A Jurisprudential Examination of Article 1 of the Executive Contract on Banking-based Mudarabah and the Validity of Mudarabah with Legal Persons

Document Type : Original Article

Authors

1 Doctoral student of Qom University

2 Associate Professor of Qom University

3 Professor at Qom University

10.22081/jf.2025.70135.2847

Abstract

Undoubtedly, banking-based Mudarabah is derived from the classical Islamic Mudarabah, and the legislator has aimed to uphold the foundational principles of this contract according to Islamic teachings. However, Article 1 of the Executive Banking Mudarabah Contract, ratified on 10 November 2015 by the Money and Credit Council of Iran, introduces a provision whereby both natural and legal persons may act as either the capital provider or the agent. This raises two central questions: Can the jurisprudential conditions established for the provider and the agent be applied to legal persons? And is Mudarabah with a legal person religiously valid? This article, using a descriptive-analytical method, examines the views and reasoning of contemporary jurists. The conclusion is that while legal persons themselves may not independently enter into a Mudarabah contract, their managers or representatives—whether seen as legal agents (with authority akin to a guardian) or as integral organizational representatives—may validly conclude such contracts on their behalf. Additionally, legal persons, like natural persons, are capable of owning property and can therefore be classified as insolvent (muflis) when applicable.

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References

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History

  • Receive Date: 17 October 2024
  • Revise Date: 09 November 2024
  • Accept Date: 18 May 2025

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