What is the default legal ruling regarding the increase (profit) of invested capital in a partnership if the contract is invalid?
General Chapter
Al-Mughni
Book of Partnership
Primary text
The foundational rule is that the profit generated from the capital belongs to the owner of that capital, as it is an increase derived directly from their asset. This default rule is only set aside by a valid contract. If the contract is not valid, the ruling reverts to the original principle, just as in an invalid sale contract where ownership of the assets is not transferred between the transacting parties.