Islamic Fiqh > Companies and leases > The conditions of the company (shirkat al-amwal) > Delegation of sale and purchase within the partnership's capital
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Updated on 25 September 2026 at 6:57 PM
This part belongs to the full section: All sections of this part.
This second part completes the chapter on the conditions of the partnership (shirkat al-amwal): delegation of sale and purchase within the partnership's capital, the pledge, the transfer of the price, liability under the rights of the contract, whether the partnership is optional or binding, its grounds of annulment, the partner's hand, then the remaining types: the mufawada, the partnership of bodies (abdan) and the wujuh partnership, down to the division of profit and loss. The positions of the four schools are quoted faithfully, with their classical references in brackets.
Concluding the previous question: whether it be a boy set to water a mount or any other work, abundance and smallness are appraised in relation to the partnership's capital ("Ash-Sharh al-Kabir" with ad-Dasuqi's gloss 5/9-10; "Sharh Mukhtasar Khalil" 6/43; "Tahrir al-Mukhtasar" 4/243; "Mawahib al-Jalil" 7/63-64; "At-Taj wa-l-Iklil" 4/146-147).
8. Delegation of sale and purchase within the partnership's capital: the majority of jurists, the Hanafis and the Hanbalis in the madhhab, hold that neither partner may dispose gratuitously of the partnership's capital, nor gift it, nor lend it, for lending is a gratuitous act and he does not own it. He was only entrusted with conducting the business by his judgment in trade, and this is not part of it. According to Imam Ahmad, he may spend part of the price for a benefit (Bada'i' as-Sana'i' 6/71; al-Jawhara an-Nayyira 3/433; al-Mughni 5/15; al-Mubdi' 5/9; Kashshaf al-Qina' 3/586; Sharh Muntaha al-Iradat 3/554).
The Shafi'is say: if one of the two says to his partner "sell as you see fit", deliberation must be observed, for it is a delegation of his judgment, which requires seeking the benefit. If he says "sell as you wish", he may then sell with favoritism (Nihayat al-Muhtaj with ash-Shabramallisi's gloss 5/11; an-Najm al-Wahhaj 5/15).
The Hanafis and the Hanbalis, according to one opinion, hold that each partner may delegate a third party to sell and buy, owing to the generality of their dealings, their frequency and their long duration in most cases. These are so many indicators of the permission of delegation in sale and purchase. The partnership is indeed concluded upon the custom of merchants, and the delegation of sale and purchase is part of their habits.
Delegation is among the necessities of trade: the merchant cannot conduct all his dealings himself and needs to delegate. If one partner dismisses the delegate, the latter leaves the agency if it concerned sale, purchase or hire; for each of the two, having received from his companion the power to delegate, also holds the power to dismiss. And because the one who grants the agency is himself his partner's delegate: if he in turn delegates, the granter may dismiss his delegate. But if he is a delegate for recovering what he is owed, the other may not dismiss him, for he has no power to delegate his partner, hence none to dismiss that partner's delegate.
The Hanbalis in the madhhab, which is also the import of the Shafi'i madhhab, hold that a partner may not delegate in sale and purchase if he is not incapable; this is the qiyas with the Hanafis. Each of the two is indeed his companion's delegate, and a delegate may not delegate another; for the one who granted the agency, that is, his partner, consented only to his judgment and not to another's (Bada'i' as-Sana'i' 6/69; al-Jawhara an-Nayyira 3/432; Mukhtasar al-Wiqaya 2/183; al-Mughni 5/14; al-Mubdi' 5/11; al-Insaf 5/417).
9. The jurists differ: may one of the two partners pledge the debt that rests upon them both, or the debt due to them, or not?
The Hanbalis in the madhhab hold that a partner, in case of need, may pledge the debt resting upon them or the debt due to them. The pledge is intended for discharging the debt and the taking of pledge for its recovery, and he holds the power to discharge and to recover; he therefore holds what these acts are intended for, with no distinction between the one who concludes the contract and another. Receiving is indeed among the rights of the contract, and the rights of the contract are not exclusive to the contracting party; likewise what is intended by them.
The Hanbalis, according to one narration, hold that he has no such right, for it involves risk (al-Mughni 5/14; al-Furu' 4/290; Kashshaf al-Qina' 3/586; Sharh Muntaha al-Iradat 3/553).
The Hanafis hold that a partner in a mufawada may pledge and take in pledge; they differ over the partners of an 'inan. In some copies of al-Quduri's Mukhtasar, the pledge and the taking of pledge are established for him, and this is also what al-Kasani mentioned: he may pledge goods of the partnership for a debt contracted by its contract, that is, a purchase, and take in pledge what he has sold. For the pledge is the discharge of the debt and the taking of pledge its recovery; he holds discharge and recovery, so he holds the pledge and the taking of pledge.
Most Hanafi books hold that the partner of an 'inan may not pledge or take in pledge without his partner's authorization (al-Mabsut 11/202-203; Bada'i' as-Sana'i' 6/70; al-Jawhara an-Nayyira 3/432; Majma' al-Anhar 2/556; Durrar al-Hukkam 7/482).
As for the Malikis and the Shafi'is, I have found no stated rule with them on the pledge by one of the two partners, though the apparent import of their madhhab is that neither may do so without the other's authorization.
10. Imam al-Shafi'i stated in "al-Umm" that the pledge and the taking of pledge are not permitted to the lender in the mudaraba, as will come, if Allah wills, under mudaraba. The Hanafis and the Hanbalis stated that one of the partners may resort to the transfer.
The Hanafis say: the partner may transfer, for the transfer is among the works of trade; the merchant needs it because of people's differing solvency and insolvency, some being fuller than others, and custom prefers the fuller. The transfer is thus a means of recovery, equivalent to the pledge for securing recovery. And because the transfer is the conveyance of what is in the liability for its like, which is permissible, like exchange (sarf) (Bada'i' as-Sana'i' 6/70).
The Hanbalis say: the partner may transfer and resort to transfer, for the transfer is a contract of exchange (mu'awada) which he has the power to conclude (Kashshaf al-Qina' 3/585; Sharh Muntaha al-Iradat 3/553; Matalib Uli an-Nuha 3/503).
The Hanafis say: everything attached to the rights of the contract undertaken by one partner of an 'inan partnership devolves upon the contracting one alone; he is bound by them to the exclusion of his partner, for so long as no suretyship is stipulated the rights of the contract belong only to the contractor. Thus, if one of the two sells something of the partnership, the other may receive nothing of the price.
Likewise, any debt binding a person whose contract one of the two concluded: the other may not receive it, and the debtor may refuse to pay it to him; as the buyer from the sale-delegate may refuse to pay the price to the granter of the agency. Receiving belongs to the rights of the contract, which revert to the contractor; the debtor did not bind these rights for the owner: it is the contractor who bound them, and he is bound only by what he bound, save by the contractor's delegation. If he pays the partner without delegation, he is discharged of his own share but not of the creditor's share: this is istihsan, while the qiyas would have the payer not be discharged.
The argument of the qiyas: the rights of the contract do not attach to the receiver, who is foreign to them; they attach to the contractor; the payer therefore paid the receiver without right and is not discharged.
The argument of the istihsan: annulling this receipt serves no purpose; were we to annul it, we would need restitution, the debtor having to pay the contractor, and the contractor returning the partner's share to him; receiving and then restituting at once is of no use. The same applies, by qiyas and istihsan, to the sale-delegate: if the buyer pays the price to the granter of the agency without the delegate's permission, the partner is not required to hand over the sold item.
Neither of the two may litigate over what the other had acknowledged or sold; litigation belongs to the one who sold and answers for it, not to the one who had charge of none of it: no testimony is heard against him in this matter, nor is he made to swear. He and the third party are equal here, for litigation is among the rights of the contract, and the rights of the contract attach to the contractor.
If one of the two buys something, the other cannot be claimed for the price, and the partner may not receive the purchased item; the contractor may however delegate someone to receive the price and the purchased item in what he bought and sold, as mentioned previously.
One of the two may rescind the sale (iqa'a) of what the other sold, for rescission has the meaning of purchase, and he holds the power to buy for the partnership, hence the power to rescind.
What one of the two sold or bought, and in which a defect appears: the other neither returns it for defect nor is it returned against him, for the return for defect is among the rights of the contract, which revert to the contractor; the return of the price when the goods are liable is directed against the seller because he is the contractor. If one of the two acknowledges a defect in goods, his acknowledgment is valid against himself and his partner.
If one of the two sells goods of the partnership, they are returned to him and he accepts them without the judge's ruling, this is valid for both; for the acceptance of the goods by mutual consent without a ruling is like an original purchase by deed, and each of the two may buy for the partnership what he sold. Likewise, acceptance without the judge's ruling is like rescission of the sale, and the rescission made by one of the two takes effect upon the other (Bada'i' as-Sana'i' 6/70; al-Fatawa al-Hindiyya 2/325).
As for the mufawada partnership, all the rights of the contract undertaken by one of the two devolve upon both together: a partner of the mufawada may acknowledge a debt binding himself and his partner, and the creditor claims it from whichever of the two he wishes; for each of the two is surety for the other, the acknowledger being bound by his acknowledgment and his partner by his suretyship.
Likewise any debt of trade binding each of the two: the price of what was bought in a valid sale, or its value in an invalid sale, the wage of the hired worker, or what is akin to trade, such as usurped property and disputes over deposits, loans for use, hires and borrowings; the creditor takes his debt from whichever of the two he wishes, or from the partner by way of suretyship.
The debt of trade is a debt that bound him because of the partnership, the valid sale being comprehended by the partnership contract since it is trade, each of the two being surety for his companion for what binds him because of the partnership. This is why they say that testimony is heard on this against the partner who did not contract, the debt having bound him as it bound his partner, whose surety he is; and testimony of a debt is heard against the surety as against the one for whom it was given. Likewise the invalid sale, the command to sell embracing the valid and the invalid; likewise the wage, for hire is trade.
As for usurpation, its liability is akin to trade: establishing liability in it confers ownership of the compensated thing, so it is akin to the liability of sale. Disputes over deposits, loans for use and hires are akin to usurpation, for they belong to aggression upon another's property without his owner's permission.
As for shares of offenses, the mahr, maintenance, the compensation of khul' and settlement in place of retaliation, the partner is not held to them; for these are neither the trade's liability nor its equivalent, the meaning of exchanging wealth for wealth being entirely absent.
If one of the two stands surety for someone with property, his partner is bound according to Abu Hanifa, not according to his two companions; if he guarantees by his person, his partner is not bound according to all their views.
The rights of the contract undertaken by one of the two devolve upon both together, to the point that if one of the two sells something of the partnership's capital, the one who is not the seller may be required to hand over the goods like the seller, and may be required by the buyer to pay the price, which he must do like the seller.
If one of the two buys something, the other is liable for the price like the buyer, and may receive the goods like the buyer.
If the buyer of the two discovers a defect in the goods, his partner may return them for defect like the buyer, and recover the price upon liability.
If one of the two sells goods of their partnership and the buyer discovers a defect in it, he may return it to whichever of the two he wishes; if he contests the defect, he may put the seller to a decisive oath and his partner to an oath of knowledge.
If one of the two acknowledges, his acknowledgment takes effect upon himself and his partner.
If they both sold goods of their partnership and the buyer discovers a defect in it, each of the two may take a decisive oath over the half he sold, and over the half his partner sold an oath of knowledge, according to Muhammad's view. Abu Yusuf (may Allah have mercy on him) says: each of the two takes a decisive oath over what he sold, and the oath of knowledge falls away from each of the two.
Both are equal in the revenue of the trade and its liability: the act of one equals that of both, the word of one that of both; in reality they are two persons, and in the rules of trade as one single person.
The mufawid's dealing is effective in everything whose benefit reverts to the partnership's capital, whether of trade or not; unlike the partner of the 'inan partnership, whose dealing is effective only in trade.
Each of the two may claim what they acknowledged or what his partner acknowledged, or what is due to them from usurpation or suretyship; for each of the two is surety for the other and may recover his rights by delegation.
What rests upon one of the two, the creditor may take from either; for each is surety for the other, each is an adversary for his companion, claims what rests upon him, and testimony is established against him.
He is put to an oath of knowledge in what belongs to the trade's liability; for the surety is an adversary in what he claims against the one for whom he stood surety, and he is put to an oath of knowledge, for it is an oath over another's act.
What one of the two bought as food for his family, a garment, or what he needs, is permitted and is his alone, to the exclusion of his companion.
The qiyas would have the purchase be shared between them, for it is shareable like other goods; but they approved (istahsanu) that it be his alone out of necessity, for it cannot be dispensed with. It is thus an exception to the mufawada, and the buyer holds it exclusively; the seller may however claim the price from whichever of the two he wishes, when the purchase becomes the exclusive property of the buyer. For it is shareable, and each of the two is surety for the other for the price of what is shareable; except that they say the partner has recourse against his partner for half that price, for he discharged a debt on his behalf out of his own wealth, not as a gift: he undertook it, hence his recourse.
If one of the two rescinds a sale made by the other, the rescission is valid for both, for what was said: rescission has the meaning of purchase, which he holds for the partnership, hence he holds rescission; and since the partner of the 'inan partnership holds rescission, the mufawid is all the more entitled.
When one of the two partners of the mufawada dies, or they separate, the one who did not undertake the mutual debt may not receive the debt; for the partnership is annulled by the death of one, being an agency. The agency is annulled by the death of the granter, his command ceasing with his death, and by the death of the delegate, his acting becoming impossible. Neither may therefore receive the other's share if he is not the one who undertook the contract; he may receive his own share, for the agency was granted to him in it, and the delegate's receipt is permitted by istihsan.
As for the one who undertook the mutual debt, he may receive all; he acquired that right by the debt contract, which is among the rights of the contract, and it is not annulled by the partnership's dissolution through the partner's death, just as it is not annulled by dismissal.
If one of the two hires himself out for tailoring or some work, the wage is between them in halves; if he hires himself out for service, the wage is his alone. In the first case he hired himself out for work he may accept for himself and his companion: when he works, he fulfils what rests upon both, so the wage is between them; in the second he may not accept for his companion but only for himself, so the wage is his alone.
Al-Hasan ibn Ziyad said: Abu Hanifa (may Allah have mercy on him) said: if one of the partners of the mufawada lends money, hands it to a man and then takes a bill of exchange (suftaja) for it, this is valid for both, and he does not guarantee the money's perishing, whether it perished or not.
According to the qiyas of Abu Yusuf's view, the one who lent and took the bill guarantees his partner's share; this is a branch of their difference over suretyship, the surety standing in the lender's position. If suretyship is permitted with Abu Hanifa, lending is; with Abu Yusuf suretyship is not permitted because of the gratuity it involves, and lending is the same (Bada'i' as-Sana'i' 6/73, 67).
The Malikis say: the 'inan partnership is permitted and binding, derived from the bridle ('inan) of the mount: each of the two partners required of his companion that he decide nothing unilaterally in the partnership without his partner's authorization and knowledge, as though he had seized his bridle, that is, his forelock, to do nothing without his permission. If one of the two deals without the other's authorization, the latter may reject it ("Ash-Sharh al-Kabir" 5/21; "Sharh Mukhtasar Khalil" 6/49; "Tahrir al-Mukhtasar" 4/253).
The Hanbalis say: the rights of the contract are not exclusive to the contracting one of the two partners; the claim of the wage belongs to both and its payment rests upon both.
Each of the two may return for defect the share of what he had charge of in the sale or which his partner had charge of; for the delegate returns, so the partner is all the more entitled, even if his partner consents.
He may acknowledge the defect in what was sold of their wealth, and accept the delegate's acknowledgment on behalf of his granter, for it is among its annexes.
If the goods are returned to the partner for defect, he may accept them and return the price.
He may pay the defect indemnity (arsh), deduct from the price on account of the defect, or defer the price because of the defect; for this is the custom of trade.
He may rescind the sale, for there may be a share in it: if it was a sale, he was authorized in it; if it was a dissolution, it is like the return for defect.
He may acknowledge the price or part of it, the wage of the crier and of the porter and the like, for this is needed, like acknowledging the defect.
He may do everything conducive to their trade's interest; for the partnership rests upon agency and trust (al-Mughni 5/13; Kashshaf al-Qina' 3/585; Sharh Muntaha al-Iradat 3/553).
The jurists differ: is the partnership a binding contract that dissolves only by both parties' consent, like sale, or an optional contract which either partner may terminate whenever he wishes?
The Malikis, in the famous opinion, hold that the partnership is optional at the outset, but once concluded it binds and becomes a contract binding by the mere contract, like sale; that is, by what custom indicates, whether a word, like "we have partnered", or a deed, like mixing the two capitals or bringing them together. Neither has any going back, like sale: if one wants separation before mixing and the other refuses, the word is with the one who refuses, until the capital matures after the work.
As for the partnership of works, bodies or tillage, mentioned further on, there are two opinions: one that it is like the partnership of capitals, binding by the contract, the view of Sahnun; the second that it binds only by the work, the view of Ibn al-Qasim ("Ash-Sharh al-Kabir" with ad-Dasuqi's gloss 5/4; "Sharh Mukhtasar Khalil" 6/39; "Mawahib al-Jalil" 7/58, 60; "At-Taj wa-l-Iklil" 4/140).
The majority of jurists, the Hanafis, Shafi'is, Hanbalis, and the opposite of the famous opinion among the Malikis, hold that the partnership is an optional contract which either partner may dissolve like the agency; the contract being optional, it is thereby annulled, like the agency. They then differ over whether the other partner must be informed of the dissolution or not, and over whether the capital must be minted coin (nadd) or not.
The Hanafis say: the partnership is an optional, non-binding contract which either may dissolve alone; but among the conditions of a valid dissolution is that it occur in the presence, that is, to the knowledge, of the companion, so much so that if he dissolves upon a record (mahdar) made by his companion, the dissolution is permitted. Likewise if the companion is absent but informed of the dissolution; if he is absent and the dissolution does not reach him, it is not permitted and the contract is not dissolved, for it would harm him. This is why dismissing the delegate without his knowledge is not valid, even though the partnership includes the agency, the delegate's knowledge of his dismissal being a condition of its validity; the same applies to the agency included within the partnership.
Al-Kasani (may Allah have mercy on him) said: must the partnership's capital be in coin at the time of the partnership for the dissolution to be valid, that is, in dirhams or dinars? Al-Tahawi mentioned that this is a condition, to the point that if the capital is in goods at the time of the dissolution, the latter is not valid and the partnership is not dissolved, with no narration from our masters about the partnership, but a narration about the mudaraba.
Thus, if the owner of the capital forbids the mudarib to deal, one considers whether the mudaraba's capital at the time of the prohibition is in dirhams or dinars: the prohibition is then valid, but he may convert the dirhams into dinars and the dinars into dirhams, for they are, in value, one species, as though he had bought nothing with them, and he may not buy goods. If the capital at the time of the prohibition is in goods, his prohibition is not valid, for he must sell them for the profit to appear, and dissolution would nullify his right of dealing.
Al-Tahawi made the partnership like the mudaraba; some of our masters distinguished: the dissolution of the partnership is permitted even if the capital is in goods, but not that of the mudaraba. The partnership's capital is indeed in both partners' hands, both holding the authority of dealing, so either may impose his companion's prohibition whether the capital is coin or goods. As for the mudaraba's capital, it is in the mudarib's hands with the authority for him, not for the owner, who therefore cannot prohibit once the capital has become goods (Bada'i' as-Sana'i' 6/77).
The Shafi'is say: each of the two partners may dissolve the partnership whenever he wishes, like the agency; both are removed from dealing by the dissolution of either, for the contract has ceased, and each of the two may dispose of his own share.
If neither dissolves, but one says to the other "I remove you from dealing" or "do not deal with my share", the addressee is removed, and the remover is not removed from dealing with the removed one's share: he deals with the removed one's share, for no one has prevented him, unlike the addressee; if the latter wishes to remove him in turn, let him do so.
Its form with the removed one: he sets apart a portion of the mixed capital for his partner, then one removes the other, and the remover deals with the whole to the exclusion of the removed one (Nihayat al-Matlab 7/26; Rawdat at-Talibin 3/481; al-Bayan 6/387; Mughni al-Muhtaj 3/188-189; Nihayat al-Muhtaj with ash-Shabramallisi's gloss 5/11-12; an-Najm al-Wahhaj 5/16).
The Hanbalis say: the partnership is annulled by the dissolution of either and by all that annuls the agency; if one says "the partnership is dissolved", both are removed, and each deals only to the extent of his share of the capital. Dissolving the partnership indeed implies removing oneself from dealing with one's companion's wealth and removing one's companion from dealing with one's own, whether the capital is coin or goods; for the partnership is an agency and the profit enters into it, and because the mudarib's right is original.
If one removes his companion saying "I have removed my partner", the removed one is removed even without knowing, like the delegate. The removed one may deal only to the extent of his share of the capital: if he deals with more, he guarantees the excess; the remover deals with all the partnership's capital, which remains in his right, for his companion did not remove him; unlike the case where one dissolves the partnership: each then deals only with his own capital.
This removal applies when the capital has matured (nadd), that is, returned to the state it was in at the contract, in dinars or dirhams. If the capital is in goods, there are two narrations: one, that neither is removed by the removal his companion pronounces against him, and he may deal by selling to liquidate the capital, like the mudarib, without exchange for other goods and without any dealing that does not liquidate the capital; for he is removed and no need calls for it, unlike liquidation: this is what al-Qadi mentioned and the apparent import of Ahmad's words. The other, which is the madhhab: he is removed absolutely, even if it is goods, al-Shafi'i's view; for it is an optional contract resembling the agency; on this basis, if they agree on sale or division, it takes place.
If one demands division and the other sale, the one demanding division is answered, not the one demanding sale.
If it is asked: is it not the case that when the owner of the capital dissolves the mudaraba and the worker demands sale, he is answered? The answer: the worker has a right to the profit, and the profit only appears through sale, so he has earned it, his right's acquisition being suspended upon it; in our question, whatever comes of the profit each of the two recovers in his share of the goods, so he is not compelled to sell (al-Mughni 5/15; al-Furu' 4/300; Kashshaf al-Qina' 3/592-593; Sharh Muntaha al-Iradat 3/551-552; Matalib Uli an-Nuha 3/502).
The partnership is annulled by the following:
The Hanafis say: whichever of the two dies, the partnership dissolves, ownership and the capacity for dealing ceasing with death; for the partnership includes the agency, which is annulled by death, whether the companion's death is known or not. Each of the two is indeed his companion's delegate, and the granter's death amounts to the delegate's dismissal, whether he is informed of it or not, it being a juridical dismissal that does not depend on knowledge (Bada'i' as-Sana'i' 6/78; al-Ikhtiyar 3/21; al-'Inaya 8/310; al-Jawhara an-Nayyira 3/439; Mukhtasar al-Wiqaya 2/185; al-Lubab 1/536).
In "al-Mudawwana al-Kubra" (Maliki), under the ruling on one of the two partners dying: I said: what do you say if one of the partners dies? He said: if one of them dies, the one who remains may not originate anything in the remaining capital or in the goods, little or much, without the heirs' consent; for at one's death the partnership between them is severed and the deceased's share passes to the heirs; this is my opinion (al-Mudawwana al-Kubra 12/84).
The Shafi'is say: when one dies, the partnership dissolves in the sense that the authorization to deal is annulled, optional contracts being annulled by death like the agency. It follows that the deceased either has debts and bequests or has none; if he has none, the heir's state is either capable or not; if he is capable by majority and good sense, he has the choice concerning the partnership's capital among three things: either mutual division, whereby his share is set apart and he deals with it; or leaving the capital shared as it is, without authorizing the partner to deal with it; or remaining in the partnership and authorizing the partner to deal with it, thereby becoming a partner as his legator was.
Whichever of the three he does, it is permitted to him, whether the share is in the wealth or elsewhere, for one whose capacity is sound, his contracts take effect even without a share in the wealth. This heir, if he wishes to remain in the partnership, must know the amount of the capital he inherited before authorizing dealing with it, for fear that a debt attached to the partnership should emerge, so as to know its amount and distinguish it from the inherited profit not attached to it; if he does not, it is valid, the fear of the debt's emergence being set aside since the default is innocence of liability.
If it is said: the partnership is a contract, how can it be valid with ignorance of the amount of the capital contracted upon? The reply: what is required is knowledge of each partner's share of the total, a half, a third or a quarter, not its weight. Do you not see that if two men partner, one placing dirhams on one pan of a scale and the other opposite, and they partner upon it and trade without knowing its weight, the partnership is valid through knowledge of each one's share of the total? Likewise the heir in the estate (al-Hawi al-Kabir 6/484-485; Nihayat al-Matlab 7/26; Rawdat at-Talibin 3/481; al-Bayan 6/388; Mughni al-Muhtaj 3/188-189; Nihayat al-Muhtaj with ash-Shabramallisi's gloss 5/12; an-Najm al-Wahhaj 5/16).
The Hanbalis say: the partnership is annulled by the death of one of the two; if the one who dies has an adult and rational heir, the latter may remain in the partnership, the partner authorizing him to deal and he likewise authorizing his partner. His remaining in the partnership is the completion of the partnership, not its founding: its conditions are therefore not taken into account, that is, the partnership's conditions, the presence of the capital, its being minted coin, the specification of profit and the like, as said previously. Al-Buhuti said: this is the import of his words in "al-Mughni" and "al-Mubdi'".
He said in "al-Mustaw'ib": if he dies, he leaves the partnership and his heirs receive his right. The text is thus explicit on the annulment of the partnership by the death of one of them, which is his plain meaning closely, as are the words of "al-Muntaqa" and others, in what preceded concerning the agency and what will come concerning the mudaraba, with no difference.
The heir may demand from the partner the division of the partnership's capital; if the heir is under guardianship through interdiction, his guardian acts in his place in this, that is, in maintaining the partnership and the division; the guardian does only what contains the ward's interest, like his other dealings. If the deceased bequeathed the partnership's capital or part of it to a specific person, the legatee, if he accepts, is counted like the heir in what was said, ownership having passed to him. If the bequest is to a non-specific person, like the poor, it is not permitted for the executor to authorize dealing, the bequeathed capital must be handed to the legatees, and the executor sets apart the deceased's share and distributes it to the legatees according to the bequest.
If the deceased has a debt, it attaches to his estate; the heir may not ratify the partnership until he has discharged it. If he discharges it from other than the partnership's capital, he may complete the partnership; if he discharges it from that, the partnership is annulled to the extent of what he discharged, mentioned in "al-Mughni", "al-Mubdi'" and others. But what precedes implies that the heir is not prevented from completing the partnership before discharge, though it be suspended: if he discharges, the partnership takes effect, like his other dealings; otherwise it is annulled and the debt paid from the deceased's share (al-Mughni 5/15; Kashshaf al-Qina' 3/592-593).
Concerning fainting it is said: dissolution occurs only if it lasts so long that a prayer time elapses and a prayer is missed; if he faints for less, it does not harm him (Rawdat at-Talibin 3/481; al-Bayan 6/387; Mughni al-Muhtaj 3/188-189; Nihayat al-Muhtaj 5/12; an-Najm al-Wahhaj 5/16).
6. Apostasy together with joining the abode of war: the Hanafis state that if one of the partners apostatizes and joins the abode of war as an apostate, and the judge rules on his joining, the partnership dissolves, for it is like death. Each of the two indeed deals by authorization, and death severs the authorization, with no difference whether the partner knows of his companion's apostasy or not; for it is a juridical dismissal, unlike dissolution, as said previously.
If the apostate returns to Islam after his joining before the judge has ruled, the partnership is not annulled; if his return occurs after the ruling, there is no partnership between them. When the judge ruled on his joining, his properties vanished, so the partnership dissolved and returns only by a new contract (Bada'i' as-Sana'i' 6/78; al-Ikhtiyar 3/21; al-'Inaya 8/310; al-Jawhara an-Nayyira 3/439; Mukhtasar al-Wiqaya 2/185; al-Lubab 1/536; Sharh Fath al-Qadir 6/194).
The jurists of the four schools agree that the partner's hand over the partnership's capital is a hand of trust, like that of the depositor and the delegate, not a hand of liability. No partner therefore guarantees what perishes of the trade capital without aggression or negligence, by the jurists' consensus; for he took the capital with its owner's permission, not on the mode of exchange like the receiver of a purchase's price, nor on the mode of security like the pledge. And because he stands in his partner's place in safekeeping, what perishes in his hand without aggression or negligence is like what perishes in the owner's hand.
The partner guarantees only if he commits an aggression or a negligence. Aggression is doing what is not permitted to him, explained previously: everything not permitted to the partner, if he does it, he guarantees his partner's share. Negligence is leaving what ought to be done: if he neglects, he guarantees his partner's share.
Because the partner is trustworthy, his word is accepted without testimony in the return of the partner's share, in loss, and in destruction if he claims it without cause or with a hidden cause, like theft, establishing testimony being impossible for him.
If he claims destruction by an apparent cause, like fire, his word is not accepted with the Shafi'is until he establishes testimony concerning the apparent cause, this being within his power. If the testimony attests to the cause and to the wealth's destruction through it, there is no dispute; if it attests to the cause without mentioning the wealth's destruction, the word is the partner's, with his oath that the wealth perished thereby.
If one of the two accuses his companion of treachery, he is not heard until he specifies the extent of the treachery; once specified, the word is with the contesting one, with his oath (al-Muhadhdhab 1/347; Rawdat at-Talibin 3/483; al-Bayan 6/380; Mughni al-Muhtaj 3/190; Nihayat al-Muhtaj 5/15; an-Najm al-Wahhaj 5/17-18; ad-Dibaj 2/300; Kashshaf al-Qina' 3/592; Bidayat al-Mujtahid 2/193; al-Fatawa al-Hindiyya 2/348; Durrar al-Hukkam 2/218).
The Hanafis say: the partner is trustworthy in the capital; his word with an oath is accepted concerning the amount of profit, loss, perishing and payment to his partner, even if he claims it after his death.
He guarantees through aggression, such being the status of trusts: if he is told "do not cross beyond Khwarazm" and he crosses it, he guarantees his partner's share.
Likewise he guarantees if he dies leaving his companion's share unappraised, when the partnership's capital consists of debts owed by people; he guarantees, just as he would guarantee if he died leaving unappraised the partnership's capital in coin held in his hand. The same applies to the rest of trusts, unless he knows that his heir knows it, in which case he does not guarantee (ad-Durr al-Mukhtar with Ibn 'Abidin's gloss 4/319-320; Tanqih al-Fatawa al-Hamidiyya 2/105; Majma' al-Anhar 2/556).
The Malikis say: the partner is trustworthy in the partnership's capital; if one of the two holds something of the capital and says "what is in my hand has perished in whole or in part, or I suffered a loss in it", he is believed with an oath if he is suspect, as though he were not suspect in the matter itself, so long as no charge hangs over him. Such is the claim of destruction while he is in an association where it could not be hidden: the members of the association are asked and none of them knew anything of it; or the claim of a loss in goods whose price is not notorious, and the like.
Likewise the word of one of the partners is accepted if he bought something suited to food, drink and clothing, saying he bought it for himself; but if he bought goods, a property or a mount, saying "I bought it for myself", he is not believed in that, and his partner may enter it with him. The word is with the claimant of a taking befitting him, specific to edibles and the like, as passed ("Ash-Sharh al-Kabir" 5/14-15; "Tahrir al-Mukhtasar" 4/246-247; "Sharh Mukhtasar Khalil" 6/46).
The mufawada partnership with the Hanafis: two men partner, equal in their capital, their dealing and their debt, each of the two being surety for the other in everything that binds him from what he buys, just as he is his delegate; for it is a general partnership in which each entrusts his companion generally with the trades and dealings. Generality is the partnership, and the mufawada is equality: absolute equality in what is shareable is therefore required, and equality generalizes over it.
It derives from tafwid, from the overflowing (fawd) from which water overflows when it spreads and spreads; for each of the two entrusts the dealing to his companion in every state. A poet said: "Affairs are directed by men of judgment so long as they go well; when they veer, one obeys the wicked. People are not upright in disorder, lacking a core; nor a core when their ignorant men rule. When the people's notables take charge of their affairs, the people's affair grows and increases."
The meaning of the verse: when people are equal, with no elder and no master to turn to, each acting independently as he wishes, contest is realized, as in Allah's word:
"Had there been within the two gods other than Allah, both would have been corrupted."
Surah al-Anbiya, 22
The sara is the plural of sari, the master; the reason of equality will come: equality must therefore be realized at the outset, at the partnership's contract, and to the end, that is, during its duration; for the partnership contract is not binding, either being able to dissolve it when he wishes. Its continuation therefore has the ruling of its inception: whatever prevents the contract at the outset through disparity of capital prevents its continuation, so much so that if the two capitals were equal on the day of the contract, then the value of one increased before the purchase, the mufawada is vitiated and becomes 'inan; unlike an increase after the purchase with the two capitals; for the partnership passed to the purchased thing, only the price of the capital having changed after it left the partnership (Bada'i' as-Sana'i' 6/58; al-Ikhtiyar 3/14-15; al-Jawhara an-Nayyira 3/421; Mukhtasar al-Wiqaya 2/179; al-Lubab 1/524-525; Sharh Fath al-Qadir 6/156; al-Bahr ar-Ra'iq 5/182).
The Malikis say: the mufawada partnership is that each of the two entrusts the other with dealing, selling and buying, whether the other is present or absent, the hand of each being like the hand of the other; they are partners only to the extent for which they contract the partnership, to the exclusion of what one owns alone without having brought it into the capital. Equality and disparity of capitals are both permitted in it, the work and the profit being by Allah's power.
If each of the two entrusts the dealing, even restricted to a specific type, to his companion, for selling and buying, taking and giving, without dependence on the other's authorization, it is a mufawada partnership; for each entrusted the dealing. If it is not restricted to a type, it is called a general mufawada; if it is restricted to a type, like buying slaves, it is called specific mufawadas, that is, in the type in which the dealing was granted.
It is called mufawada for their equality in profit and liability and their joining together in taking and giving; from their saying "two men negotiated with one another in a matter" when they engage in it; it is permitted over the portions upon which they agree.
The mufawada is not vitiated by the fact that one of the two has capital set apart that he has not brought into the mufawada (al-Kafi 1/392; al-Ma'una 2/139; "Ash-Sharh al-Kabir" 5/9; "Tahrir al-Mukhtasar" 4/242; "Sharh Mukhtasar Khalil" 6/43; "Mawahib al-Jalil" 4/146; "al-Qawanin al-Fiqhiyya" 1/187).
The Hanbalis say: the mufawada is that each of the two entrusts the other with every financial and bodily dealing of the types of partnership, at all times and places, as he sees fit; the profit as they stipulate, the loss in proportion to the capital; it may thus be an 'inan, wujuh or bodies partnership, or a mudaraba (al-Insaf 5/465).
The jurists differ over the status of the mufawada partnership: is it valid and permitted or void?
The Hanafis and the Malikis hold the mufawada permitted. The Hanafis rely on what is narrated as rising to the Prophet: "Negotiate with one another, for it carries the greatest blessing", and on his word: "When you negotiate, negotiate well"; because it contains two permitted things, the agency and the suretyship, each being permitted alone and likewise combined, like the 'inan; and because it is a path of making wealth grow or acquiring it, whose need is real; it is thus permitted like the 'inan.
It is permitted by istihsan with the Hanafis; by qiyas it is not. The argument of the qiyas: it contains an agency over an unknown genus and a suretyship over an unknown, each void alone. The argument of the istihsan: people traded in it without disapproval, and by it the qiyas is abandoned, practice being like consensus; ignorance is excused by extension, as in the mudaraba; it is concluded only by the term mufawada, its conditions being remote from the common people's knowledge, so much so that even if we expounded all it requires, it would be valid, for what counts is the meaning (Bada'i' as-Sana'i' 6/58; al-Ikhtiyar 3/14-15; al-Hidaya 3/4; al-Jawhara an-Nayyira 3/421; Mukhtasar al-Wiqaya 2/179; Majma' al-Anhar 2/547).
The Malikis say: the mufawada partnership is permitted; for the partnership's measure is that both brought out their capitals, then each entrusted the other with dealing over them absolutely, which is permitted; the mufawada contains the agency and the suretyship, the agency's attachment to it being like its attachment in the 'inan; the mufawada adds the suretyship for rights established for one before his companion; and liability is valid in the liability (dhimma) for an unknown, like one who consumes something of one who does not know him.
Equality of capitals is not required in it, and one of the two may have wealth he does not bring into the partnership, even if the capitals differ, unlike Abu Hanifa who forbade all of that; for every partnership permitted with equal capitals is permitted with differing ones, like the 'inan; for it is a partnership by wealth in lawful earning: the equality of the two capitals and their difference must therefore be equal in permissibility, like the 'inan. And because the partnership contract is the sale of one's share by his portion of the other's share and the entrusting of one to the other in dealing, which does not require equal capitals (al-Ma'una 2/139, 142; al-Ishraf 3/70, 72; "Ash-Sharh al-Kabir" 5/9; "Tahrir al-Mukhtasar" 4/242; "Sharh Mukhtasar Khalil" 6/43; "Mawahib al-Jalil" 4/146; "al-Qawanin al-Fiqhiyya" 1/187).
The mufawada partnership with the Hanbalis is of two types. The first: each entrusts to his companion the purchase or the sale, the mudaraba, delegation, purchase upon liability, travel with funds, the taking of pledge and the undertaking of what he sees of works: this is a valid partnership, for it does not leave the 'inan, wujuh and bodies partnerships, all stated valid; the profit as they stipulate, the loss in proportion to the capital.
The second type: that they bring into it rare earnings and the like, or what binds one of liability, suretyship or usurpation, or what he finds of treasure (rikaz) or lost property (luqta), by saying: "you are my partner in everything that comes to me, by whatever means, inheritance or other": this partnership is void according to the sound view of the madhhab; for it is a contract not valid between two disbelievers nor between a disbeliever and a Muslim, hence not valid between Muslims, like the other void contracts. And because it is a contract of which the Sharia brought nothing the like, it is therefore not valid, as said; and because it contains gharar, it is therefore not valid, like the sale of gharar. Its gharar: what binds one binds the other, and something may bind him that he cannot bear; and they brought into it the rare earnings.
According to the madhhab, each of the two has the profit of his wealth and the wage of his work and what benefits him, and he alone is liable for what he usurped, wrongfully took or withheld from others (al-Mughni 5/18; Kashshaf al-Qina' 3/623-624; Sharh Muntaha al-Iradat 3/598-599; ar-Rawd al-Murbi' 2/81-82).
The Shafi'is say: the mufawada partnership is that they partner in all the minted coin of their capitals, to the exclusion of goods, stipulating that whatever they own of wealth is between them, and that each guarantees what is due from the other by usurpation, sale or liability. This partnership is void. Imam al-Shafi'i said: "The mufawada is void, and I know nothing in the world that would be void were the mufawada partnership not void" (al-Umm 7/134).
The proof of its invalidity: the Prophet's (peace be upon him) prohibition of gharar, and no gharar is greater than the mufawada in what it brings in of gain or sends out of liability. And because it is a partnership not valid with unequal wealth, it must therefore not be valid with equality, its origin being when one of the two is a mukatab or a dhimmi; for every partnership not valid between a Muslim and a dhimmi, and between a free man and a mukatab, is not valid between two free Muslims; its origin: when the capitals differ. And because whatever does not branch from an origin that the partnership contract may apply to, the partnership is not valid in it, like inheritance; and because it is a partnership not valid with two differing religions, it is therefore not valid either with two agreeing religions, like the goods partnership.
And because they contracted the partnership so that each shares the other in what is specific to him through his own cause, which is not valid, as if they contracted the partnership over what they own by inheritance; or the saying: a partnership wherein each guarantees what is due from the other through his aggression, which is not valid, as if they contracted that each guarantees what is due to each through an offense.