Fair Business Practices
In Islam, business and trade are highly encouraged, as long as they are conducted by lawful means and through lawful channels. It is expected that any earnings be made through decent and honest labor. A Muslim is to be self-supporting and should avoid becoming a liability on any person or the society at large.
Business practices must be conducted with frankness and honesty. Islam encourages that contracts and agreements should be written down and witnessed by two trustworthy persons so neither party can try to take advantage of the other or make false claims in the future.
Muslims are forbidden from cheating, hiding defects in merchandise, and engaging in exploitation, monopoly, and fraud. There is a chapter of the Qur'an called Al-Mutaffifin, or “Dealing in Fraud.” It begins, “Woe to those that deal in fraud. Those who, when they have to receive some measure from men, exact full measure, but when they have to give by measure or weight to men, give less than due” (Qur'an 83:1–3).
Muslims are encouraged to pay for services as soon as they are performed and not to withhold or delay payment. Muhammad instructed that when Muslims hire laborers to do some work, they should “compensate them before the sweat dries.”
In another section, the Qur'an commands that Muslims “Give just measure, and cause no loss to others by fraud. And weigh with scales true and upright. And do not withhold things that are justly due to men, nor do evil in the land, working mischief” (Qur'an 26:181–3). It was common practice in ancient times to “tip the scales” or to hide defective merchandise underneath a pile of quality goods. These practices were strictly forbidden in Islam.
Muslims are prohibited from working with illegal industries or trading in substances that are forbidden in Islam. For example, working in factories that make alcohol, in meat-packing plants that package pork, or in nightclubs that serve alcohol are all forbidden. Muhammad once said, “When Allah prohibits a thing, He prohibits giving and receiving the price of it as well.”