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    Gharar and Maysir

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    ziqsyah
    Gharar refers to uncertainty, risk, or ambiguity in a contract. It is prohibited in Islamic finance because it can promote deception and unjust gains for one party at the expense of another. There are different types of gharar, including uncertainty around price, quantity, time of delivery or payment, or the specific item being traded. Future sales, suspended sales, and sales of non-existent items are generally considered void due to gharar. Scholars disagree on the permissibility of some types of uncertainty, like allowing inspection of an item to validate a sale. Maysir refers to games of chance like gambling, which rely on luck rather than hard work and are prohibited in Islamic finance. Some contemporary financial instruments

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    Gharar and Maysir

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    Gharar refers to uncertainty, risk, or ambiguity in a contract. It is prohibited in Islamic finance because it can promote deception and unjust gains for one party at the expense of another. There are different types of gharar, including uncertainty around price, quantity, time of delivery or payment, or the specific item being traded. Future sales, suspended sales, and sales of non-existent items are generally considered void due to gharar. Scholars disagree on the permissibility of some types of uncertainty, like allowing inspection of an item to validate a sale. Maysir refers to games of chance like gambling, which rely on luck rather than hard work and are prohibited in Islamic finance. Some contemporary financial instruments

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    Gharar refers to uncertainty, risk, or ambiguity in a contract. It is prohibited in Islamic finance because it can promote deception and unjust gains for one party at the expense of another. There are different types of gharar, including uncertainty around price, quantity, time of delivery or payment, or the specific item being traded. Future sales, suspended sales, and sales of non-existent items are generally considered void due to gharar. Scholars disagree on the permissibility of some types of uncertainty, like allowing inspection of an item to validate a sale. Maysir refers to games of chance like gambling, which rely on luck rather than hard work and are prohibited in Islamic finance. Some contemporary financial instruments

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    8 views3 pages

    Gharar and Maysir

    Uploaded by

    ziqsyah
    Gharar refers to uncertainty, risk, or ambiguity in a contract. It is prohibited in Islamic finance because it can promote deception and unjust gains for one party at the expense of another. There are different types of gharar, including uncertainty around price, quantity, time of delivery or payment, or the specific item being traded. Future sales, suspended sales, and sales of non-existent items are generally considered void due to gharar. Scholars disagree on the permissibility of some types of uncertainty, like allowing inspection of an item to validate a sale. Maysir refers to games of chance like gambling, which rely on luck rather than hard work and are prohibited in Islamic finance. Some contemporary financial instruments

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    Gharar and Maysir

    What is Gharar?

    Uncertainty risk speculation hazard jeopardy danger stake peril

    What happens when there is uncertainty?

    Literal: To deceive or fog the mind

    Hanafi scholars: something which its consequence is undetermined

    Uncertainty avoidable?

    Too much and nominal uncertainty

    Only excessive levels of uncertainty, should be prohibited

    A confusion or hesitation leading to a validity of a contract

    Confusion on what? Price, quantity

    What’s not allowed? Any risk built into the contract resulting in a profit for one party gamble between
    parties corresponding loss for the other, unjustified gain. Distinct advantage, more returns at the
    expense of another party where their returns are uncertain

    Absence of knowledge: Promotes uncertainty a manipulative situation one party

    Ijtihad: independent interpretation of Quran and sunnah, companion of Prophet Muhammad SAW

    Ijma: same ruling as it is similar

    Gharar in terms of contract


    Inability to deliver, Ignorance of time

    Two sales in one: specifiying the price, in one month 100, two months 150, void sale, conditional sale,
    ali and ahmad sell land if lease a car, price is not specified, sales not certain. Warranty is a valid sale

    The pebble touch toss sales: outcome determined by throwing of a stone, parties agree on binding sale
    of a certain price with the throw of a pebble from one person to another, placing it on the item or
    goods, falling from one place. Touch sale, if buyer touch item sale is biding whether seller agrees or not.
    Toss sales, seller tosses the item to buyer sales become binding no option but to buy it.

    Suspended sale: conclusion of sale is conditional upon an uncertain event. I will you sell my house if
    Ahmad sells me his house. Uncertain of time, uncertain in guarantee.

    Future sale: offer to sale something from the present to a future date. Possible lapse of interest, buyer
    financial changes, market price of item changes significantly.

    Down-payment:
    Gharar in the object of contract
    Ignorance of the Genus: Ignorance of the item sold, entity type and attributes of the object. “I sell you
    what in my bag for $20”. Option to inspect may validate it, maliki and hanifi. Allowing buyer to reject

    Ignorance of the Species: General classification of object is known; ignorant on specific species. “I will
    sell you an animal for 9.99” what animal, what jewelry

    Ignorance of the attributes: Is description of attributes an essential element? Condition for validity.

    Ignorance of the quantity: If not in sight

    Ignorance of the Essence: Genus species type attribute & quantity are known but the specific identity of
    the item is not known. Buying unspecified cow in a herd of cows. Sale of piece of clothing from a stack of
    clothes. “Not standardized” “No option of specifications” “buyer at disadvantage”. All jurist unanimously
    agrees: Gharar exist.

    Ignorance as to time: When payment is deferred, establishing a known time of payment is essential.
    Sale of the unborn animal

    Inability to deliver: Invalid to sell what one cannot deliver; not in possession. Example bird in the sky.
    Sale of which buyer bought before he takes possession.

    Contracting on a non-existing item: Sale void if sold object does not exist at time of contract. Sale of
    fruit before fruition. Uncertain must not be sold, normally ascertainable may sale.

    Sale of the unseen: one of the contracting parties cannot see it; though exist, it’s not visibly.

    Gharar and the Islamic finance industry


    Understanding differences: when primary sources are silent, jurist undertake ijtihad (Total expenditure
    of effort by a jurist to infer, with a degree of probability, the rules of Shariah from their detailed
    evidence in the sources). Thus differences in the school of jurisprudence

    Aspects of insurance business: Sale contract in conventional insurance; premium (money to pay to buy
    the contract) against……? In general, it is Gharar, In Islamic no sales contract, cooperative insurance.
    Pool of funds. “Tabaruk” donation contract. Conventional insurance uses sales contract, buyer and
    seller. What am I buying in an insurance, may occur or may not occur. Short selling (Islamic capital
    market): Not allowed due to borrowing of stocks/shares.

    Definition of short selling: borrow shares from the broker, sell the share, stocks to go down. Go down
    then buy it again. Only can sell what we own not what we borrow.

    Maysir/Qimar
     Games of chance
     Outcome of any game of chance: Uncertainty akin to gharar
     Such games of chance relies on accidental gains or luck legitimate means hard work and
    diligence, addiction
     Gambling activities e.g casinos are screened out from Islamic investments.
     Contemporary futures and options contracts, falls under gambling, avoided in Islamic finances

    Forex: Can be similar with gambling, in terms of currency there is some question marks. outcome is
    unknown. Speculators not investors.

    Stocks: Allowed as it is an investment in buying stocks.

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