He is an agent for a company and he sells goods for a price higher than that of the company and keeps the extra amount

Question: 173200

My father is an indenter. He is a sole agent in pakistan of a manufacturing company of Malaysia. Now, my father imports and sells. But some customer demand for the whole container of the product. So my father gives them an indent(proforma invoice of the Malaysian company).

But the prob is that my father always tells the customer the amount which is more than the amount offered by malaysia company.So the amount above goes into my father pocket.

I dont think this is halal for my father since he is not purchasing and then selling, rather he is just an agent. He can only be entitled to commission that the company might give to him per $ sold or per product sold.

I argued a lot with my father but he says that this is the practice done by everyone and that this time is different than the time of the Holy Prophet(Peace be upon him). please help me in making my father understand.

Praise be to Allah, and peace and blessings be upon the Messenger of Allah and his family.

This transaction may take three forms:

-1-

If your father buys the product for himself from the
Malaysian company, then sells it to customers in Pakistan.

There is nothing dubious in this trade, and whatever he makes
of profit is his to keep; it has nothing to do with the price for which the
Malaysian company sold it. But it is nor permissible for him to tell the
purchaser of the price charged by the Malaysian company unless he is telling
the truth about it, in the sense that if any customer asks for the invoice
from the Malaysian company, or to tell him the price he bought it for from
them, then he works out a reasonable profit and offers him a price on that
basis, this comes under the heading of a transaction based on trust. It is
not permissible for him to tell him anything but the real price.

-2-

If your father is simply an agent for this company, and
markets its products according to the prices set by the company in return
for commission that he takes from what he sells, or a fixed salary that he
takes from the company.

In this case, he does not have the right to sell to the
customers for a price other than that which is set by the company, and it is
not permissible to take the extra profit for himself, because that comes
under the heading of betrayal of the company that has appointed him as its
agent. It also involves cheating and deceit of the customers, because he
makes them think that this company’s products are being sold at the official
price, whereas that is not the case. Our Prophet Muhammad (blessings and
peace of Allah be upon him) said: “Whoever deceives us is not one of us.”
Narrated by Muslim, 101.

In al-Mawsoo‘ah al-Fiqhiyyah (45/42) it says: If the
one who appoints an agent sets out specific guidelines for him, he is
obliged to adhere to them when carrying out the task he has been appointed
to do on his behalf, according to the consensus of the fuqaha’. End quote.

In Fataawa al-Lajnah ad-Daa’imah (14/264) it says: The
agent is a trustee, so it is not permissible for him to take anything from
the price except with the permission of the one who appointed him as his
agent. If he allows that, then there is nothing wrong with it; if not, then
he must return the rest of the money to him. End quote.

The scholars of the Standing Committee for Issuing Fatwas
were asked about a man who was selling goods for another man, and this man
is adding to the price and keeping the extra amount for himself. What is the
ruling on the one who does that?

They replied:

The one who is selling the goods is regarded as an agent of
the owner of the goods, and he is entrusted with them and their price. Hence
if he takes something of the price without the knowledge of the owner of the
goods, then he is betraying the trust and whatever he takes is haraam for
him.

End quote. Fataawa al-Lajnah ad-Daa’imah, 14/274

See also the answers to questions no.
9386 and
98439.

-3-

If he is an agent for the company, but it has agreed with him
that if he sells for more than the set price, then he may keep the extra
amount.

In this case, the matter is the subject of a difference of
scholarly opinion; the more correct view is that there is nothing wrong with
it.

Ibn Quddaamah (may Allah have mercy on him) said: If he says:
Sell this garment for ten, and anything more than that is yours to keep,
that is valid and he is entitled to the extra amount… Ibn ‘Abbaas did not
see anything wrong with that. End quote. Al-Mughni, 5/108

Imam Ahmad was asked about someone who gave a garment to a
man and said: Sell it for such and such amount, and anything more than that
is yours to keep. He said: There is nothing wrong with it.

End quote. Masaa’il al-Imam Ahmad wa Ishaaq ibn Raahawayh,
6/2566

See also the answer to question no.
9386,
121386

And Allah knows best.

Source:

Islam Q&A

Was this answer helpful?