The Maxim’s Source
The maxim derives from a Prophetic tradition (al-Tirmidhi): “Profit (al-kharaj) belongs to whoever bears the liability.” (al-kharaj bi’l-daman). A buyer who purchases a slave, uses him for a period, then discovers a defect that existed at the time of sale: he returns the slave but keeps whatever benefit he derived during the period of ownership — because he bore the risk of ownership during that time.
Applications in Contract Law
Sale: The buyer who owns property bears the risk of its destruction before delivery. If the property is destroyed between contract and delivery, and the seller was not at fault, who bears the loss? The answer depends on when risk transfers — and the risk-bearer is also the benefit-receiver.
Leasing: The lessor who receives rent bears the risk that the leased property becomes uninhabitable. He cannot simultaneously demand rent and be immune from the consequences of the property’s condition.
Partnership (Musharaka/Mudaraba): The investor who receives a share of the profit of a venture is also the one who bears the loss if the venture fails. The riba prohibition is, in this analysis, a consequence of the ghurm-ghanm principle: taking guaranteed interest while bearing no risk violates the principle that benefit requires accepting risk.
The Riba Connection
The Islamic prohibition on riba (interest) is often explained through this maxim: a lender who charges interest receives guaranteed benefit (the interest) regardless of whether the borrower’s venture succeeded or failed. He receives ghanm without bearing ghurm — a violation of the maxim. In Islamic finance, any permissible structure must ensure that those who receive returns also bear the associated risk.
See also: Fiqh Al Musharakah, Fiqh Al Waqf, Fiqh Al Ghasb, Fiqh Al Shuf Ah, Ilm Al Usul