Compensation when the borrowed item wears out or is lost

Q 7: If a Muslim borrows something from a person and the object is destroyed or lost, what is the Islamic ruling on giving a substitute or compensation?

A: If the borrowed object wears out, it should be replaced with another if it is Mithly (interchangeable) or with its value if it is not replaceable. Any disagreement should be referred to the courts. May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.