From the point of view of economic history, the ideal way to study any institution of commercial law would be to compare the information contained in legal codes and treatises with the material relating to its application in economic life as manifested by actual contracts, letters, and business records found in archives and other repositories. In the case of the early centuries of the Islamic period, available sources unfortunately preclude such a procedure. Theoretical legal texts exist in abundance, but any corresponding documentary material is for all practical purposes non-extant. In order to determine the framework in which the trade...

The Ḥanafī and Mālikī schools of Islamic law divide the institution of partnership into two broad categories:sharikat al-milk¹—proprietary partnership, andsharikat al-‘aqd²—contractual or commercial partnership. Briefly stated, proprietary partnership is concerned exclusively with joint ownership of property. Joint ownership is, in fact, its only qualification, and no joint exploitation of property is involved. In commercial partnership, joint ownership is not an element necessary for the establishment of the partnership; the emphasis is rather on the joint exploitation of capital and the joint participation in profits and losses. Joint ownership is a consequence, and not a prerequisite, of...

In Medieval Arabic usage, the termmufāwaḍacarried several connotations. Its dictionary meaning simply conveys the notion of mutual consultation, or mutual delegation of authority and jurisdiction, and could be applied in any number of circumstances. Even in the more restricted commercial context, its meaning varied, being used by some as a general term for any kind of commercial association;¹ but in the Ḥanafī and Mālikī schools of law, the termmufāwaḍais employed as a technical designation for a specific form of partnership. The meaning of the term for each of the schools, however, is by no means identical,...

One can describe the‘inānpartnership as conceived in Ḥanafī law by stating that any contractual partnership (sharikat al-‘aqd) which is not aMufāwaḍapartnership is an‘inān. Any partnership which does not include all the commercial transactions of the parties concerned and which does not demand equality in investment, personal status, and the distribution of profits and liabilities is an‘inānpartnership. Unlike theMufāwaḍa, the‘ināncan take on a variety of formsvis-à-viseach partner’s contribution to the common capital and the share of profit and liability allotted to each, as well as to the categories of...

The two basic books of Mālikī law are theMuwaṭṭa’, composed in the latter half of the eighth century by the founder of the school, Mālik b. Anas,¹ and theMudawwana al-kubrā, composed less than a century later by Saḥnūn b. Sa‘īd at-Tanūkhī² on the basis of his discussions with 'Abdar-Raḥmān b. al Qāsim,³ who had reputedly studied with Mālik himself for twenty years. These two works provided the foundation for all subsequent Mālikī legal literature; together they constitute a reliable and comprehensive source for the early period of Mālikī doctrine.

Surprisingly enough, the institution of commercial partnership is not...

In the medieval period, the partnership andcommendacontracts were the two basic legal instruments for combining financial and human resources for the purposes of trade. This holds true for the medieval West as it does for the medieval Muslim world.¹ In Islamic law and in Western commercial practice these two institutions were the chief methods for pooling capital and bringing together investors and managers. Having discussed partnership in preceding chapters, we will now focus our attention on thecommenda.

Thecommendais an arrangement in which an investor or group of investors entrusts capital or merchandise to an agent-manager,...

“The grandeur and significance of the medieval merchant is that he creates his own law out of his own needs and his own views.” Thus the great nineteenth century historian of commercial law, Levin Goldschmidt, epitomized the development of the major institutions of European commercial law.¹ In the context of the history of Western law, this statement would go unchallenged. The independent jurisdiction of medieval fairs and trading towns contributed toward the creation in every commercial country in Europe of a body of rules and legal doctrines for merchants and mercantile transactions. These rules were regarded by merchants and jurists...