Muslim Creed – Gharar (غرار) means excessive uncertainty in the sale or purchase of a commodity. It is one of the most controversial issues in Islamic jurisprudence, and there are many opinions about how it should be treated and how far it can go to be considered unlawful.
This article attempts to cover all aspects of Gharar in detail by going through its history, nature, types, and effects on buying and selling transactions from an Islamic legal perspective. The following are just some of the questions that will be addressed in this article: What is Gharar? How was it practiced in pre-Islamic Arabia?
Types of Gharar
Gharar is often classified into two types: minor and major. Minor gharar includes situations where the outcome is uncertain, but not impossible to predict. An example of minor gharar would be buying a used car without knowing its full history.
Major gharar, on the other hand, refers to situations where the outcome is impossible to predict. An example of major gharar would be gambling or investing in a new business venture without doing any research first.
Ruling on Contracting it in Sharee’ah
The basic ruling on gharar is that it is haraam, because it involves taking advantage of people’s ignorance and because it leads to gambling, which is also haraam.
The scholars have divided gharar into two types: major and minor. Major gharar is that which renders the contract void, such as if one does not know what he is buying or selling, or if the thing being sold does not exist.
Minor gharar is that which does not render the contract void but which still involves some element of risk, such as if one does not know the exact price of something or if the thing being sold may or may not exist.
Examples of Gharar
Gharar is often defined as uncertainty, risk, or chance. In the context of contracts, it usually refers to situations where one party does not know what they are agreeing to.
For example, if you buy a car without knowing its make or model, that would be considered gharar. Other examples include gambling, insurance, and derivatives.
It’s a common misconception that gharar only refers to uncertainty. Although it does involve uncertainty, it has another essential component – risk. There are situations where one party knows what they’re agreeing to and that can still be considered gharar.
Take for example buying insurance. You know you’re buying insurance from an insurance company, but you don’t know how much coverage they will provide or if they will cover certain costs.
Methodology in avoiding it
In Islam, there is a concept known as gharar which refers to uncertainty and risk. This can take the form of not knowing the quality of what you’re buying, not knowing the quantity of what you’re buying, or not knowing whether or not you will even receive what you’re buying.
To avoid gharar, Muslims are advised to only enter into contracts where all these uncertainties have been removed. This means only dealing in things that are known and measurable, and avoiding speculation altogether.
Countering the causes of it
The Quran and Sunnah are clear on the prohibition of gharar, and there are many verses and hadiths which mention it. The scholars have explained that gharar is of two types: major and minor.
Major gharar is where the thing being sold does not exist at all, or its existence is not certain. An example of this would be selling something that doesn’t exist yet, like a baby that hasn’t been born yet.
Minor gharar is where the thing being sold exists, but its quality or quantity is not known. An example of this would be selling fruit on a tree, where the buyer does not know how much fruit there will be.