Islamic Fiqh > Companies and leases > Mudaraba (capital-management partnership) > Selling at a grave price gap (ghabn fahish)
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Updated on 25 September 2026 at 6:57 PM
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Sixth case: selling at a grave price gap. The majority of the jurists hold that the mudarib may not buy or sell at a price people would not accept for its like; if he does so, is the sale void or not? The Hanafis say: the mudarib may not buy at a price people would not accept for its like, even if told "act by your judgment"; if he buys, he becomes a contravener, for the mudaraba is a delegation to buy, and delegation to buy in absolute terms extends to the customary: buying at the value, or at what people would accept for its like; buying at what is not accepted is favoritism, and favoritism is a gift, which does not enter the mudaraba contract.
If he is handed a thousand dirhams as mudaraba with the instruction to act by his judgment and buys with it a slave worth five hundred, he is a contravener, buying for himself, liable for the money if he pays it: he bought at what people would not accept for its like; the mudarib, in buying, is like the agent, and the agent may not buy at what people would not accept. If he buys the slave for a thousand dirhams while it is worth nine hundred and fifty, it binds the mudaraba: the fifty of the thousand belongs to what people accept for its like, being a license granted to the buying agent. If he buys a slave worth a thousand and then sells it for a hundred, it is valid by analogy with Abu Hanifa's reasoning, for in selling he is like the selling agent, and from the very origin it appears that the selling agent may sell at a grave price gap (al-Mabsut 22/54; Bada'i' as-Sana'i' 6/92; Tabyin al-Haqa'iq 4/226; Durrar al-Hukkam 3/467).
They also say: the mudarib may lower the price of the sold good slightly for a defect, even beyond his share; if the reduction is not slight but grave, it is likewise valid, but the mudarib guarantees it to the owner (Durrar al-Hukkam 3/468 and 469).
The Shafi'is hold that the mudarib may not sell or buy at a grave, intolerable price gap, like the agent, without the capital owner's permission, for it harms him; if the latter permits, it is lawful, the prohibition protecting his right which vanishes through his consent. Despite its validity, he must not exaggerate the gap, selling what is worth a hundred for ten; he sells rather as the situation shows to be customary for such a good; if he exaggerates the gap, his disposition is not valid (Rawdat at-Talibin 3/749; Mughni al-Muhtaj 3/350; Nihayat al-Muhtaj ma'a Hashiyat ash-Shabramallisi 5/264; an-Najm al-Wahhaj 5/274; ad-Dibaj 2/434).
The Hanbalis say that the mudarib is like the agent: he may not sell below the price of the like nor buy above it, beyond what people accept for its like; if he does so, it is reported from Ahmad that the sale is valid and he guarantees the shortfall, the harm being repaired by guaranteeing the shortfall. Ibn Qudama: the analogy is that the sale is void, and such is al-Shafi'i's school, for it is a sale without permission, resembling the sale of a third party. On that basis, if the sold good cannot be returned, he guarantees the shortfall as well; if it can be returned, it must be returned if it remains, or its value if it perished; the owner may claim from whichever of the two he wishes, worker or buyer: if he takes its value from the buyer, the buyer has recourse against the worker for the price; if he claims its value from the worker, the worker has recourse against the buyer for it and returns him the price, the loss having occurred in his hand (al-Mughni 5/13 and 25; al-Kafi 2/261; al-Mubdi' 5/9; Kashshaf al-Qina' 3/586; Sharh Muntaha al-Iradat 3/554).
As for what people accept for its like, it is not prohibited, for one cannot guard against it. If he buys above the price of the like with the money itself, it is like selling; if he buys on liability, the obligation binds the worker, not the owner, unless the latter ratifies it, in which case it is his; such is the apparent sense of al-Khirqi's words. Al-Qadi: if he concludes the purchase in general terms without mentioning the owner, the same applies; if he declares to the seller: "I bought it for so-and-so", the sale is likewise void. Ibn Abd al-Barr, may Allah have mercy on him, reports that the people of knowledge all agreed, to his knowledge, that the agent and the entrusted deputy, which includes the mudarib, in selling or buying a thing at what people would not accept for its like, see their act void and rejected (al-Istidhkar 6/539).
Seventh case: sale by exchange of goods (bi-al-'ard). The jurists of the four schools, Hanafis, Malikis, Shafi'is and Hanbalis, permit the mudarib to sell by exchange of goods. The Malikis permit it even without the capital owner's permission, for it belongs to the trade for which the owner authorized him, and the aim is profit, which may occur in it, unlike the agent (ash-Sharh al-Kabir 5/292; Sharh Mukhtasar Khalil 6/211; Tahrir al-Mukhtasar 4/516; at-Taj wa-l-Iklil 4/421; Mughni al-Muhtaj 3/351; Nihayat al-Muhtaj 5/264; an-Najm al-Wahhaj 5/274; ad-Dibaj 2/434; al-Mughni 5/26; al-Asl by ash-Shaybani 4/162; ad-Durr al-Mukhtar 5/655).
Eighth case: returning goods for a defect. The jurists of the four schools, Hanafis, Malikis, Shafi'is and Hanbalis, agree that the worker may return merchandise of the qirad on account of a defect it contains, the capital owner having no say in it, for the worker's right is attached to the increase contained in the merchandise.
The Hanafis explain that the rights of the contract, in buying as in selling, revert to the mudarib, not to the owner: the mudarib is the contracting party; it is he who claims delivery of the sold good, claims delivery of the price, receives the good and the price, returns for a defect and is returned upon, and brings the actions. If the mudarib buys a defective slave while the capital owner knew of the defect without the mudarib knowing it, the mudarib may return it, even though he had knowledge; if the mudarib knew it without the owner knowing, he may not return it, for the rights of the contract attach to the mudarib, not to the owner: the mudarib's knowledge is what counts, not the owner's.
If he buys a slave and then a defect appears, and the owner says after the purchase: "I accept this slave", the return is cancelled, for ownership belongs to the owner: by accepting it he annulled his own right. If the owner hands a thousand dirhams as mudaraba to buy a designated slave and sell him, and the mudarib buys him without having seen him, he may not return him, neither by the option of inspection nor by the option of defect: the order to buy given after knowledge amounts to consent to that defect, as if he said after the purchase "I accept"; unlike the order to buy an undesigned slave, for he does not necessarily know that he is buying a defective slave, and his knowledge therefore does not amount to consent. May the mudarib exercise the right of pre-emption over a house bought by a third party adjoining the mudarib's house, or when the owner sells a house of his and the mudarib holds the right of pre-emption over it by virtue of another house of the mudaraba? Here there are details (Bada'i' as-Sana'i' 6/90).
The Malikis hold that the mudarib who buys a thing and then discovers a defect in it may return it even if the owner refuses, for the worker's right is attached to the increase; this is when the purchase was made with part of the qirad money. If he buys with the whole of it a merchandise containing a defect, the owner has the right to accept that defective good against the price: the owner's argument against the worker is that, by returning it, the money is liquidated and he may then take it; that is not possible if the price is in goods, for the worker hopes for his profit when the merchandise returns to his hand. Some added another condition: that the owner take it for himself by way of preference, not of sale (ash-Sharh al-Kabir 5/292; Sharh Mukhtasar Khalil 6/211; Tahrir al-Mukhtasar 4/515; at-Taj wa-l-Iklil 4/421).
The Shafi'is hold that the worker may return for a defect required by the interest, even if the owner accepts, for the worker has a right in the money and the owner's acceptance does not bar him, unlike the agent who has no right in the money. This applies when he thought it sound and it proves defective; he may also buy it knowing the defect if he sees profit in it. If the interest requires keeping the defective good, the worker does not return it on the sounder view, for that would betray the purpose of the contract. According to the other view, he may return it like the agent. The first replies that the agent may not buy the defective good, unlike the worker who sees profit in it: he therefore does not return what carries an interest, unlike the agent. If return and keeping are equal, the return is his with certainty, and the worker must weigh the interest in returning as in keeping. The owner may return what the worker bought defective wherever the worker may; he is even more entitled, for he owns the origin. If they differ, owner and worker, over return or keeping, that is, over the interest, the judge or the arbitrator rules by the interest established with him, each of the two having a right, whether the owner seeks keeping alone or the reverse. If the two are equal, it is stated in Nihayat al-Matlab that it reverts to the worker, if we allow him to buy the defective good at its value, that is, on the sounder view, if he sees an interest (Nihayat al-Matlab 7/464 and 467; Mughni al-Muhtaj 3/351 and 352; Nihayat al-Muhtaj 5/265; an-Najm al-Wahhaj 5/274 and 275; ad-Dibaj 2/435).
The Hanbalis hold that the mudarib may buy the defective good if he sees an interest in it, for the aim is profit, which may be found in the defective; if he buys it thinking it sound and it proves defective, he may do what he sees as the interest: return it for the defect, or keep it and take the indemnity for the defect. If the mudarib and the owner differ over the return, one claiming it and the other refusing, one rules by the interest and the advantage, the aim being to obtain the advantage, which attaches to what carries it. This differs from the case of two partners differing over returning the defective good: the one claiming the return returns his share and the other keeps his share; unless the seller did not know the purchase was for both: he is then not bound to accept the return of part of it, for the apparent is that the contract belongs to the one who concluded it, and the seller may not be harmed by splitting the transaction; if the one who concluded it wants to return part and keep part, his ruling is as if his partner wanted that (al-Mughni 5/13 and 26; Kashshaf al-Qina' 3/585; Sharh Muntaha al-Iradat 3/553).
Ninth case: the mudarib giving or taking a pledge on the mudaraba property. The jurists differ: may the mudarib pledge the debt owed by him, or take a pledge for the debt owed to him, or is that not permitted? The Hanafis and the Hanbalis in the school hold that, in case of need, he may pledge the debt owed by him, or take a pledge for the debt owed to him, for the pledge is sought for discharge and the pledge taken is sought for collection: he owns discharge and collection, so he owns what serves them, the pledge taken standing in place of collection; the collection of the debt due to the mudaraba belongs to him. If the mudaraba is two thousand and he buys a slave for a thousand, receives and pays him, then buys merchandise with the second thousand, taking delivery on condition that the slave give him a pledge for it, that is permitted: the pledge standing in place of collection, and the debt due by his disposition for the mudaraba is settled only from the mudaraba property (al-Mughni 5/14; al-Kafi 2/260; al-Furu' 4/290; Kashshaf al-Qina' 3/586; Sharh Muntaha al-Iradat 3/553; Mukhtasar al-Wiqaya 2/189).
The Hanbalis, in a narration, hold that he has no right to it, for it carries danger. The Hanafis add: if the capital owner dies while the mudaraba is in merchandise and the mudarib pledges something of it, it is not permitted, for the mudaraba is dissolved at the owner's death like the partnership; thereafter he owns as disposition only the liquidation of the money, the return of the capital and the division of the profit with the heirs; the pledge is none of that, and disposing without right makes him liable, unlike selling part of the money: selling for cash is a disposition that liquidates the money, and selling against merchandise likewise, for merchandise is sometimes not purchasable for cash, and exchanging it against other merchandise makes cash obtainable from it.
If the owner pledges a merchandise of the mudaraba that carries an increase, it is not permitted: the mudarib's right over the increase is owned by him, and the owner's pledge of it without the claimant's consent is invalid, as is what follows beyond it, by diffusion; if there is no increase over the capital, it is permitted: he pledges owned property for his debt; but he guarantees its value, for he removed it from the mudaraba while a right of the mudarib lay on it; see that if he forbade him to dispose of it, his prohibition would not be acted upon and he would become liable for his right, as if he had consumed it. According to Zufar's view, he guarantees him nothing (al-Mabsut 21/155; al-Bahr ar-Ra'iq 7/264; al-Hidaya Sharh al-Bidaya 3/210).
Imam al-Shafi'i, may Allah have mercy on him, holds that the muqarid's pledge is not permitted, the pledge not being guaranteed, unless the owner permits the muqarid to pledge a debt owed to him that is known; likewise he may not take a pledge unless the owner permits him to sell on credit: if he sells on credit, the pledge is an increase; and he may pledge only the owner's property: if he pledges on behalf of another, he is liable, and the pledge is not permitted (al-Umm 3/151). Elsewhere he says: the muqarid may not pledge, for ownership belongs to the owner of the money, whether there is an increase over the capital or not; the muqarid owns the pledged thing only up to a part of the increase he stipulated for himself if it is delivered to him, until the qirad capital returns to him; if it is not delivered, he has nothing (al-Umm 3/193). The Malikis: no view was found with them on this question.
Tenth case: donation, loan, favoritism and the suftaja (letter of credit) with the mudaraba property. The majority of the jurists, Hanafis, Malikis, Shafi'is and Hanbalis in general, hold that the mudarib may not donate, lend, or grant favor with the mudaraba property without the owner's authorization; if he does, he is liable.
The Hanafis: the mudarib may not lend the mudaraba property, for lending is an immediate gift, with no immediate counter-value, becoming an exchange only afterwards; another's property bears no gift. The same applies to the gift and to charity, each being a gift. He may not take a suftaja, for taking it is a borrowing, and he does not own borrowing; nor give one, for giving the suftaja is a loan, and he owns lending only by express specification. Muhammad reports from Abu Hanifa that he said: he may neither lend nor take a suftaja until he orders him expressly, saying to him: take suftajas and lend if you wish. If he tells him "act in that by your judgment", it bears only on selling, buying, partnership, mudaraba and the mixing of monies: such is Abu Yusuf's view and ours, for "act by your judgment" delegates judgment within the mudaraba, and donation is not a work of the mudaraba (Bada'i' as-Sana'i' 6/92; al-Jawhara an-Nayyira 3/448; al-Hidaya 3/211; Tabyin al-Haqa'iq 5/69; Majma' ad-Damanat 2/655; al-Fatawa al-Hindiyya 4/292).
The Malikis: the worker may not give anything of the qirad money without substantial counter-value, even to secure future goodwill; the gift of a small thing, such as offering a morsel to a beggar, is permitted, as the gift for a reward is permitted to him, being a sale. The difference between the partner and the qirad worker, where the large gift to secure goodwill is permitted to the partner and not to the muqarid, is that the sounder view concerning the latter is that he is a hired man, the view making him a partner being the weaker; the partner is therefore stronger than him. He may likewise not alienate a merchandise of the qirad by buying it for the qirad and then handing it to another for what he bought it for, the owner's right being attached to the profit, unless the possible loss is known to him and small, in which case it is permitted.
He may bring food to people who bring its like: that is widely permitted to him so long as he does not seek to overwhelm them; if he does it deliberately without the owner's permission, the latter may permit him, and if he refuses, he must reward him with the like, if the thing is rewardable, that is, give him according to what is specific to him, the surplus of food over the others. Al-Baji: if he finds himself with his companions and they exchange food as fellow travelers do, that is widely permitted, even if one gives more than another, so long as he does not seek to overwhelm them by a blameworthy act. That one of them eats at times more than his companion, or fasts a day unlike his companions, is permitted; likewise if each of them brings an equal share and they then spend on their food and needs. For managing one's food alone is burdensome and distracts from the trade that is its cause; Ibn Arafa said it is the same for non-travelers, clear words, as reported by the one who met him. Ibn al-Qasim saw nothing wrong in the qirad worker giving a beggar a crust of bread or dates, that being of the little over which one does not dispute; likewise the executor may give a beggar from the orphan's property, and its basis is the word of Allah:
« or the house of the one whose keys of wealth you hold »
Surah an-Nur, 61
to the end of the verse (ash-Sharh al-Kabir ma'a Hashiyat ad-Dasuqi 5/314; Sharh Mukhtasar Khalil 6/226; Tahrir al-Mukhtasar 4/243; Mawahib al-Jalil 7/63 and 64; at-Taj wa-l-Iklil 4/438 and 439).
The Shafi'is: the worker does not give charity from the qirad money, not even a crust, for the contract did not cover it (Rawdat at-Talibin 3/755; Mughni al-Muhtaj 3/354). The Hanbalis in the school: the mudarib gives nothing of the mudaraba property without the capital owner's permission; Hanbal reported from Imam Ahmad that he may make a donation of part of the price for an interest. He may not lend from the mudaraba property, the apparent sense being that it is prohibited even with a pledge. He may not grant favor in a sale or a purchase, for that contradicts the purpose of the partnership, which is seeking profit. He may not take with the mudaraba money a suftaja, that is, hand mudaraba property to someone and receive from him a letter to an agent in another country to collect what was handed over; nor give a suftaja by buying merchandise for the mudaraba and handing, for its price, a letter to his agent, the buyer's agent, in another country, so that the seller may collect the price from it: for it carries a danger that was not authorized (al-Mughni 5/15; al-Mubdi' 5/9; Kashshaf al-Qina' 3/586; Sharh Muntaha al-Iradat 3/554).
Ibn al-Qattan al-Fasi, may Allah have mercy on him, adds: the muqarid gives nothing of the qirad money, neither to a beggar, nor as reward to anyone. If he shares a meal with others, putting in his share without overwhelming them, there is no wrong in it in most cases; and these are indications of the permission to delegate in selling and buying (Tuhfat al-Fuqaha 3/9; al-Ikhtiyar 3/24; al-Hidaya Sharh al-Bidaya 3/210; al-Jawhara an-Nayyira 3/445; Nihayat al-Matlab 5/478; al-Mughni 5/15; ash-Sharh al-Kabir 5/122; al-Mubdi' 5/10; al-Insaf 5/415 and 418; Kashshaf al-Qina' 3/587).
Twelfth case: depositing the mudaraba property. The jurists differ: may the mudarib deposit the mudaraba property? The Hanafis and the Hanbalis in the school hold that he may deposit it without the owner's authorization in case of need, for it is the merchants' custom, and need may call for deposit: it belongs to the necessities of the partnership, like handing merchandise to a porter; and since the mudarib may entrust the mudaraba property to one who guards it for a wage, it is all the more proper to hand it to one who guards it without wage, the depositary. A narration from Ahmad holds it not permitted, for it does not belong to the mudaraba and carries gharar (al-Jawhara an-Nayyira 3/432; al-Hidaya 3/9; al-'Inaya 8/289; Mukhtasar al-Wiqaya 2/182; Durrar al-Hukkam 2/196; al-Mughni 5/14; al-Muharrar 1/351; al-Furu' 4/290; al-Insaf 5/417; Kashshaf al-Qina' 3/587; Sharh Muntaha al-Iradat 3/553; Matalib Uli an-Nuha 2/507).
The Malikis hold that the muqarid may deposit the mudaraba property only on account of an excuse, such as lodging in a place of fear, without the owner's authorization; if he deposits without excuse and the property perishes, he is liable, whether the property is substantial or not; his claim of excuse is believed, and if he acts without excuse he is liable. Al-Lakhmi, may Allah have mercy on him, reports that Ibn al-Qasim said of the muqarid: he may neither deposit the qirad nor send it with another to be carried. Al-Mudawwana reports, concerning the muqarid who deposits the qirad money with another: "I said: consider the muqarid to whom I permitted selling for cash and on credit: may he deposit with another? He said: no, except out of fear, as is permitted to the holder of a deposit. I said: and is this Malik's view? He said: Malik said, concerning the deposit: if he deposits it with another, he is liable, except for an excuse: a ruined dwelling, the intention of traveling, a dwelling that is not secure, or the absence of a trustworthy man with him to entrust it to; then no liability falls on him; your question is analogous. I said: consider the worker: may he deposit the qirad money? He said: he may do so only out of fear, or if he did it as a precaution against a fear he dreads, like the deposit held by a man whose dwelling has no guard. Malik said in a like case: if he deposits it with another out of fear of what may befall him, there is no liability on him if he deposits it in that state; the qirad, in my view, is like the deposit" (al-Mudawwana al-Kubra 12/104; at-Tabsira 11/5267; al-Jami' li-Masa'il al-Mudawwana 15/634 and 701). Among the Shafi'is, no view was found on this question.
Thirteenth case: hiring at the charge of the mudaraba. The jurists of the four schools explicitly state that the mudarib may hire from the mudaraba property when the property is abundant beyond his capacity to manage it all, or when custom is that one does not undertake these tasks oneself; if he hires without necessity, he is liable.
The Hanafis: the mudarib may hire whoever works on the money, for it belongs to the merchants' custom and to the necessities of trade: a man sometimes cannot accomplish all the works himself and needs laborers. He may also rent houses to place the money in, being able to preserve it only that way; and hire ships and mounts for transport, carrying from place to place being a path by which profit is obtained and which he cannot accomplish alone (Bada'i' as-Sana'i' 6/88; al-Jawhara an-Nayyira 3/446; Mukhtasar al-Wiqaya 2/189; al-Lubab 1/541).
The Malikis: there fall on the worker the customary acts, such as spreading out and folding light garments, not numerous garments beyond custom; if he hires for that, the wage comes from his own property, not from the owner nor from the profit; light transport is the same. As for what custom holds he should not undertake, if he undertakes it and it serves the money's interest, the wage is his if he claims to have done it for a wage and the owner contests it with an oath: it is a claim of a known thing, the oath being directed against him when the owner's claim bears on what the worker did by custom; if it was for his silence, he does not swear. It is also permitted to him to hire from the money when it is abundant beyond his capacity, for part of its works, works the worker does not do and that his like does not do (ash-Sharh al-Kabir 5/288; Tahrir al-Mukhtasar 4/511; Sharh Mukhtasar Khalil 6/209; at-Taj wa-l-Iklil 4/18; Hashiyat as-Sawi 8/402).
The Shafi'is: there falls on the worker every customary act of the qirad work according to usage, such as folding and spreading out the cloth, its measuring, storing it in the chest and weighing light things like gold, silver and musk, custom requiring it; not the heavy goods: neither their weighing nor the like, such as carrying them and transporting them from the caravanserai to the market and back, and the public cry for their sale, custom running to hiring for that. What does not fall on him, like the wage of measuring and guarding, he may hire for from the qirad money, for it belongs to the completion of the trade and its interests; if he does it himself he earns no wage. What falls on him: if he hires someone to do it, the wage is on his own property, not on the qirad money; if it is stipulated on the owner that the hiring be at the charge of the qirad money, two views are reported, the apparent one being non-validity (Mughni al-Muhtaj 3/344 and 354; an-Najm al-Wahhaj 5/287; ad-Dibaj 2/437).
The Hanbalis: there falls on the worker to do himself everything customarily done by the mudarib himself: spreading out the cloth, folding it, showing it to the buyer, negotiating the price with him, concluding the sale, taking the price, counting it, tying the purse, sealing it and storing it in the chest; he has no wage for it, for he deserves the profit in return; if he hires someone to do it, the wage falls on him alone, the work falling on him. As for what custom does not charge the mudarib with, like the public cry over the merchandise and its transport to the caravanserai, it is not the worker's work and he may hire whoever does it: work in the mudaraba is not stipulated, its stipulation being burdensome, and one has reverted to custom. If the worker does what is not his to do purely as a gift, he has no wage; if he does it to receive a wage, he has nothing according to Ahmad's explicit text, and according to one view he has the wage, by analogy with the partner who alone undertakes a work not incumbent on him; on two narrations; and the correct is that he has nothing in both cases, for he worked on another's property without an assigned counter-value, deserving nothing, like the third party (al-Mughni 5/32 and 33; Kashshaf al-Qina' 3/585; Sharh Muntaha al-Iradat 3/553).
Fourteenth case: mixing the mudaraba property with the mudarib's own property or with another's. The majority of the jurists of the four schools hold that if the mudarib mixes the mudaraba property with his own property without distinguishing them, or with another's property to work with both, without the owner's authorization, he is liable for it, the property being a trust, like the deposit. If he is told "act by your judgment", that is permitted to him among the majority of the jurists as well; here is the detail of their views.
The Hanafis: if he mixes the mudaraba property with his property or another's to work with both, he is liable, for he establishes in the owner's property a right for another, which is permitted only by his authorization; if the latter permits him or tells him "act in it by your judgment", he may mix it with his property or with another's. Once mixed with authorization or delegation, the profit obtained is divided in proportion to the two capitals: he takes the profit of his capital alone, it being the profit of his property, and the mudaraba property is divided between him and the owner according to the stipulated manner. Example: the owner gives fifty dinars as mudaraba against half the profit; the mudarib mixes it with a hundred dinars of his own and earns thirty dinars of profit: twenty dinars are the profit of his capital, his alone, and the remaining ten dinars are the profit of the mudaraba property, which he shares with the owner by halves (Bada'i' as-Sana'i' 6/99 and 100; Majma' ad-Damanat 2/660; al-Bahr ar-Ra'iq 7/264; al-Fatawa al-Hindiyya 4/309; Durrar al-Hukkam 3/475).
The Malikis: the worker may mix the qirad money with other money, including his own, if the mixed money and that with which it is mixed are of like kind, for abundance of money brings great profit. Mixing the qirad money is right if the worker fears preferring one of the two monies in selling or buying, to the detriment of the other: fearing to prefer one in sale to the detriment of the other's price, or to prefer one in buying by overpaying for the other; what he buys of merchandise then stands between them on the qirad. Is this correct mixing obligatory or merely recommended? Two views, which ground the case where, without mixing, a loss occurs: on the first, the worker guarantees the loss if he feared and did not mix; on the second, it is recommended and he does not guarantee. This is without stipulation; if it is stipulated that he hand him a thousand dinars on condition that he add a hundred of his money and work with both, the profit being between them by halves, it is void, and the worker then reverts to the wage of his like (ash-Sharh al-Kabir ma'a Hashiyat ad-Dasuqi 5/290; al-Bayan wa-t-Tahsil 12/414 and 415; Sharh Mukhtasar Khalil 6/210; Tahrir al-Mukhtasar 4/514; at-Taj wa-l-Iklil 4/420).
The Shafi'is: the muqarid may not mix his property with the qirad property, each of the two being distinguished; if he mixes them, there are two cases. The first: that he mix his property with the mudaraba property with the owner's permission; it is then permitted and he becomes partner and mudarib; the charge of the money is apportioned to the extent of the two monies, and his personal expense, if one says it is not due on the qirad money, is his alone, and if one says it is due on the qirad money, it is apportioned to the extent of the two shares. The second: that he mix the two monies without the owner's authorization: the qirad becomes void, for he is like one substituted against its rule; he bears his personal expense unchanged, the expense of the two monies is apportioned by shares, and the profit of the qirad money belongs entirely to the owner, because of the invalidity of the qirad; the worker has the wage of his like for his work, not the wage of the whole work, the latter having been apportioned on his money and on the qirad money (al-Hawi al-Kabir 7/320; Mughni al-Muhtaj 3/361).
The Hanbalis: the mudarib may not mix the mudaraba property with his property; if he does so without distinguishing them, he is liable for it, the property being a trust, like the deposit. If he is told "act by your judgment", it is permitted to him, for he may see mixing as sounder for him, and it falls within "act by your judgment"; likewise participation: he may not undertake it unless told "act by your judgment", in which case he owns it (al-Mughni 5/29 and 30; Kashshaf al-Qina' 3/586; Sharh Muntaha al-Iradat 3/555).
Fifteenth case: the mudarib hands the mudaraba property to another as mudaraba. The jurists of the four schools, Hanafis, Malikis, Shafi'is and Hanbalis, except for a weak view among the Hanbalis, agree that the mudarib may not hand the property to another as mudaraba, except by the capital owner's express authorization, or if he tells him "act by your judgment" according to the Hanafis and the Hanbalis: a thing does not encompass its like, and the mudaraba is the like of the mudaraba; the absolute contract of mudaraba therefore does not yield a like mudaraba, the two being equal in strength. An express stipulation or an absolute delegation is needed, like the agent who may delegate only if the principal tells him "act by your judgment", unlike entrusting (ibda') and deposit, which are below the mudaraba and thus encompassed; and because it establishes in the money a right for another, and establishing a right in a man's property without his authorization is not permitted (Bada'i' as-Sana'i' 6/65 and 96; al-'Inaya Sharh al-Hidaya 12/139; al-Jawhara an-Nayyira 3/447 and 448; Tabyin al-Haqa'iq 5/63 and 64; Majma' al-Anhar 3/447; ash-Sharh al-Kabir 5/295; Sharh Mukhtasar Khalil by al-Kharshi 6/214; Tahrir al-Mukhtasar 4/519; Rawdat at-Talibin 3/753; Mughni al-Muhtaj 3/349; Nihayat al-Muhtaj 5/262; an-Najm al-Wahhaj 5/270 and 271; ad-Dibaj 2/433; al-Mughni 5/28 and 29; al-Muharrar 1/351; al-Furu' 4/290; al-Insaf 5/417; Kashshaf al-Qina' 3/586 and 587; Sharh Muntaha al-Iradat 3/555; Matalib Uli an-Nuha 2/507).
The jurists then differ over the profit obtained and over liability: does the first become liable by the mere handover, or is a disposition required, or the profit of the second mudarib? Abu Hanifa, in al-Hasan's narration: he is not liable by the handover, nor by the second mudarib's disposition until he profits; when he profits, the first mudarib guarantees the owner, for the bare contract does not entail liability; this is why the intruder does not become liable by the mere sale of another's property, nor by delivery for disposition, which is a deposit he owns, nor by the disposition, for he is its agent and may delegate; he becomes liable only by contravention, and by these acts he does not contravene, since he may do each of them alone without thereby becoming liable. But when profit occurs, the partnership is established in it, and establishing the partnership in another's property is a cause of liability, as when he mixes it with another's.
Abu Yusuf, Muhammad, and Abu Hanifa according to the apparent sense of the canonical narration: if he works with it, he is liable, whether he profits or not, the handover being a deposit in reality, its belonging to the mudaraba being determined only by the disposition. Zufar, and Abu Yusuf in a narration from him: he is liable by the handover, whether he worked or not, for he may not hand over the money on the mode of mudaraba, the contract not entailing its like as shown; the first is therefore liable by the handover and the second by the taking, each exceeding his authorization, like the depositary who lends the deposit without its owner's permission. The owner then has the option: if he wishes, the first guarantees his capital, having become a usurper by the handover to another without permission; if he wishes, the second, who took another's property without its owner's consent; and this is apparent upon their principle, both establishing liability on the depositary's depositary. According to Abu Hanifa, it was said that the second should not guarantee, like the depositary's depositary, who takes for the first's benefit and is therefore not liable; it was also said that the second guarantees according to him as well, for he took for his own benefit and may therefore be liable.
If the first guarantees, the mudaraba between the first and the second is valid, and the profit between them according to their stipulation: by discharging the guarantee he owned it from the moment of contravention, as if he had handed his own property as mudaraba to the other. If the second guarantees, he has recourse against the first for what he guaranteed, the latter having undertaken towards him the safety of what was taken; not delivering it to him, recourse falls on him by contravention, he having been deceived by him, like the depositary of the usurper; and the mudaraba between them is valid, the establishment of the guarantee on him having made him own the handed property from the moment of excess, showing that he handed over as mudaraba property owned by him. The profit between them follows their stipulation, for the validity of the mudaraba; what the second profited is lawful to him, he deserves it by his work without foul play; but it is not lawful to the first, who would deserve it by the capital, his ownership resting on a doubtful basis: his way is charity. That is when both mudarabas are valid; if either is void, or both, no liability falls on either: if the other is the void one, he becomes a hired worker as shown, and the first may hire whoever works on the money; if the first is void, likewise, its voidness entailing the other's: the first, having become void, became a hiring, the profit being entirely the owner's; were the other valid, the second would be a partner, and the hired worker may not make another a partner, nor can the mudarib himself: it is necessarily void, and both are hired workers. Likewise if both are void: both hired, neither guarantees; and it is not said that the hired worker may not hire for work, so how could the first mudarib hire after the other became void while he is a hired worker in it: for the void contract is judged by the valid one, and since he could hire in the valid mudaraba, he may hire in the void one too (Bada'i' as-Sana'i' 6/65 and 96; al-'Inaya Sharh al-Hidaya 12/139; al-Jawhara an-Nayyira 3/447 and 448; Tabyin al-Haqa'iq 5/63 and 64; Majma' al-Anhar 3/447).
The Malikis: the qirad worker may not hand the money to another worker as qirad without the capital owner's authorization; if loss or destruction occurs, the liability falls on the first worker; if profit occurs, the first worker has nothing of it, the profit belonging to the second worker and to the owner: the qirad is a fee deserved only by the completion of the work, and the first did not work, so he has no profit. If the first worker afterwards joins the second to the extent of what he entered upon with the owner, that is apparent; if he joins him beyond what he entered upon with the owner, the first worker owes the second the increase, the profit belonging to the second worker and the owner, nothing being the first's, the qirad being a fee deserved only by the completion of the work. As if a third of the profit had been fixed for him and he lends to another for half: the profit is shared between his owner and the second worker on the third and the two thirds, and the first worker owes the other the whole half. If he joins him for less, like the quarter in the example, the surplus belongs to the owner, not to the first worker, who has nothing if no profit arises; if the second worker obtains no profit, he has nothing either, and the first owes him nothing at all, according to the rule that the worker has nothing when no profit arises (ash-Sharh al-Kabir ma'a Hashiyat ad-Dasuqi 5/295; Sharh Mukhtasar Khalil by al-Kharshi 6/214 and 215; Tahrir al-Mukhtasar 4/519 and 520; Hashiyat as-Sawi ala ash-Sharh as-Saghir 8/408).
The Shafi'is: the worker may not lend the money to another in qirad without the capital owner's authorization; if he does, it is void in absolute terms, whether he aimed at sharing the work and the profit, or the profit alone, or at dispossession: the owner did not consent to it and did not entrust another with the money; the worker disposing for the other without the owner's authorization, his disposition is that of a usurper and he guarantees what he disposed of, the authorization emanating from one who is neither owner nor agent. If the first buys on liability and delivers what he took of the qirad money in what he bought, and profit occurs: according to the recent position established in the school, the profit being entirely the usurper's, the profit here is entirely the first worker's on the sounder view, for the other disposed with his permission and resembles the agent; the purchase is valid and the delivery void: he guarantees the price he delivered and delivers him the profit, whether he knew the situation or not. The second then has the wage of his like taken from the increase, without distinction, for he did not work gratis. According to the earlier position, the profit belongs to the owner, for were it given to the usurper, people would take it as a pretext for usurpation. Al-Khatib al-Shirbini, may Allah have mercy on him: the soundest, according to a widespread disagreement, is that half the profit belongs to the owner and the other half is shared between the two workers. It was also said that the profit belongs to the second of the two workers, as-Subki's choice, for he disposed without the owner's permission and resembles the usurper; that is when he bought on liability for himself, the profit falling to him. If the second buys with the money itself, his purchase is void according to the recent position holding the intruder's purchase void, the earlier opposite position holding suspension. All this if the money remains; if it perishes in the second worker's hand while he knew the situation, he is a usurper and liability is established on him; if he did not know, it falls on the first worker (al-Bayan 7/204 and 206; Rawdat at-Talibin 3/753; Mughni al-Muhtaj 3/349; Nihayat al-Muhtaj 5/262; an-Najm al-Wahhaj 5/270 and 271; ad-Dibaj 2/433).
The Hanbalis: the mudarib may not hand the money to another as mudaraba unless the capital owner permits it; otherwise not. If he does so and the money has not perished, with no apparent profit, he returns it to its owner: he has nothing for himself nor against himself. If it perishes or profit occurs, ash-Sharif Abu Ja'far said he is, as regards liability and disposition, like the usurper, and the owner may claim from whichever of the two he wishes the restitution of the property if it remains, or of its equivalent if it perished or if its restitution is impossible. If he claims against the first and makes him guarantee the value of the perished property, and the second did not know the situation, he has no recourse against him, the property having been handed to him on the basis of trust; if he knew of it, recourse falls on him, for he took another's property by aggression and it perished in his hand, liability being established on him. If the second guarantees with knowledge of the situation, he has no recourse against the first; if he did not know, does he have recourse against him? Two views: he does, for he deceived him, like one who deceives about a slave-girl's freedom; or he does not, the loss having occurred in his hand and liability being established there. If profit occurs, it belongs to the owner of the money, nothing being the first mudarib's, for he produced neither property nor work. Does the second have the wage of his like? Two narrations: he has it, for he worked on another's property against a counter-value that was not delivered to him, and he has the wage of his like as in the void mudaraba; or he has nothing, for he worked on another's property without permission and therefore deserves no counter-value, like the usurper, unlike the mudaraba where he works with permission; whether the purchase was with the money itself or on liability makes no difference.
Ibn Qudama: it is possible that, if he buys on liability, the profit be his, for it is a profit in what he bought on his liability, which did not fall in the purchase for another, as if the price had not been paid from the owner's money. Abu ash-Sharif Abu Ja'far said this is the view of most of them, that is, of Malik, al-Shafi'i and Abu Hanifa; it is also possible that, if he knew the situation, the worker have nothing, like the usurper, and that, if he did not know it, he have the wage of his like, with recourse against the first mudarib, who deceived him and employed him against a counter-value that did not materialize: the wage is therefore owed on him, as if he had employed him on his own property. Al-Qadi: if he buys with the money itself, the purchase is void; if he buys on liability and then pays the money, and the owner had stipulated half for the mudarib, and the mudarib hands it to another on condition that half belong to the owner and the other half be between them, it follows their agreement: the owner having been content with half the profit, nothing more is paid to him, and the two workers stand by their agreement. This is an early view of al-Shafi'i's, but it conforms neither to the school's principles nor to Ahmad's explicit text: the latter said the profit is not lawful to the mudarib; the first mudarib has neither work nor property, and the profit of the mudaraba is deserved only by one of the two; the other worked on another's property without permission or stipulation by its owner, and therefore does not deserve what another stipulated for him, as if the usurper handed him the property as mudaraba; and since the owner deserves nothing in the void mudaraba, all the more what another stipulated without authorization.
Al-Qadi further says: if the capital owner permits the handover as mudaraba, it is permitted, Ahmad's explicit text, no disagreement known. The first worker then becomes the owner's agent for that: if he hands it to another without stipulating any share of the profit for himself, it is valid; if he stipulates for himself a share of the profit, it is not valid, for he has neither property nor work on his side, and the profit of the mudaraba is deserved only by one of the two. If the owner says "act by your judgment or as you see Allah wills", the handover as mudaraba is permitted to him, explicit text, for he may see someone who sees better than he; but it is possible that it not be permitted: "act by your judgment" bears on the manner of the mudaraba, the selling, the buying and the kinds of trade, and the handover falls outside the mudaraba, beyond the reach of that authorization (al-Mughni 5/28 and 29; al-Muharrar 1/351; al-Furu' 4/290; al-Insaf 5/417; Kashshaf al-Qina' 3/586 and 587; Sharh Muntaha al-Iradat 3/555; Matalib Uli an-Nuha 2/507).
There remains the entrusting of the money to a third party to work with it (ibda'). The Malikis and the Hanbalis in the school hold that the mudarib may not entrust the money to a third party without the owner's authorization, because of the gharar it carries and because the owner did not consent to other hands; if he does, he is liable. If he does it with the owner's authorization, there is no harm, provided he does not take the money for that, as the Malikis explicitly state: with them, the capital owner may not stipulate on the worker the entrusting of the money to a third party; if he stipulates it, the qirad is void; but if he permits it without stipulation, it is valid and the entrusting is permitted to him. Entrusting the money to a third party who works with it is, on his part, more scrupulous for the money, for the ibda' is only an assistance (ash-Sharh al-Kabir 5/286; Sharh Mukhtasar Khalil 6/208; Tahrir al-Mukhtasar 4/510; at-Taj wa-l-Iklil 4/416; Manh al-Jalil 7/333; al-Mughni 5/14; al-Muharrar 1/351; al-Furu' 4/290; al-Insaf 5/417; Kashshaf al-Qina' 3/586 and 587; Sharh Muntaha al-Iradat 3/555; Matalib Uli an-Nuha 2/507). Among the Shafi'is, no view was found, but the apparent sense of their school indicates non-validity without the owner's authorization.
Sixteenth case: farming and irrigation (musaqat) with the mudaraba property. The majority of the people of knowledge, the Hanafis, the Malikis, and the Hanbalis according to one of their two views, hold that the mudarib may rent land to cultivate it, or take land in sharecropping (muzara'a) or in irrigation (musaqat), spending on it from the mudaraba property.
The Hanafis: if he is handed a thousand dirhams as mudaraba with the instruction to act by his judgment, or without instruction, and he rents with part of it uncultivated land and buys with another part food that he sows in the land, that is valid on the mudaraba in the manner of trade: the work of farming belongs to the merchants' practice, aimed at growth, and what belongs to the merchants' practice the mudarib owns by the absolute contract. If he rents uncultivated land to plant trees or fresh dates in it, it belongs to the mudaraba and is valid, the loss falling on the owner and the profit according to their stipulation, for it belongs to the merchants' practice aimed at growing the money. If he is handed a mudaraba against half and told "act in it by your judgment", and he takes palm trees, trees and fresh dates by share contract (mu'amala), on condition that whatever Allah afterwards brings forth from them be half for the palm owner and half for the mudarib at the mudarib's charge, and he works and spends the mudaraba property on it: what comes forth is shared in halves between the palm owner and the mudarib, and the owner has nothing of it; for he deserves the half only by the share contract, in which the mudarib hires out himself, while the money's owner delegated to him his judgment in the mudaraba: the benefits of his hand, where his staying requires work, are his alone, as is the expense he made from his own property, and he guarantees what he spent of the mudaraba property, having turned to his own need in a way the owner had not authorized.
If the mudarib takes from a man uncultivated land to cultivate it, half the produce belonging to the landowner and half on the mudaraba, and he buys food with part of the money, sows it, then spends on it what remains of the mudaraba until ripening, that is permitted: he rented the land against half the produce, as if he had rented it for dirhams, and the mudaraba is valid; his disposition on the money is here grounded, his right to the produce resting on his having sown it with the seed of the mudaraba money: half the produce belongs to the landowner, the other half is sold, the owner recovers his capital, and the remainder is shared between him and the mudarib according to the stipulation. If he was not told "act in it by your judgment", the mudarib guarantees the mudaraba: he associated another in the mudaraba money, and it was shown that by the absolute contract the mudarib does not own association, as if he had handed part of the money as mudaraba to another; becoming a contravener by his disposition, he guarantees the mudaraba money, which is the ownership of what is guaranteed, and what comes forth from the crop is shared in halves between the mudarib and the owner according to the stipulation.
Al-Kasani, may Allah have mercy on him, specifies: if the mudarib takes palm trees, trees or fresh dates by share contract on condition of spending on them from the money, it does not fall on the owner, even if he told him "act in it by your judgment" at the handover: for the taking by share contract is a contract upon the benefits of his own person, and the benefits of the mudarib's person do not enter the mudaraba contract; it is as if he hired himself out for service, and the stipulated spending is not considered, not being the object of the contract, but following the work, like the thread in the tailor's hire and the dye in the dyer's. Likewise "act by your judgment" is not considered: it amounts to delegating judgment within the mudaraba, which is a disposition on the money, whereas this contract bears on the benefits of his person, whose price the owner cannot deserve. If the mudarib takes land in sharecropping to cultivate it, the produce being shared in halves, and he buys food with part of it and sows it, Muhammad said it is permitted if he was told "act by your judgment"; if not, it is not permitted, for he establishes a right of the landowner in the owner's money, as if he made him a partner in the mudaraba money, and the absolute contract gives no right of association until "act by your judgment" is said; when it is said, he owns it. Al-Hasan ibn Ziyad, may Allah have mercy on him, said: if the land, the seed and the oxen come from the landowner and the work falls on the mudarib, it does not belong to the mudaraba but to the mudarib alone, the contract bearing on the benefits of his person, whose price he obtains and which the owner does not deserve; likewise if the oxen are charged to the mudarib, the contract falling on his benefit: the oxen are the tool of the work, and the tool follows, as long as the contract did not bear upon it. If the mudarib takes land in sharecropping without seed, it is valid, whether he was told "act by your judgment" or not, for he establishes no partnership in the owner's money: he rents out his land, and hiring enters the mudaraba contract (Bada'i' as-Sana'i' 6/95; al-Mabsut 22/54, 72 and 73; al-Hidaya 4/4; Tabyin al-Haqa'iq 5/207; al-Bahr ar-Ra'iq 6/264; Majma' ad-Damanat 2/655; al-Fatawa al-Hindiyya 4/334).
The Malikis: the owner may not stipulate that the mudarib sow from the qirad money; if he stipulates it, it is void, and the worker has the wage of his like at the owner's charge, whether profit occurs or not. If the worker sows without stipulation in land bought with the qirad money or rented, that is permitted in a place of safety and equity, without liability; if he takes the risk on it in a place of injustice and gharar which he perceives as such, he is liable. If he takes palm trees in irrigation and spends on them qirad money, it is like the sowing, without exceeding the permission (Tahdhib al-Mudawwana 2/184; ash-Sharh al-Kabir 5/287; Tahrir al-Mukhtasar 4/510, 511 and 518; Sharh Mukhtasar Khalil 6/207; at-Taj wa-l-Iklil 4/415 and 416; Hashiyat as-Sawi 8/403 and 404; Manh al-Jalil 7/332).
Among the Hanbalis, Ibn Qudama, may Allah have mercy on him, said: if he is told "act by your judgment", is farming permitted to him? It is possible that he does not own it, for the mudaraba does not imply it by its absoluteness. Yet it is reported from Ahmad, may Allah have mercy on him, concerning the one who hands a thousand dirhams to a man saying "trade with it as you wish", and who farms and profits, that the mudaraba is valid and the profit between them. Al-Qadi: the apparent is that "trade as you wish" includes it, farming being one of the ways by which growth is sought; on that basis, if the money perishes entirely, no guarantee falls on him (al-Mughni 5/26).
The Shafi'is: the worker's function is trade, that is, profiting by selling and buying, and their adjuncts which custom holds he undertakes himself, like spreading out and folding the garments and measuring them. Profiting by trade means professional extraction: if the money is lent to him to buy wheat to grind and bake, or wool to weave and sell, the qirad is void in both cases, for the qirad was instituted as a license for need, and these works are regulated and may be hired: the license therefore does not cover them, and he who engages in them is not a merchant but a craftsman, outside the worker's function. On this basis, and Allah knows best, they do not permit farming with the mudaraba property. Yet the view of al-Amrani in al-Bayan and an-Nawawi in ar-Rawda is found: if the money is lent to him to buy palm trees, mounts, land or productive assets of waqf origin, keeping them for their fruits, their offspring and their yield, the revenues being shared between the two, it is void and the qirad is not valid, for the contract of qirad bears on the worker's disposition over the ownership of the money, and he is here stipulated to refrain from it. And because it is not a profit by trade, but the money itself (Mughni al-Muhtaj 3/343 and 344; Nihayat al-Muhtaj 5/254 and 255; an-Najm al-Wahhaj 5/262 and 263; ad-Dibaj 2/428 and 429; Kifayat al-Akhyar 341; Hashiyat al-Bajuri ala Sharh Ibn Qasim 2/44; al-Bayan 7/200; Rawdat at-Talibin 3/742 and 758). An-Nawawi adds in ar-Rawda, in the chapter on the increase or decrease befalling the qirad money: as for the increase, it includes the fruit of the tree bought for the qirad, the offspring of the mount, the earnings of the slave, the child of the slave-girl and her bride-price if the marriage was consummated in doubt, as well as the price of the benefits of the mounts and the land, whether that benefit was obtained by wrongful use or by hiring on the worker's part, he being entitled to hire if he sees an interest: the Imam and al-Ghazali say all of this is qirad money, coming from its benefits. Al-Mutawalli says that if the money has profited and the worker's share was owned by appearance, it is the same; if the money has not profited or the share was not owned, some authors say it is qirad money, and the majority of their scholars that the owner takes it, for it is not among the benefits of trade, which seems sounder; if it is made qirad money, the soundest is that it comes from the profit, and it was said that it mingles with the profit and the capital.