ANNOUNCEMENTS:

We will be closed for summer vacation from July 6 to August 17.

Title
Redbubble
Question
بسم الله الرحمن الرحيم
I wanted to know the rulings related to istisna' transactions. I am using a print on demand site called Redbubble where I upload my designs, and I set the price in addition to the base price of the product. If a customer places an order mainly by seeing the design which I have made, Redbubble then, actually produces the product and ships it to the customer, and I end up getting profits according to how I have set up the price. Here is a link to one of my product pages of a sticker sheet: https://www.redbubble.com/i/sticker/Water-Tracker-Black-Daily-Planner-by-StickersNLabels/155139120.EJUG5 Therefore, I wanted to know the details about istisnaa'.
Answer
الجواب حامدا ومصليا

Although Redbubble engages in istiṣnāʿ contracts with its customers, that is not a freelance artist's relationship with the company. An istiṣnāʿ contract can be considered in one of two ways: (a) the artist is the client, and Redbubble is the manufacturer, or (b) Redbubble is the client, and the artist is the manufacturer.

Both scenarios are problematic. In the first scenario, among a host of issues, the most problematic aspect is that it entails the manufacturer (Redbubble) selling the product on behalf of the client (artist) without the client having ever received possession thereof. The second scenario would require the client (Redbubble) to detail the product specifications they would like the manufacturer (artist) to make. The manufacturer must, then, make the product according to the specifications of the client. However, Redbubble is not seeking any specific design from the artists. They are free to make designs as they please, when they please.

Rather, the relationship between the freelance artist and Redbubble is that of juʿāla, wherein the jāʿil (freelance artist) offers a specified compensation to the ʿāmil (Redbubble) if they are able to complete a specified task (selling the artist’s designs).

The basic rules of both concepts are listed below.

Istiṣnāʿ

Istiṣnāʿ is a contract wherein a client places an order for a product and the manufacturer makes the product using their own materials.

Conditions

The following conditions must be met for an istiṣnāʿ contract to be valid:

  1. The client must order something that needs to be manufactured.
  2. All necessary specifications (of type, kind, quality, and quantity) must be stipulated.
  3.  The price must be set by mutual agreement.
    1. However, the money does not need to be paid upfront. The parties can even agree to a deferred payment that is fulfilled in installments.
  4. The manufacturer may not stipulate that he/she is not liable for defects.
  5. The manufacturer must use his/her own materials to manufacture the product.
  6. The manufacturer must make and deliver the item within the specified period.
    1. Once the product is delivered to the client or his/her representative, the manufacturer is no longer liable for damages to the product.
  7. The manufacturer may subcontract the production of the product to a third party, but he/she will remain liable to deliver the product to the client irrespective of the third-party contract.

Delivery

The exact time of delivery does not need to be decided beforehand in order for the contract to be valid. However, if a time is stipulated, the manufacturer must deliver the product within that period. The client can refuse to receive delivery of a product before a certain time as well. Additionally, the client can put a clause that if the product is not delivered on time, the price will be decreased.

Amendments

Both parties may agree to allow amendments to the product before completion on the condition that the price is adjusted accordingly, and the manufacturer is given sufficient time to incorporate such changes.

Cancellation/Rejection

Both parties have a right to unilaterally cancel the contract until manufacturing begins. Once the manufacturer starts making the product, it can only be canceled by mutual agreement.

If the product is not up to specifications or the manufacturer does not deliver the product within the specified period, the client may refuse to accept the product.[1]

Juʿāla

Juʿāla is a contract in which the client (jāʿil) offers specified compensation (juʿl) to any worker (ʿāmil) who will achieve a determined result in a known or unknown period.[2]

Conditions

The following conditions must be met for a juʿāla contract to be valid:

  1. The juʿāla contract can be offered to the general public or to a specific individual or entity.
    1. Although it is not a condition that the worker (entity) be specified when offering a juʿāla contract, if it is specified, that worker (entity) must, themselves, do the work unless they have permission from the client to utilize someone else under their supervision or control.
  2. It is not a condition that the worker offers an acceptance of the offer. If they complete the task, they will deserve compensation.
  3. The client may stipulate that the job must be completed within a specified period or leave it open-ended.
    1. The worker will not deserve compensation if they do not complete the task within this period.
    2. The period will automatically be extended if they are very close to completion.
    3. If they have not completed the task but have done a considerable amount of work, they will be owed the market value cost of that labor.
  4. The work sought in juʿāla must be such that it requires some type of effort.
  5. The compensation should be known, valuable (in the eyes of the Sharia), and deliverable.
    1. The compensation can also be a portion of the object of the work in juʿāla. For example, a debt collector can receive a portion of the debts they collect.
    2. If the compensation offered is invalid, the worker will be owed the market value cost of their labor. 
  6. The compensation is not owed until the work is completed and delivered to the offeror (if required).
    1. However, if an accident, which is not the fault of the worker, occurs, destroying the work, the worker will be owed the compensation.
    2. It is also permissible to stipulate that the compensation will be paid upfront before the work is completed.

Termination

Juʿāla is not a binding contract and, as such, can be revoked unilaterally unless the worker has already begun the work. However, if the worker cancels the contract after starting the work, he/she is not owed any compensation.[3]

And Allah knows best.

Mf. Siddiq Mohiuddin
Graduate, Darul Iftaa Chicago

Checked and Approved:

Mf. Abrar Mirza
Head Mufti, Darul Iftaa Chicago


[1] Authors of AAOIFI. Standard 11. In AAOIFI, 296–308. Manama, Kingdom of Bahrain: Almaiman, 2015.

Uthmani, Taqi. “Istisna’.” Chapter. In An Introduction to Islamic Finance, 195–97. Karachi, Pakistan: Quranic Studies Publishers, 2018.

Uthmani, Imran Ashraf. “Istisna’.” Chapter. In Islamic Finance, 167–69. Karachi, Pakistan: Quranic Studies Publishers, 2017.

[2] Authors of AAOIFI. Standard 15. In AAOIFI, 426. Manama, Kingdom of Bahrain: Almaiman, 2015.

[3] Authors of AAOIFI. Standard 15. In AAOIFI, 426–31. Manama, Kingdom of Bahrain: Almaiman, 2015.

September 15, 2024 Finance