Profit (ribh): lawful and unlawful gain, profit from another's property, profit-sharing in partnership and investment, and zakat on trade profit

الربح

Ribh is gain in trade; its relatives are growth (nama') and income (ghalla), and growth is the wider term. ¹ ² Lawful profit comes from a lawful contract such as sale, mudaraba or partnership, and is lawful by consensus; unlawful profit comes from a forbidden transaction, such as riba or gambling. ² On profit made from another's property in one's hand, the Hanafis hold it not lawful to the user, the Malikis and the preferred Shafi'i view give it to the user, and the Hanbalis give it to the owner. ² ³ All agree that the share of profit between owner and worker must be fixed in a mudaraba. ³ ⁴ In partnership the profit follows the agreed shares, and the schools differ on whether unequal capital may bring equal shares. ⁴ Profit on trade goods is added to the principal for zakat by the Malikis, the preferred Shafi'i view and the Hanbalis, while Abu Hanifa has each new gain run its own year. ⁴ ⁵

Summary

Ribh is gain in trade. Its relatives are growth (nama') and income (ghalla), and growth is the wider term. ¹ ²

Lawful and unlawful profit

Lawful profit comes from a lawful transaction such as sale, mudaraba or partnership, and is lawful by consensus when the contract's conditions are kept. Unlawful profit comes from a forbidden transaction, such as riba or gambling. ²

Profit on another's property in one's hand

The Hanafis hold that profit does not become lawful for one who dealt with a usurped or deposited property; the Malikis and the preferred Shafi'i view give it to the one who dealt, and the Hanbalis give it to the owner. ² ³

Profit in mudaraba and partnership

All agree that fixing the share of profit between owner and worker is a condition for the validity of a mudaraba. ³ ⁴ In partnership profit follows what the partners agree, and the jurists differ on whether unequal profit may follow equal capital. ⁴

Zakat on trade profit

Profit on trade goods is added to the principal within the year for the Malikis, the preferred Shafi'i view and the Hanbalis; Abu Hanifa has each new gain run its own year. ⁴ ⁵

Where to look further

Sale, partnership, mudaraba, murabaha and zakat are treated in their own entries. ¹ ⁵

Sources

al-Mawsu'a al-Fiqhiyya al-Kuwaitiyya, Noor-Book copy (file named v3) , p.8607

al-Mawsu'a al-Fiqhiyya al-Kuwaitiyya, Noor-Book copy (file named v3) , p.8608

al-Mawsu'a al-Fiqhiyya al-Kuwaitiyya, Noor-Book copy (file named v3) , p.8609

al-Mawsu'a al-Fiqhiyya al-Kuwaitiyya, Noor-Book copy (file named v3) , p.8610

al-Mawsu'a al-Fiqhiyya al-Kuwaitiyya, Noor-Book copy (file named v3) , p.8611

Riba in the rulings: the forbidden excess in exchange and in delay, its kinds, its causes and its rulings

Riba is excess in the lexical sense; in the jurists' usage it is an excess on one of two counter-values in an exchange, or an excess on a debt in return for delay, and the schools define it differently. It is forbidden by the Qur'an, the Sunna and consensus, is a major sin, and is counted among the seven destructive sins. The Hanafis, Malikis and Hanbalis divide riba of sale into excess and delay, and the Shafi'is into three kinds. The six items named in the hadith are gold, silver, wheat, barley, dates and salt; most jurists extend the rule to other items sharing its cause, and the schools differ on that cause. Related questions include 'inah, muhaqala and muzabana, the mud 'ajwa case, and riba in the abode of war, where the jurists differ.