Critical Thinking

The as qirad. There are various opinions on

The terms used to refer mudarabah are differ in the
opinion of some jurists. Hanafis commonly phrase mudarabah as muqaradah while
Malikis and Shafies put the term of mudarabah as qirad.

 

There are various opinions on the type of capital for
mudarabah contracts.
As claimed by Ibn Rushd, one of the Maliki scholars, the majority of jurists
agree that invested capital should be either monetary or currency (dinar or
dirham) assets. Most Islamic scholars reject the use of non-financial assets or
types as capital, as it raises uncertainty (gharar) on estimates of initial
value of assets, which may vary according to the person evaluating the
property. Nonetheless, two lawmakers, Ibn Abi Layla and A-Awzai disagreed on
the issue, permitting the use of non-monetary assets as capital. On the other
hand, Abu Hanifah, Malik and Ibn Hanbali allowed the listing of non-monetary
asset prices as mudarabah capital. Mudarib may sell assets provided by rabbul
maal and use the price as capital for the contract. However, al-Shafie disagrees
with this idea as a result of physical assets that do not exist during the
contract. Most Islamic scholars also agree that capital should not be in the
form of debt owned by potential entrepreneurs from rabbul maal.

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In terms of capital protection, all classical scholars
collectively consented with the prohibition of collateral schemes for mudarabah
because they are irrelevant to mudarabah efforts. Besides, in terms of the
distribution of profits and losses, all Islamic scholars agreed that the ratio
where profits to be allocated should be determined based on forecasts to avoid
any dispute after business is conducted. Malikis and Shafies have accepted that
mudarabah contracts should be unlimited as it encourages entrepreneurs to find
more opportunities for better returns. But, Abu Hanifa and Ahmad Ibn Hanbali
agreed to restrict certain aspects of mudarabah contracts, such as in terms of
time and agency options to reduce business risks.

 

In terms of discontinuation
and termination of the contract of mudarabah, all Islamic scholars agreed that
mudarabah is not binding before the beginning of the work and may be discontinued
by one party. But Maliki scholars disagreed with the other scholars and declared
that after the work begins, the contract would be binding on both sides. As
claimed by scholar other than Shafie, the contract is also terminated if one
party becomes mentally unstable. Nevertheless, Hanafis asserted that a
mudarabah contract would not be invalid if rabbul maal were placed under legal
care. In terms of capital requirements, the Hanafis stated that the contract
could be terminated only if the share capital was monetary. However, Shafies
and Hanbalis consented that the partnership termination was valid even if the
capital was not monetary, as long as the two parties agreed to sell it and to
share profits as stated by the predetermined ratio.

 

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