142 chapter four
to the merchant and a safeguard to the continuation of the coop-
eration, especially when both merchants know that such information
was difficult to obtain. A dispute might arise, as the Geniza papers
show, if the merchant thought that his counterpart did not act in
his interest, which would put the cooperation into jeopardy. Trust,
which would be enhanced gradually by the repetition of operations,
the reputation of the merchant and the flow of information via trav-
elling fellow merchants, made the system workable. Or, as Goitein
(1967) says, “The fact remains that the Mediterranean trade, as
revealed by the Cairo Geniza, was largely based, not upon cash
benefits or legal guarantees, but on the human qualities of mutual
trust and friendship”.
Agency was also common as a means of running the business.
The merchant would have a representative in the far market to ren-
der services to him for a fee or a commission, which varied depend-
ing upon the level of services. The representative, “wakìl”, had three
different interrelated tasks: (a) to represent the merchant in legal dis-
putes, which explains why professional experience in law was required
in representatives, (b) to provide storage facilities, which were pro-
vided on premises owned by the representative, and (c) to serve as
a depositary for the merchants and a neutral arbiter between them
(Goitein, 1967). The warehouse of the representative served also as
a bourse for auctioning the goods and a postal address for merchants.
Legal Forms of BusinessTurning our attention to the legal forms of business, we find that
businesses, as shown in Figure 4.1 (see page 154), consisted of three
main types: sole proprietorships, partnerships, commenda and state
enterprises. The sole proprietor had the full authority of running the
business, within the general rules of the Sharì"ah, and was liable for
the business debt up to his own private fortune. Partnership was
based on the conditions laid down by early Muslim jurists. The jurists
divided commercial partnership into two main types: “mufàwadah”
partnership, which could be translated as unlimited-authority part-
nership, and “inàn” partnership, which could be translated as lim-
ited-authority partnership. The relationship between partners in the
“mufàwadah” partnership is based on mutual surety and mutual agency,