Hacene Chebbani – Islamic Finance – Part 7

Hacene Chebbani
AI: Summary © The speakers discuss the use of a loan in Islamic society, including the use of a tool called "by buying securities" to sell bonds and property. They also discuss various rules and agreements related to partnerships and sharing profitability between partners. The importance of maintaining a healthy balance between profit and investment, sharing loss and liability, and maintaining a strong agreement is emphasized. They stress the need for clear regulations and regulations to avoid legal issues and discuss the use of credit cards and prepaid cards. They also explore the idea of a partnership and salary-based salary ratios.
AI: Transcript ©
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hamdu Lillahi Rabbil alameen wa salatu salam, ala

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Hammad, he was Safi, he may

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continue with a program of business transactions. And he would like to start tonight with this kind of sale because last time I talked about it. And

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it was not really clear for to some brothers, they were not clear about this type of sale, which is called bayarena in Arabic, translated as buyback sale.

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And there are some different agreements in the Western

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world and in some Muslim countries that are based on the same. So here, this is a clear example. So we have Ahmed who bought a car from alley with a price of $800 on installment on a deferred payment basis.

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an alley who is the same owner of the car, he bought the car the same car from 100 on a cash basis with a price of $600. So the end result would be what we've got the amount of 600 in his in his hand, cash in his hand, and Allie will receive the deferred payment of $800.

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So it looks like a loan of 602 100 his interest is the amount of interest. So it is afraid it is stratagem. The tricksters, some people might use to consumer evil to deal with river and that's why I'm a all the earlier they said it if it is pre arranged this way, then it is halal haram sorry. And it is a type of river.

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The controversies only if there is no pre arrangement, there is no pre arrangement between the two parties, then here that could be highlighted in the opinion of some scholars.

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So as you can see, the car has stayed with the original owner who is early. And now he owes 100 $800. And he gave him $600. It looks like Subhanallah interest based transaction.

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But because there is controversy about it. So it's used in some countries like Malaysia, Malaysia, the folder chef at meta chef a school of thought. And in the chef Erie school of thought they said this, if there is no pre arrangement, or you know, it's controversial, but the sad it is it could be highlighted because the form of transaction, there is nothing wrong with the form of transaction. But other scholars are looking at the substance at the end result of the transaction. So they have something called in Malaysia sale and by buyback agreement as BBVA. And they call it in Islamic financial instruments. Because they've been criticized for using this. Now they are trying to

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introduce some adjustments, some changes to their system to conform with the rest of the Muslim world. But it's been it's been used for a while in Malaysia and they said it was introduced for the purpose of enhancing liquidity between Islamic banks because they don't have this is a something called interbank money market. The banks overnight lend to each other when they need money. Because every bank at every every day, at the end of every day, they have to calculate their money How much do they have now it's easy with a new technology and they have a ratio of capital that they have to keep in the bank there is a requirement now universal requirements that are applied to all banking

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systems in the whole world. So Islamic Islamic banks, they don't have this market, you cannot borrow money from the non Islamic banks, because the other conventional banks will charge them interest if they borrow money from them. They want to adjust you know their capital overnight every night they have to adjust their capital. So we came up with this, this tool where the sell securities to each other to that one bank would sell securities which are bonds but in this case Islamic bonds that are called so Kook cannot like the conventional bonds or equities. So they sell them securities and then they have an agreement with them to buy them again.

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So anyway, it was used in Malaysia because one brother said oh people are not using the same nowadays. Here in Canada in the Canadian market. It is an open market operation.

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It is used by the Bank of Canada, the Central Bank of Canada would sell securities to charter banks

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today and would have an agreement with them to buy it to buy them from from the same bank the next day tomorrow and it is done for the purpose of controlling the supply of money in the market. And they're controlling the rate of interest, the interest rates, if the if the money is less in the market is not enough in the market. So, they would increase you know the they would sell securities or buy securities from the banks for example, give them money. So, the supply of money will increase and then the interest rate will be reduced and vice versa.

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So, it is a monetary policy tool that is used here in the Canadian market will allow to allow, but it could happen in the form of aina if the price is different. And if also the one of the you know, arrangement is based on deferred payment, then it could it could be clear in the sale of Marina

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type tonight. We will talk a little bit about moussaka. Do you have any questions about this before we continue? We will leave the questions till the end, we think

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till the end. Bye.

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Let's talk a little bit about moussaka tonight partnership. So moussaka is frequently used in the context of Islamic

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Islamic modes of financing nowadays. And it is a bit different from the word or the term sharika or shilka, which is commonly used in the classical sources of

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in the sources of Islamic jurisprudence.

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Okay, and shilka Oh, sharika it means in Arabic for the linguistic meaning of sharing case sharing.

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But we have in the chairman ology of Islamic Islamic jurisprudence, we have two types of sharika. We have Sherry kettle m lac, and Sherry, kettle eurocode. Sherry kettle amlak, is joint ownership. And this could be the outcome of an agreement. Like some people or two people come together, they agree to buy a property. So they own it, a lot goes to invest this property is no investment taking place. But the oldest property two brothers decided to buy a house. For their mother, for example, they are the owners of this house, both of them. So this is called cherry kettle amla, joint ownership. And their mother is using the house that they're not investing, making, putting any investment in this

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house, it could be the outcome of inheritance, you have no choice, you belong to a family, the head of the family passed away. And then you ended up being a partner to someone else, some other family members could be could be included in this group of family members who actually have the right to inherit the wealth of this man of this person who passed away. So here we got the joint ownership, but they didn't choose it. It was not based on their choice. It was because of inheritance. So this is called, in fact, Sherry kettle black or a donation, someone who would give a gift, give his house as a gift to his children, for example, or to a group of family members. And then they will be

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partners in that in owning that house. So this is not used, it's not a problem is not an issue. This is not commonly used. In fact. In fact, they talk about the other type of sherry cat, which is called cherica. To record, a record means contracts. And earlier Maddie said it is a partnership that is effected by mutual contract. So two people or more come together and they make a contract to participate in a partnership. It could be translated as joint commercial enterprise, they come together and establish a business together. So here we have many rules. You know, the other ones have some rules, too, has some rules, too. But this one, this one, the fuqaha will talk about

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oceanica partnership in Islamic finance are more interested in this kind of sharika sharika turaco. And this one is divided into three types or three kinds. The first one is Sherry Catalina and is very common, very famous, and all the owner Modi said this one is permissible. We're all the partners in that invest some capital, and they participate in running the business and we agree to share the profit between them. As simple as that, and we call it cherica tillery Nana and all the scholars said this is Hillel. he disagreed on some conditions. But basically this is Harold is the agreement between them shall

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Till a man partnership in labor or crafts, so the group of people come together the work jointly, they work together in in one place. They offer services to their client. They are accountants, or they are medical doctors or they are hairdressers. And they are doing something together. They are we're working in the construction business to the same thing. This is called cherry kettle ama, and they charge some fees.

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And they share the earnings between them. So

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majority of scholars said this partnership kind of partnership is held. There is nothing wrong with that, even though we know that some of them will be doing some work than the other members. But they said it is Helen even though at the end they will share the earnings equally or based on their agreements. But it is Helen shafie Rahmatullah Allah did not agree. He said, No, this is not halal. Because there is too much hot or excessive water here, included in this partnership because some people some members of this partnership could be doing more work than the other the other members of this enterprise. So but majority of scholars, they said it's Helen, and many people are doing it you

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find brothers who are hairdressers or medical doctors or friends who are medical doctors, they open a clinic together, and they work together and they share and they share the earnings at the end of the month, for example, or the end of the year depends on their the agreement.

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The third type is called the sharing and this one is called also sharing attackable afsaneh. Err.

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Okay, in case you read a book of Furqan, you want to do some research about it. It's called also Cherokee, Cherokee to abdon. In fact, these are Arabic terms sharika caboolture, ricotta Sana.

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Shake it, Lou. It's like partnership and creditworthiness.

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Partners don't have money. But they got together and they established a company they don't have a capital. And we buy goods based on their personal creditworthiness. So they don't pay immediately.

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They take this merchandise they sell it. And they agree to share the benefits of the profits between them. Also, Mr. Shafi, and some other scholars have problems with this cherica. And some scholars that said it is Helen, it should be fine. But he said an agreement, they have to have an agreement about the liability of each partner

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in in what we buy. But then if I buy something or partner with Ahmed or Allie, and I buy something, I buy it myself, he didn't buy it, and I am selling it. If there is a loss, what how much what is the ratio of his liability in this loss? And what is the ratio of my liability in this loss? Then we lost less than 10,000.

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Who's gonna take care of this 10,000 who's gonna pay it?

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So now we had this, they said they have to have an agreement. Everyone has to know this share of liability in loss if they lose money, otherwise, this sharika will not be valid.

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It used to be very common in the old days now people I don't think people would.

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Now well, let's talk a little bit about some basic rules of moussaka. So, the earlier map, they said these conditions have to be there. Otherwise, the moussaka partnership is not is not valid. The first one he said they said the ratio of profit must be agreed upon at the time of effecting the contract when you start when you establish the sharika when you sign the agreement, you have to agree on the ratio of the profit, we make a profit how much you make, how much you take, you take 60% 50% 40% I take 20% you take 80%. So we have to make an agreement before we start at the time of effecting the contract of this partnership, when we sign it.

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The second rule decide it is not allowed to fix a lump sum amount for any one of the partners for example, you are my partner, and I will guarantee every month I give you 5000

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this is not possible.

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This is not Helen, you cannot guarantee him a lump sum amount of profit, you cannot do that. Otherwise it will be a kariba is bringing his capital into this business. And you're trying to guarantee a you know an amount of money for profit for him he can't because the business can, what will happen, lose and then how come from where you're going to pay him this money. So you cannot guarantee your partner or any partner a lump sum of money

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If you want to give him a salary for his services, that's a different story, we'll talk about it,

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there is a difference between guaranteeing an amount of money to one of the partners and between giving him a salary appointing him as an agent, or as a manager to the business, your sleeping partner, you don't want to be involved, and he wants to be the manager, and you want to give him a salary, that's okay, that's fine. That's a different story. This is Helen.

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The element he said it is not allowed to tie up any rate of profit with the amount of one's investment you tell him you will, we'll give you 20% of your investment, that will be your profit of your investment. Now, it should be 20% of all the whole profit, but you cannot tell him 20% of your what you invest, or 5% or 30% of what you invest, that will be your profit.

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So what is the correct method, there should be an agreed percentage of the actual profit accrue to the business 20% 30%. Whatever. Any amount taken by one of the partners is something many people do it shall be subject to the final settlement. At the end of the term, it should be adjusted to the actual profit method. And he's taking every month 1000 or 2000, he has a family and he needs some money. But this is not his salary is taking 2000 so at the end of the year, you're gonna the final settlement, calculate your money, you do your math, and you see how much profit you made. So you found out that you made 100,000.

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And your agreement is that he should take care, it should take 40% of the profit. So how much is profit 40,000. But he's been taking 2000 3000 every month to spend it on his family. So for 12 months, he took 24,000. So you do 40,000 minus 24. What is the rest 16 give him 16,000 that is your profit the rest of your profit.

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It was not a salary. But if you make if you want to give him a salary, you have to make a separate agreement is not part of the partnership. not part of the partnership or the sheer moussaka no separate agreement like you hire someone else. If you want to hire someone else instead of him. He's not a partner, an outsider, you hire him as a manager. We have people who came together they established a company, and they don't want to manage the business. But they want to hire someone else an outsider, yes, you give him a solid. So if you decide to hire one of the partners, that should be his salary should be separate, then the agreement of the you know of how much profit he

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would he would make or how much percentage he would take from the profit.

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thing. Let's talk a little bit about the ratio of the of the profit.

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There, I had this question is it necessary that the ratio of the profit of each partner conforms to the ratio of capital invested by him? Like for example, my son, he's investing 40% of the capital is coming from a and 20% is coming from B person and C person is bringing to the capital that will show the moussaka 20%. So we have three partners here, for example, should we give a 40% of the profit and 20% of the profit goes to be

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20%. Another 20% goes to to see. So we have different opinions here in America and Shafi. They said each partner gets a profit exactly equivalent to the proportion of his investment.

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Which doesn't make sense. Because some partners could be more skillful, they will bring more expertise or experience. They are more trained, well trained. So they're bringing something extra to the partnership. So it's not fair to give them like the exact amount of their you know, their investment. They could deserve more than investing 20% of the capital bringing 20% of the capital, but they have more skills, more training more and more. They are highly educated. So they bring value to the business. So this opinion does not make sense. He said the ratio of the profit may differ from the ratio of investment based on the agreement and three consent they are free to agree

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on any ratio.

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There is no there are no restrictions on the agreement here. Remember hanifa has a good opinion. Rahmatullah Allah He says ratio of the prophet may differ from the ratio of investment. However, the share of any sleeping partner cannot exceed the ratio of his investment. He's bringing 20% to the capital of the company. And he's asking for 30% of the of the profit as a percentage of the profit. Now, we cannot give him that, because his share in the company is only is only moussaka partnership in the company, is what he brought to the company 20% of investment that's it, he's not bringing any knowledge and expertise, any service to the company. So and this is the best opinion without Allah

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Allah, that he cannot exceed.

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So if someone My friend is bringing 80% of the capital 80% to the partner to the moussaka and the other partner is bringing 20% but the other partner who's bringing 20% He is the one who will be managing the business and not taking a salary. So it's not fair here to you know, to give either one more than 80% or give him even 80% is not fair here. So the the the share of the second one could be increased belongs to Allah Allah so there will be no if you have question brother Fadi leave it till the end.

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time sharing floss.

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Each partners shall suffer shall suffer the loss exactly equivalent to the ratio of his investment. This is something that is agreed upon. And the remedy said any condition, contrary to the contrary, shall render the contract invalid. There is complete consensus on this principle. below. Kodama in a moment he said, there is complete consensus of this. And unfortunately, we see some Muslim companies as I said, I'm not going to mention names, but they have this kind of business specially in in the area of housing. If the when the share of the customer exceeds 50% then if the sell the property,

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he will bear 90% of loss. This is this is this knowledge they got it from their customers, their clients. That's why I shouldn't mention any name. But this is something that is done in the market. I need to patient pay attention to it. So the owner Maddy said each partner shall suffer the loss Exactly. equivalent to the ratio of his investment. I don't know if there is another opinion but mmm Barracuda in Ill move and he said he there is math there consensus on this will out I'll add him. So, they have this famous Maxim elkaar ideal fit here. Profit is based on the agreement of the parties, but loss is always subject to the ratio of investment. Clear. So, profit is always subject

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or based on the agreement of the parties, whatever they agree on, should be effective. And they have to write it down. So they don't, they don't they don't face problems in the future and disputes and and hard feelings and you know issues you have to write down everything, but loss is always subject to the ratio of investment will load

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time nature of the capital

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the owner older owner, some of them they said it has to be in the form of cash, the capital and the all of them preferred preferred, that partners must contribute their capital in liquid form. It has to be cash. But what about if he contributed commodities to the partnership? Here we have some, you know, disagreement between the scholars in America and some hambley jurists from the Hammadi school of thought they said the end and liquidity of the capital is not a condition for the validity of the moussaka that means if some partners bring commodities to the Capitol, there, Masaryk is still valid.

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So they don't have to transform the commodities into cash. They don't have to liquefy their their commodities and bring cash into the capital into the moussaka but they said the share of each partner has to be determined on the basis of evaluation and every commodity has to be commodities have to be evaluated. According to the market price. On the time on the day, the signed contract. Let's say we're signing today contracts with three partners are signing contract today. And Ahmed is bringing my friend three cars we want to open a car dealership established

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car dealership. Hamad is bringing three cars have zero are you bringing five cars and Alli is bringing like for example six cars will Oh we got at the end around 12 or 13 cars and we want to start the business of selling cars.

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Now, some of you said no this is not a capital it has to be in the form of cash cash is king right.

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So, it has to be in form of cash. Similarly, a man like Mr. Malik, he said, they said no moussaka is valid, but these cars have to be evaluated, we have to know the prices of these cars. So, I only brought three cars we have to know their prices on the same day, how much what is their prices, if it is like 10,000 So, that is his capital that is his investment, that is the ratio of his investment 10,000. And you he brought six cars of seven cars, and they value added time on that day is 20 per 20,000 that is his contribution to the capital and so on. We work it this way. And this is our opinion from American some other Indian scholars, Abu hanifa Imam Shafi Mohammed, they said no,

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they don't agree with that. They said no contribution in kind is is accepted. No commodities are accepted. When we form the capital in a one way established, moussaka Lima Michelle fury has an opinion that is a bit Anyone have to pay attention to it, kind of delicate, he divided the oil

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commodities into two types. There were till emcell was our till Kima there were till amsale they are fungible in English they are called fungible they are easily exchangeable. Like if you fall if you if I borrow from you 100 kg of wheat

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here and a and I promised to bring you to give it to you back within like give them back to you within like a month or so, I don't have to bring the same 100 kg of wheat actually I consume them. So they are actually easily exchangeable can go to the market, buy another 100 kg of wheat and bring it back to you. So these are called

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m world, though until am said in Arabic, there are two there are fungible items of fungible commodities.

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He said yes, with this kind of commodities, we can accept them, when establishing a moussaka to be part of the capital. This is the opinion from Shafi, but the other ones the other ones that are called in Arabic they were till Kima Kima they are not fungible, they are not exchangeable, like Messina house house has his own specification design is different from the other houses. So, if I take this house from you and I destroyed it myself for whatever reason, what I did something with it, I cannot look at the market go to the market and look and bring to you the same house and say okay, here is another house buy it is the same. So don't worry about it, we cannot do that, because

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they are not the same or even when it comes to cars matter and even if they are from the same make or the same year, cars have different conditions. My car could be very clean, even though it is the same year and the same make and everything but your car could have some issues, some deep issues in the engine right. So there is no you know, you cannot compare between the two cars here. So they are not there what lm said they are not fungible. That's why the Imam Shafi said these types of these types of commodities we cannot establish a partnership and Mashallah

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many ruler Modi said to make it easy to people there is no clear no

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evidence from the Sunnah. But we said we can if we need to go with the opinion of human Malick, it's okay, it's acceptable, as long as we agree on the value of their commodity. On the same day we established the moussaka

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the management, I talked about it, the management, when the manage the business, if all of them are involved in the management of this moussaka, then everyone is an agent on behalf of the other partners. What does it mean? An agent is not liable to any loss.

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It's not like someone who takes loan from other people. Because when you take loan from other people, you have to secure this loan and you have to give it them to them back even if you lose in your business. They have nothing to do with your loss. They have nothing to do with your business. They gave you long you give it back to them. But when you are acting as an actor

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Agent of someone else. So you are not farming you are not liable to any loss unless there is negligence. If there is an accusation of negligence here, we could end up with a lawsuit with a dispute in the court, if the other party does not agree that there was negligence, so these cases might go to the court and people have to deal with this dispute. But as at least when we establish our partnerships, we do business together, these rules have to be clear in the mind of everyone. And I know people who did business together and they were taking money without writing down anything. And then I they came to me and we sit down, we try to solve the issue. Remember, I gave you the day,

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you remember that they gave you $500 cash to cash you put it in your pocket, you remember that day when I paid this for you. And so Panama big mess, we create a big mess. And then when

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Hannah law and there is a dispute, this is stop talking to each other, stop saying sell them to each other. And then either they come to the mercy to solve it, or they go to the court. But if we do our job, we do our homework, we write everything, and the regular rules are clear, then inshallah

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we will have no issues. I know people who started business like this partnership, but nothing was clear in their minds. Is it mudaraba? Or it is moussaka? What are the rules. So after a while, he started giving paying back some some investors, and the rest of the investors didn't take their money. It's a big mess.

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A big mess. Because we don't know what we're doing. And we just want to do business without you know, learning about the effects of you know, business transactions, we need to know these things. Like Salah like CRM, you want to observe fasting you need to do how, in order to learn how to fast you need to perform your prayer, you need to learn how to pray, or make Waldo is the same thing. Because you may if we don't know these rules, you might end up taking something that doesn't belong to us, or dealing with Reba without paying attention like Elena here.

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bayarena plate.

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I'll open the floor for your give you a chance now we have 15 minutes today. Your questions and sisters? If you have a question, you can write it down and send it to us we'll deal with it inshallah.

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is renting a place from someone, and then the agreement is that he has to pay him 20% of the profit. The profit is more than 10,000. Okay.

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Every month, if it's less than 10,000.

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Yeah, I don't believe this is a right agreement. Why? Because there is no certainty there is an error here. No certainty, he might be paying one month 1000 only. And the other month he might be paying like, let's say if he made 20,000 as a profit he might be he might end up paying 4000 What's the difference? Why? Why would I pay for this month 1000 for renting the same property and the other month they'll end up paying 3000 or 4000 2000. What's the difference? So there is a lot of this is excessive horror. And this agreement is not right is not valid.

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Question from before

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for phone contracts.

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They have penalties.

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penalty is a pure Riba. But the problem is, these are adhesion contracts. Any poodle a van and the owner Matthew said you have no choice

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Yeah, you can't you can't begin but the problem is with signing, I know you're not paying the penalty. You've tried to avoid it, try to pay on time like mithuna using credit card the same concept here or buying a car through financing they will put this penalty in the agreement. So penalties, these penalty clauses are everywhere.

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And these contracts are as I said adhesion contract or holding a van have nothing to you have no say unless you have the power to negotiate with the company. Tell them can you remove this condition this penalty clause, then it will be fine. There's a problem with signing as a Muslim director

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They said why muscle and using credit card is controversial. They know that you are Muslim practicing Muslim will not pay interest will try to avoid paying interest. But the problem with signing, it's like you are agreeing to the terms right. So here these are they said the AMA who talked about this issues, so people cannot live without electricity without utilities, they have to subscribe to this company's

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The prepaid the money they will take

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automatically from your account.

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Okay, that's good. It's a good solution.

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Yeah, yeah, that would be good. If we do it this way, like now using credit card, we have now prepaid credit cards, pre or pre loaded, they are called pre loaded

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Visa Debit. So, there is no excuse to use the other type of credit cards now.

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As a visa, debit there are you know, beside the debit that you are talking about, now, TD is issuing debit visa, we have credit cards fuel to the cars, they are not debit cards, and they are pre pre loaded.

00:36:27 --> 00:36:31

I know that I know that, but it's better than the other agreement.

00:36:33 --> 00:36:33


00:36:35 --> 00:36:39

no fees fees are for us for services, yes

00:36:55 --> 00:36:56

to change the last

00:36:57 --> 00:36:58

change the percentage

00:37:02 --> 00:37:02


00:37:04 --> 00:37:09

they said they said any agreement that is not compatible with this rule

00:37:11 --> 00:37:12

then the contract is not valid.

00:37:15 --> 00:37:15

This is what

00:37:16 --> 00:37:22

I got it from some scholars who were quoting Lehman aveeno Kodama in his book

00:37:24 --> 00:37:25

it's a big source of physical copy.

00:37:27 --> 00:37:29

So, there is a map this what he said

00:37:33 --> 00:37:52

even all the members are happy with it satisfied allow on based based on what they said that no loss should be based on the percentage of the investment allowed to Allah, there is another opinion we can look into it, but this is what some earlier said that there is an agreement between the scholars that this should be the case

00:37:59 --> 00:38:12

be invested in the company. Yeah, you can do that. Yeah, you can do that. So, the brother he said can we have an agreement that some percentage of the profit be reinvested in the company? Yeah, you can do that no problem.

00:38:24 --> 00:38:25


00:38:27 --> 00:38:28


00:38:35 --> 00:39:00

No, this is not Yeah, there are a number have studied all these issues. And these are these are fees of a service. It's not like it's not something that was agreed upon a group of ordinary said these are fees paid by the shop owner because they are giving him a service actually, they are facilitating the business transaction between him business transactions between him and his clients. So this is a service that he gets this machine in his in his

00:39:02 --> 00:39:09

in his shop and the money's transferred right away in his account. So, this is a kind of service and they are charging him

00:39:13 --> 00:39:24

there is something this is good point you are making here. There is a good point here what the brother is saying they are naming it interest. Some few things are named interest in this society, they are not ribbon

00:39:25 --> 00:39:29

and things that are named profit are interest.

00:39:31 --> 00:39:32

So what is the criteria?

00:39:35 --> 00:39:47

I know, I know. But there are things that are named interest in this society in this culture. They are not Riba they're not haram or halal, but some of them are not named interest but they are Riba.

00:39:52 --> 00:39:54

One is investing capital money.

00:39:58 --> 00:39:58


00:40:13 --> 00:40:16

To one would like to buy the share of the other one?

00:40:17 --> 00:40:20

Yeah. Very common. Yep.

00:40:22 --> 00:40:23

Yeah, it is permissible.

00:40:30 --> 00:40:44

Yeah, no problem. So two partners having business, they established business together their partners, and they don't get along. And at some point, they decided that one of them would buy the share of the other one. There is nothing wrong with that.

00:40:47 --> 00:40:48

Yeah, of course. Yeah. Yeah.

00:40:53 --> 00:40:54


00:40:55 --> 00:40:59

Well here any they have to.

00:41:01 --> 00:41:27

Yeah, if it is a partnership, if it is a partnership, in when someone provide the capital and the other one is not providing anything. It could be moussaka. It could be mudaraba. Without always easy to calculate it. Without Oba is I own the capital. And you can it came with your expertise, you are the intrapreneur. But I'm not allowed to be involved in the business.

00:41:28 --> 00:41:33

I'm not allowed to be I am a capital provider. This is mudaraba. And it's easy to calculate it.

00:41:34 --> 00:41:51

If there is a profit, there should be an agreement between the two parties how to divide the profit, and the capital is always the ownership of the capital provider. But if they decide to have moussaka and the other one is involved, that's another issue.

00:41:53 --> 00:41:57

Another issue it depends anyhow, what they bought with this money and

00:42:06 --> 00:42:07


00:42:13 --> 00:42:37

divisible appropriately moussaka you cannot guarantee the capital you cannot guarantee Amano shrieky has a T shirt, he cannot guarantee you cannot tell him you know, this is your capital and it is saved. You have your whatever profit we make, we're going to share it you know the cannot guarantee the the profit if there is moussaka any this case

00:42:39 --> 00:42:44

this case I don't know if it is valid in this way or not to have to have to double check.

00:42:49 --> 00:42:51

Yeah, but the capital is always guaranteed

00:42:53 --> 00:42:54

for the investor

00:42:55 --> 00:43:02

is a problem you cannot do that you cannot you cannot guarantee the what will happen if there is a loss.

00:43:16 --> 00:43:17

I will look into it.

00:43:19 --> 00:43:20

I will look into it

00:43:21 --> 00:43:27

is a good point is making any we have to just try to look into this is that

00:43:28 --> 00:43:29

there is

00:43:31 --> 00:43:34

a question that the brother made here before two weeks or three weeks ago

00:43:35 --> 00:43:51

if someone buy something with the intention of returning it. Okay. And we have something similar in there was also there was Benny the talaq getting married with the intention of divorcing. This is different than than then Mata

00:43:52 --> 00:44:05

is not without, but it's harder than I believe it's Haram, this is who they are cheating. But here in this case, because there is a disagreement about the other case, I said maybe I should research it and see what the owner said.

00:44:06 --> 00:44:15

So the the federal that they found that they said it's haram unless they said unless in their federal that the

00:44:17 --> 00:44:46

the the business owner agrees with this condition that he's fine with that. And I thought about it who would be fine with that you sell something who would be fine with no selling something to someone else, expecting him to return it after two days, you know for sure for a fact that he will return. I'll give you an example. That happened. A brother told me a group of brothers. He came from Vancouver, they bought a GPS in Vancouver and became used to Calgary and they went to same to the same shop,

00:44:47 --> 00:44:49

the same company and they returned.

00:44:50 --> 00:44:59

So the aroma they said you cannot do it. It's hard on buying something with the intention of returning it in this you know during the period of

00:45:00 --> 00:45:04

option when you have the option to return this.

00:45:05 --> 00:45:06

Below Thailand

00:45:19 --> 00:45:29

partner is a borrower and the current is giving money and the borrower doesn't have a choice to negotiate saying, okay, you're saying that it needs to be

00:45:30 --> 00:45:36

10%. But instead of that, partially it needs to be based on the capital. I don't have.

00:45:37 --> 00:45:39

To me, I know what you mean. Yeah.

00:45:42 --> 00:46:18

Well, the problem is the owner, they're saying not valid, the brother is saying, Danny, we are we have a partnership. And then you know, the the loss percentage of the loss should be borne by each party is not equivalent to the percentage of the investment and it is an adhesion contract, contract that was like, has no say in it, this is leave it, take it or leave it a company that is offering this in a contracts and agreements to Muslim clients. And they don't have a choice. So based on what some of them are saying, the contract is not valid.

00:46:19 --> 00:46:20

This was,

00:46:21 --> 00:46:33

but but you shouldn't take any action. Let's see. And wait. Maybe there is I don't know, maybe you should call them I know what you mean. Which company you're talking about? Maybe you should call them and see what is your

00:46:34 --> 00:46:40

argument about that? What is your foundation? What is your basis? What basis you are doing this? You know, to me?

00:46:44 --> 00:46:44


00:46:47 --> 00:46:53

Wait a minute, because it's fine. Just give a chance to other people? Yes, brother. militia.

00:47:18 --> 00:47:19

Yeah, I said that email.

00:47:21 --> 00:48:03

Remember what he said it's based on their agreement. So it's not it shouldn't be equivalent to their investment to the ratio of their investment. But when it comes to salary, the odema decide it is okay. It is fine. If it is done based on a different agreement. It is not part of the partnership. The ratios in the partnership are as they are, they don't deal with them. They leave them as they are my friend. He's ratio of profit is 20%, for example, but he has some knowledge about this business. And he wants to work in this business as a manager. So he has the right to apply like an outsider, to be a manager in the same business and to be paid a salary. Because if they don't have

00:48:03 --> 00:48:15

this manager, who is a partner at the same time, they should hire another one, someone from outside to be a manager, if they don't want to be involved in it. You don't want to deal with this business.

00:48:16 --> 00:48:55

So the point is, it is helpful to make one of the partners as a manager and give him a salary. And this is what many non Muslims do it here in. In companies, they pay their daughters and their sons and their brothers, they pay them a salary, the same family, the owner business, they own the business, but everyone takes a salary. Because of his services, he is paid an hourly, hourly wages, at the end of the month, he will get a check like everyone in the company, but he's one of the owners, which means at the end of the year, when they do their math and they calculate the profit. They might take the shares or leave them in the company.

00:49:18 --> 00:49:28

Yeah, but he cannot give a salary based on their skills. You give a salary based on their hourly, the time they spend in the company. You know, Jamie,

00:49:29 --> 00:49:56

you don't say my son, I know he has more skills will be working in the company. Let's give him more you can do that you can very SWAT is not really clear. Because you will end up going and following the opinion of Mr. Mohammed and Abu hanifa. If you give him something different than his initial investment, because Imam Shafi and Malik they said no, it has to be equivalent to their investment, which doesn't make sense.

00:49:57 --> 00:49:59

Hello, Tyler. Yes, brother.

00:50:00 --> 00:50:01

You had a question

00:50:02 --> 00:50:16

after him after him shall and then we just talk on limitation of liability. Now, if you're if you're in a construction industry and you hire some workers to do some work in a contract between you and them, is it?

00:50:17 --> 00:50:32

Is it good to put a limitation of liability in terms of they would say, Okay, if we cause any damage, we're only paying up to 100,000. But their damages like 500,000. And up to us, is that limitation of liability? Any, is there anything in Islam that

00:50:34 --> 00:50:40

to limit as a man liability limit the liability of the person even though they're responsible for that damage?

00:50:41 --> 00:51:02

The damage was 500,000. But they said in the contract, we agreed to a limit of 100. Yeah, I'm not sure about this, this is something that we shall look into it but what we have here in the in the Canadian society in the Canadian market, if there is potential risk, with this kind of liability, usually divide people by insurance.

00:51:03 --> 00:51:26

And there is insurance for professionals and for different types of workers and they have they have the the buy insurance, they don't leave it as it is any without any protection. They do, but it's the insurer of the owner and insured the subcontractor to different insurance. Yeah, so when they put a limit there, what the insurance the insurance company will always put a limit

00:51:28 --> 00:51:46

depends on how much money you're contributing into how much you know, premiums, you are, you're paying to the company, and it depends on the agreement between the company and the insurance company. But when it comes to individual agreement, like doing a mutual agreement between the owner of the business and the worker,

00:51:47 --> 00:51:54

do we have this this concept in Islam, like limiting the liability? I've never I've never seen it in the books.

00:51:56 --> 00:52:08

I mean, just some, that's a different issue. But here in the modern world, the buy insurance for this kind of risks will allow talana but this is worth the money searching Sharla

00:52:15 --> 00:52:15

as long as

00:52:16 --> 00:52:17

I'm getting more than

00:52:21 --> 00:52:22


00:52:23 --> 00:52:24


00:52:29 --> 00:52:30

different ratios

00:52:33 --> 00:52:36

based on the capital, the amount of the capital.

00:52:39 --> 00:52:41

Okay, yeah. Okay.

00:52:42 --> 00:52:43

As long as

00:52:49 --> 00:53:13

as long as a sleeping partner doesn't get so he said the brother is saying the question here, is it permissible to have different purposes should a person be you know, different ratios for different amounts of profits? Like for 10,000 everyone will get one a certain amount if it is 20,000 Is it very common here and we do it here in Canada

00:53:20 --> 00:53:20


00:53:21 --> 00:53:36

But I just thinking about why they would do something like that. If you get 10,000 of profit, you get this percentage 20% from 10,000 if it is 20,000 you might end up getting a different ratio which is 30%. Why What's the reason

00:53:52 --> 00:53:54

to encourage any departments to

00:53:56 --> 00:54:00

to work harder and the sleeping partners will get only their

00:54:03 --> 00:54:11

Yeah, their investment to be equivalent to the ratio of their investment. Yeah, and allow them I'm not sure this is something that

00:54:13 --> 00:54:15

I'm not hear about it is not clear to me.

00:54:20 --> 00:54:24

seven plus eight will leave you till next holiday shala

00:54:25 --> 00:54:30

is eco haven Baraka love equals particle or Hyundai Chateau La la la Mr. Philco to Boise

Musharakah by Sheikh Hacene Chebbani

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