What are the sharia rules for the above contract

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Reference no: EM132176423

Case - Assume that Ahmed wants to purchase a taxi and use it for offering transport services to passengers and earning income through fares recovered from them, but Ahmed is short of funds. Bakri agrees to participate in the purchase of the taxi. Therefore, both purchase a taxi jointly. Bakri pays 80% of the price and Ahmed pays 20%.

After the taxi is purchased, it is employed to provide taxi rides whereby the net income of say RM1000 is earned on a daily basis. Since Bakri has an 80% share in the taxi, it is agreed that 80% of the fare will be given to him and 20% will be retained by Ahmed, who has a 20% share in the taxi. Therefore, on a daily basis Bakri earns RM800 and Ahmed earns RM200. At the same time the share of Bakri is further divided into eight units.

Every three months Ahmed purchases one unit from the share of Bakri. Consequently the share of Bakri is reduced to 70% and the share of Ahmed is increased to 30%, meaning thereby that, as from that date, Ahmed will be entitled to RM300 from the daily income of the taxi and Bakri will earn RM700.

This process continues until after the expiry of two years Ahmed owns the whole taxi and Bakri will have been repaid his original investment along with the income distributed to him.

a) Analyse the above case.

b) Use a digram to illustrate the above case?

c) What are the Sharia Rules for the above contract?

Reference no: EM132176423

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