Hadith Text & Reference

The Messenger of Allah (ﷺ) said: "Profit follows responsibility."

Reference: Sunan Abi Dawud 3508, Book: Wages (Kitab Al-Ijarah)

Linguistic Analysis

The Arabic phrase "Al-Kharāj biḍ-Ḍamān" consists of "Kharāj" meaning profit, benefit, or return, and "Ḍamān" meaning responsibility, guarantee, or liability. This establishes a direct correlation between entitlement to gain and assumption of risk.

Legal Principle Established

This hadith establishes a fundamental principle in Islamic commercial law: the right to profit is intrinsically linked to bearing responsibility for potential losses. One cannot claim benefits without accepting corresponding liabilities.

Application in Business Transactions

This principle prohibits transactions where one party enjoys profit without risk, such as in usurious loans (riba) or uncertain sales (gharar). It validates legitimate partnerships like Mudarabah and Musharakah where profit-sharing corresponds to risk-bearing.

Ethical Dimensions

The hadith promotes economic justice by preventing exploitation. It encourages entrepreneurs to undertake legitimate risks rather than seeking guaranteed returns without effort, fostering a balanced economic system where rewards align with contributions and responsibilities.