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What is the concept of a Mudarabah contract, and what are the fundamental obligations incumbent upon the Mudarib under it?

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A Mudarabah contract is an agreement whereby the Rab al-Mal (capital provider) undertakes to provide capital, and the Mudarib (entrepreneur/manager) undertakes to manage and trade with it, with the profits shared between them as agreed. The Mudarib's obligations include providing the Rab al-Mal with information, submitting an account upon the...

A Mudarabah contract is an agreement whereby the Rab al-Mal (capital provider) undertakes to provide capital, and the Mudarib (entrepreneur/manager) undertakes to manage and trade with it, with the profits shared between them as agreed. The Mudarib's obligations include providing the Rab al-Mal with information, submitting an account upon the expiry of the term, compensating the Rab al-Mal for any capital deficit in cases of transgression (ta'addi) or negligence (taqseer), and returning the Rab al-Mal's share upon the termination of the contract.
Source: Radiif.com (رديف) · Saudi Legal AI Platform

Legal References & Citations

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نظام المعاملات المدنية - Article 554

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