Questions

Assalamu Alaikum Wa Rahmatullahi Wa Barakatuhu,

How are you our virtuous Sheikh and respected scholar? I hope that you are in the best condition inshaAllah.
My First Question: Is it possible for a partner to leave a company whenever he wants, knowing that there is a specific period of time agreed on in advance which is one year? Please provide some details and evidences, may Allah bless you.

My Second Question: Public gatherings are held for bid sales, and excessive increase between merchants occur in them, where the price reaches multiple the original price which leads to the some merchants' loss. Is it legitimately permissible for a merchant to bid on a price to an extent that leads to the loss of his competitors and to his bankruptcy some times? Please provide some details and evidences, May Allah bless you.

My Third Question: To avoid the excessive increase, an agreement occurs between merchants in the public or private bid sale gathering before it is held: that is some of them give money to the others so that no increase will occur between them in the bid sale, or the price will not reach its maximum. What is the ruling of this money given between these merchants? And what is the ruling of this commercial process? Please provide some details and evidences, may Allah reward you good deeds.

Please forgive me for my drawn-out and frequent questions. I know the extent of your responsibilities, may Allah help you and bless you with victory and conquer, and may He provide you with people of support as He provided His beloved al-Mustafa (saw). May Allah also keep you a treasure for Islam.

Answer

Wa Alaikum Assalam Wa Rahmatullahi Wa Barakatuhu.

First: Your Question About the Period That Can Be Stayed in a Company:

1. A company, literally, is mixing two or more shares, where no one is distinguished from others. A company, conventionally, is a contract between two or more, who agree on performing a financial work for the sake of benefit. The agreement of the company requires the presence of both offer and acceptance, as all other contracts. Offer is when one of them says to the other that I have shared with you in something, and the other says I accept... However, the contract should include the meaning of sharing something.

Company is permissible because Prophet Mohammad (saw) had been sent to people who used to deal with it, and he (saw) approved them doing so, thus his approval for people's dealing with is a legitimate evidence for its permissibility.

Abu Hurayrah narrated that the Messenger of Allah (saw) having said:

«إِنَّ اللَّهَ يَقُولُ: أَنَا ثَالِثُ الشَّرِيكَيْنِ مَا لَمْ يَخُنْ أَحَدُهُمَا صَاحِبَهُ، فَإِذَا خَانَهُ خَرَجْتُ مِنْ بَيْنِهِمَا»

"Allah, Most High, says: "I make a third with two partners as long as one of them does not cheat the other, but when he cheats him, I depart from them."

2. Mentioning the period of time in the contract of a company is not necessary, as the company does not require a period of time to be held, but it is held, without the unknowns, so that it should require specifying a period of time as rent for example. As rent would be unknown, if the period of time was not mentioned, so it will not be held unless the period of time is mentioned, whether the period of time on its own is separated from others by day or month or year... Or whether it was connected with the work itself such as rent for building a wall or digging a well, so the period of time will be connected with the accomplishment of the work.

3. The dissolution of a company contract depends on the will of each partner, so the two partners contracted it for a specific task and dissolute it whenever they will.

In The Economic System, it is mentioned regarding the dissolution of a company in the following:

"The company contract is one of the contracts which is allowed by Shar'a. It becomes void by the death of any partner or his becoming insane or if he was declared incompetent and put under guardianship, if it is a company consisting of two persons. Dissolution of the company by one of the two partners is valid because it is a permissible contract, which is annulled in the same way as deputation (Al-Wikala). If one of the partners dies leaving behind a mature inheritor, he has the option to continue with the company and his partner has to permit him to dispose (Tassaruf) in the company. However, he also has the option to demand dissolution of the company.

If one of the partners demands dissolution of the company then the other partner must accept his request. If they were more than two partners, and one of them demanded the dissolution of the company and the rest were happy to continue with the company, then the existing company would be dissolved and renewed between the remaining partners. However, there is a difference between the Mudharaba company and the other types of companies regarding the dissolution. In the Mudharaba company, if the worker demanded the sale of the company and the Mudharib demanded division, then the demand of the worker will be accepted because his right is in the profit which will not be known except when selling. However, in the other types of company, if one partner demanded division and the other demanded sale of the company, the demand of division is accepted rather than that of sale."

This is what we adopt in the state of holding a company without duration, as the duration is not necessary for the validity of the company's contract.

4. As to mentioning the duration in a company, scholars have disagreed about it. You can imitate any Mujtahed whom you like his Ijtihad in this issue, and I will pass to you the opinions of some authentic Mujtaheds in this issue:

- It is permissible in the Hanafiyya and Hanabilah to have time duration, that is to specify a time duration for it; and if the time duration ends, the company is dissolved.

- Malikiyyah and Shafi'iyyah said that duration does not need timing because its ruling, as Malikiyyah said: it should be without a term, so each one of them can leave it whenever he wants. Because timing it -as Shafi'iyyah said- leads to restricting the worker in his work, and an-Nawawi has mentioned in "ar-Rawdah" that the company does need duration.

Second: Your Question about Bid Sale:

1. Bid sale is permissible, that is the seller displays his piece of merchandise to the buyers and then sell it to whoever pays more, and the evidence for that is:

It was narrated from Anas bin Malik that:

أَنَّ رَجُلاً مِنْ الأَنْصَارِ جَاءَ إِلَى النَّبِيِّ * يَسْأَلُهُ فَقَالَ: لَكَ فِي بَيْتِكَ شَيْءٌ؟ قَالَ: بَلَى، حِلْسٌ نَلْبَسُ بَعْضَهُ وَنَبْسُطُ بَعْضَهُ وَقَدَحٌ نَشْرَبُ فِيهِ الْمَاءَ، قَالَ: ائْتِنِي بِهِمَا، قَالَ: فَأَتَاهُ بِهِمَا، فَأَخَذَهُمَا رَسُولُ اللَّهِ *بِيَدِهِ ثُمَّ قَالَ: مَنْ يَشْتَرِي هَذَيْنِ؟ فَقَالَ رَجُلٌ: أَنَا آخُذُهُمَا بِدِرْهَمٍ، قَالَ: مَنْ يَزِيدُ عَلَى دِرْهَمٍ مَرَّتَيْنِ أَوْ ثَلاثًا، قَالَ رَجُلٌ: أَنَا آخُذُهُمَا بِدِرْهَمَيْنِ، فَأَعْطَاهُمَا إِيَّاهُ وَأَخَذَ الدِّرْهَمَيْنِ فَأَعْطَاهُمَا الأَنْصَارِيَّ...

"A man from among the Ansar came to the Prophet (saw) and begged from him. He said, "Do you have anything in your house?" He said: "Yes, a blanket, part of which we cover ourselves with and part we spread beneath us, and a bowl from which we drink water." He said: "Give them to me."

So he brought them to him, and the Messenger of Allah (saw) took them in his hand and said, "Who will buy these two things?" A man said: "I will buy them for one Dirham." He said: "Who will offer more than a Dirham?" two or three times. A man said: "I will buy them for two Dirham." So he gave them to him and took the two Dirham, which he gave to the Ansari..."

2. Cheating in this selling is not permissible: that is to raise the price not for the sake of buying but to cheat others, so that they buy it for a high price...
Narrated Abu Huraira: Allah's Messenger (saw) said, «...ولا تناجشوا...»"...and do not practice Najsh..."

Ibn 'Umar (May Allah be pleased with them) said: «نَهَى النَّبِيُّ عَنِ النَّجْشِ» "The Messenger of Allah (saw) prohibited the practice of Najsh."

Najsh is when a person raises the price of a piece of merchandise, and he is not buying it; that is, a person who does not want to buy raises the price of a piece of merchandise, so that the one who bargains follows him and thinks that the other did not do this except because it is equal to this price, so he is deceived and raises the price in order to buy it.

3. Also, it is not permissible for the buyers to agree between one another on cheating in the price of the piece of merchandise so as not to pay more than a reduced price... And they do not add to it, and this is to make the seller sell for this low price because he cannot find a merchant who pays more... Usually, merchants agree with other merchants, who gives them money so as not to raise the price more than what he pays, while he pays a low price for the piece of merchandise, and they pay less than him according to the agreement, and then its owner sells it to the merchant for a cheap price because all merchants pay less according to the agreement. This falls under the category of cheating.

It was narrated by Zirr from Abdullah that he said that the Messenger of Allah (saw) said: «مَنْ غَشَّنَا فَلَيْسَ مِنَّا، وَالْمَكْرُ وَالْخِدَاعُ فِي النَّارِ» "He who cheats us is none of us, cunning, and deception."

Abu Hurairah has narrated that the Prophet (saw) said: «الْمَكْرُ وَالْخَدِيعَةُ فِي النَّارِ» "Whoever does cunning and deception is in hell."

Also, Allah (swt) prohibits cheating people in their things, where buyers pretend that the price of the piece of merchandise is cheap, so that they cheat its owner, and then sells it for a cheap price. Allah (swt) said:

((وَلا تَبْخَسُوا النَّاسَ أَشْياءَهُم))

"... and do not deprive people of their due..."

Al-Qurtubi states in his explanation of the Ayah, "al-Bakhs means deficiency. This happens in the piece of merchandise through saying that it has flaws and making it cheaper, or through cheating in its value, and deception in increasing or decreasing in weighing. All this under the category of consuming money unjustly..." End.

For that, if merchants agree between each other that a person buys the piece of merchandise for a cheap price, then he gives them money so that they do not raise the price more than the price for which he wants to buy. In another words, merchants agree on paying a price that is less than the price for which that man wants to buy, so that he pays them money. This process is haram because it falls under the category of cheating of the owner of the piece of merchandise in order to sell it for a cheap price, and the money that this merchant gets from the other merchants is haram.

Your brother,
Ata Bin Khalil Abu Al-Rashtah

Link to the answer from the Ameer's Facebook page