Some Lessons from Jurisprudence (Fiqh)

The Book of Peace (sulh)

The sulh (peace) that is studied in this book is different from the sulh that is studied in the book of jihad. Sulh in the book of jihad means "political agreements", whereas the Book of Peace concerns property affairs and common rights. For example, if a debt is owed without the amount of the debt being precisely known, the two parties make a sulh agreement and settle on a specified sum. Sulh agreements generally occur as a settlement for arguments and disagreements.

The Book of Partnerships (sharikat)

Sharikat is that a property or a right belongs to more than one person. For example, if some brothers inherit their father's property, then, for as long as they do not divide it, they are partners in that property. Or, for example, two people together buy an automobile or a house or a piece of land. Or it may happen that a group of people together take possession of a piece of land that belongs to no one by reclaiming, say, and restoring a part of a desert or marshland. Furthermore, a partnership is sometimes accidentally forced on someone, like, for example, when the wheat of two farmers accidentally becomes mixed and to separate the wheat of one from the wheat of the other is not possible.

There are two types of partnership existing in Islam, contractual partnership and non-contractual. The examples previously cited were non-contracted partnerships. A contractual partnership is that two people or a group of people by an agreement, compact and contract, form what in English is called a company, such as a trading company, a farming company or an industrial company. Contractual partnerships or companies are subject to many laws which are still studied in jurisprudence. In the Book of Partnerships the laws of profit sharing are also discussed.

The Book of the Partnership of Capital and Labor (mudarabah)

A mudarabah is a kind of contractual partnership, but not a partnership of two or more investors. Rather it is a partnership of capital and labour, meaning that one one or more partners provide the capital for a trading business and one or more partners provide the labour of the actual trading. Firstly the partners must be in concord as to the division of profits, and then the contract of mudarabah is to be executed, or must at least be formed in practice.

The Book of Agricultural Partnerships (mazaro'at and musaqat)

Mazara'at and musaqat are two more types of partnership. They are like mudarabah, which we have just mentioned, in that they are both types of partnerships between capital and labour. The difference is that mudarabah is relevant to trading whereas muzara'at is for farming. The meaning of this is that the owner of land and water makes an agreement with someone else who does the actual farming and they are in concord as to the specified proportion of each party in the division of the profits. Likewise, musaqat is for the affairs of orchards. This means that the owner of fruit trees concludes an agreement with someone else who becomes responsible for all the work involved in looking after those trees, such as watering them and all the other things effective in fruit production, and, according to the specified proportion they agree upon in the actual agreement, both investor and worker take their share of the profits.

Here there is a point that wish to mention, which is that in partnerships between capital and labour, whether mardarabah agreements or mazara'at or musaqat, any kind of harm or loss the capital is subject to is born by the owner of the capital, the investor. And, likewise, there is also no certainty of making a profit on the capital, meaning that it is possible a profit will be returned, and it is possible that a profit will not be returned. The only profit that is returned to the owner of the capital is in accordance to the profit made by the partnerships and to his specified proportion of those profits. Here it is that the financer, just like the worker, might make no profit, and it is even possible that he may lose his capital and even become bankrupt.