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Consignment, employer working elsewhere

Fatwaa ID: 892


  1. Some businessmen have a habit of purchasing goods for resale on a consignment basis, i.e not paying for them until they themselves make a sale. And whatever is not sold, they ask the seller to collect his goods. Is this allowed?
  2. There is a gym that charges on a timed basis. For example $50 for 30 minutes and $100 for 1 hour. However, some clients utilise less than the paid time, and when on their way out, they ask for a partial refund. So for example, they pay for an hour, but only utilised 30 minutes so now want a $50 refund. Technically they are correct, but company policies dictate that clients must choose the appropriate time they’ll be using the services before going in. The business does this to avoid the logistical nightmare of refunding scores of clients that have not utilised their allocated time period. Is it right for clients to ask for a refund?
  3. There is a fashion business that employs a skilled tailor who is on contract and works there from morning till evening. On his day off and after hours, he does a side hustle and makes clothes, using his own machine or his clients’ machine. Is it right for him to do that? His argument is it’s a free world and that what he does after work hours is not anyone’s concern. His employer says it’s a conflict of interest as he is depriving the business of the same clients who may have been lured to do business with him. Who is correct here?

In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

  1. The above is not permissible. The sales of an item cannot be conditional. Once sold, it is final. There are ways to work around it. The businessmen in reference for instance may become agents of the suppliers and thereby take a commission or fee for each item sold.
  2. The gym may place a minimum time limit or a clause of no refund. That is justified. In the enquired situation, we are unable to comment as we do not know the terms and conditions of the gym that the client has agreed to. Depending on the agreement, he may or may not be able to ask for a refund for the remaining time. Your words in this regard are not clear.
  3. This too depends on the agreement between the employer and the employee. If they had mutually agreed that the employee will not work elsewhere, then he is bound to honor that agreement. If they had not agreed on such, then the employer may not enforce such a rule afterwards.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York

08/28/1444 AH – 03/20/2023 CE | AMG3-3542

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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