Business Ethics in Islam

A person can earn money by two means; one is agriculture and the other is business. If business is not done according to the ethics then there will always be inflation and shortage of goods. As it can be seen in the case of many commodities like wheat, sugar etc. It is due to the stocking in, speculation and the selfishness of some businessmen. The government has also become a trader itself, while the shariah has stopped the Islamic government from trading.

As it can be seen that business is an important part of life, the Prophet Muhammad (P.B.U.H) said, “People get 9/10 of their daily bread by trade.” Islam explains the concept of righteous trade by telling business ethics. If trade or any other thing is done against the morals and creed then this will lead to the bad end on the day of resurrection. Also by the law the person guilty of illegal business would end up no where. Islam emphasizes on the importance of the business ethics a lot. Allah says in the Quran, “they say that buying is also like interest but Allah has declared buying as permissible and interest as forbidden.” And “When you buy or sell then make someone a witness of it.” The Holy Prophet Muhammad (P.B.U.H) said, “If trade was not there then you would have become a burden on others.” He also said that “A trader is the guardian of the means of daily bread and a keeper of the dignity of himself and other people.” The Holy Prophet Muhammad (P.B.U.H) encouraged the trust worthy traders by these words, “A trustworthy and truthful merchant shall be with the prophets and the truthful and the martyrs and the righteous.” “God shows mercy to a person who is kindly when he sells, when he buys and when he makes a claim” The prophet emphasized on the truthfulness and the righteousness of the businessmen a lot. He said that “Verily, merchants shall be raised up sinners on the day of resurrection, except he who fears God, and is good, and speaks the truth.”

Business and ethics

As Muslims, we have to adhere to ethical standards, not only in business but also in all aspects of life. Both business and ethics are interrelated. There is a reference to this point in the Qur’an, “For you in the Messenger of Allah is a fine example to follow.” Allah Almighty says, “To the Madyan people (we sent) Shu’aib, one of their own brethren: he said: ‘O my people! Worship Allah. You have no other god but Him. And give not short measure or weight. I see you in prosperity, but I fear for you the penalty of a day that will compass (you) all rounds. And O my people! Give just measure and weight, nor withhold from the people the things that are their due: commit not evil in the land with intent to do mischief. That which is left you by Allah is best for you, if you (but) believed! But I am not set over you to keep watch!”

Prophet Muhammad was chosen by God to be His last prophet and messenger at the age of 40. Before that he was very much involved in business. He and his wife Khadija were both merchants. It is reported that he traveled to Syria, Yemen, Bahrain, and many other places in Arabia for trade. Some historians have also suggested that he probably traveled to Iraq and Ethiopia. From his early age, he was involved in commerce. He had a good reputation as a hardworking, honest, truthful, and very successful businessman.

Fair dealings in business

The Holy Qur’an and Prophet Mohammad (PBUH) have made it clear that a Muslim must be honest and upright in his business and monetary dealing. Also the true Muslim should keep his word and fulfill his promises, shun fraud and avoid deceit and perfidy, encroach not upon the rights of others, nor take part in wrongful litigation. Also a good Muslim does not give false testimony, and abstains from making unlawful money as from usury and graft. According to Islam whoever is not free from these vices, is not a true believer but a renegade and a worthless transgressor.

And the Qur’an is rich with verses that confirm all this. Allah says in the Quran, “Eat not up each other’s property by unfair and dishonest means.”

Allah forbids all unclean and corrupt means of making money, such as, dishonest trading, gambling, and bribery. And the Holy Quran has explained and described such practices in many of its verses. He says, “Woe to those that deal in fraud, – those who, when they have to receive by measure from men, exact full measure, but when they have to give by measure or weight to men, give less than due. Do they not think that they will be asked on a Mighty Day when (all) mankind will stand before the Lord of the lords.”

Another example is given in the coming verse, where Allah urges Muslims to be very particular about their trusts and about other people’s rights. “Allah does command you to render back your trust, to those to whom they are due.”

Major principles of fair business dealings

According to Islam, the following things must be avoided to commence fair business.

1. No fraud or deceit, the Prophet (P.B.U.H) is reported to have said, “When a sale is held, say, There’s no cheating”

2. Sellers must avoid making too many oaths when selling merchandise. The Prophet (P.B.U.H) is reported to have said, “Be careful of excessive oaths in a sale. Though it finds markets, it reduces abundance.”

3. Mutual consent is necessary. The Prophet (P.B.U.H) is reported to have said, “The sale is complete when the two involved depart with mutual consent.”

4. Be strict in regard to weights and measures. The Prophet (P.B.U.H) said, “When people cheat in weight and measures, their provision is cut off from them.” He told the owners of measures and weights, “You have been entrusted with affairs over which some nations before you were destroyed.”

5. The Prophet (P.B.U.H) forbade monopolies. “Whoever monopolizes is a sinner.”

6. Free enterprise, the price of the commodities should not be fixed unless there is a situation of crisis or extreme necessity.

7. Hoarding merchandise in order to increase the prices is forbidden.

8. Transaction of forbidden (Haram) items, such as intoxicants, is forbidden.

Fraud and dishonesty in business

Prophet Muhammad (P.B.U.H) has stressed the importance of honesty in most of his sermons, saying, “Remember, there is no faith in him who is not trustworthy; there is no place for him in religion who cares not for his pledged word or promise. He (PBUH) also said, “The signs of a hypocrite are three, when he speaks, he is false, when he promises, he fails; and when he is trusted, he plays false.”

Condemning those who cheat in business Prophet Mohammad (PBUH) has said, “He who cheats is not of us. Deceitfulness and fraud are things that lead one to Hell.”

Once Prophet Muhammad (P.B.U.H) came upon a heap of corn in the market of Madinah and thrust his hand onto it. His fingers felt damp. On being asked, the trader replied that rain had fallen upon it. The Prophet (P.B.U.H) observed, “Why did you not then keep (the wet portion of) it above the dry corn, so that men may see it? He, who deceives, is not one of us.”

Thus traders who deceive by showing to customers a false sample or by concealing from them the defects of the product they’re selling are not true Muslims in the judgment of Allah Prophet (PBUH) and, they are going to end up in hell.

Prophet Muhammad (P.B.U.H) said, “The seller must explain to the buyer the defects, if any, in the quality of the article offered for sale. Should this not be done, the seller will permanently be caught in the Wrath of Allah.”

In short, all manner of deceit and dishonesty in business is prohibited in Islam. The Holy Prophet has expressed his strong dislike for those who do so.

Bribery in business transactions

Bribery and usury, although might be practiced by mutual consent and agreement, are totally prohibited and forbidden. Those who are guilty of them have been condemned by Allah and His Prophet (P.B.U.H). Prophet Muhammad (P.B.U.H) said, “The curse of Allah rests on him who offers loan on usurious terms, and on him who receives, and on those who are witnesses to the transaction, and on the writer who writes the deed thereof.”

Prophet Muhammad (P.B.U.H) said, “If a person made a recommendation for anyone in a just manner and gratified party gave him something as a gift (in return for it) and he accepted it, then he committed a grave error (meaning that it, too, is a form of bribery).”

Usurpation of another’s property by force or fraud or dishonest litigation is even worse. Prophet Muhammad (P.B.U.H) made this clear, as he says, “Whoever occupies land belonging to another unjustly will be sunk into the ground along with the plot of land on the Doomsday till he reaches the lowest layer of the earth.” And “He who acquires the property of a Muslim unjustly by taking a false oath (before an Officer) is debarred by Allah from entering Paradise and the Fire of Hell is made inevitable for him.” Prophet Muhammad (P.B.U.H) again, is reported to have warned a person who was very fond of entering into litigation with others in these strong words, “Remember, he who will obtain the property of another by swearing a false oath will appear as a leper before Allah (on the Day of Judgment).”

And, again he (P.B.U.H) said, “Whoever laid a claim on a thing that was not his is not of us.”


The Prophet’s general advice to all people was that, “What is lawful is clear and what is unlawful is clear, but between them are certain doubtful things which many people do not recognize. He who guards against the doubtful things keep his religion and his honor blameless, but he who falls into doubtful things falls into what is unlawful, just as a shepherd who pastures his flocks round a sanctuary will soon pasture them in it. Every king has a sanctuary, and God’s sanctuary is the things he had declared unlawful.” Before the Prophet invited his people towards Islam, it was his truthfulness and trustworthiness which had earned for Muhammad (S.A.W.) the glorious titles of “Sadiq” (truthful) and “Amin”. Therefore, one must follow the teachings of the Holy Prophet (P.B.U.H) in regard to business and all other aspects of life; to become a good Businessman and hence, a better Muslim.