Dispute over the nature of a transaction when capital was designated as a loan versus a partnership.

General Chapter

Al-Mughni

Book of Partnership

Book 18 · Issue 5 · Bab 1

Open in Qurani

Primary text

If the owner states the transaction was a 'Bida'ah' (consignment) and the agent states it was 'Qirad' (partnership), the agent's statement may be accepted because the labor was performed for the owner's benefit. Alternatively, both parties might swear oaths, and the agent receives the lesser of his profit share or the customary wage for his labor. If the owner states the capital was a loan and the agent states it was a loan, each swears to deny the opponent's claim, and the agent is entitled only to the wage for his labor.

Supporting text

If the capital is lost or destroyed, and the owner claims it was a loan, while the agent claims it was a partnership or consignment, the statement of the owner is accepted.