[Extract from Preface of Islam and Business Ethics by Dr S M Hasanuzzaman,
published by the Institute of Islamic Banking and Insurance, London, UK 2003]

The objective behind Islamic law and procedure in trading is that of protecting both the trader and the customer from any harm being inflicted by the other party. Harmful situations may arise in the process of payment of price by the buyer or delivery of goods by the seller.

The Islamic law on sales of goods also provides the use of options by either party in order to protect their interest. The Prophet has given to the seller the option to annul the sale if he finds that he was paid less than the market price in the off-market purchase made by brokers. He also enjoys the option to rescind the contract of sale if the buyer fails to pay the price within the stipulated period. The law protects the consumer by giving him options on a number of grounds. The first is the option on account of false description, where the seller has sold goods as possessed of some good quality. The buyer also enjoys the option of inspection, after which he has a right to annul the purchase. A third kind of option the buyer enjoys arises as a result of a defect in the goods which the seller has knowingly concealed.



Source : islamic-banking.com