intent: it is
permissible for the organisation to
request the would-be tenant to pay
a stipulated amount of money to
the organisation, to be kept by the
latter as a guarantee that the client
is serious in his promise to rent and
abide by any commitments that
result from that.
This sum that is paid in advance as
a sign of commitment is either a
trust to be kept by the organisation,
in which case it is not permissible
for the organisation to dispose of it;
Or it is a trust for investment, for
which the client gives permission to
the organisation to invest it on the
basis of a shar‘i mudaarabah (profit-
sharing) contract between the client
and the organisation. End quote.
Based on that, it is not permissible
to deposit this money if it is known,
or thought most likely, that the
company will use it, unless there is
a prior agreement that the company
will invest it, on the basis of a shar‘i
mudaarabah (profit-sharing)
contract.

Secondly:
It is not permissible to take interest
on this deposit, because that comes
under the heading of interest on a
loan, which constitutes riba
according to scholarly consensus.
Thus it becomes clear that it is not
allowed to use this deposit at all,
and that it is forbidden to charge or
give interest on it.
The way to make the obtaining of
this agency permissible is as follows:
1. Cancel this deposit;
2. Or make an agreement that
the company will keep it and
not use it;
3. Or make an agreement that
the company will invest it for
you according to a shar‘i
mudaarabah (profit-sharing)
contract.
As for the company using it, that is
haraam, because in that case the
contract will be combining a loan
and a transaction.
If you add to that the taking of
interest, then this is riba (usury).
It is not permissible to accept this
agency in either case.
And Allah knows best.

islamqa.info/en/answers/287867/he-is-going-to-obtain-an-agency-to-distribute-goods-on-condition-that-he-deposit-a-sum-of-money-with-the-company-for-which-interest-will-be-paid-to-him

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