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Philosophy and Fundamentals of Sharī’ah for Islamic Finance
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Thus, avoidance of gharar is applicable to the whole arrangement of any given
contract ranging from parties to contract, asset, offer and acceptance as
well as price.

A contract is presumed to suffer from gharar when:

1. The parties are unaware whether such an event will take place or not.

2. The subject matter is not within the knowledge of the parties.

3. There is no certainty over the existence of the subject matter.

4. Its acquisition is in doubt.

5. Its quantum is unknown.
Examples of gharar are a sale of fish in the sea, birds in the sky, sale of an unborn
calf in its mother’s womb, sale of un-ripened fruits and sale of a runaway animal.

Gharar is prohibited in Islām based on the rule of justice and fair dealings.
Gharar, however, is tolerated in certain circumstances, in which the risk is:

1. Negligible except in trust contract (‘uqūd al-amānah) like Murābaḥah
contract.

2. Inevitable: by way of necessity such as public needs, like Salām
contract.

3. Unintentional (to some jurists).
4. In charitable contracts (‘uqūd al-tabarru‘āt) according to most of
the jurists. Kamali states that “gharar does not in principle apply to
‘uqūd al-tabarru‘āt such as gift. For example, a person who wishes to
donate a meal without specifying the delivery time.”

Gharar can be classified into two types as shown below.

GHARAR

• Minor gharar or minor uncertainty is
forgiven

• Contracts involving minor gharar are
permissible and valid.

Diagram 22: Types of Gharar