AN EVALUATION OF THE RULES RELATING TO DOCUMENTATION OF PARTNERSHIP CONTRACTS UNDER ISLAMIC LAW

This paper evaluates the rules relating to documentation of partnership contracts in Islamic law. Partnership contracts under Islamic law cover, strictly speaking, sharikah and mudharabah. In Islamic law, there are a number of rules which guides the documentation of partnership agreements. These rules must comply, strictly, with the dictates of shari’ah for such agreement to be valid and enforceable. The major objective of this paper is to examine the rules governing the practice of documentation of partnership contracts under Islamic law. It is to find out how partnership contracts are documented and accepted under Islamic Law. The paper adopts doctrinal research smethodology in gathering the relevant information in the conduct of this reseach. Thus, primary and secondary sources housed in both academic and public libraries are consulted. Online sources were consulted via the use of different search engines to access same such as Goggle Scholar, Find the Law, Elsevier, Nexus-Lexus among others. The paper observes that most partnership contracts documentation are carbon copy of the agreement under the Received English Law or Common law of England which are mostly not in compliance with shari’ah rules. Total disregard for dealing in usury, improper formula for sharing of profit and loss, dealings in uncertainties, maysir and two contracts in one contract are not shariah compliant. The paper recommends that partners should adhere to the rules of Islamic law in documentation of partnership contracts strictly instead of English or common law rules. Usurious, uncertain, game of chance, two contracts in one should be avoided.