Islamic Finance Law from A-Z

Excessive profiteering with deception – a person sells a commodity stating explicitly or giving the impression that he is charging the market price, but actually he is charging an exorbitant price taking benefit of the ignorance of the purchaser – in such cases the purchaser has the option to revoke the sale and get back the price paid.

Uncertainty, hazard, risk relating to major elements of a contract; technically, sale of a thing which is not present at hand, or the sale of a thing whose consequence or outcome is not known, or a sale in which one does not know whether it will come to be or not, such as fish in water or a bird in the air. It refers to an element of absolute or excessive uncertainty in any business or a contract about the subject of contract or its price, or mere speculative risk. It leads to undue loss to a party and unjustified enrichment of another, which is prohibited. Gambling is a form of Gharar because the gambler is ignorant of the result of the gamble. Selling goods without allowing the buyer to properly examine the goods is also a kind of Gharar. Some examples of Gharar are: selling goods that the seller is unable to deliver; selling known or unknown goods against an unknown price, such as selling the contents of a sealed box without exact information about its contents; selling goods without proper description; selling goods without specifying the price, such as selling at the “going price”. of exchange as to the existence of the subject-matter of the contract and deliverability, quantity or quality of the subject-matter. It also involves contractual ambiguity as to the consideration and the terms of the contract. Such ambiguity will render most contracts void.