The Book of Profit Sharing - Libri i Partneritetit (Kirad) - كتاب القراض

Malik said, "The recognised and permitted form of qirad is that a
man take capital from an associate to use. He does not guarantee it
and in travelling pays out of the capital for food and clothes and
what he makes good use of, according to the amount of capital. That
is, when he travels to do the work and the capital can support it. If
he remains with his people, he does not have expenses or clothing from
the capital."


Malik said, "There is no harm in the two
parties in a qirad helping each other by way of a favour when it is
acceptable to them both."


Malik said, "There is no harm in
the investor of the capital buying some of the goods from the agent in
the qirad if that is acceptable and without conditions."


Malik spoke about an investor making a qirad loan to a man and his
slave, to be used by both. He said, "That is permitted, and there is
no harm in it because the profit is property for his slave, and the
profit is not for the master until he takes it from him. It is like
the rest of his earnings."

Malik said, "When a man owes money to another man and he asks him
to let it stay with him as a quirad, that is disapproved of until the
creditor receives his property. Then he can make it a qirad loan or
keep it. That is because the debtor may be in a tight situation, and
want to delay it to increase it for him."


Malik spoke about
an investor who made a qirad loan to a man, and some of the principal
was lost before he used it, and then he used it and made a profit. The
agent wanted to make the principal the remainder of the money after
what was lost from it. Malik said, "His statement is not accepted, and
the principal is made up to its original amount from his profit. Then
they divide what remains after the principal has been repaid according
to the conditions of the qirad."


Malik said, "Qirad loan is
only good in gold or silver coin and it is never permitted in any kind
of wares or goods or articles."


Malik said, "There are
certain transactions which if a long span of time passes after the
transaction takes place, its revocation becomes unacceptable. As for
usury, there is never anything except its rejection whether it is a
little or a lot. What is permitted in other than it is not permitted
in it because Allah, the Blessed and the Exalted, said in His Book,
'If you repent, you have your capital back, not wronging and not
wronged. ' "


32.4 Conditions Permitted in Qirad

Yahya said that Malik spoke about an investor who made a qirad
loan and stipulated to the agent that only certain goods should be
bought with his money or he forbade certain goods which he named to be
bought. He said, "There is no harm in an investor making a condition
on an agent in qirad not to buy a certain kind of animal or goods
which he specifies. It is disapproved of for an investor to make as a
condition on an agent in qirad that he only buy certain goods unless
the goods which he orders him to buy are in plentiful supply and do
not fail either in winter or summer. There is no harm in that case."


Malik spoke about an investor who loaned qirad money and
stipulated that something of the profit should be his alone without
the agent sharing in it. He said, "That is not good, even if it is
only one dirham unless he stipulates that half the profit is his and
half the profit is the agent's or a third or a fourth or whatever.
When he names a percentage, whether great or small, everything
specified by that is halal. This is the qirad of the muslims."


He said, "It is also not good if the investor stipulates that one
dirham or more of the profit is purely his, with out the agent sharing
it and then what remains of the profit is to be divided in half
between them. That is not the qirad of the Muslims."

Yahya said that Malik said, "The person who puts up the principal
must not stipulate that he has something of the profit alone without
the agent sharing in it, nor must the agent stipulate that he has
something of the profit alone without the investor sharing. In qirad,
there is no sale, no rent, no work, no advance, and no convenience
which one party specifies to himself without the other party sharing
unless one party allows it to the other unconditionally as a favour
and that is alright to both. Neither of the parties should make a
condition over the other which increases him in gold or silver or food
over the other party."


He said, "If any of that enters the
qirad, it becomes hire, and hire is only good with known and fixed
terms. The agent should not stipulate when he takes the principal that
he repay or commission anyone with the goods, nor that he take any of
them for himself. When there is a profit, and it is time to separate
the capital, then they divide the profit according to the terms of the
contract. If the principal does not increase or there is a loss, the
agent does not have to make up for what he spent on himself or for the
loss. That falls to the investor from the principal. Qirad is
permitted upon whatever terms the investor and the agent make a mutual
agreement, of half the profit, or a third or a fourth or whatever."


Malik said, "It is not permitted for the agent to stipulate
that he use the qirad money for a certain number of years and that it
not be taken from him during that time."


He said, "It is not
good for the investor to stipulate that the qirad money should not be
returned for a certain number of years which are specified, because
the qirad is not for a term. The investor loans it to an agent to use
for him. If it seems proper to either of them to abandon the project
and the money is coin, and nothing has been bought with it, it can be
abandoned, and the investor takes his money back. If it seems proper
to the investor to take the qirad loan back after goods have been
purchased with it, he cannot do so until the buyer has sold the goods
and they have become money. If it seems proper to the agent to return
the loan, and it has been turned to goods he cannot do so until he has
sold them. He returns the loan in cash as he took it."


Malik
said, "It is not good for the investor to stipulate that the agent pay
any zakat due from his portion of the profit in particular, because
the investor by stipulating that, stipulates fixed increase for
himself from the profit because the portion of zakat he would be
liable for by his portion of the profit, is removed from him.


"It is not permitted for the investor to stipulate to the agent to
only buy from so-and-so, referring to a specific man. That is not
permitted because by doing so he would become his hireling for a
wage."


Malik spoke about an investor in qirad who stipulated
a guarantee for an amount of money from the agent, "The investor is
not permitted to stipulate conditions about his principal other than
the conditions on which qirad is based or according to the precedent
of the sunna of the Muslims. If the principal is increased by the
condition of guarantee, the investor has increased his share of the
profit because of the position of the guarantee. But the profit is
only to be divided according to what it would have been had the loan
been given without the guarantee. If the principal is destroyed, I do
not think that the agent has a guarantee held against him because the
stipulation of guarantees in qirad is null and void."


Malik
spoke about an investor who gave qirad money to a man and the man
stipulated that he would only buy palms or animals with it because he
sought to eat the dates or the offspring of the animals and he kept
them for some time to use for himself. He said, "That is not
permitted. It is not the sunna of the Muslims in qirad unless he buys
it and then sells it as other goods are sold."


Malik said,
"There is no harm in the agent stipulating on the investor a slave to
help him provided that the slave stands to gain along with him out of
the investment, and when the slave only helps him with the investment,
not with anything else."

Yahya said that Malik said, "No one should make a qirad loan
except in coin, because the loan must not be in wares, since loaning
wares can only be worked in one of two ways:
Either the owner of the
wares says to the borrower, 'Take these wares and sell them. Buy and
sell with the capital realized according to qirad.' The investor
stipulates increase for himself from the sale of his goods and what
relieves him of expenses in selling it. Or else he says, 'Barter with
these goods and sell. When you are through, buy for me the like of my
goods which I gave you. If there is increase, it is between you and
me. 'It may happen that the investor gives the goods to the agent at a
time in which they are in demand and expensive, and then the agent
returns them while they are cheap and he might have bought them for
only a third of the original price or even less than that. The agent
then has a profit of half the amount by which the price of the wares
has decreased as his portion of the profit. Or he might take the wares
at a time when their price is low, and make use of them until he has a
lot of money. Then those wares become expensive and their price rises
when he returns them, so he buys them for all that he has so that all
his work and concern have been in vain. This is an uncertain
transaction and is not good. If, however, that is not known until it
has happened, then the wage an agent in qirad would be paid for
selling that, is looked at and he is given it for his concern. Then
the money is qirad from the day the money became cash and collected as
coin and it is returned as a qirad like that."

Yahya said that Malik spoke about a man who made a qirad loan to
a man and he bought wares with it and transported them to a commercial
centre. It was not profitable to sell them and the agent feared a loss
if he sold them, so he hired transport to take them to another city,
and he sold them there and made a loss, and the cost of the hire was
greater than the principal.


Malik said, "If the agent can pay
the cost of the hire from what the capital realized, his way is that.
Whatever portion of the hire is not covered by the principal, the
agent must pay it. The investor is not answerable for any of it. That
is because the investor only ordered him to trade with the principal.
The investor is not answerable for other than the principal. Had the
investor been liable, it would have been an additional loss to him on
top of the principal which he invested. The agent cannot put that on
to the investor."

Yahya said that Malik spoke about an investor who made a qirad
loan to a man, who used it and made a profit. Then the man bought with
all the profit a slave-girl and he had intercourse with her and she
became pregnant by him, and so the capital decreased. Malik said, "If
he has money, the price of the slave-girl is taken from his property,
and the capital is restored by it. If there is something left over
after the money is paid, it is divided between them according to the
first qirad. If he cannot pay it, the slave-girl is sold so that the
capital is restored from her price."


Malik spoke about an
investor who made a qirad loan to a man, and the agent spent more than
the amount of the qirad loan when buying goods with it and paid the
increase from his own money. Malik said, "The investor has a choice if
the goods are sold for a profit or loss or if they are not sold. If he
wishes to take the goods, he takes them and pays the agent back what
he put in for them. If the agent refuses, the investor is a partner
for his share of the price in increase and decrease according to what
the agent paid extra for them from himself."


Malik spoke
about an agent who took qirad money from a man and then gave it to
another man to use as a qirad without the consent of the investor. He
said, "The agent is responsible for the property. If it is decreased,
he is responsible for the loss. If there is profit, the investor has
his stipulation of the profit, and then the agent has his stipulation
of what remains of the money."


Malik spoke about an agent who
exceeded and borrowed some of what he had of qirad in money and he
bought goods for himself with it. Malik said, "If he has a profit, the
profit is divided according to the condition between them in the
qirad. If he has a loss, he is responsible for the loss."


Malik said about an investor who paid qirad money to a man, and the
agent borrowed some of the cash and bought goods for himself with it,
"The investor of the capital has a choice. If he wishes, he shares
with him in the goods according to the qirad, and if he wishes, he
frees himself of them, and takes all of the principal back from the
agent. That is what is done with some one who oversteps."

Yahya said that Malik spoke about an investor who made a qirad
loan to a man.


He said, "When the investment is large, the
travelling expenses of the agent are taken from it. He can use it to
eat and clothe himself in an acceptable fashion according to the size
of the investment. If it saves him trouble, he can take a wage from
some of the capital, if it is large, and he cannot support himself.
There are certain jobs which an agent or his like are not responsible
for, amongst them are collecting debts, transporting the goods,
loading up and so forth. He can hire from the capital someone to do
that for him. The agent should not spend from the capital nor clothe
himself from it while he resides with his family. It is only permitted
for him to have expenses when he travels for the investment. The
expenses are taken from the capital. If he is only trading with the
property in the city in which he resides, he has no expenses from the
capital and no clothing."


Malik spoke about an investor who
paid qirad money to a man, and the agent went out with it and with his
own capital. He said, "The expenses come from the qirad and from his
own capital according to their proportions."

Yahya said that Malik spoke about an agent who had qirad money
with him and he spent from it and clothed himself. He said, "He cannot
give away any of it, and neither a beggar nor anyone else is to be
given any of it and he does not pay anyone compensation from it. If he
meets some people, and they bring out food and he brings out food, I
hope that that will be permitted to him if he does not intend to
bestow something on them. If he intends that or what is like that
without the permission of the investor, he must get the sanction of
the investor for it. If he sanctions it, there is no harm. If he
refuses to sanction it, he must repay it with like if he has something
which is suitable as compensation."

Yahya said that Malik said, "The generally agreed on way of doing
things among us about an investor who pays qirad money to an agent to
buy goods, and the agent then sells the goods for a price to be paid
later, and has a profit in the transaction, then the agent dies before
he has received payment, is that if his heirs want to take that money,
they have their father's stipulated portion from the profit. That is
theirs if they are trustworthy to take the payment. If they dislike to
collect it from the debtor and they refer him to the investor, they
are not obliged to collect it and there is nothing against them and
nothing for them by their surrendering it to the investor. If they do
collect it, they have a share of it and expenses like their father
had. They are in the position of their father. If they are not
trustworthy to do so, they can bring someone reliable and trustworthy
to collect the money. If he collects all the capital and all the
profit, they are in the position of their father."


Malik
spoke about an investor who paid qirad money to a man provided that he
used it and was responsible for any delayed payment for which he sold
it. He said, "This is obligatory on the agent. If he sells it for
delayed payment, he is responsible for it."

Yahya said that Malik spoke about an investor who gave qirad
money to a man, and then the man sought a loan from the investor or
the investor borrowed money from the agent, or the investor left goods
with the agent to sell for him, or the investor gave the agent dinars
to buy goods with. Malik said, "There is no harm if the investor
leaves his goods with him knowing that if the agent did not have his
money and he had asked a similar thing of him, he would have still
done it because of the brotherhood between them or because it would
have been no bother to him and that had the agent refused that, he
would not have removed his capital from him. Or if the agent had
borrowed from the investor or carried his goods for him and he knew
that if the investor had not had his capital with him, he would have
still done the same for him, and had he refused that to him, he would
not have returned his capital to him. If that is true between both of
them and it is in the way of a favour between them and it is not a
condition in the terms of the qirad, it is permitted and there is no
harm in it. If a condition comes into it, or it is feared that the
agent is only doing it for the investor in order to safeguard the
capital in his possession, or the investor is only doing it because
the agent has taken his capital and will not return it to him, that is
not permitted in qirad and it is part of what the people of knowledge
forbid.' "

Yahya said that Malik spoke about a man who loaned another man
money and then the debtor asked him to leave it with him as a qirad.
Malik said, "I do not like that unless he takes his money back from
him, and then pays it to him as a qirad if he wishes or if he wishes
keep it."


Malik spoke about an investor who paid a man qirad
money and the man told him that it was collected with him and asked
him to write it for him as a loan. He said, "I do not like that unless
he takes his money from him and then lends it to him or keeps it as he
wishes. That is only out of fear that he has lost some of it, and
wants to defer it so that he can make up what has been lost of it.
That is disapproved of and is not permitted and it is not good."

Yahya said that Malik spoke about an investor paying qirad money
to an agent who made a profit and then wanted to take his share of the
profit and the investor was away. He said, "He should not take any of
it unless the investor is present. If he takes something from it, he
is responsible for it until it is accounted for in the division of the
capital."


Malik said, "It is not permitted for the parties
involved in a qirad to account and divide property which is away from
them until the capital is present, and the investor is given the
principal in full. Then they divide the profit into their agreed
portions."


Malik spoke about a man taking qirad money, and
buying goods with it while he had a debt. His creditors sought and
found him while he was in a city away from the investor, and he had
profitable merchandise whose good quality was clear. They wanted him
to sell the merchandise for them so that they could take his share of
the profit. Malik said, "None of the profit of the qirad is taken
until the investor is present. He takes his principal and then the
profit is divided mutually between them."


Malik spoke about
an investor who put qirad money with an agent and he used it and had a
profit. Then the principal was set aside and the profit divided. He
took his share and added the share of the investor to his principal in
the presence of witnesses he had called. Malik said, "It is not
permitted to divide the profit unless the investor is present. If he
has taken something here turns it until the investor has received the
principal in full. Then what remains is divided into their respective
portions."


Malik spoke about an investor who put qirad money
with an agent. The agent used it and then came to the investor and
said, "This is your portion of the profit, and I have taken the like
of it for myself, and I have retained your principal in full." Malik
said, "I do not like that, unless all the capital is present, the
principal is there and he knows that it is complete and he receives
it. Then they divide the profit between them. He returns the principal
to him if he wishes, or he keeps it. The presence of the principal is
necessary out of fear that the agent might have lost some of it, and
so may want it not to be removed from him and to keep it in his hand."

Yahya said that Malik spoke about an investor who put qirad money
with an agent who bought goods with it, and the investor told him to
sell them. The agent said that he did not see any way to sell at that
time and they quarrelled about it. He said, "One does not look at the
statement of either of them. The people of experience and insight
concerning such goods are asked about these goods. If they can see
anyway of selling them they are sold for them. If they think it is
time to wait, they should wait."


Malik spoke about a man who
took qirad money from an investor and used it and when the investor
asked him for his money, he said that he had it in full. When he held
him to his settlement he admitted that "Such-and-such of it was lost
with me," and he named an amount of money. "I told you that so that
you would leave it with me." Malik said, "He does not benefit by
denying it after he had confirmed that he had it all . He is
answerable by his confession against himself unless he produces
evidence about the loss of that property which confirms his statement.
If he does not produce an acceptable reason he is answerable by his
confession, and his denial does not avail him."


Malik said,
"Similarly, had he said, 'I have had such-and-such a profit from the
capital,' and then the owner of the capital asked him to pay him the
principal and his profit, and he said that he had not had any profit
in it and had said that only so it might be left in his possession, it
does not benefit him. He is taken to account for what he affirmed
unless he brings acceptable proof of his word, so that the first
statement is not binding on him."


Malik spoke about an
investor who put qirad money with an agent who made a profit with it.
The agent said, "I took the qirad from you provided that I would have
two-thirds." The owner of the capital says, "I gave you a qirad
provided that you had a third." Malik said, "The word is the word of
the agent, and he must take an oath on that if what he says resembles
the known practice of qirad or is close to it. If he brings a matter
which is unacceptable and people do not make qirads like that, he is
not believed, and it is judged to be according to how a qirad like it
would normally be."


Malik spoke about a man who gave a man
one hundred dinars as a qirad. He bought goods with it and then went
to pay the one hundred dinars to the owner of the goods and found that
they had been stolen. The investor says, "Sell the goods. If there is
anything over, it is mine. If there is a loss, it is against you
because you lost it." The agent says, "Rather you must fulfil what the
seller is owed. I bought them with your capital which you gave me."
Malik said, "The agent is obliged to pay the price to the seller and
the investor is told, 'If you wish, pay the hundred dinars to the
agent and the goods are between you. The qirad is according to what
the first hundred was based on. If you wish, you are free of the
goods.' If the hundred dinars are paid to the agent, it is a qirad
according to the conditions of the first qirad. If he refuses, the
goods belong to the agent and he must pay their price."


Malik
spoke about two people in a qirad who settled up and the agent still
had some of the goods which he used - threadbare cloth or a waterskin
or the like of that. Malik said, "Any of that which is insignificant
is of no importance and belongs to the agent. I have not heard anyone
give a decision calling for the return of that. Anything which has a
price is returned. If it is something which has value like an animal,
camel, coarse cloth or the like of that which fetches a price, I think
that he should return what he has remaining of such things unless the
owner overlooks it."