Forbidden Trades. Islam forbids all trade that involves injustice, cheating, making exorbitant profits, or promoting that which is haram. Examples of such trades are doing business in alcoholic beverages, intoxicants, drugs, pigs, idols, or anything whose consumption and use has been forbidden. Any related earnings are considered sinful.

Even if the trading is in entirely halal things, merchants must still adhere to many moral considerations, such as not lying and cheating, for those who cheat are considered to be outside the Islamic community; not tampering with the scales when weighing; not hoarding, lest they forfeit the protection of God and His Messenger; and not dealing in usury or interest (riba), for God has forbidden it.

The Prohibition of a Sale Involving Uncertainty. The Messenger forbade any kind of transaction that could lead to a quarrel or litigation due to some uncertainty.

Price Manipulation. In Islam, the market is to be free and allowed to respond to the natural laws of supply and demand. Unnecessary interference in the freedom of individuals is unjust. However, if any artificial forces (e.g., hoarding and price manipulation) interfere in the free market, public interest takes precedence over the individual’s freedom. In such a situation, price control becomes permissible in order to meet society’s needs and to protect it from greedy opportunists by thwarting their schemes. Researchers have concluded that, depending upon the nature of the circumstances, price controls may be either unjust and forbidden or just and permissible, depending upon the relevant circumstances.

Hoarding. Freedom for individual and natural competition in the marketplace is guaranteed by Islam. Nevertheless, it severely condemns those who, driven by ambition and greed, accumulate wealth at the expense of others and become rich by manipulating the price of food and other necessities.

Interfering in the Free Market. The Messenger forbade another practice related to hoarding: allowing a person in the town to sell on behalf of a person from the desert. Scholars have explained this as follows: A stranger would bring some goods to be sold in town at the current market price. A townsman would approach him, saying: “Leave them with me for a while. I will sell them for you when the price is better.” If the stranger had sold his own goods, the price would have been lower, the people would have benefited, and he would have made a reasonable profit.

Brokerage. With the exception of such unlawful cases as mentioned above, brokerage is permissible, since it is a kind of mediation and connection between the buyer and the seller, which in many cases facilitates a profitable transaction for at least one of them or for both. In modern times, brokers have become far more necessary than before due to the complexities of trade and commerce, which involve all types of exports and imports, and wholesale and retail sales and purchases. Brokers play an important role in keeping things moving. There is nothing wrong, therefore, if they charge a commission for their services. The commission may be a fixed amount, proportional to the volume of sales, or whatever is agreed upon among the parties involved.

Exploitation and Fraud. In order to prevent the market’s manipulation, the Messenger forbade najash. Ibn ‘Umar explained that najash signifies someone’s bidding for an item in excess of its price without having any intention of actually buying it, but merely in order to induce others to bid still higher. Many times this is prearranged for the purpose of deceiving others.

“He Who Deceives Us Is Not of Us.” Islam prohibits every type of fraud and deception, whether in buying and selling or in any other matter between people. In all situations, Muslims must be honest and truthful, holding their faith to be dearer than any worldly gain.

Frequent Swearing. The sin of deceiving becomes greater when a seller supports it by swearing in God’s name that something is true. God’s Messenger told merchants to avoid swearing in general and, in particular, in support of a lie: “Swearing produces a ready sale but blots out the blessing.”
He disapproved of frequent swearing in business transactions because it is probably done to deceive people, and because it reduces respect for God’s Name.

Withholding Full Measure. One way of defrauding customers is to measure or weigh inaccurately. The Qur’an orders full measure and full weight (6:52) and severely warns against any fraud in this aspect of business transactions:

Woe to those that deal in fraud, those who, when they have to receive by measure from people, exact full measure, but when they have to give by measure or weight to people, give less than (what is) due. Do they not think that they will be called to account? On a Mighty Day – A Day when (all) humanity will stand before the Lord of the Worlds? (83:1-6)

Buying Stolen Property. In order to combat crime and to confine criminals within a very narrow sphere of activity, Islam has forbidden Muslims to buy any article that they know to be usurped, stolen, or taken unjustly from its owner. Anyone who does so abets the usurper, the thief, or the one committing injustice.

Interest. Islam permits an increase in capital through trade. At the same time, it blocks the way for anyone who tries to increase his or her capital through lending on usury or interest (riba), whether at a low or a high rate.

Sale for Deferred Payment (Credit). While it is best to buy an article with cash, it is also permissible to buy on credit by mutual consent. Some jurists opine that if the seller increases his or her price and if the buyer asks for deferred payments, as is common in installment buying, the price differential due to the time delay resembles interest, which is likewise a price for time. Accordingly, they declare such sales to be haram. However, most scholars permit it because there is, on the whole, no resemblance to interest in such a transaction, since the seller is free to increase the price as he or she considers proper, as long as it does not cause blatant exploitation or clear injustice. If it does, it becomes haram. In order for such trade to be lawful, there should be mutual consent and the amount and the duration should be fixed and known to both sides.

Bribery. Taking a bribe is one way of consuming someone else’s wealth wrongfully. A bribe refers to any kind of property offered to a judge or public servant in order to obtain a favorable decision favor of oneself or against a rival, to expedite one’s own affair, or to delay any competition, and so on.

Wasteful Spending. Just as the wealth of others is sacred and any violation of it, whether secret or open, is forbidden, a person’s wealth is sacred with respect to oneself. Thus, one should not waste it by extravagant or other wasteful spending.

Salaried Employment. Muslims are free to seek employment with a government, an organization, or an individual, as long as they can do their job satisfactorily and carry out their duties. However, they cannot seek a job for which they are unfit, especially if the job carries judicial or executive authority.

Forbidden Types of Employment. Muslims cannot take jobs that are injurious to the cause of Islam or harm Muslims. Accordingly, they cannot work for companies that manufacture haram items. Similarly, any service rendered in support of injustice or in promoting what is haram is itself haram. For example, Muslims cannot work in organizations that deal with interest, in bars or liquor shops, nightclubs, and the like.

A General Rule in Earning a Living. When it comes to making a living, Islam differentiates between lawful and unlawful methods. One of the rules is that any transaction in which one person’s gain results in another’s loss is unlawful, while any transaction that is fair and beneficial to all the parties concerned, and that is transacted by mutual consent is, lawful.

The verses:

O you who believe, do not devour one another’s wealth in legally nonvalid, wrongful ways, except it be a trade by mutual consent; and do not cause your own and community’s perishing. (Do not forget that) God has deep, special compassion (toward you as believers). Whoever acts wrongfully through enmity (toward others) and by way of deliberate transgression and wronging (both himself and others), We shall surely land him in a Fire to roast there. That indeed is quite easy for God (4:29-30),

lay down two conditions for a transaction: mutual consent of the parties involved, and the benefit to one party should not be a loss to the other.