Question:
1. What is the difference between a Dallaal and a Simsaar دلال and سمسار?
2. Can brokers charge commission and if so how?
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
The two words Simsār and Dallāl are interchangeable, and in a loose sense, one can be used in place of the other.[1]
However, from a more refined perspective, there is a distinction.
The Simsār سمسار is a person of a more independent nature. He is not employed per se, but he nevertheless charges for his services.
The Dallāl دلال on the other hand is employed for that function.
Perhaps this could be illustrated by a few examples. If a wholesaler employs a sales representative to source orders for the wholesaler, this roving sales representative in most cases works exclusively for that particular wholesaler. He earns a fee for every sale he secures. This would be a Dallāl دلال.
If an independent broker serves as a go between potential purchasers and sellers, but is not employed by any of them, then such a person would more accurately be referred to as a Simsār سمسار.
A stock-broker is for example an independent broker. In certain specialised fields or markets, independent brokers are an easy reference point, but are independent. For example in livestock or heavy-machinery, an independent company puts itself up as a broker. Should a person want to sell a cow or a tractor, instead of advertising it in the open market, he requests the broker to find a buyer. Similarly, should a person wish to source such an item, instead of looking in the open market, he will request the broker to find a seller. In this way the broker is the middle-man and an easy reference point for both sellers and buyers in specialised markets. The broker will generally charge the one making the request, whether it be the buyer or seller, a fee for his function of making the match and sourcing the buyer or seller, as the case may be. However, he is not employed by either party.
Technically auctions refer to the sale to the highest bidder. However in practice, most auctioneers also provide the service of brokerage as well, hence there is a tendency to associate the two different services or functions. However, brokerage and auctioneering are different functions, and involve distinctly separate processes.
It is permissible for a broker to take commission. The commission agreed between the two can be any mutually agreed amount. However, his commission should take one of two forms:
1) A percentage of the total amount.
2) A fixed rate.
It is not permissible to leave an open ended amount of commission. For example, if A utilised the services of B to sell his car for $10,000, B cannot stipulate whatever is gained over and above $10,000 as his commission.[2]
And Allah Ta’ālā Knows Best
Mufti Faraz Adam
www.darulfiqh.com