Is the aforementioned contract formula correct, and is the second party obligated to return the capital to the first party after two years without achieving profits? Does Islamic law guarantee the capital in such circumstances? And is this contract considered a partnership or a Mudarabah?

If the capital is from you and the work is from your partner, this is a Mudarabah (profit-sharing partnership). If both the capital and the work are from him, it is a Shirkat al-’Inan (equity partnership). The contract stipulated the return of the investment amount upon termination, which suggests a guarantee of capital, even though the loss, if not due to negligence or misconduct, is borne by the capital provider. The timing of the partnership is permissible, with the partner having the right to فسخ (annulment). The contract lacked a specification of the profit share for each party, which is a religious requirement. What is prohibited is for the profit to be a fixed amount or a percentage of the capital. If a loss occurs, and it was due to negligence or misconduct on your partner's part, then he guarantees your capital. If not, then he owes nothing. If your partner refused to sign the contract and took the money without another form of agreement, then it is a debt owed by him. If he mentioned another form of agreement and you accepted it, then the contract is valid unless it lacks the specification of the profit share, in which case it would be فاسد (invalid). In this case, the loss is borne by the capital provider.