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Background reading material for medicine & fiqh panel discussion on 22nd January 2000 for 3rd year medical students, Kulliyah of Medicine, International Islamic University, Kuantan by Professor Omar Hasan Kasule Sr.
OUTLINE
1.0 BUYING and SELLING, buyuu'u
A. Goods and services
B. Conditions of a valid transaction
C. Types of sales/transactions
D. Cancellation and disputes
E. Etiquette of the market
2.0 PERSONAL LOANS AND DEBTS, quruudh & duyuun
A. Conditions
B. Collateral
C. Guarantee
D. Transfer of debts
E. Bankruptcy
3.0 INVESTMENTS
A. Investment in property
B. Investment trade
C. Investment in agriculture
D. Deposits
E. Insurance
4.0 OTHER TRANSACTIONS
A. Wikalah
B. Ijarah & I'arah
C. Waqf
D. Prize Competitions
E. Gifts
5.0 MODERN CHALLENGES
A. Stock exchange
B. Commodity exchange
C. Currency trading
D. Public debt
E. Free trade
1.0 BUYING and SELLING, buyuu'u
A. GOODS AND SERVICES
HALAAl, HARAAM, & MUTASHABIH
What is permitted, halal, and what is prohibited, haram, are clear but there are grey areas between them, mutashabihaat (MB 985-988). Extra care has to be taken when dealing with the grey areas lest one falls into the prohibited. Doubtful matters are better avoided
Some general principles guide us in matters of halaal and haraam. The basis is permissibility, al asl fi al umuur al ibaahat. Thus all transactions are permitted unless there is specific text on prohibition. Only Allah decrees what is halaal and what is haraam. Prohibiting halaal and permitting haram is the same as shirk. What is halaal is sufficient and what is haraam is superflous. Prohibited things are impure and harmful. Whatever is conducive to haraam is itself haraam. It is prohibited to represent haraam as halaal. Good intentions do not make haraam acceptable. Haraam is prohibited to all people with no exceptions. Necessity dictates exceptions in some prohibited things.
INDIVIDUAL and COMMUNITY PROPERTY
Individual ownership of property is a basic human right in Islam. The Law specified fire, water, and pasture are considered community property (BG 784). Air could be added to this list because it is the most precious community resource endangered by industrial pollution. Fire stands for energy resources and pasture stands for agricultural resources. If an individual expends effort in developing community property, he or she acquires rights of private ownership to it. Government property is in a category on its own. It is neither individual property nor is it community property that any citizen can use at will. The concept of legal personality, dhimmat, could be extended to include government and joint stock companies thus giving them the same rights of ownership as individuals. Lost or unclaimed property does not automatically become the individual property of the finder. If property is lost it must be announced for a year (BG 801, BG 802).
TRADE GOODS/ARTICLES
All articles are halaal for commercial transactions unless specifically prohibited. The following articles can not be bought or sold in normal commercial transactions.
Intoxicants, khamr: Any intoxicant should not be exchanged in transactions (BG 649). It is considered filth, najasat. Also prohibited from transactions materials that will be used to make intoxicants (BG 684).
Pictures & idols: The prohibition of transactions involving pictures (MB 1045) and Idols (MB 1047, BG 649) is based on their misuses for worship. The prohibition does not cover pictures for beneficial purposes such as passport photographs.
Humans: Free humans can not be sold or bought (MB 1046, BG 772). Humans can voluntarily sell their labor and not their person, dhimmat. The prohibition includes minor children who can not be sold for any reason. Sale of brides is also prohibited. Marital transactions are valid only on payment of mahr which becomes the property of the wife. The wife in marriage retains her full legal personality, dhimmat, and her full civil rights and is not property of anyone.
Dead animals: Dead animals are considered filth and so can not be bought or sold (MB 1047, BG 649). The fat of dead animals can not be sold (BG 649).
Dogs: A dog can not be sold or bought (MB 1048, BG 651). This restriction applies when the dog is going to be kept as a pet. The hunting dog (BG 656) is excepted from the prohibition. Also excepted are dogs that perform police work or that lead the blind.
Pig: The pig is considered filth and can therefore not be sold (BG 649)
Semen: The semen of animals can not be sold for purposes of fertilizing other animals (BG 690)
Stolen property: property known to have been stolen can not be sold or bought
INTELLECTUAL PROPERTY
Knowledge can not be sold. However an author and publisher sell the labor and material involved in manufacturing a book. The purchaser of the book has full rights to the use of the knowledge including teaching it to others for a fee. It is however illegal to reproduce and resell the book.
PROFESSIONAL SERVICES
Professional services are performed in return for a fee. Halaal services can be sought and can be offered. It is prohibited to seek, pay for, or offer haraam services. The Law mentioned the following services as halaal:: cupping, hijaam (MB 1004 and MB 1005), ruqyat (MB 1058), teaching Qur'an (BG 773), and tailoring (MB 1001). By extension we can say that all services that do not involve handling prohibited material or violation of morals are halaal. The Law specified the following services as haraam: prostitution (MB 1048, BG 651) and soothsaying (MB 1048, BG 649). By extension all services that involve prohibited articles or involve infraction of the law, violation of public morals, or exploitation of other humans are haraam.
RIGHTS
Rights are a form of intangible property. As the economy becomes more sophisticated, the number of rights also increases. Some rights can be acquired and can be sold. Debts for example are considered rights than can be sold or transferred. It is prohibited to sell the right of inheritance (MB 663).
SCALES and MEASURES
The Law prescribes measures to ensure fair play and prevent cheating in business transactions. Thus scales and measures are needed to make sure that the amounts of goods exchanged in a transaction are specified so that the buyer and the seller know what they are giving and are taking. Measuring is recommended (MB 1015). The seller is responsible for measuring (MB 1014). The buyer has a right to check the measuring before they separate.
PRICE CONTROLS
The Law does not interfere in the operations of the free market unless there is exploitation or immoral effects are feared. Thus price control is not legislated. The prophet refused to fix prices in Madina (BG 679). Action should however be taken to ensure that unfair practices of hoarding and monopoly do not arise.
B. CONDITIONS OF A VALID TRANSACTION
WITNESSES:
Business transactions should preferably be witnessed. This will be of benefit later if disputes arise and a court of law has to adjudicate in the matter. The witness chosen must be one who can understand the transaction. The evidence of women not involved or familiar with commercial transactions is less valuable than that of men and women who are conversant with such transactions.
WRITTEN CONTRACT
A written contract is a permanent reference that can be referred to in case of disputes. A written contract is preferred to witnesses. It is best to have a written contract that is witnessed. No condition repugnant to the Law is permitted in the contract (BG 657)
TRANSFER OF OWNERSHIP
Ownership must be transferred as soon as possible. Ownership can be transferred without taking physical possession (MB 1077). In case of food, the buyer must take physical possession before selling the food to someone else (MB 1017, 1018, 1019).
C. TYPES OF TRANSACTIONS
PERMITTED TRANSACTIONS
Advance payment for goods, salam: In advance sales the buyer pays for goods and services that will be delivered at a future date. The price, weight, and other specifying particulars of the goods must be mentioned (MB 1049). It is not a condition that the seller has physical possession of the goods at the time of the payment (MB 1050, MB 1051). In case of fruits and crops, advance sale is permitted only after they have passed the stage of failure (BG 714, BG 715, BG 716).
Credit purchase, nasiiat: purchase on credit is allowed MB 992). However any form of usurious exploitation is forbidden. The buyer can not be made to pay interest. Increasing the price for deferred payment is considered riba.
Auction, muzayadat: Goods can be bought at the price of the highest bidder.
Sale of absent article, ghararat,: It is permitted to sell an article that is not present (MB 1022). Its nature, quantity and other specifications must be included in the sale contract to prevent cheating and later disputes.
Commission: It is permitted to sell on commission. The commission agent sells goods of an owner on the understanding that he will get a fixed proportion of the price. The commission agent works for the seller and not the buyer.
Araaya: In this type of transaction, the yield of a date tree is computed in the form of dry dates as the basis for pricing although the dates are received and are eaten fresh (BG 712, GB 713).
FORBIDDEN TRANSACTIONS
Transactions are based on mutual satisfaction, taraadhi (p. 227 4:29). Even in such a situation there could be unfairness because one of the transactors may not have full information or the transaction may be innately loaded against him or her. The Law therefore imposes restrictions on the free conduct of transactions to make sure that there is fair-play. In general, forbidden transactions are those that have uncertainty or a potential for cheating (BG 664)
Mukhadharat: This is sale agricultural produce before its maturity (MB 1040, BG 672, BG 689). It is discouraged because it leads to disputes (MB 1035, MB 1036, MB 1037, MB 1038, MB 1137).
Mulamasat: This is paying a pre-fixed price for goods chosen when blinded (BG 673).
Munabadhat: In this type of sale, the eyes of the persons involved in the transaction are closed. They throw goods at one another with the transaction being accepted whatever good one manages to catch (BG 673)
Munajashat: This is offering a price with no intention of buying in order to raise cost (MB 1020). This is sometimes pre-fixed in order to deceive. Munajashat could be used illegally in auctions.
Muzabanat: This is sale of dried dates or grapes for fresh ones on the tree (MB 1033, BG 710, BG 672, BG 709)
Muhaqalat: is sale of wheat in ears (un-harvested wheat in the field) for pure wheat (harvested wheat) (MB 1033, BG 672)
Thunya: This is selling agricultural produce still on the trees with the understanding that the seller will keep an unspecified amount at the time of harvesting (BG 672).
Riba al fadhl: this is sale of good quality dates for poor quality ones. What is permitted is to first sell the good quality dates for cash and then the cash buy the poor quality ones (MB 1039)
Selling fur while still on the animal (BG 689) is forbidden
Selling sadaqat before it is received (BG 688)
Habala Habalat: This is buying an animal while it is still in utero (BG 662, BG 690, BG 687)
Selling milk in udders (BG 687, BG 689)
Selling fish while still in water (BG 688)
Combining 2 transactions in one transaction (BG 666)
Selling what is not in your possession (BG 667)
Combining a loan and a sale (BG 667)
Non-refundable deposit, urban: Non-refundable deposits are prohibited (BG 668)
Buying and selling on the spot before taking possession of the goods (BG 69)
Selling debt for debt (BG 711)
Riba transactions are prohibited (2:278-279). The giver, the recipient, and the writer of riba are all guilty.
USE OF CURRENCY IN TRADE
It is permitted to quote the price of goods in one currency and receive payment in another currency provided payment is immediate and in full (BG 670).
D. CANCELLATION AND DISPUTES
Any transaction can be cancelled before separation (MB 996, BG 692, BG 693). The buyer has the right to return defective goods (MB 1008). It is forbidden to urge a buyer to return sold goods (MB 1020)..Guidelines on return of defective merchandise can be gleaned from the story of Ibn Omar and the purchase of a defective camel (MB 1003). Any gain or loss is the responsibility of the buyer during the period when goods can be returned (BG 685).
In case of disputes that can not be resolved and there are no witnesses, the seller's word is final (BG 650). Disputing when you know you are in error (MB 1123)
E. ETIQUETTE OF THE MARKET
Transactions and prayer: All transactions must be suspended as soon as the call for prayer is sounded and can be resumed immediately after the prayer (p. 216 62:9-11).
Writing and witnessing transactions: Transactions must be written to provide evidence in later disputes (p 215 2:282). A written contract is not necessary where there is immediate exchange of money for goods but if possible the transaction should be witnessed.
Scales and measures: Traders should give full measure (83:1-6, 6:152, 17:35, 26:181-183). Cheating in measurement is prohibited and has severe penalties.
Leniency and generosity are recommended in bargains (MB 994). The transaction is better concluded in a friendly rather than a hostile way. It is better to conclude a transaction with sufficient good will for future transactions. Leniency is recommended in debt collection (MB 995). The wealthy could even consider forgiving debts of the poor.
Full disclosure by both the buyer and the seller is mandatory (MB 996). The seller should not try to hide any defects in the goods. He should honestly point out the good and the bad. Deception is forbidden. For example a seller may keep a cow un-milked for several days before its sale (MB 1023, BG 681). It is forbidden to cover defective goods with good ones (BG 683)
Courtesy: Frequent swearing is forbidden. It is offensive to raise the voice in the market (MB 1013)
Hoarding is forbidden (BG 680)
Brokerage and middle men: brokerage and middle men are allowed because they are a necessity in trade. Middle men who make quick profits without effort are discouraged (MB 1026 and 1027) because this will lead to unnecessary inflation of the cost of business and rise of prices. It is forbidden to meet trade caravans outside before they enter the city. This is a type of black market in which the caravaneers are cheated because they sell their goods before they know the prevailing market prices (BG 674, BG 675). Town-folk should not be brokers for rural folk because they can cheat them (BG 674)
Urf is respected (MB 1041)
2.0 PERSONAL LOANS, quruudh
A. CONDITIONS
Debts must be written and witnessed (p. 436 2:282-283). If it is not possible to write, a collateral can be taken (p 515 2:283). A debtor is obliged to pay back (BG 751, BG 752). Delay of debt payment by those with ability to pay is a punishable offense (BG 728). The property of the debtor can be seized to settle outstanding claims (BG 730)
B. COLLATERAL
A collateral ensures that the debtor will endeavour to pay back. It is taken if the debtor fails to pay. A collateral is needed especially if the debt is not written down in an agreement.
C. GUARANTEE
A debtor could get another person who can vouchsafe for his honesty and ability to pay to act as guarantor. The guarantor of a debt is liable to pay (BG 734) if the original debtor fails to fulfill his obligations.
D. TRANSFER OF DEBTS, hawala
It is permitted for a debtor to transfer the responsibility of paying the debt to another person. Transfer of a debt to a rich person is irrevocable (MB 1060, MB 1061, BG 738). Transfer to a poor person may be cancelled and the liability of the original debtor is maintained. Transfer of a deceased's debt is irrevocable (MB 1060 and 1061). It is also possible for the creditor to transfer the right of collecting the debt to someone else.
E. BANKRUPTCHY
A debtor becomes bankrupt when the assets he has are less than the liabilities. Creditors can take back property from a bankrupt debtor (BG 727). Creditors take whatever they find of the debtor's property (BG 729)
3.0 INVESTMENTS
INVESTMENT IN PROPERTY
Partnership, sharikat, is in general allowed (BG 742, BG 744). People can jointly own and use articles such as food (MB 1131). They can buy property such as a house jointly and sell it later for profit. The partner in a joint property has the right of pre-emption, shuf'at (MB 1042, BG 760, BG 761, BG 762, BG 763, BG 764) and must be informed before any sale of the joint property is done (MB 1052).
B. INVESTMENT IN TRADE
MURABAHAT
This is pooling of capital that is invested. The partners agree to a fixed proportion of profits or losses. It is illegal to fix a certain amount as the profit due to a partner because that would constitite riba.
MUDHARABAT
This is co-operation between the owner of capital, the worker and the manager. There is a pre-fixed proportion of sharing losses and profits. Outstanding liabilities are deducted from the ramaining capital and the worker just suffers loss of time.
C. INVESTMENT IN AGRICULTURE
WORKING THE LAND BY THE OWNER
The owner of the land may work it himself. He can use hired labor who are paid wages and have no share in the produce.
LENDING LAND
The land-owner may let a farmer cultivate unused land for free
RENTING LAND
The land-owner may rent land to the farmer in return for a fixed amount of money. The farmer is entitled to all the produce of the land.
SHARECROPPING, muzara'at
The Law allows the following share-cropping arrangements (MB 1079, 1080, and 1083). The land-owner and the farmer agree to share the produce according to agreed formula. The formula must state a proportion of the produce. It is haram to fix each partner's share by weight. The land-owner may contribute agricultural inputs like seeds and fertilizers. Share-cropping was agreed between the prophet and the Jews at Khaybar (BG 767, BG 768).
MUKHABARAT
This is letting a farmer use your land in return for the produce of a delineated portion of the land. It is forbidden because it will be a source of dispute when the delineated plot does not produce well (BG 672). Mukhabarat is prohibited because it is similar to gambling
D. DEPOSITS & TRUSTS, wadii'at
The trustee does not pay if the trust is destroyed accidentally. He pays for depreciation due to his use of the property (BG 823). The concept of wadii'at has been employed in modern Islamic banking schemes.
E. INSURANCE
Insurance is accepted is presented in the form of a joint investment. Islamic financial institutions have developed an Islamically-acceptable insurance scheme called takaful.
4.0 OTHER TRANSACTIONS
WAKALAH
Appointing an attorney or an agent is permitted (BG 746, BG 747, BG 748, BG 749). The prophet had an agent in Khaybar (BG 745). The agent can take measures to prevent property under his care from getting spoiled or getting lost MB 1065. The agent can pay debts on behalf of the owner MB 1060. Illegal transactions by the agent are not binding on the owner MB 1069
WAGE EMPLOYMENT, ijarah & LENDING, i'arah
Ijarah is employment in return for wages. Living on earnings of one's labor is honor MB 993. Agreed wages should be paid in full. Early payment of wages is required (BG 774). If the employer invests unclaimed wages, he will have to pay the employee the profits earned. Non-payment of wages is a serious crime (BG 772).
Iarat is when you lend someone an animal to benefit from the milk and he returns the animal after that (MB 1173).
ENDOWMENTS, waqf
Waqf is continuous charity (BG 785, BG 786). The endowment consists normally of fixed property whose income is used for a fixed purpose. The income is used and the endowed property is never sold. Sometimes the endowment may be a building or a well that is used directly by the needy.
COMPETITIONS, sibaaq
The following sports and those like them are allowed: foot racing, wrestling, archery, spear play, camel racing, and horse racing. Prizes for winners are allowed (BG 1130, BG 1131, BG 1132). Any form of gambling associated with sports is forbidden (BG 1133).
GIFTS, hibaat
Gifts express mutual love (BG 795, BG 796, BG 797). Gifts can be accepted and something is given in return (MB 1160). A gift can be witnessed (MB 1161) especially if future disputes are anticipated. It is an offense to ask for return of a gift (MB 1162, BG 789, BG 790). The recipient of a gift has the right to give it away (MB 1167) without getting permission from the gift giver. Life tenancy, umri, is a type of gift (BG 793). Gifts to officials are discouraged (BG 791, BG 792) because they may encourage bribery and corruption.
5.0 MODERN CHALLENGES
A. STOCK EXCHANGE
B. COMMODITY EXCHANGE
C. CURRENCY TRADING
Currency exchange is allowed of no delay in involved (MB 989 and MB 1028). Exchange of the same amount of currency must be done at once (MB 1029). Gold can be sold for silver in any way you like (MB 1029 and MB 1030). A dinar can be exchanged for a dinar if the transaction is carried out on the spot (MB 1031). Gold can not be sold for silver on credit MB 1032.
D. PUBLIC DEBT
E. FREE TRADE
DISCUSSION ON TRANSACTIONS
BUYING & SELLING
Pharmaceutical products from haram material such as khamr and pigs
Government control of prices of medical services and medicine
Advance payment for medical services
Higher fee for delayed payment for medical services
Receiving medical services on credit
Monopoly and lack of free competition among providers of medical care
Government intervention with quality assurance programs
Peer review
Professional licensure
Licensing of new drugs
Does a fee for service medical encounter follow the normal rules of transactions?
Is it valid to combine medical care with sale of drugs?
What relief does a paying patient have if the treatment fails
Does lack of patient consent to treatment invalidate the transaction? ie no payment liability
Advertising of medical services
Promise of cures
Buying and selling blood and organs
Payment for medical services as a business transaction
PERSONAL LOANS & DEBTS
Mental condition of a person taking a debt. Is an insane liable to pay back?
Is an unpaid medical bill by a poor person a debt?
Colossal medical bills leading to bankruptcy
Use of zakat funds to pay medical bills of the indigent
INVESTMENTS
Medical Care between the profit motive and social welfare
Investment in for-profit hospitals
Managed health care and consumer protection
Health insurance through a third party payer
Government or company sponsored health insurance
Life insurance
Health Maintenance Organizations
WIKALAH
Power of attorney for unconscious patient: who has financial liability for medical costs?
The living will
IJARAH
Is the physician an employee of the patient under the concept of ijarah?
Industrial action by physicians and nurses
WAQF
Hospital as a waqf
PRIZE COMPETITIONS
Medical assessment of competitors for fitness
Sports injuries
Gambling in sports competitions
Spectator vs participatory sports
GIFTS
1. Blood and organ donation
STOCK EXCHANGE
Pharmaceutical stocks
Hospital stocks
HMO stocks
Life insurance stocks
Health insurance stocks
Stocks in companies that manufacture weapons
COMMODITY EXCHANGE
1. Starving third world nations despite surplus agricultural produce in the west
CURRENCY TRADING
Haraam and usurious trading
Halaal currency trading
FREE TRADE
Multi-national pharmaceutical companies
Multi-national hospital corporations