Mudaraba (capital-management partnership)

Chapter: the conditions in the mudaraba divide into two parts: sound and corrupt. The sound is, for example, that it be stipulated upon the managing associate not to travel with the capital, or to travel with it, or to trade only in a specific land, or a specific kind, or to buy only from a specific man. All of that is sound, whether the kind is of those whose existence is common or not, or the man is among those who have much merchandise or little. And Abu Hanifa said thus. And Malik and al-Shafi'i said: if it is stipulated that he buy only from a specific man, or a specific commodity, or that whose existence is not common, like the red ruby or the bulle horse, it is not valid, for it prevents the purpose of the mudaraba.

because the mudaraba is a kind of partnership, and it is the partnership in profit; and this condition severs the partnership in profit, since it is possible that the managing associate gain only that mentioned amount: it would then be for one of the two to the exclusion of the other, and the partnership is not realized; the disposition would therefore not be a mudaraba. Likewise if they stipulate that one of the two have the half or the third plus a hundred dirhams, or they say: except a hundred dirhams, that is not permitted, as we mentioned that it is a condition severing the partnership in profit; for if they stipulated for one of them the half plus a hundred, it is possible that the profit be.