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What is the definition of a Mudarabah contract, what are the provisions for withdrawing from it if it is of indefinite duration, and what is the liability of the Mudarib in case of transgression or negligence?

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A Mudarabah contract is a contract whereby capital is entrusted to a person who works with it for a specified share of the profit. If the Mudarabah contract is of indefinite duration, either party may withdraw from it at any time, provided that the other party is notified of the...

A Mudarabah contract is a contract whereby capital is entrusted to a person who works with it for a specified share of the profit. If the Mudarabah contract is of indefinite duration, either party may withdraw from it at any time, provided that the other party is notified of the withdrawal within a reasonable period, and that the withdrawal is not made fraudulently or at an inappropriate time. In the event of transgression or negligence by the Mudarib, he is obligated to compensate the Rab al-Mal for any reduction in capital and for any resulting damages.
Source: Radiif.com (رديف) · Saudi Legal AI Platform

Legal References & Citations

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نظام المعاملات المدنية - Article 550

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