Islamic Finance

Business Transactions examples in

Quran, Hadiths, Qiyas

NAME: Zamrud Khursheed

Student ID: S2021096006
Submitted To: Dr.Tallat Hussain
Submitted Date: 3/20/2021
 ISLAMIC FINANCE
BUSINESS TRANSACTIONS
Allah, in His Noble Book, the Quran, and the Prophet (Pbuh) through his
honorable Sunnah (Prophetic Tradition), pointed out the rulings on transactions
because of people's need for them; people in general need food, clothes, houses,
vehicles and other necessities of life in addition to different luxuries which are
obtained through trade.

Examples about business transaction in Quran, Hadith, Qiyas

Quran tells about transaction

1. Mutual Consent: 
Surah 4 An-Nisa, Ayat 29-29

(4:29) Believers! Do not devour one another's possessions wrongfully; rather than
that, let there be trading by mutual consent. You shall not kill yourselves. Surely
Allah is ever Compassionate to you.

2. Surah Al-Baqara Ayat 283

And if you are on a journey and cannot find a scribe, then let there be a pledge
taken (mortgaging );then if one of you entrust the other, let the one who is
entrusted discharge his trust ( faithfully ) , and let him be afraid of Allâh, his Lord.

3. Al-Ma'idah, Ayat 3-3

“Forbidden unto you (for food) are carrion and blood and swine flesh, and that which
hath been dedicated unto any other than Allah, and the strangled, and the dead through
beating, and the dead through falling from a height, and that which hath been killed by
(the goring of) horns, and the devoured of wild beasts, saving that which ye make lawful (by the
death-stroke), and that which hath been immolated unto idols. And (forbidden is it) that
ye swear by the divining arrows. This is an abomination. This day are those who
disbelieve in despair of (ever harming) your religion; so fear them not, fears Me! This
day have I perfected your religion for you and completed My favour unto you, and have
 chosen for you as religion al-Islam. Whoso is forced by hunger, not by will, to sin: (for
him) lo! Allah is Forgiving, Merciful.”

4. “O you who believe! When ye deal with each other, in transactions

involving future obligations in a fixed period of time, reduce them to
writing. Let a scribe write down faithfully as between the parties…Disdain
not to reduce to writing (your contract) for a future period, whether it be
small or big: it is juster in the sight of Allah, more suitable as evidence, and
more convenient to prevent doubts among yourselves… and let neither
scribe nor witness suffer harm. If ye do (such harm), it would be wickedness
in you. So fear Allah; for it is Allah that teaches you. And Allah is well
acquainted with all things.”

5. Surah Al Baqara (2), Aayah 164, reads:

“Behold! In the creation of the heavens and the earth; in the alternation of

the night and the day; in the sailing of the ships through the ocean for the

profit of mankind; (here) indeed are Signs for a people that are wise.”

6. Surah Ar Rum (30), Aayah 46 says:

“Among His Signs is this, that He sends the Winds, as heralds of Glad

Tidings, giving you a taste of His (Grace and) Mercy, that the ships may

sail (majestically) by His Command and that ye may seek of His Bounty: in

order that ye may be grateful.”

7. Surah Al Israa (17), Aayah 35:
“Give full measure when ye measure, and weigh with a balance that is

straight; that is the most fitting and the most advantageous in the final

determination.”
8. Surah Al Mu’min (40), Aayah 82 says:
“Do they not travel through the earth and see what was the End of those

before them? They were more numerous than these and superior in
 strength and in the traces (they have left) in the land.Yet all that they

accomplished was of no profit to them.

Hadith examples about transaction:

 Narrated/Authority of Nafi

I used to send trade goods to Sham and Egypt, then I prepared to send
trade goods to 'Iraq. I went to 'Aishah, the Mother of the Believers, and said to her: " O
Mother of the Believers I used to send trade goods to Sham and I am preparing to send
trade goods to 'Iraq." She said: "Do not do that. What is wrong with the way you have been
doing it? I heard the Messenger of Allah (saw) say: 'If Allah causes provision to come to one
of you through a certain means, he should not leave it unless it changes or deteriorates.

 Narrated Abu Huraira:

The Prophet said, "Procrastination (delay) in paying debts by a wealthy man is

injustice. So, if your debt is transferred from your debtor to a rich debtor, you should
agree."

 Narrated Abu Al-Minhal:

I used to practice money exchange, and I asked Zaid bin 'Arqam about it, and he narrated what the
Prophet said in the following: Abu Al-Minhal said, "I asked Al-Bara' bin `Azib and Zaid bin Arqam
about practicing money exchange. They replied, 'We were traders in the time of Allah's Messenger (
‫ )ﷺ‬and I asked Allah's Messenger (‫ )ﷺ‬about money exchange. He replied, 'If
it is from hand to hand, there is no harm in it; otherwise it is not permissible.

 Narrated Ubayy bin Ka'b :

I taught a man the Qur'an, and he gave me a bow. I mentioned that to the
Messenger of Allah (‫ )ﷺ‬and he said: 'If you accept it you will be
accepting a bow of fire.' So I returned it.

 Narrated An-Nu'man bin Bashir:

The Prophet said "Both legal and illegal things are obvious, and in between them are
(suspicious) doubtful matters. So who-ever forsakes those doubtful things lest he may
commit a sin, will definitely avoid what is clearly illegal; and who-ever indulges in these
(suspicious) doubtful things bravely, is likely to commit what is clearly illegal. Sins are
Allah's Hima (i.e. private pasture) and whoever pastures (his sheep) near it, is likely to
get in it at any moment."
  Narrated Haram bin Munayyisah:
His father asked the Prophet (PBUH) about the earnings of a cupper and he forbade
him from that. Then he mentioned his need and he said: Spend it on feeding your she-
camels that draw water.
 Narrated from Abu Sa'eed Al-Khudri :
The Messenger of Allah (PBUH) forbade Mulamasah and Munabadhah. (Sahih) Sahl
added: Sufyan said: 'Mulamasah means when a man touches something with his hand
without seeing it, and Munabadhah means when he says: Toss me what you have, and I
will toss you what have.
 Narrated Jabir bin ‘Abdullah:
The Prophet( PBUH) said: A city-dweller should not sell for a Bedouin. Leave people to
(engage in trade) and Allah will grant them provision through one another

Qiyas examples:

 The Qur'an (al-Jumu'ah, 62:9)

forbids selling or buying goods after the last call for Friday prayer until the end of the
prayer. By analogy this prohibition is extended to all kinds of transactions, since the
effective cause called (Illah), that is, diversion from prayer, is common to all.
Asl – forbids selling & buying
Far’ – forbids all kinds of sale i.e. agricultural activity, industrial activity etc.
Illah – diversion from prayers

 Prohibition of wine drinking based on Qur’anic verse in Surah Al-Maidah:90

Asl – wine drinking
Far – taking drug.
Illah – intoxicating effect
 Smoking in mosque
Asl – eating onion in mosque
Far’– smoking in mosque
Illah – causing bad smell to the mouth
 Life insurance
Asl – gambling
Far – life insurance
Illah – contain the elements of gharar, gambling and riba
Hukm - prohibition/haram
 Criminal misappropriation of property
Asl – theft
Far – criminal misappropriation of property
Illah – take unlawful possession of one’s property