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Does the partner's failure to provide the full agreed-upon capital invalidate the Mudarabah contract, and does stipulating that the Mudarib (entrepreneur) receive a monthly salary for the first eight months vitiate the form of this contract? What is the ruling on terminating the contract and the resulting obligations for both parties?

1 min readAlso available in العربية

This transaction is not without complexity and lack of clarity, because the capital of the Mudarabah (partnership) is unknown, and this invalidates the Mudarabah. For ignorance of the capital leads to ignorance of the profit. Among the reasons for the invalidity of the Mudarabah also is the Mudarib (working partner) stipulating a fixed salary in addition to his percentage of the profit, which is not permissible. As for the issue of dedicating oneself, if the Mudarib's work in this project cannot be accomplished without it, then stipulating it is a foregone conclusion, because the work in Mudarabah is an obligation upon the worker, not the capital owner. If the Mudarabah is invalidated, the capital returns to its owner, and the profit or loss of the money is upon him. As for the Mudarib, he is entitled to a fair wage (ujrat al-mithl). So, the acquisitions and equipment that have been made belong to the capital owner, and the work performed by the Mudarib is estimated by its value, and he is entitled to a fair wage for it.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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