A Twenty Percent Loss Condition in a Factory

Question

A factory owner took money for his factory from a person who, together with the reckoning of the division of income, also stipulated that if there is a loss, “I will not bear more than twenty percent of the money I have invested,” whereas it is necessary to bear a loss in proportion to the joint value of the original capital. The question is: is the income of the said factory halal or haram because of this wrong transaction?

Answer

On account of this limitation of loss, the entire income of the factory will not be called haram.

Source: Fatawa Mahmudiyya

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