in partnerships. The Prophet’s statement (may Allah bless him and grant him peace),

“Why did he not stay in his father’s and mother’s house and see whether gifts would be given to him or not?”

covers all these situations. When a gift is given for a particular reason, its receipt is governed by that reason, just like anything else received on that basis. An agreement established by customary practice is like an expressly stated agreement. If someone receives a gift on account of a loan or lending, that gift is treated like property received under a loan contract or a profit-sharing investment contract, unless a reciprocal gift is given in return. This is a fundamental principle whose neglect gives rise to immense injustice and corruption.

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As we have said concerning property received: until repayment has been made, he may not take any money or benefit from the other party before repayment without providing equivalent compensation, because this entails usury. Giving gifts and lending things for use belong to the same category.

The same applies to profit-sharing investment partnerships and sharecropping. Whenever the owner of the capital takes money or receives a benefit before the proceeds have been fully divided, this is impermissible without equivalent compensation. Examples include requiring the investment worker or cultivator to perform services outside the obligations of the partnership agreement, benefiting from his property, or anything similar—unless he credits him for all of it. Allah, glorified be He, knows best.

For this reason, the jurists differed over the case in which someone gives another person an item of merchandise and says: “Sell it and use its proceeds as capital in a profit-sharing investment partnership.”