In a Mudarabah company, does the capital owner bear the entire loss, or does the Mudarib share it, or does the Mudarib bear it alone, knowing that the Mudarib disposed of the funds without the capital owner's knowledge and consent, and spent them in ways not agreed upon?
The Mudarib (agent) is bound by the conditions agreed upon with the Rab al-Mal (investor), unless these conditions forbid what is lawful or permit what is unlawful. The Mudarib is liable for the capital if he violates the conditions, such as violating the investor's instructions regarding the place of investment or the method of sale, because he is disposing of another's property without their permission. The Mudarib is a trustee and is not liable for losses except in cases of transgression, negligence, or violation of the agreed-upon conditions. Therefore, the Mudarib is liable for losses in cases of transgression and disobedience to what he was commanded.
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