Terminating a Mudhaarabah partnership
Question:-
Can one terminate a Mudaarabah partnership and what is the method of doing so?
Answer:-
In a Mudhaarabah agreement, any party is at liberty to end the agreement. However, it is necessary that the other party is informed of the agreement being terminated. The cancellation of the agreement will only be correct and valid when (all) the goods have been converted to cash. If the goods haven’t yet been converted to cash, then the Mudhaarib (that is the partner carrying out the work) should be given the opportunity to sell out the goods so that the actual profit is specified and known, for which the actual transaction took place.
References:- Fataawa Haqqaniyyah Pg.354 Vol.6
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