How should losses be divided in an agricultural project where a verbal agreement was made to split profits equally between a partner who provided the capital (520,000 EGP) and another who undertook the farming and management (receiving 1,500 EGP monthly and half the cost of his car), given that the project incurred losses leading to the complete loss of the capital and outstanding debts, and knowing that the working partner did not shirk his efforts but the loss resulted from his lack of agricultural experience, and there was no prior agreement on how to divide losses?
It appears that the aforementioned agreement is a Mudarabah contract, and any losses incurred are borne solely by the capital provider. The worker guarantees nothing unless there is misconduct or negligence on his part. The Mudarib (worker) is considered a trustee and is not liable for loss or damage except in cases of transgression or dereliction of duty. If the worker misled the capital provider into believing he possessed expertise when he did not, then he is liable for the losses. Whatever monthly wage the worker received, if it is the wage of his like (fair market wage for similar work), then it is his; otherwise, he is only entitled to the wage of his like.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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