Is a partnership contract (Qirad) valid if the capital consists of one of two known amounts of money held in separate bags?
General Chapter
Al-Mughni
Book of Partnership
Primary text
The partnership contract is invalid if the capital consists of one of two known quantities of money held in separate bags, regardless of whether the amounts are equal or different. This is because the contract necessitates specification, and contracting over an unspecified item invalidates it, similar to a sale. This view is held by Al-Shafi'i, Abu Thawr, and the Ashab al-Ra'y (Hanafi scholars). The underlying principle is that the deposited property (Wadi'ah) remains the property of the owner, thus permitting a partnership contract over it, even if the owner indicates it by pointing, such as saying, "I partnered you with this thousand," while pointing to it in a corner of the house. This differs from a debt, as the debt only becomes the creditor's property upon physical possession.
Supporting text
Al-Hasan stated that the partnership is invalid unless the capital is physically handed over to the managing partner, drawing an analogy to the ruling concerning a debt. Furthermore, if the deposited property had been destroyed due to the depositor's negligence, thus turning into a liability ('ayn al-dhimmah), it is invalid to enter into a partnership contract over it because it has transmuted into a debt.