Tawliyah is when he sells it for his original cost. It is called tawliyah because the buyer takes the seller’s place, as though he becomes his successor—that is, one who follows him. It is as though he says to him, “I appoint you to take over what I have taken over.” Thus, he buys it for one hundred, then another person comes to buy it from him, and he says, “I have sold it to you for the original cost.” This is tawliyah.

Shirkah is when he sells him a portion of it for its corresponding share of the price—for example, when he sells him half, in which case the second buyer is liable for half the price; or a third, a quarter, more, or less. A sale by way of shirkah may be tawliyah, murabahah, or muwadha'ah.

Murabahah is when he sells it for his original cost plus a known profit. Thus, he may say, “I have sold it to you for its original cost plus a profit of ten riyals,” or, “I have sold it to you for its original cost with a profit of one tenth”—that is, whether he specifies the profit as a fixed amount or as a percentage.

Muwadha'ah is when he deducts something from the price. Thus, he may say, “I have sold it to you at a loss of ten riyals,” or one tenth, one fifth, or something similar.

Further examples of these four forms:

An example of tawliyah: a person says, “I bought a car for one hundred thousand. Then a man came to me and said, ‘Sell it to me for its original cost,’ so I said, ‘I have sold it to you for its original cost.’”

An example of shirkah: “I bought a piece of land for one hundred thousand. Then a man came to me and said, ‘Give me half of the land; I want to build a rest house for myself.’ So I said, ‘I have made you a partner in half of the land according to its original cost.’ This is shirkah, but in terms of the price it is tawliyah, because he has neither made a profit from it nor reduced anything from its price for him.”