Making intellectual decisions can positively or negatively shape our financial existence, but what about the decisions that encroach on our ethical lives?

There is more to transactions than simple trade; in Islam, there is a certain and specific “code of business ethics” that must be followed. These rules and regulations for business conduct have been detailed and played out over the centuries by our ancestors and by our brethren in Islam who have followed them unwaveringly.

Growingly, new methods of using usury are knocking on our doors and we have got to acquire the knowledge to grasp the roots of those essential values dug deep by Islamic law. We not only need to aspire to follow them unwaveringly, but we also need to understand that applying this “Islamic code of ethics” goes much deeper – we must begin to understand the “why’s” of what is unlawful and comprehend the result of Satan’s whispering that this sin is only transitory.

The Islamic principles in transactions refer to those principles and rules that have been derived from the sources of the Islamic Law, or Shari‘ah, and which pertain to transactions in general and include such things as commercial transactions, economic transactions and financial transactions.

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These principles have, as a reference, the decisions and fatawa (legal verdicts) issued by the jurisprudence academies relating to contemporary issues. Individual opinions are not to be considered if they contradict those of the Muslim scholars or those of the jurisprudence academies. Understanding and observing the Islamic principles in transactions has a host of benefits which include the following:

  • Seeking Allah’s pleasure, guidance and mercy and avoiding contradicting His Laws.
  • Increasing one’s wealth.
  • Avoiding falling into prohibited acts and thereby eschewing sins and evil deeds.
  • Avoiding suspicion among Muslims and establishing justice amongst all people in transactions.
  • Stressing the comprehensiveness of Islam—which is not only a set of religious duties, but is also a way of life.
  • Calling others to the fold of Islam with knowledge and translating words into reality.
  • Setting an ideal example for the Muslim businessman in the arena of life.
  • Enabling the implementation of Allah’s Law with a view to saving humanity from misery and suffering.


Islamic Principles in Transactions

❋   Ensuring that one has a sincere intention, namely that the object of transactions is to earn a living through lawful means in order to satisfy one’s basic needs and thus to enable oneself better to worship Allah and to shun the worship of wealth—which may otherwise have detrimental effects.

❋   Observing high morals in transactions, for doing so testifies to one’s true worship of, and obedience to, Allah and this will certainly help increase one’s earnings.

❋   Choosing only lawful projects, even if the profits may be minimal.

❋   Choosing good partners and laborers on the basis of good moral conduct, as this is bound to lead to success and help gain more profits.

❋   Giving the laborers their dues “before their sweat dries up” to motivate them and to prompt them to work vigorously.

❋   Discharging one’s financial obligations to Allah, such as giving Zakah and charity in order to purify one’s wealth and cause it to grow.

❋   Discharging one’s duty towards society by paying the required tax, which is a form of social responsibility.

❋   Giving priority to fellow Muslims in one’s dealings over others, as the believers are protecting friends one of another, in the words of the Quran.

❋   Avoiding dealing with those who openly oppose our religion, as doing so may lead to trials and tribulations.

❋   Solving disputes by reaching amicable settlement to be supervised by righteous people.

❋   Retaining friendliness and love for Allah’s sake in case of the dissolution of a business partnership.

❋   Turning to Allah in repentance and seeking His forgiveness for the transactions that may have been conducted contrary to the Islamic dictates.

Examples of Common Legal Infractions that Must be Avoided

❋   Engaging in unlawful transactions in search of big profits and blindly following non-Muslims in this respect.

❋   Engaging in transactions that involve the exchange of interest to fund projects.

❋   Failing to document agreements between partners—which can lead to suspicion and disputes.

❋   Failing to document debts and having others to witness them—which is also bound to lead to suspicion and disputes.

❋   Making obscure agreements—which also leads to bitter disputes and the dissolution of business partnerships.

❋   Being shy to count cash upon giving or receiving it—thus causing conflicts.

❋   Using one’s partners’ shyness to one’s advantage—and thus not giving them their dues. Or, taking away their rights unlawfully—which is strictly forbidden.

❋   Delaying giving any person their due despite one’s financial ability to do so, usually using a person’s goodwill to one’s advantage.

❋   Encroaching upon other people’s property or upon public property; in fact, this is a blatant form of injustice and corruption.

❋   Entrusting property to incompetent and irresponsible people—who may then squander it or destroy it and thus cause conflicts and suspicion.

❋   Choosing partners on the basis of social status and authority and not on the basis of righteousness and high morals.

❋   Employing people on the basis of emotional feelings and neglecting the importance of moral values and technical expertise.

❋   Setting unjust conditions and exploiting the needs of the employees and other people—which can lead to monopoly.

❋   Failing to discharge one’s financial obligations, such as paying Zakah, charity and tax.

❋   Changing the original purpose of the agreement in the event of disputes and interpreting the agreement texts to one’s advantage.

❋   Reliance on independent or weak legal verdicts that contradict the opinion of the majority of Muslim scholars in order to gain worldly profits.

❋   Belittling the commission of minor as well as major sins on the plea that Allah is “Most Forgiving, Most Merciful.”

❋   Imitating sinners in their dealings.

❋   Allowing wealth and authority to rule one’s life and neglecting moral and spiritual education.

Observing Islamic Principles in Transactions

Islamic principles can be achieved by following these few simple guidelines:

❋   Develop a good understanding of the rules of transactions by educating yourself in the subject and then abide by them under all circumstances.

❋   Set up a reference library to help provide continual guidance on the rules of transactions which can be used as the need arises.

❋   Consult competent authorities whenever a new question is raised for the first time and which requires an Islamic ruling or guidance.

❋   Refer transactions and contracts that have been concluded to competent jurists and knowledgeable Muslim scholars to be on the safe side, whenever possible.

❋   Provide yourself with a continuous purification of your earnings through charity, seeking Allah’s forgiveness and repentance.

Call to Conscience

We must become responsible for our own transactions, large and small, and prepare to incur the consequences of the decisions we make in this life and in the Hereafter—understanding that all what we do will not go hidden and forgotten in the end. By educating ourselves and our community, we will begin to develop a society of Muslims who will not only be fair dealers to fellow Muslims, but will also become prime examples to all who deal with our Ummah.

A good business man or woman, who is known as fair, honest and trustworthy, is someone that provides one of the best forms of dawah there is… Never forget, our beloved Prophet, was a renowned merchant known for his ethical dealings with all people. We must endeavor to emulate his excellent example by upholding the sanctity of Islamic business ethics – because business principles will ultimately be our professional legacy.

Today is the day to make the choice and decide what will be your own legacy: Will you be:

  • A follower of money who is morally bankrupt?
  • Or, will you become an astute leader of the business community that leaves behind a commendable legacy?


  • Umm Suleiman

    May 19, 2017 - 5:46 pm

    Ahmed Zahr

  • Nur Ahmad Furlong

    December 11, 2018 - 1:06 am

    Masha-Allah what a wonderful outline of the Islamic Code of Ethics as applied to business.There’s a huge need for these principles to be communicated in a way that people can connect with and understand in terms of their practical implications. This article could be expanded into a detailed guide ideally with all the relevant references so people can gain a deeper understanding on how these play out in various situations as well as understand how islam has set a comprehensive framework for the most ideal way of doing business. I’ve been hunting for some time for an Islamic Guide to modern business as I found often the classical works were difficult to contextualize in our current context even though their principles are universal and timeless.

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