Gharar

Gharar refers to excessive uncertainty or ambiguity in a commercial transaction, which can lead to unfairness or risk for involved parties. In Islamic finance, transactions with high Gharar are discouraged because they can create confusion about the terms, outcomes, or ownership, potentially causing disputes or exploitation. For example, selling a product without clear details or speculative trading with unclear outcomes involve Gharar. The concept aims to promote transparency, fairness, and clarity in business dealings, ensuring that all parties have a clear understanding of what is being exchanged and the associated risks.