Lesson 78

 Business (1)

Partnership and Contracts

Partnerships for wealth development through trade, agriculture or industry are lawful as enacted and admitted by the Prophet (SAWS) in various forms

Al-`Anan (Cooperative) Partnership:

In which individuals have their shares to invest money and divide profit and loss according to the value of each share.

Al-Abdan (Manual) Partnership:

Individuals participate in a certain activity and agree on dividing the revenue

between them.

Al-Wujuh (Well-Known Partner) Partnership:

It is the participation in trade transactions, purchase and sale, while dividing profit

and loss.

Financing a Profit-Sharing Venture:

A Muslim gives another a sum of money to invest in a lawful business, and they

share both profit and loss according to conditions they had stipulated.

Comprehensive Partnership:

It includes the above dealings, as the two partners authorize each other in carrying

out any transactions and they share in both profit and loss.

Sharecropping:

It is to let another cultivate his land in return for a known portion of the

harvest.

Watering for Part of the Crop

It is to contract with another concerning irrigation of his crop in return for a

known share of their yield.

Evidence from the Qur’an and Sunnah

The legality of partnership:

The Messenger of Allah (SAWS) said:

“Allah, Most High, says: I make a third with two partners as long as one of them

does not cheat the other, but when he cheats him, I depart from them.”

(Reported by Abu-Dawud)

Manual partnership:

`Abdullah Ibn-Mas`ud (RA) narrated:“I, `Ammar, and Sa`d became partners in

what we would receive on the day of Badr. Sa`d then brought two prisoners,

but I and `Ammar did not bring anything.”

(Reported by an-Nasa’iyy and Abu-Dawud)

Financing a Profit-sharing venture:

It was applied in the time of Prophet Muhammad (SAWS) and he agreed upon

it.

(Minhaj al-Muslim)

Sharecropping and watering for part of the crop:

`Abdullah Ibn-`Umar (RA) narrated:“The Prophet concluded a contract with the people of Khaybar to utilize the land on the condition that half the products of

fruits or vegetation would be their share.”

(Reported by al-Bukhariyy and Muslim)

Sharecropping and watering

Rafi` Ibn-Khadij (RA) narrated that the Prophet (SAWS) said:

“It is better for one of you to lend his land to his brother than to take a prescribed

sum from him.”

(Reported by an-Nasa’iyy)

Job wages:

The Prophet (SAWS) said to a group of the Companions:

“How do you know that Surah Al-Fatihah is a Ruqyah? You have done the right thing. Divide (what you have got as a wage for Ruqyah) and assign for me a

share with you ”.

(Reported by Muslim)

Job wages:

The Messenger of Allah (SAWS) said:“Allah, the Exalted, said: I will be the

adversary of three persons on the Day of Judgment. One who makes a covenant in

My Name and then breaks it, one who sells a free man as a slave and devours

his price, and one who hires a workman and having taken full work from him,

denied him his wages ”.(Reported by Al-Bukhari)

Job wages:

Abu Sa`id Al-Khudri (RA) narrated:

“The Prophet (SAWS) prohibited (Muslims) to hire a laborer without

determining his wages”.

(Reported by Ahmad)

Job wages:

The Prophet (SAWS) also said:

“Anyone who practices medicine when he is not known as a practitioner will be

held responsible ”.

(Reported by An-Nasa’i, Abu Dawud ,

and Ibn Majah)