Prepared by:

NAME
1. NUR FAHEZZA BT MUSA

MATRIC NO
2010108559
2010521411 2010126529 2010730561 2010127963

2. NORFAJRINA BT ISMAIL
3. SITI NORHASIMA BT MOHD YUSOF 4. NURUL AIN BT MOHD ANUAR 5. NURUL HANISS BT MANAB

Prepared for: Miss Mardziyana bt Maalom

DEFINITION TYPES OF MUDARABAH LEGITIMACY OF A MUDARABAH PILLARS & CONDITIONS OF MUDARABAH DIFFERENCE BETWEEN MUDARABAH & MUSYARAKAH CONTRACT TERMINATION OF A MUDARABAH CONTRACT

 Literally : derived from the phrase al-darb fi al-ard which means to make a journey
Technically : is a kind of partnership where one partner gives money to another for investing in a commercial enterprise The profit will be shared between them at a mutually ratio

If loss, it will be borne by the Rabbul-Mal (capital provider) and the Mudarib will lose his efforts

This is a kind of partnership where one partner gives money to another for investing in a commercial enterprise

... And others who travel in the land seeking of the bounty of Allah (73:20)

but when the prayer is ended, they disperse abroad in the land and seek Allahs grace (62:10)

there is no blame on you in seeking bounty from your lord (2:198)

The Narration of Ibnu Abbas

Ibnu Abbas r.a. reported that: When our leader Abbas Ibn Abd al-Mutallib gives his property to someone for Mudarabah, he stipulated conditions for his partner not to bring the capital throughout the sea; and not to bring with him the capital crossing a valley; and not to buy livestock with the capital; and if his partner violates the conditions, he should guarantee the loss occurred. These conditions have been brought to the attention of Prophet Muhammad (SAW) and he approved them. (Mujam Al-Awsat; Al-Tabrani)

The Narration of Suhayb

Suhayb r.a. reported that the Prophet Muhammad (SAW) said: Three matters that have the blessing (of Allah): A deferred sale, Muqaradah (Mudarabah), mixing the wheat with barley for domestic use and not for sale. (Sunan Ibn Majah).

The Tacit Approval of the Prophet Muhammad (SAW) Mudarabah venture has being practised before the Prophets (SAW) first revelation and he did not raise or show any objections against the practice. This is considered a tacit approval by the Prophet Muhammad (SAW).

The Muslim jurists have reached Ijma among them upon conducting Ijtihad on the permissibility of the Mudarabah contract. It has also been established that the comp anions of the Prophet Muhammad(SAW) suc h as Umar, Uthman, Ali, Abdullah Ibn Masu d, Abdullah Ibn Umar, Ubaydullah Ibn Umar and A`ishah have placed the property of orphans under the Mudarabah contract with no objections from other companions .

SUBJECT MATTER

CONTRACT (SIGHAH)

CONTRACTING PARTIES

PILLARS OF MUDARABAH

RELATED TO THE CONTRACTING PARTIES

CONDITIONS OF MUDARABAH

RELATED TO SIGHAH

RELATED TO SUBJECT MATTERS

1. CONDITIONS RELATED TO SIGHAH (IJAB & QABUL)

Generally, the condition related to the sighah of mudarabah is similar to those of other contracts which constitute offer and acceptance. Offer is done by uttering the terms of Mudarabah, Muqaradah or any terms to that effect.

Offer and acceptance can be done verbally, in writing or through any means of communication that is acceptable by both contracting parties.

Both Mudarib and Rabbul Mal must be qualified persons under the law. (e.g: sound mind)

a)

Mudarabah capital Shall be in the form of cash money. Immovable or movable properties cannot serve as the capital of mudarabah due to the fact that there is gharar (uncertainty). Lead to a dispute (al-niza) between contracting parties.

 Ibn Abi Layla and Al-AwzaI are of the

opposite opinion. (the capital need not be in terms of cash money only);
i.

The capital must be present during the conclusion of the contract. The capital must be determined in terms of its value and be delivered to the mudarib.

ii.

Mudarabah profit i. The distribution of profit must be on the basis of an agreed percentage of the profit and not on the basis of a lump sum or percentage of capital. - Although the ratio of profit must be fixed upfront, it can always be changed or structured on different tiers with mutual consent of both mudarib and rabbul mal.
b)

ii.

AAOIFI states in its Shariah Standard No. 13, Clause 8/2 - The mudarib cannot claim any periodical salary or a fee or remuneration for the work done by him.
- It is permissible for the two parties to construct a separate agreement independent of the mudarabah contract, assigning one party to perform, for a fee, a business activity that is not by custom part of the mudarabah operations.

c)
-

Labour of the contract The mudarabah contract can be divided, from the work of the mudarib perspective, into 2 categories:

Al-Mudarabah AlMutlaqah

Al- Mudarabah AlMuqayyadah

Al-Mudarabah Al-Mutlaqah

Al- Mudarabah Al-Muqayyadah

The capital provider permits the mudarib to administer a mudarabah fund without restrictions.

The capital provider restricts the action of the mudarib.

The mudarib has a wide range of trade or business freedom.

The Shafiiyyah & the Hanabilah are the opinion that the mudarib can only enter into this kind of act with permission of the rabbul mal.

Mudarib Mudarabah Company

Rabbul mal

LOSS Profit / Loss

Financial loss is borne by rabbul mal. The mudarib lost his effort

Profit Distributed according to agreed PSR

Mudarabah

Musharakah

Investment is the sole responsibility The investment comes from all the of rabbul-mal (capital provider) partners The rabbul-mal has no right to All the partners can participate in participate in the management the management of the business and can work for it which is carried out by the mudarib only The loss is suffered by the rabbul- All the partners share the loss to mal only, because the mudarib the extent of the ratio of their does not invest anything investment The liability of rabbul-mal is The liability of limited to his investment, unless he in musharakah unlimited has permitted the mudarib to incur debts on his behalf the is partners normally

All the goods purchased by the The partners mix up their capital mudarib are solely owned by in a joint pool, all the assets of the the rabbul-maal, and musharakah become jointly the mudarib can earn his share in owned by all of them according the profit only in case he sells the to the proportion of their goods profitably respective investment

Give notice

Insanity

Set a time limit

Death of mudarib

Exhausted /suffer losses

If all assets of the Mudarabah are in cash form at the time of termination, and some profit has been earned on the principal amount, it shall be distributed between the parties according to the agreed ratio. If the assets of Mudarabah are not in cash form, they will be sold and liquidated so that the actual profit may be determined.
28

If there is a profit, it will be distributed between Mudarib and Rab-ul-Maal. If no profit is left, Mudarib will not get anything.

29