Al-bida ah

Definition of "Al-bida ah"

A form of quasi-agency in medieval trading. It involved a merchant who, unable personally to attend to a business affair, handed over some of his property to another party for the latter to take care of it for him. Upon completion of his task, the outside party, without receiving any commission, profit or compensation in any other form returned the proceeds of the transaction to the merchant whose bidding he had done. All parties to a partnership or mudarabah contract were endowed with the right to exercise this practice freely because it was one of the accompaniments of trade. It was often practised on reciprocal basis by merchants for each other.