Paying an unstipulated commission-based fee
Q: Is it permissible for one to give his merchandise to a rep to sell for him on the condition that his commission will be any profit he makes over and above the selling price?
A: In principle, this agreement should not be permissible as the commission is not fixed. However, on account of this practice becoming common in the world, the latter Fuqahaa have permitted it.
Below we will reproduce a fatwa of Mufti Mahmood Hasan Gangohi (rahimahullah) in regard to a similar question:
“This arrangement that you have described is not that of a sale. Umar is not a seller and Zaid is not a purchaser. Rather, this situation is the hiring of a service. It is as if Umar said to Zaid, “Sell this cloth of mine.” Zaid thereafter takes the cloth and finds customers to whom he sells the cloth. Zaid’s fee for selling the cloth has been stipulated in the following manner: he will pay Umar the cost of the cloth together with a profit of one anna (a sixteenth of a rupee) per rupee, and all the additional profit will be for him.
In principle, this hire agreement is faasid (invalid), as the fee is not stipulated but is rather unknown, and the fee being unknown is a factor that causes the hire agreement to become invalid. However, Allaamah Shaami (rahimahullah) has written in Raddul Muhtaar that despite the fee being unknown, it is permitted on account of ta’aamul of the people (this form of transacting becoming common among people in services that relate to ijaarah of services).”
And Allah Ta'ala (الله تعالى) knows best.
فتاوى محمودیة 25/170
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