How should one deal with profits received from a Mudarabah contract in which the other party guaranteed the capital, knowing that guaranteeing capital is impermissible? Should these profits be returned to the other party, deducted from the capital, or spent on charitable causes?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
Scholars have differed on whether stipulating a guarantee for the capital in a contract invalidates it or not. The more preponderant opinion is that the contract is valid, while the condition itself is invalid. This void condition must be nullified. The profits generated from this contract are permissible, and there is no obligation to spend them on charitable causes.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/189210
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 189210
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy