Glossary
Gharar
غررDefinition
Excessive uncertainty or ambiguity in a contract — for example, selling an unspecified asset or one whose existence is genuinely uncertain.
Classical fiqh distinguishes minor uncertainty (yasir), which is unavoidable in any contract, from excessive uncertainty (fahish) that vitiates the sale. Fahish gharar invalidates the contract.
In modern finance, scholars cite gharar when ruling on derivatives, binary options, conventional insurance (where the payout is contingent on an uncertain event), and highly speculative crypto products. Spot transactions and clear forward contracts on specified goods do not contain prohibited gharar.