Principles of Business Part Five

CONTENTS FOR THIS SECTION

Mudârabah Or Silent Partnership

Amânah Or Trusts

‘Âriyah Or Borrowed Items

Hiba Or Gifts

 

Mudârabah Or Silent Partnership

1. You gave some money to a person in order to conduct some business. You told him that he should conduct some business and the profits that accrue from there will be shared between the two of you. This is permissible. This is known as mudârabah. However, there are several conditions for this. If these conditions are fulfilled, it will be valid. If not, it will not be permissible and will be regarded as fâsid. The conditions are:

(a) You must mention the amount of money you wish to give him and also hand it over to him in order to conduct the business. If you do not hand over the money to him and keep it with you, this agreement will be fâsid.

(b) You should also specify how the profits will be shared by mentioning the percentage that each one will receive. If this is not specified and you merely said that we will share the profits, this will be fâsid.

(c) When specifying the share of profits, do not say that from all the profits, R100 will be mine and the balance yours or R100 yours and the balance mine. Instead, you should specify the percentage, e.g. half the profits will be mine and the other half yours, one third mine and two thirds yours or one quarter mine and three quarters yours. In short, the distribution should be according to the profits that accrue. If this is not so, the agreement will be fâsid.

(d) Only if there is a profit will the person who is working receive a share of the profits. If there are no profits, he will not receive anything. If you say that even if there are no profits I will give you a certain amount from the capital, this agreement will be fâsid. Similarly, if you make this condition that if there are any losses, they will be borne by the person who is working or borne by both of us, it will also be fâsid. The rule is that if there are any losses, it will be the responsibility of the owner and it will be his money that has been lost.

2. As long as the person has the money with him and has not purchased the goods for trade as yet, you have the right to dismiss him and take the money back. Once he purchases the goods, you do not have the right to dismiss him.

3. If you make this condition that I will work with you or a certain employee of mine will work with you, then this agreement will be fâsid.

4. The rule with regard to mudârabah is that if the agreement is valid and there are no nonsensical conditions in it, then both of them will be partners in the profits. They must divide the profits according to their agreement. If there are no profits or if they suffered any loss, then the person who is working will not receive anything and he will not have to pay any compensation for the loss. If the agreement becomes fâsid, the person who is working will not be regarded as a partner in the profits. Instead, he will be regarded as any other ordinary employee. You must check the amount of salary he would have received had he been employed as an ordinary employee and pay him accordingly. He will receive a salary irrespective of whether there are any profits or whether they suffer a loss. All the profits belong to the owner. However, if his salary is more than the profits, in such a case he will not receive a salary. Instead, the profits will have to be shared.

Note: Since women very rarely need such masâ’il, we have not written any lengthy explanations. Whenever the need arises, consult an ‘âlim so that you do not commit any sin.

 

Amânah Or Trusts

1. A person came and gave you something to keep as an amânah and you accepted it. It is now wajib on you to safeguard it. If you display any shortcoming in safeguarding the item and it gets lost, you will have to compensate for it. However, if you did not display any shortcoming in safeguarding the item and it still gets lost either by being stolen or getting burnt when your house caught on fire, etc. then that person cannot demand any compensation from you. In fact, even if at the time of accepting the amânah you said to the person that you are responsible for it and that he can take the money for it if it gets lost, he does not have the right to demand any compensation. Compensating him out of your own free will is another matter.

2. A person comes and says, “I am going for some work. Please keep this item for me.” You reply, “Okay leave it here.” Alternatively, you do not say anything but merely remain silent. That person leaves it with you and goes away. This becomes an amânah. However, if you clearly state that you are not going to keep it and that he should keep it with someone else or you do not accept it and yet the person keeps it with you and goes away, then that item will not be an amânah. However, if you pick up that item and keep it away after the departure of the person, it will become an amânah.

3. Several women were sitting together. A lady comes, keeps an item with them and goes away. It is wajib on all of them to safeguard that item. If they leave that item behind and go away and it disappears thereafter, they will have to pay compensation. If all of them did not leave at once but left one after the other, it will be the responsibility of the last person to safeguard the item. If she leaves that place and the item disappears, compensation will be taken from her.

4. The person who has an amânah with her has the right to keep the item with her and safeguard it or to give it to her mother, sister, husband or any such relative who lives in the same house as hers and by whom she also keeps her possessions at the time of need. However, if any of the relatives are not trustworthy, it will not be permissible to keep it with them. If she intentionally gives it to such an unreliable person, she will have to pay compensation in the event of that item disappearing.

It is not permissible to keep an amânah by anyone else (besides the above-mentioned) without the permission of the owner. This is irrespective of whether the person is a total stranger or a distant relative. If an amânah is kept with such a person, she will have to pay compensation in the event of that item disappearing. However, if this person is such that she herself entrusts her with her own possessions, then it will be permissible to keep an amânah with that person.

5. A person came and gave you an item to be kept as an amânah. You forgetfully left it behind and went away. If it disappears, you will have to pay compensation. Alternatively, you left the lock of the closet or safe open and went away. And there are several persons sitting over there. Furthermore, the item is such that it generally cannot be safeguarded without being locked. In the event of it disappearing, you will have to pay compensation.

6. Your house caught on fire. At such a time, it is permissible to keep the amânah with strangers as well. However, once this excuse (house being on fire) is no more, you should immediately go and take that amânah from that person. If you do not go and take it, you will have to pay compensation in the event of it disappearing. Similarly, if at the time of your death, none of your house folk are present, it will be permissible to give it to your neighbour.

7. If a person gives you gold or silver coins to be kept as an amânah, it will be wâjib on you to safeguard those very gold or silver coins. You cannot mix them with your gold or silver coins nor can you spend them. You should not think that all gold or silver coins are the same and therefore you will use them and when he asks you for them you will give him your own. This is not permissible. If the person permits you to use them, it will be permissible. However, the rule with regard to this is that if you keep those very coins aside, it will be regarded as an amânah. If they disappear, you will not have to pay any compensation. But if you seek his permission and use them, it will now be regarded as a debt and not an amânah. You will therefore have to pay him irrespective of whether they disappear or not. After using his coins, you kept aside the same amount in his name (with the intention that it is his). It will still not be regarded as an amânah. They will be regarded as your coins. If they are stolen, your coins will be considered to be stolen and you will still have to pay him. In short, once you use his coins, it will be regarded as your responsibility as long as you do not repay him.

8. A person kept R100 as an amânah with you. You sought his permission to use R50 and spent it. R50 will be regarded as a debt on your shoulders and R50 will be regarded as an amânah. Later when you obtain R50, do not mix it with his R50 which you kept as an amânah. If you mix it, the entire amount (R100) will not be regarded as an amânah and you will be responsible for the entire R100. If this amount disappears, you will have to repay the entire R100. This is because by mixing the money of amânah with your own, the entire amount becomes a debt and you will have to repay the entire amount irrespective of whether it disappears or not.

9. You sought the person’s permission and mixed his R100 with your R100. The entire amount will be regarded as a partnership. If it is stolen, both the amounts will be considered to be stolen and there is no need for any compensation. If part of the money is stolen and part is left behind, then from the money which has been stolen, half will be considered to be yours and half his. If one person had given R100 and the other R200, then the amount that is stolen will be calculated accordingly, e.g. if R12 is stolen, R4 of the person who gave R100 will be considered to be stolen and R8 of the person who gave R200. This rule will only apply if it was mixed with his permission.

If you mix it without his permission, the rule that has been mentioned previously will apply. That is, by mixing the money of amânah with your money without the owner’s permission, that amânah becomes a debt. That money no longer remains an amânah. Whatever money from there disappears will be regarded as yours and you will have to repay him.

10. A person kept a goat or cow as an amânah with you. It is not permissible for you to drink its milk or benefit from it in any other way. However, it will be permissible for you to do so if you obtain his permission. Whatever milk you drink without permission will have to be paid for.

11. A person kept clothing, jewellery, a bed, etc. as an amânah. You cannot use these items without permission. If you use these items without permission and while using them, the clothing gets torn or stolen, or the jewellery or bed breaks or gets stolen, then in all these cases you will have to pay compensation. However, if you repent from this action and keep these items away safely and thereafter they disappear, you will not have to pay any compensation.

12. You removed the clothing which was given to you as an amânah from the cupboard with the intention that you will wear it in the evening for a particular occasion. However, before you could wear it, it got stolen. You will still have to pay compensation.

13. The cow or goat which was given to you as an amânah fell ill. You gave it medication. Because of this medication it died. You will have to pay compensation. If it dies without your giving it any medication, you will not have to pay any compensation.

14. A person gave you some money. You kept it in your wallet or cash pocket. However, this money did not go into your wallet or cash pocket. Instead, it fell down but you were under the assumption that it is in your wallet or cash pocket. You will not have to pay any compensation.

15. When a person asks for his amânah, it is wâjib to hand it over to him immediately. It is not permissible to delay without any valid excuse. A person asks you for his amânah. You reply that you are busy now and that he must take it from you tomorrow. The person agrees – there is no harm in this. If the person is not happy about taking it tomorrow and goes away angrily, that item will no longer be regarded as an amânah. If it disappears, you will have to pay compensation.

16. A person sent someone to collect his amânah. You have the right of refusing to hand it over to this person with the message that the person must come himself and that you will not give it to anyone else. If you hand it over to this messenger thinking him to be honest and later the owner says that he did not send him, the owner can demand the item from you. You can take the item back from that person. If the item is no longer in his possession, you cannot demand the money for it from him but the owner can demand it from you.

 

‘Ariyah Or Borrowed Items

1. You borrowed clothing, jewellery, a bed, utensils, etc. from someone for a few days and told them that you will return them once your need for them is over. The rule with regard to this is the same as that of an amânah. It will be wâjib on you to safeguard these items. If such borrowed items disappear despite your taking all the precautions to safeguard them, then that person cannot demand any compensation from you. In fact, even if you had told that person that if it gets lost you will compensate him, it is not permissible for him to take any compensation. But if you did not safeguard it and it therefore got lost, you will have to pay compensation for it. Furthermore, the owner has the right to take back his item whenever he wishes. It is not permissible for you to refuse to return it to him. If you refuse to hand it over to him despite his asking you to do so and thereafter it gets lost, you will have to pay compensation.

2. If the owner permitted you to utilise the item in a particular manner, you will have to utilise it in that very manner. You cannot use it in any manner contrary to that which he permitted. If you use it in a contrary manner and it gets lost, you will have to pay compensation. For example, a woman lent you her scarf in order to cover your head. Instead, you spread it out on the ground and lied down on it. On account of this it became damaged. She lent you her couch and so many people sat on it that it broke. She lent you a glass utensil and you placed it over the fire and it therefore broke. Alternatively, you used any other item contrary to its normal manner of usage. In all such cases you will have to pay compensation. Similarly, if you borrow an item and have this evil intention in your heart that you will not return it but keep it for yourself, you will have to pay compensation if it disappears.

3. You borrowed an item for a specific number of days. It will be necessary to return it on the expiry of that period. If you do not return it within the specified number of days and it gets lost, you will have to pay compensation.

4. If the owner lent an item and clearly stated that you can use it yourself and also give it to others to utilise, then you have the right to lend it to others. Similarly, if the owner did not clearly state this but your relationship with him is such that you have full conviction that others are permitted to utilise it as well, then the above rule will also apply. If the owner clearly prohibited you from lending it to others or allowing others to utilise it, then under no circumstances will it be permissible for you to give it to others.

If you borrowed an item telling the owner that you will use it and he did not prohibit you from giving it to others nor did he clearly permit you to do so, then check the nature of the item. If it is such that the manner of utilising it is the same and everyone utilises it in the same manner without there being any difference whatsoever, it will be permissible for you to use it and to allow others as well. If the item is such that it is not utilised in the same manner – some people use it in the proper manner while others mishandle it, then it will not be permissible for you to allow others to utilise it.

Similarly, if you borrowed an item telling the owner that a certain relative or friend will use it and the owner did not mention anything about you using it yourself or not using it, then the same rule will apply here as well. That is, if the manner of utilising it is the same, it will be permissible for you to use it. If not, it will not be permissible for you to use it. Only that person in whose name you borrowed it will be permitted to use it.

If you borrowed an item without informing the owner as to who is going to utilise it and the owner did not specify anyone as well, then the rule is that if the manner of utilising it is the same, it will be permissible for you to utilise it and give it to others as well. But if the manner of utilising it is not the same and you already commenced utilising it, it will not be permissible for you to give it to others. If you did not commence utilising it and gave it to someone else, it will not be permissible for you to utilise it. Understand this well.

5. It is not permissible for the parents and others to lend items that belong to their immature children. If they lend it out and it gets lost, they will have to pay compensation. Similarly, if an immature child lends his item on his own accord, it will not be permissible to take it.

6. You borrowed an item from a person. Thereafter, the owner passed away. Once he passes away, it does not become the possession of the borrower. It will therefore not be permissible for you to use it. Similarly, if the borrower passes away, it will not be permissible for his inheritors to use it in any way.

 

Hiba Or Gifts

1. You gave an item to a person and he accepted it. Alternatively, he did not accept it verbally, instead, you placed it in his hand and he took it. That item will now be his and it no longer belongs to you. In the Sharî‘ah this is known as hiba – a gift or present. There are several conditions for this. One is that you have to hand over the item to the person and he has to take possession of it. If you tell him that you are giving him this item and he says that he is accepting it but you have not handed it over to him as yet, then this giving of yours is not correct. The item will still be considered to be under your ownership. However, if he takes possession of it he will become its owner.

2. You placed the item in front of him in such a manner that if he wishes he can take it, and you say to him, “Here, take this.” By placing the item in such a way, he will also become its owner. It will be regarded as if he picked it up and took possession of it.

3. You gave a person clothing that is kept in a locked trunk but did not give him the keys to the trunk. This will not be regarded as taking possession of the item. Once you hand over the keys, possession will take place and he will become the owner of the clothing.

4. There is oil or any other substance in a bottle. You gave the bottle to a person but did not give him the oil. This giving will not be correct. Even if he takes possession of it he will not become its owner. Only when you take out your oil from it will he become its owner. If you give the oil but not the bottle and the person takes the bottle with the oil and tells you that he will empty the oil out and then return the bottle to you, then giving the oil in this manner will be correct. Once he takes possession of it he will become its owner. In short, if you wish to give a bottle, utensil, etc. it is a prerequisite to empty the utensil first. It is not permissible to give it without first emptying it. Similarly, if anyone gives a house, he must remove all his belongings and he himself must come out of it and then hand it over.

5. If you wish to give a person a portion of a certain item (i.e. half, quarter, one third or whatever the case maybe), first check the nature of the item. Will it be of any use after being divided or not? If it will not be of any use after dividing it, it will be permissible to give it. Such items are: a grinding mill that if it is split in half, it will not be of any use, a bench, a bed, a utensil, a pitcher, a bowl, a tumbler, a trunk, an animal, etc. Once the person takes possession of such items he will become owner of that portion which you have given to him and the whole item will come under a partnership between both of you.

If the item is such that if it is divided it can still be of use, then it is not permissible to give it without dividing it. Such items are: a plot of land, a big house, a roll of material, firewood, dry groceries, milk, yoghurt, etc.

You tell a person, “I am giving you half the ghee that is in this container.” He replies, “I accept it.” This giving will not be correct. In fact, even if he takes possession of the container he will not become the owner of that ghee. All the ghee still belongs to you. However, if you thereafter separate half the ghee and hand it over to him, he will become its owner.

6. Two persons purchased a length of material, a house or a farm and each one paid half the money for it. As long as they do not divide it, it is not permissible for any one of them to give his share away to anyone.

7. You gave R10 to two persons and told them to take half each. This is not correct. Instead, you should divide both in half and then give it to them. However, if both of them are poor, it is not necessary to divide it. If you give one cent to two persons, this will be correct.

8. A goat or cow is pregnant. It is not permissible to give the young of the goat or cow to anyone before it can be born. In fact, even if the person takes possession of it after it is born, he will not become its owner. If you wish to give it, you must give it again after it is born.

9. A person gives you a goat and tells you that he is not giving you the kid that is in its stomach and that it belongs to him. The goat and the kid now belong to you and the person does not have the right to take the kid away.

10. A certain item of yours is kept with someone as an amânah. You gave that very item to that very person. In such a case that person will become its owner by merely stating that he has accepted it. It is not necessary for him to go and take possession of it again because it is already in his possession.

11. If an immature boy or girl give their possession to someone, this will not be correct. It is also not permissible to take anything that they give. Remember this mas’ala well because many people are neglectful in this regard.

Giving To Children

1. When anything is given to a child on the occasion of his circumcision or any other such occasion, the purpose and object is not to give the child but to his parents. All those gifts are therefore not the possession of the child. Instead, the parents are its owners and they can do whatever they wish with those gifts. However, if a person gives an item specifically for the child, he will be its owner. If the child has reached an age of understanding, it is sufficient for him to take possession of the item himself. Once he takes possession of it, he will be its owner. If the child does not take possession of it or is incapable of doing so, then by the father taking possession of it, the child will become its owner. If the father is not present, the child will become its owner by the grandfather taking possession of it. If the father and grandfather are not present, the guardian of the child should take possession of it. If the mother or grandmother take possession of the item despite the father or grandfather being present, it will not be considered.

2. If the father or the grandfather (in the absence of the father) wish to give the child or grandchild a gift, it is sufficient for them to say, “I have given this to the child.” In the absence of the father or grandfather, if the mother or brother wish to give a gift to the child and this child is also under their care, then by their saying the above words, the child will become its owner. It is not necessary for anyone to take possession of the item.

3. When wishing to give anything to your children, ensure that you give it equally among your children. The son and the daughter should be given equally. If you give one of your children more than the others, there is no harm in this. However, you should not have the intention of causing harm to the one whom you gave less. If this is your intention, it will not be permissible to give him less.

4. Anything that belongs to an immature child should only be utilised for him. It is not permissible for anyone to utilise it for their personal purposes. Even the parents should not utilise it for their personal purposes nor for any of the other children.

5. If an item is given outwardly to the child but the actual purpose was to give it to the parents, but the person gave it in the name of the child because he considered the gift to be insignificant, then that item will be considered to be under the ownership of the parents. They can utilise it as they wish. Furthermore, one should see who has given the gift. If the gift was given by the wife’s relatives, it will belong to the wife. If it was given by the husband’s relatives, it will belong to the husband.

6. You sewed a set of clothing for your immature child. That child will now be its owner. You made a set of jewellery for your immature daughter. She will now be its owner. It will not be permissible to give that clothing or jewellery to any other boy or girl. It should be given to the one for whom it was made. However, if at the time of making it, you clearly stated that this item belongs to you and that you are merely loaning it to this child, the item will belong to the person who made it (or got it made). It is the habit of many elder sisters and also mothers to borrow a scarf and other items from their immature sisters or daughters. It should be noted that it is not permissible to borrow such items even for a little while.

7. Just as an immature child cannot give any of his possessions to anyone, in the same way the father cannot give any of the possessions of his immature child to anyone. If the parents give any of the possessions of the child to anyone or lend it to anyone, it will not be permissible to accept it. However, if the parents have a severe need for it on account of poverty and cannot obtain it from anywhere else, then at such a time of need and desperation it will be permissible for them to take an item that belongs to the child.

8. It is not correct for the parents to loan the wealth of the child to anyone. In fact, it is not correct for the parents themselves to borrow the wealth of the child. Remember this well.

Taking Back Something That Has Been Given

1. It is a major sin to take back something that you have given. If a person takes back something that he has given and the person gives it back willingly, then the person who had originally given the item will once again become its owner. However, there are certain things which the person has no right to take back, e.g. you gave a goat to a person. This person fed that goat so well that it became fat and healthy. In such a case you do not have the right to take it back. Alternatively, you gave a plot of land to a person. He constructed a house on that plot or turned it into an orchard. In such a case you do not have the right to take it back. Alternatively, you gave a length of material to a person. He sewed a garment out of it, dyed it or had it washed. You do not have the right to take it back.

2. You gave a goat to a person. After some time it gave birth to kids. You can take the goat back but you do not have the right to take the kids.

3. If the person who gives an item or the person who receives it dies after the item was given, the right to take it back no longer remains.

4. A person gave you something. You also gave her something in return for this and said to her, “Sister, take this in return for the item that you gave me.” After giving this item in exchange, you do not have the right to take it back. However, if you did not tell her that you are giving this in exchange for what she gave you, you have the right to take back your item and she also has the right to take back the item that she gave you.

5. The husband gave something to his wife or vice versa. They do not have the right to take back whatever they give. Similarly, if a person gives something to a relative with whom marriage is harâm forever and this is a blood relation, such as brother and sister or nephew and niece, they do not have the right to take back whatever they give. If the relative is such that marriage is not harâm with him or her, such as one’s cousin, then one has the right to take back whatever one gives. Similarly, if marriage is harâm but the relationship is not a blood relationship, instead it is a relationship based on breast-feeding or some other relationship such as foster brothers or sisters or son-in-law, mother-in-law, father-in-law, etc., then in all these cases one has the right to take back whatever one gives.

6. All the cases wherein we have mentioned that one has the right to take back what one gives, means that he will only have the right to take it back if the person is also willing to give it back, as mentioned in the beginning. However, there is also a sin in doing this. If the person is not willing to give it back and does not give it back, one does not have the right to take the item forcefully without first obtaining a ruling from a judge in his favour. If he takes it forcefully without obtaining a ruling from a judge, he will not become its owner.

7. Most of the rules that have been mentioned with regard to the giving of gifts also apply to giving in the path of Allah, e.g. an item will not go into the ownership of a poor person without the latter taking possession of it. The item which has the prerequisite that it has to be divided before it can be given, this prerequisite will also apply here. The item which has to be emptied before it can be given will also have to be emptied in this case.

However, there are two differences. One is that when you give something you have the right to take it back if the person is willing to do so. However, when you give something in the path of Allah you do not have the right to take it back. The second difference is that if you give a certain amount of money to two poor persons and tell them to share it between themselves, it will be permissible to do so. However, when giving a gift to someone, you cannot ask them to divide the money.

8. You were going to give R10 to a poor person but you mistakenly gave him a R20 note. You do not have the right to take it back.

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