If it occurs before trading begins, the partnership is dissolved, because the capital upon which the contract was based has been destroyed, and the capital owner is not required to replace it. But if it occurs after trading has begun, he states that if all or part of the capital is destroyed, it is to be made good out of the profit. This is because, so long as the partnership remains for its stipulated term, the contract remains in force until that term expires; thus, any increase or decrease is accounted for in the profit. This is conditional, however, upon its occurring before the profit is divided. After it has been divided, each party has received his due.

For example, a working partner trades with the capital and places the money in a cashbox. It was ten thousand, and through profit it became twenty thousand. Then ten thousand is stolen from it. The author says, “It is to be made good out of the profit.” In this example, does anything remain for the working partner? No, because all of the profit has now been stolen. The author’s point is that whatever is destroyed before the profit is divided or the assets are liquidated is taken from the profit. Thus, the remaining ten thousand belongs to the capital owner.

In the same example, if five thousand of the twenty thousand were stolen, the profit would be five thousand, while ten thousand would remain for the capital owner, because a loss occurring before distribution or liquidation is taken from the profit.

His statement, “or if a loss occurs”: if a loss occurs, it is likewise made good out of the profit.

For example, a person trades with capital amounting to ten thousand riyals, and it becomes fifteen thousand. He takes the five thousand, which is the profit, and deposits it in the bank. He then trades with the ten thousand, but suffers a loss, leaving eight thousand. We therefore deduct the two thousand riyals—the amount of the loss—from the profit, leaving a profit of three thousand riyals. This is why he says, “or if a loss occurs, it is made good out of the profit.”