however much he might, without making any profit, he would be entitled to nothing. If this is called a reward contract granting a share of what the work yields, the disagreement is merely terminological. Rather, this is a partnership: one contributes the benefit of his labor, and the other the benefit of his capital. Whatever profit Allah allots is shared between them in undivided proportions. Neither may therefore be assigned a fixed amount of profit, because this would depart from the justice required in a partnership. This is the form of sharecropping that the Prophet, may Allah bless him and grant him peace, prohibited. They used to stipulate that the owner should receive the crop from a particular plot—namely, what grew alongside the large watercourses, at the heads of the smaller irrigation channels, and similar places. The Prophet, may Allah bless him and grant him peace, prohibited this.

For this reason, al-Layth ibn Saʿd and others said:

“What he, may Allah bless him and grant him peace, prohibited is something that anyone with discernment concerning the lawful and unlawful would, upon examining it, recognize as impermissible”—or words to that effect.

He thus explained that this prohibition follows from sound legal analogy. If a similar condition were stipulated in a profit-sharing investment partnership, it would not be permissible, because partnerships are founded upon justice between the two partners. If one is assigned profit to the exclusion of the other, this is not just. By contrast, when each has an undivided share, they share in both gain and loss. If there is a profit, they share in the gain; if there is no profit, they share in being deprived of it: the benefit of one party’s labor is lost just as the benefit of the other’s capital is lost. For this reason, financial loss is borne by the capital, since this corresponds to the loss of the benefit of the worker’s labor.