Subject : Validity of Brokerage is Bound by Certain Conditions
Fatwa Number : 879
Date : 25-07-2010
Classified : Allowance, Ration
Fatwa Type : Search Fatawaa

Question :

By virtue of having connections on different levels, I help people get whatever goods they need for a price lower than that which they could get on their own. Is it permissible for me to receive a commission or a percentage from the seller without telling the buyer about that? It is worth pointing  that I take full responsibility before both parties in the event of a dispute. 

The Answer :

Praise be to Allah the Lord of the Worlds.

A broker is an individual who acts as an intermediary to facilitate a sale transaction in return for what scholars call Ju`alah (Conditional payment). This payment is taken against introducing the seller to the buyer or vice versa. From the perspective of Sharia, this is framed as Ju`alah and not Ijarah ("to give something on rent" or "providing services and goods temporarily for a wage") since the required work isn`t defined, which is forgiven in Ju`ala but not in Ijarah.

Brokerage has become a full-time job that requires experience, a great deal of effort and a lot of expenses, and these are amongst the conditions stipulated by the Shafie jurists for Ju`alah. "If he promised paying money to whoever gives him a certain piece of information, then the latter isn`t entitled to any payment because he actually did nothing." {Hashiyat al-Sharwani ala Tohfat al-Mohtaaj, vol.2: pp.369}.

However, Maliki jurists didn`t stipulate that the required work should involve hardship on the part of the person doing it. They added: "Ju`alah is valid even if the required work doesn`t involve any hardship."

From Sharia viewpoint, two more conditions should be met in order for brokerage to be valid:

First: The broker shall reach an agreement with the other party before the former accomplishes the task for which the latter is paying him. The broker shall tell the other party that he shall do his best to conclude the deal against a certain sum of money. In case the other party agrees to this, the broker shall start accomplishing his part of the agreement.

Second: Both parties shall agree on a specific amount: a hundred JDs or less or more, and this was stipulated by the majority of the Muslim scholars. However, Hanbali jurists permitted Ju`alah even if the payment against the required work wasn`t specified. They have also permitted the owner saying to the broker: "Sell that commodity for a certain price and you are entitled to any extra amount in case you managed to sell it for more." This is the ruling of the Iftaa` Department and it has already been given in Fatwa No. (239). For more details, please refer to [Al-Moghni, Vol.5 & 6: P.270 & 375] by ibn Qhoddamah.

In conclusion, if the afore conditions are met, it is permissible for the broker to receive a commission from one party, even without telling the other party, or both parties of the contract. In order for this commission to be lawful, the broker should be sincere in doing his job and refrain from resorting to deceit or seduction. And Allah the Almighty Knows Best.



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