Gharar
Excessive uncertainty in a contract, about the object, price, quantity or delivery, which can make the contract invalid.
Gharar is uncertainty or ambiguity in the essential terms of a contract, such as what is sold, its price, its quantity or when it will be delivered. Scholars and standard setters distinguish excessive gharar, which vitiates a contract, from minor uncertainty that is unavoidable in ordinary trade and tolerated. Bank Negara Malaysia lists the avoidance of excessive uncertainty, gharar fahish, among the fundamental Shariah principles that Islamic products must meet.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
RibaAn increase over principal that Shariah prohibits: extra stipulated on a loan, or an unequal exchange of certain like-for-like goods.MaysirGambling or games of chance, where gain depends on luck rather than productive exchange; prohibited in Islamic finance.SalamA forward sale: the full price is paid at signing for precisely specified goods to be delivered later.Fiqh al-muamalatThe branch of Islamic jurisprudence that governs commercial and financial dealings between people.