GHARAR
In
simple terms, gharar means uncertainty, risk, threat, deceit, doubt, e.t.c. It
is described as a risky or hazardous sale, where details concerning the
item on sale are unknown or uncertain. Professor Mustafa Al Zarqa' defined
Gharar as the sale of probable items whose existence or characteristics are not
certain, due to the risky nature which makes the trade similar to gambling. While
some degree of Gharar may be unavoidable in some situations, excessive
uncertainty must be avoided.
'Ahmad
and 'Ibn Majah narrated on the authority of 'Abu Said Al Khudriy :
The
Prophet (pbuh) has forbidden the purchase of the unborn animal in its mother's
womb, the sale of the milk in the udder without measurement, the purchase of
spoils of war prior to their distribution, the purchase of charities prior to
their receipt, and the purchase of the catch of a diver.
For
example, paying a diver to go into the river is permissible while paying to
purchase anything a diver catches is prohibited since it is not know for
certain what he will catch or if he will even catch anything at all.
In
finance, gharar is usually observed within derivative transactions,
such as forwards, futures and options where rates are predetermined by interest
differentials and there is uncertainty as to whether the option will be
exercised. In Islamic finance, most derivative contracts are
forbidden and considered invalid because of the uncertainty involved in the
future delivery of the underlying asset. This is to guarantee full approval and
pleasure of the parties in a contract and to prevent poorly anticipated losses
and dispute that may arise due to difference of the result from the
anticipated. All parties must have full knowledge of what is being transacted
and the end result of the transaction.
Another
common transaction where Gharar is commonly found is in Insurance. When insurance premium is paid to insure a
fixed asset, it is possible that the insurance premium is paid only once before
a large claim is made. It is also possible that the insurer pays his entire
premium through the life of the asset and no single claim is made. This type of
transaction is rendered invalid because of the uncertainty involved.
Ibn
Taimiyah, a leading Muslim scholar, further reasoned "Gharar found in the
contract exists because one party acquired profit while the other party did
not".
MAYSIR
Maysir
has been depicted as involving two parties in a game played for the sole
purpose of winning at the expense of one's opponent. A readily available and
popular example is the lottery. Where there is gharar, there is always an
element of maysir. This can be exemplified in the case of insurance where a
person pay a little sum with the hope of claiming a larger amount in the event
of a claim or someone losing the premium paid in cases where the insured loss
does not occur. In either scenario, one person is gaining at the expense of the
other.
Maysir
or gambling is prohibited in Islam because it breeds hostility and abhorrence
and also involves consuming property bi-al-batil, which is a type of oppression.
The Qur’an is very clear in its prohibition of gambling as can be found in the
verse below:
They
seek thee concerning wine and gambling. Say: ‘In them is a great sin ……’
(2:219)
wonderful piece
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