Explanation of Article 561
The article addresses two reasons for the termination of the Mudaraba contract, which are:
The first reason: the expiration of the specified term for the Mudaraba contract.
The second reason: the completion of the work for which the Mudaraba was contracted.
The article stipulates that the Mudaraba contract ends with the expiration of its specified term or upon the completion of the work for which it was contracted. If a period of one year is specified for the Mudaraba and it expires, the Mudaraba contract ends. If a specific work is designated for the Mudaraba, such as the sale of specific plots of land, and the sale is completed, the Mudaraba contract ends.
It is permissible to extend the term of the Mudaraba contract before its term expires, and it can be renewed after its term expires, whether this renewal is explicit or implicit. This renewal is considered a renewal of the Mudaraba contract under its original conditions, except for those related to specifying the duration of the Mudaraba. It is subject to the provisions of an indefinite Mudaraba as outlined in paragraph (1) of article (562). If there is a custom or indication of a specific duration for the renewed term, it is considered in accordance with general rules.
The provisions related to this reason do not differ entirely from those outlined in article (544) concerning the termination of the partnership contract due to the similarity between the two contracts.
Related To
Article 561
A mudaraba contract shall terminate upon the expiration of its term, if specified, or upon completion of the work for which the mudaraba contract was concluded.