He replied:

Praise be to Allah, Lord of all worlds. If the merchant who entrusts his goods to a broker knows that he will pass them on to other brokers and consents to this, there is undoubtedly nothing wrong with it, for the broker is the merchant’s agent. By scholarly consensus, an agent, like the principal, may appoint another agent. The scholars disagree only over whether he may do so without the principal’s permission; they hold two well-known views on this. Their disagreement concerning partnerships among brokers rests on this issue: since brokers are agents, they base their ruling on whether an agent may appoint another agent.

If there is an established custom whereby a broker hands the goods over to someone he trusts, that established custom has the force of an expressly stipulated condition. Thus, the majority of leading Muslim scholars—including Mālik, Abū Hanīfah, Ahmad and others—have held “labor partnerships” to be permissible. As Ibn Mas‘ūd said: “Sa‘d ibn Abī Waqqās, ‘Ammār and I entered into a partnership on the day of Badr. Sa‘d brought back two captives, while ‘Ammār and I brought back nothing.”

“Labor partnerships” serve Muslims’ interests throughout the towns and cities, and many of their affairs cannot be properly managed without them. This applies, for example, to tradespeople working jointly in shops, including brokers and others. One person cannot handle people’s business alone and therefore needs an assistant. Yet the assistant’s remuneration and work cannot be fixed in advance, just as they cannot in profit-sharing investment partnerships and similar arrangements. They therefore need to enter into partnerships.