Author: Dr. Muhammad Zia-ur-Rahman Azmi (رحمہ اللہ)
Permissibility of Open Bidding in Auctions
In transactions involving auctions or open bidding, there are detailed rulings based on the situation:- Open and Competitive Bidding:
- If the bidding process is open, where items are publicly auctioned, bids are called out, and higher offers are sought, it is permissible for a person to outbid others.
- This practice aligns with the Sunnah, as the Prophet Muhammad (ﷺ) oversaw several such transactions and said:
"Who will offer more?"
[Sunan Abu Dawood, Hadith No. 1641; Sunan al-Tirmidhi, Hadith No. 1218] - This type of auction is considered lawful because the process is transparent, and everyone is given a fair chance to bid.
- Prohibition After a Deal is Finalized:
- If the auction or sale process has concluded, and the seller (or their representative) has agreed to sell to a particular buyer, it is not permissible for someone else to step in and offer a higher bid.
- This is based on the Hadith of the Prophet (ﷺ):
"Do not bid over your brother's bid."
[Sahih Muslim, Hadith No. 1408] - Such an act is considered unethical and disrupts the trust and fairness of trade practices.
Key Principles
- Transparency in Transactions:
Open and competitive bidding, where all participants have equal opportunity, is permissible and encouraged for fairness. - Respect for Finalized Deals:
Once an agreement is reached, intervening to offer a higher price is prohibited, as it undermines trust and fairness in business dealings. - Ethics in Trade:
Islam emphasizes honesty and fairness in commerce, discouraging practices that lead to disputes or harm relationships.