Chapter on Partnerships and Agency

Partnerships (sharikah) and agency (wakalah) are two foundational cooperative structures in Islamic commercial law that enable Muslims to pool resources and delegate authority in trade, business, and personal affairs. Ibn Abi Zayd al-Qayrawani addresses both within the Maliki school's jurisprudence, which has a rich tradition of commercial law developed in the trading centers of North Africa and Andalusia.

The Maliki school recognizes several types of partnership. Sharikat al-'inan is the most common: two or more persons contribute capital and agree to share profits and losses in proportion to their contributions, or in any ratio they mutually agree upon. This is the universally permitted form of partnership. Sharikat al-abdan (labor partnership) is a partnership where all parties contribute labor and expertise without capital — for example, two artisans sharing a workshop and splitting income. The Maliki school permits this form. Sharikat al-mufawadah — a general equal partnership where each partner is agent and guarantor for the other — is held by the Maliki school to be valid when both parties have equal shares and equal contributions.

Mudarabah (also called qirad in Maliki terminology) is a profit-sharing arrangement where one party contributes capital and the other contributes labor and management. Profits are split according to a pre-agreed ratio, while losses (unless due to the manager's negligence) are borne entirely by the capital provider. The Maliki school extensively discusses mudarabah, considering it one of the foundational forms of investment in Islamic law. The capital provider (rabb al-mal) may impose conditions on the manager (mudharib) regarding the type of trade, geographic restriction, or the avoidance of credit transactions — and these conditions are binding.

Agency (wakalah) is the appointment of one person as the legal representative of another to act in a specified domain. The Maliki school holds that wakalah is valid for virtually any act that the principal could do himself and that is susceptible to delegation — including commercial transactions, marriage contracts (on behalf of the wali or groom), legal proceedings, and collection of debts. The agent acts on behalf of the principal, and transactions the agent executes within his authority are binding on the principal as if the principal had acted directly.

The agent has a duty of loyalty and may not act in self-interest at the expense of the principal. The Maliki school holds that an agent who makes a profit from using the principal's entrusted funds for his own business, without authorization, must return any profit to the principal. The agent is not personally liable for ordinary losses in trade unless he transgresses the terms of his agency or acts negligently.

Muzara'ah (crop-sharing in agriculture) and musa'qah (orchard-sharing) are closely related cooperative arrangements that the Maliki school treats extensively. In muzara'ah, one party provides land and the other provides labor, sharing the harvest at an agreed ratio. The Maliki school permits these contracts under specific conditions regarding the known nature of the share, pointing to the practice of the Prophet at Khaybar as authority.