A man partnered with another, and his partner said to him: “I will give you (15%) profit or loss.” What is the ruling on this transaction?
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The questioner : A man partnered with another in a partnership with him for one thousand dinars. His partner said to him, “I will give you, for example, fifteen percent profit or loss regarding this money.” Is there any issue with this form from the perspective of the ruling?
The Shaykh : Do you mean one of them is trading with the money and the other with his labor?
The questioner : It may be so, or it may not be. I mean, there are two forms without a specific definition. Rather, the definition or the question is about defining the percentage of profit or loss. Twenty percent did not come as a percentage of the total money, or of the sum of the money, but the other partner said, “I will give you fifteen percent or twenty percent on this, as profit or loss.”
The Shaykh : How did he become a partner? Because I see this as a matter of debt, not a partnership.
The questioner : No, he did not lend to him, because he wants to lose with him if a loss occurs.
The Shaykh : What I want to understand is: is it a mudarabah?
The questioner : The question that was raised may be like this, or it may be like this. Both forms are permissible.
The Shaykh : No, it may be like this, or it may not be. Do you mean it is not? We need to know the form so that we can answer about it. I understood that this is either a mudarabah or a loan. If it is a mudarabah, then if they lose, this one loses from his money, and that one loses from what? From his effort. And if they profit, both profit according to what they agreed upon.
The questioner : My question, O our Shaykh, is about the issue of the fixed amount. I mean, is it permissible if the loss became more than twenty percent?
The Shaykh : Yes. First, mention the percentage of profit and the percentage of loss.
The questioner : Is the fixed percentage the issue that came to my mind?
The Shaykh : In exchange for what? We need to see what type of transaction it is. I mean, from which type do we want to classify this transaction? Is it the chapter of loans, is it the chapter of mudarabah, or is it the chapter of musharakah?
The questioner : The chapter of musharakah.
The Shaykh : Then this one participates with his money...
The questioner : And this one participates with his money. I mean, the owner of the money who brought the partner defined for him this profit or loss at twenty percent, as profit and loss.
The Shaykh : Okay, and that one?
The questioner : Of course. He wants to be in the same situation with him. He just did not stipulate for himself to define the percentage?
The questioner : O our Shaykh, allow me. I mean, if one person came and said to the other, “We want to partner with you in goods worth one thousand dinars, but if you make a large profit with them, I want twenty percent. And the other one might make a hundred percent... the other one. And conversely, it is possible that he comes to lose one hundred percent, but this one bears twenty percent of the loss.”
The questioner : Yes, this is the form, I mean.
The Shaykh : This is the form. I mean, so that we can answer, we need to know, for example, you and I. I gave you one thousand dinars. Did you put down one thousand dinars from your side?
The questioner : No, I did not put down any.
The Shaykh : And did you buy goods?
The questioner : ... .
The Shaykh : Be patient a little. If you did not do it, the answer will change. Wait until we finish visualizing it. Did it not happen?
The questioner : ... .
The Shaykh : Sorry, I put down one thousand. And what did you put down?
The questioner : Also one thousand, O our Shaykh?
The Shaykh : Okay. Did we buy goods with these two thousand?
The questioner: Yes.
The Shaykh : Okay. What did you make for yourself, and what did you make for me?
The questioner : I said, if you made a hundred percent profit, I only want twenty percent from you?
The Shaykh : If I made a profit?
The questioner: Yes.
The Shaykh : Why? Why not if you made a profit?
The questioner : Because he trades in it.
The Shaykh : Hmm...
The questioner : Yes, exactly.
The Shaykh : ... So here we need to know that one of the partners’ capital became the effort and work, right or not?
The questioner: Yes.
The Shaykh : So I was imagining that I could put down one hundred dinars, but I could not work. But he can put down one hundred dinars and can work. So he turned it on me now that I want to put down one thousand and I want to work. Okay, what do you want from me?
The questioner : If you made a profit, for example, on the one thousand dinars, also one thousand, then I only want twenty percent from you, meaning two hundred dinars. And if the one thousand dinars lost, but only the one thousand, then I want you to deduct only twenty percent from me, and give us eight hundred dinars.
The Shaykh : Yes, and if the entire money was lost?
The questioner : You want to bring me eighty percent, because my twenty percent...
The Shaykh : He himself?
The questioner: Yes.
The Shaykh : So it appears that it is not permissible? How can a partner who is a mudarib with money and a mudarib with his effort, if he loses, compensate the second partner who is a mudarib with money without effort? Where would he get this compensation from? This is riba.
The questioner : That is it.
The questioner : By Allah, it is riba.
The Shaykh : He came in the form of... it does not matter to us. What is the question? May Allah have mercy on him. Do you have the question, O professor?
The questioner : ... .
The Shaykh : I am asking a question. I am asking you a question. Do you have the question?
The questioner : I want to tell you what I understood. It seems there is a small partnership, and it is working. One person came wanting to utilize one thousand dinars. So the owner of the one thousand dinars said to the owner of the small partnership, “I have one thousand dinars, and I want to utilize them.” So he stipulated that you make a twenty percent profit, and if you lose, you lose twenty percent. This is what it seems to be? This is what I understood, or is there something else, O Shaykh Ali?
The Shaykh : Is this it?
Al-Halabi : The issue is in the matter of fixing the percentage. In the season of bags, Ahmad said, “Now it is the season of bags. I have, for example, two hundred dinars, and I want to sell bags, but the amount is not enough. I need to make a profit of one dinar. Give me one thousand dinars.” He said to him, “I only want to make a twenty percent profit or lose a twenty percent loss.” So did the sale proceed?
The Shaykh : This fixing is not permissible. This fixing is not permissible at all.
The Shaykh : Do you mean one of them is trading with the money and the other with his labor?
The questioner : It may be so, or it may not be. I mean, there are two forms without a specific definition. Rather, the definition or the question is about defining the percentage of profit or loss. Twenty percent did not come as a percentage of the total money, or of the sum of the money, but the other partner said, “I will give you fifteen percent or twenty percent on this, as profit or loss.”
The Shaykh : How did he become a partner? Because I see this as a matter of debt, not a partnership.
The questioner : No, he did not lend to him, because he wants to lose with him if a loss occurs.
The Shaykh : What I want to understand is: is it a mudarabah?
The questioner : The question that was raised may be like this, or it may be like this. Both forms are permissible.
The Shaykh : No, it may be like this, or it may not be. Do you mean it is not? We need to know the form so that we can answer about it. I understood that this is either a mudarabah or a loan. If it is a mudarabah, then if they lose, this one loses from his money, and that one loses from what? From his effort. And if they profit, both profit according to what they agreed upon.
The questioner : My question, O our Shaykh, is about the issue of the fixed amount. I mean, is it permissible if the loss became more than twenty percent?
The Shaykh : Yes. First, mention the percentage of profit and the percentage of loss.
The questioner : Is the fixed percentage the issue that came to my mind?
The Shaykh : In exchange for what? We need to see what type of transaction it is. I mean, from which type do we want to classify this transaction? Is it the chapter of loans, is it the chapter of mudarabah, or is it the chapter of musharakah?
The questioner : The chapter of musharakah.
The Shaykh : Then this one participates with his money...
The questioner : And this one participates with his money. I mean, the owner of the money who brought the partner defined for him this profit or loss at twenty percent, as profit and loss.
The Shaykh : Okay, and that one?
The questioner : Of course. He wants to be in the same situation with him. He just did not stipulate for himself to define the percentage?
The questioner : O our Shaykh, allow me. I mean, if one person came and said to the other, “We want to partner with you in goods worth one thousand dinars, but if you make a large profit with them, I want twenty percent. And the other one might make a hundred percent... the other one. And conversely, it is possible that he comes to lose one hundred percent, but this one bears twenty percent of the loss.”
The questioner : Yes, this is the form, I mean.
The Shaykh : This is the form. I mean, so that we can answer, we need to know, for example, you and I. I gave you one thousand dinars. Did you put down one thousand dinars from your side?
The questioner : No, I did not put down any.
The Shaykh : And did you buy goods?
The questioner : ... .
The Shaykh : Be patient a little. If you did not do it, the answer will change. Wait until we finish visualizing it. Did it not happen?
The questioner : ... .
The Shaykh : Sorry, I put down one thousand. And what did you put down?
The questioner : Also one thousand, O our Shaykh?
The Shaykh : Okay. Did we buy goods with these two thousand?
The questioner: Yes.
The Shaykh : Okay. What did you make for yourself, and what did you make for me?
The questioner : I said, if you made a hundred percent profit, I only want twenty percent from you?
The Shaykh : If I made a profit?
The questioner: Yes.
The Shaykh : Why? Why not if you made a profit?
The questioner : Because he trades in it.
The Shaykh : Hmm...
The questioner : Yes, exactly.
The Shaykh : ... So here we need to know that one of the partners’ capital became the effort and work, right or not?
The questioner: Yes.
The Shaykh : So I was imagining that I could put down one hundred dinars, but I could not work. But he can put down one hundred dinars and can work. So he turned it on me now that I want to put down one thousand and I want to work. Okay, what do you want from me?
The questioner : If you made a profit, for example, on the one thousand dinars, also one thousand, then I only want twenty percent from you, meaning two hundred dinars. And if the one thousand dinars lost, but only the one thousand, then I want you to deduct only twenty percent from me, and give us eight hundred dinars.
The Shaykh : Yes, and if the entire money was lost?
The questioner : You want to bring me eighty percent, because my twenty percent...
The Shaykh : He himself?
The questioner: Yes.
The Shaykh : So it appears that it is not permissible? How can a partner who is a mudarib with money and a mudarib with his effort, if he loses, compensate the second partner who is a mudarib with money without effort? Where would he get this compensation from? This is riba.
The questioner : That is it.
The questioner : By Allah, it is riba.
The Shaykh : He came in the form of... it does not matter to us. What is the question? May Allah have mercy on him. Do you have the question, O professor?
The questioner : ... .
The Shaykh : I am asking a question. I am asking you a question. Do you have the question?
The questioner : I want to tell you what I understood. It seems there is a small partnership, and it is working. One person came wanting to utilize one thousand dinars. So the owner of the one thousand dinars said to the owner of the small partnership, “I have one thousand dinars, and I want to utilize them.” So he stipulated that you make a twenty percent profit, and if you lose, you lose twenty percent. This is what it seems to be? This is what I understood, or is there something else, O Shaykh Ali?
The Shaykh : Is this it?
Al-Halabi : The issue is in the matter of fixing the percentage. In the season of bags, Ahmad said, “Now it is the season of bags. I have, for example, two hundred dinars, and I want to sell bags, but the amount is not enough. I need to make a profit of one dinar. Give me one thousand dinars.” He said to him, “I only want to make a twenty percent profit or lose a twenty percent loss.” So did the sale proceed?
The Shaykh : This fixing is not permissible. This fixing is not permissible at all.
Source
www.al-albany.com
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