Giving Cloth to a Trader for Resale at a Markup

Question

Doing business with traders: for example, if cloth worth 30 rupees was given to some trader to sell for 35 rupees, and he, telling lies and truth, sold it in a dishonest manner and handed over 35 rupees — are the 5 rupees of profit made in this halal or not?

Answer

If the cloth was given to the trader with the words, “I bought this cloth for 35 rupees; sell it for exactly 35,” then this is a lie and is forbidden, because it was bought for 30. If it was given with the words, “Sell this cloth at whatever price you wish, and give me 35 rupees,” and he then sold it either for 35 or for more, this is permissible according to the Shari‘a, and…

Source: Fatawa Mahmudiyya

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