AAOIFI Shariah Standards

Controls on Gharar in Financial Transactions : Appendix B - The Shariah Basis for the Standard

Gharar is divided into excessive, medium and minor, because there is a degree of Gharar which contracts could hardly avoid, whereas there is an excessive degree of Gharar that could become a distinguishing aspect of the contract, such as Bay’ al-Gharar (aleatory sale). In order to specify the two extreme limits of Gharar (excessive and minor) there should be a midpoint of Gharar (medium Gharar). Regarding controls on excessive Gharar, Abu Al-Walid Al-Baji said: “It is the degree of Gharar which becomes so dominant in the contract, that the contract is described in terms of it.”


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