Evaluation of Gharar Criteria in New Transactions

Abstract

Islamic Sharia has established a rule named "gharar" in order to back up and guarantee transactions and prevent loss or conflicts among those involved. This rule helps each trader or investor feel secure when entering into the transaction. The survey of religious books shows that there are different views about gharar criteria. Since financial markets face growing risks and uncertainty, providing clear criteria for gharar can prevent people from entering into transactions with unacceptable risks or the ones considered to be void. The concept of gharar is a challenging one due to its various definitions and criteria presented by jurists. Some of these have pointed out ignorance in a contract and others have focused on the ignorance which leads to danger or risk. This study used descriptive and analytical methods to offer both the literal and technical definition of gharar together with its criteria in new transactions. It has also categorized the opinions of jurists and planned an interview with contemporary jurisprudents. The aim is to provide a clear benchmark for distinguishing between gharar in new transactions and those with high risks.

Keywords

• gharar
• ambiguity
• ignorance
• unreliability
• risk