Is Paying Negotiators to Raise Offers Considered a Bribe?

Answered by Shaykh Muhammad Carr

Question

Suppose a seller agrees to pay a “commission fee” to negotiators who promise to raise a buyer’s offer for his company from below-market value to a fairer price. Would such a payment be considered a bribe? If so, would the profit from the sale be considered haram, and would it need to be given to charity upon repentance, since the company itself cannot be returned?

Answer

In the Name of Allah, the Most Merciful and Compassionate.

I pray you are in good faith and health. Thank you for your question.

Allah says, “O you who believe, devour not your wealth between you through falsehood; but only through trade by your complete mutual consent.” [Quran, 4:29].

Generically answering the above question is not without its challenges.

Assuming that the above is a stand-alone arrangement which negotiators typically offer as a service, then such a payment would not be considered a bribe. Structured as a ji‘ala, the service level agreement above would be regarded as valid.

On the other hand, if the negotiators are part of the master agreement and are contractually bound to reach the fairest price (in this case, for the seller), but refuse to do so unless they are given a bribe. It would be permissible for the seller to pay the bribe, while impermissible for the negotiators to receive it. Ibn Hajar says, As for he who knows that his wealth will be taken unjustly if not for the bribe, then there is no blame upon him. [Ibn Hajar, Tuhfat al-Muhtaj]

Ibn Athir said, “That which is given to obtain a right or to avert injustice is not included in bribery.” Ibn Mas‘ud was detained in Habasha over a matter, and he paid two dinars to secure his release.

In both instances, the sale is considered valid notwithstanding the impermissible bribe element in the latter scenario.

Bribes 

Bribes typically do not form part of the primary contract. Although impermissible, it does not invalidate the contract. Even if the payment were construed as a bribe, the contract would still be valid.

Khatib says, “Among the prohibitions are things that do not invalidate [the contract] because they refer to an associated meaning rather than to their essence or necessary consequence.” [Khatib, Mughni al-Muhtaj]

Ji‘ala

Ji‘ala, legally defined, involves committing to pay a stipulated recompense in exchange for a known or unknown service. [Khatib, Mughni al-Muhtaj]

This type of contract finds its basis in the narration of Abu Sa‘id al-Khudri, who recited the Fatiha to successfully cure a man stung by a scorpion in exchange for a recompense of thirty sheep. The Prophet (Allah bless him and give him peace) affirmed such transactions and requested a portion of the flock be assigned to him.

In a Ji‘ala contract, the recompense must be clearly defined. Commissions, often calculated as a percentage of the selling price, exemplify this principle, as the selling price is predetermined, thereby establishing the commission amount.

Khatib al-Shirbini elucidates this concept, stating, “If a person specifies, for instance, that whoever returns my slave will receive his clothing or a quarter of his value, they will be entitled to the agreed-upon amount provided they are aware of its terms.”

In the case at hand, the “fairer price” needs to be determined at the time of enacting the ji‘ala contract for the commission to be known.

The AAOIFI Sharia Standard 34 that deals with hiring of persons, believes that, “The pay, whether in cash, or in-kind or in the form of a service, should be well known to the extent that leaves no room for dispute. It can be either fixed or variable according to a method which is well known to the two parties.” [AAOIFI Sharia Standards]

I pray this is of benefit and that Allah guides us all.

[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari‘a Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.