What Is Contractual Partnership?

Participation Finance Concepts 01.03.2021, 14:13 12.03.2021, 14:19
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What Is Contractual Partnership?

Contractual Partnership: A type of partnership established through a contract involving two or more persons to share their profit or loss by merging their capital, labour, or credit facilities within the limits they decide. Contractual partnerships are divided into three in respect to their main subject as amwal partnership, abdan/amal partnership, and credit partnership, and these three types are divided into two as mufawada and general partnership in terms of their right, power, and liability balance. See Mufawada partnership, General partnership. Even though they are established through contracts like contractual partnerships, since other forms of partnerships such as mudarabah, musaqat, muzara'ah do not contain partnership over certain labour, capital, etc. in the beginning but only in the resulting product or profit, they are not generally considered as joint partnerships but as individual partnerships. See Mudarabah, Musaqat, Muzara'ah. The type of partnership called musharakah can be regarded as an amwal partnership. See Musharakah.

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