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بسم هللا الرحمن الرحيم

The Amount of Gharar That Prevents Transactions from Being

Valid

By

Dr. al-Øiddiq MuÍammad al-AmÊn al-ÖarÊr

A paper presented at the 4th

conference of the SharÊÑah Boards of Islamic Financial

Institutions, held in the Kingdom of Bahrain on the 19th

and 20th

of ShaÑbÉn, 1425 ,

corresponding to the 3rd

and 4th

of October, 2004

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All praise belongs to Allah, and may peace and blessings be upon our master, MuÍammad, the

final prophet.

This paper investigates the amount of gharar that affects the validity of a contract. I wrote it in

response to a request from his Excellency, the Secretary-General of the Accounting and Auditing

Organization for Islamic Financial Institutions, to be presented to the fourth Conference of

SharÊÑah Boards of Islamic Financial Institutions. May Allah guide me to the right and keep me

away from the areas where people lose their footing.

1. The Definition of Gharar

1.1. The term gharar literally means „risk‟. The related word taghrÊr means „to expose to

danger‟. TaghrÊr or tagharrur of one‟s self or property means to unknowingly expose

them to the possibility of destruction.1 Gharar carries the same meaning.

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1.2 Gharar in the Language of Jurists

Jurists have offered many definitions of gharar, of which I have selected the following:

Gharar is something whose consequences are hidden.

I prefer it over other definitions because, despite its brevity, it accommodates all the fiqh

rulings on gharar mentioned by jurists. It is the definition of al-SarkhasÊ,3 al-DasËqÊ,

4 al-

ShÊrÉzÊ,5 and Ibn Taymiyyah

6 (with slight variations of wording between them).

2. Qur’anic Verses on Gharar

2.1 There is no verse in the Qur’Én that specifically clarifies the legal status of gharar or its

details. However, the Qur’Én states a general rule that applies to all the detailed cases of

1 LisÉn al-ÑArab, al-QÉmËs al-MuÍÊÏ , al-MiÎbaÍ al-MunÊr, and KashshÉf IÎÏilÉÍÉt al-FunËn.

2 The related word ghurËr is reserved for the deception of others.

3 Al-MabsËÏ, vol.13, p.194.

4 ×ashiyat al-DasËqÊ, vol.3, p.49.

5 Al-Muhadhdhab, vol.1, p.262.

6 MajmËÑ al-FatÉwÉ, vol.3, p.275; and al-QawÉÑid al-NËrÉniyyah, p.116.

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gharar mentioned by the jurists. The rule is the prohibition of consuming people‟s

property unlawfully. Allah says, “And do not consume one another‟s wealth unjustly (bil-

bÉÏil) [SËrah al-Baqarah: 188]. And He says “O you who believe, do not consume one

another‟s wealth unjustly; rather, [all transfers of property should] be trade by mutual

consent.” [SËrah al-NisÉ’: 29].

Qur‟anic commentators have offered differing interpretations of bÉÏil (unjust) in the

verse, but they all agree that substantial gharar which makes transactions invalid falls

within the category of bÉÏil that is prohibited here.

2.2 Texts about Gharar in the Sunnah

Very reliable narrators have reported from a large number of the ØaÍÉbah that the Prophet

(peace be upon him) forbade sales involving gharar. Among the companions who

transmitted such ÍadÊths are AbË Hurayrah, Ibn ÑUmar, Ibn ÑAbbÉs and ÑAlÊ.7 These

ÍadÊths forbid certain types of gharar sales; for example: two sales in one, a pebble sale

(bay’ al-ÍaÎÉh),8 a touch sale (al-mulÉmasah), a toss sale (al-munÉbadhah),

9 sale of stud

sperm, sale of a fetus in the womb, sale of the offspring of an unborn animal, and sale of

fish in the water.10

There are forms of gharar sale that were not mentioned in ÍadÊths but

were mentioned by jurists. Ibn Rushd said that there are many such forms and that jurists

differed over them, and he mentioned a number of them.11

7 Al-Gharar wa Atharuhu fi al-ÑUqËd, (p. 78 onwards).

8 Editor’s note: One of the prevalent business practices of pre-Islamic Arabia was for the buyer to toss a pebble at

the goods for sale. Whatever the stone touched, its transaction became binding. There are some other explanations

for the meaning of “a transaction determined by stones.” One is that a person would agree to buy land at a certain

price, but the exact amount of land would be determined by how far he could throw a rock while standing at one of

its boundaries. Another is that the price of a commodity would be decided by the buyer grabbing a handful of

pebbles and agreeing to pay a dirham for each pebble in his hand. Abu al-ÑAbbÉs al-QurÏubÊ, al-Mufhim, 4:362. 9 Editor’s note: AbË SaÑÊd al-KhudrÊ explained that mulÉmasah is when one man touches the cloth of the other by

night or day without any further inspection of it, while munÉbadhah is when each man throws his garment to the

other, and by doing so the sale is completed, without any inspection, and even if one or both is not satisfied with

what he received. ØaÍÊÍ Muslim, (trans. by Siddiqi), narration no. 3613. They considered the act of touching or

catching to make the sale binding. 10

Al-Gharar wa Atharuhu fi al-ÑUqËd, pp. 100, 132, 138, 149, 205, 206, 299, and 325. 11

BidÉyat al-Mujtahid, vol. 2, pp. 148, 155, and 159, and al-Gharar wa Atharuhu fi al-ÑUqËd, pp. 94 & 95.

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3. Transactions Affected by Gharar

The ÍadÊths that mention gharar all discuss gharar in sale contracts, which may give the

impression that gharar has no effect on anything but sale contracts. However, jurists agree that

gharar affects the validity of all exchange contracts (muÑÉwaÌÉt) based on analogy with sale

contracts. They disagree, however, over the effect of gharar on donation contracts (tabarruÑÉt).

The MÉlikÊ School has a unique rule regarding gharar in donation contracts: that gharar has no

effect on any donation contract. Al-QarÉfÊ, a prominent MÉlikÊ scholar, clearly affirmed the rule,

saying:

ImÉm MÉlik differentiated between contracts in which gharar and ignorance must be

avoided and contracts in which gharar or ignorance need not be avoided.

Accordingly, he categorized contracts into three types, two extremes and an

intermediary:

1. Pure exchange contracts must be free of gharar except what is usually dictated

by necessity.

2. Purely benevolent acts, in which the [donor] has no motive of increasing [his

own] wealth, like charity and gifts. [Here, gharar is excused.] If the beneficiary

of a donation misses the benefit, he would not be hurt because he has not spent

anything. This is different from the first category in which the beneficiary

(buyer) pays to get something. If he doesn‟t get what he paid for, he lost what he

spent. The wisdom of the Lawgiver requires that gharar be prohibited in this

case to avoid harm.

As for doing someone a favor, it comprises no harm. The wisdom of the

Lawgiver requires that charity be encouraged; therefore, the door is opened wide

to all charitable transactions, even if they include gharar. Forbidding such

transactions because of gharar would lead to a reduction in the number of

charitable acts. Assume someone makes a gift to another of his runaway slave. It

is possible that the recipient will find the slave, in which case he will get

something that benefits him, while he would not lose anything if he doesn‟t find

him, for he has spent nothing.

ImÉm MÉlik considered khulÑ to be a donation contract because the basic

objective of divorce is not an exchange [for profit]. The nature of divorce is that

it is usually concluded without compensation, so it is like a gift contract.

Moreover, the ÍadÊths [on the topic] contain no indications that such contracts

are included, so we can‟t say that this opinion goes against the SharÊÑah. They

only mention sales and the like.

3. The intermediary category is the marriage contract, which sometimes must be

free of gharar and sometimes may include gharar.

Ibn Taymiyyah [a ×anbÉlÊ] agreed with the MÉlikÊ opinion. He ruled that gharar has an effect on

commutative contracts but has no effect on donation contracts.

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I did not find a general rule on the effect or lack of effect of gharar on donation contracts in

madhhabs other than the MÉlikÊs. However, al-QarÉfÊ (a MÉlikÊ) mentioned that al-ShÉfiÑÊ

forbade gharar in all contracts [exchanges and donations]. He stated, “It is reported in a number

of authentic ÍadÊths that the Prophet (peace be upon him) has forbidden sales involving gharar

and sales with unknown elements. Jurists differed on other [transactions]. Some, like al-ShÉfiÑÊ,

generalize the rule of prohibition of gharar and unknown sales to all contracts such as a gift

(hibah), charity, absolution (ibrÉ’), khulÑ (divorce at the instance of the wife), settlement (ÎulÍ),

etc.”12

Ibn Taymiyyah agreed with al-QarÉfÊ’s assessment, saying about al-ShÉfiÑÊ, “He prohibited

gharar in all contracts of donation and exchange, based on the prohibition of gharar in sale

contracts.”13

In my opinion, the strongest view is that of the MÉlikÊs: gharar has an effect on exchange

contracts but has no effect on donation contracts. That is because freedom of contract is a basic

principle of Islamic jurisprudence unless there is a text to restrict that freedom. It was reported in

authentic ÍadÊths that the Prophet (peace be upon him) forbade gharar in sales. Therefore, it is

obligatory to implement those ÍadÊths and prohibit any sale containing gharar.

The implication of this [principle] is that gharar would only affect sale contracts. However,

gharar was prohibited in sale contracts because of the likelihood that it will cause hostility,

hatred and unjust consumption of people‟s property, as was explained by the Prophet (peace be

upon him) in the ÍadÊth prohibiting the sale of unripe fruits.14

Since the same factors are

operative in all contracts involving exchanges of wealth, we apply the same rule to them and

hold that gharar affects the validity of these contracts just as it affects a sale contract.

On the other hand, because the factors that cause the prohibition of gharar in sale contracts are

missing in other contracts [i.e., donation contracts], gharar cannot be considered to affect their

validity. That is because there is no authentic textual evidence prohibiting gharar in these

contracts, nor is the analogy [with sales] valid.

12

Al-FurËq, vol. 1, p. 150. 13

Al-QawÉÑid al-NËrÉniyyah, p.122 and 216. 14

Al-Gharar wa Atharuhu fi al-ÑUqËd, p. 375 & 376. JÉbir narrated that the prophet (peace be upon him) has

forbidden the sale of unripe fruits. ØaÍÊÍ al-BukhÉrÊ, no. 1416.

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Gharar in donation contracts―hibah, for example―does not result in hatred or the unjust

consumption of people‟s wealth. Suppose that a person voluntarily gives dates of a tree he owns

to another person. When it is time to reap the dates, if there are any, the beneficiary will take

them. There is no cause for dispute because: a) the beneficiary has not paid anything, and b) the

donor has not taken the beneficiary‟s wealth. This is very different from a contract in which one

person sells to another the dates of a tree he owns [before they exist or before they are ripe]. This

kind of contract will usually result in one of the parties unjustly consuming the other party‟s

wealth, which will lead to dispute. That is because the contract was concluded based on equality

between the good being sold and the price. If it later becomes clear that they are highly unequal,

there will be regret, sorrow, dispute and unjust consumption of wealth. It is, therefore, wise and

just to prevent any contract likely to lead to such results in order to stabilize transactions and

eliminate the causes of conflicts as much as possible.

Gharar also does not affect non-financial commutative contracts, e.g. marriage and khulÑ

(divorce at the instance of the wife). This is because compensation in the form of wealth is not

the intended goal of such contracts. Thus, gharar should not affect the mahr (the husband‟s gift

to his bride) or the compensation of the khulÑ. If a man marries a woman or grants her a khulÑ for

the fruits of his date palm, the transaction is valid because the gharar in it will not result in a

dispute, as may likely occur as a result of gharar in a sale contract or a lease. The two parties

who enter into a marriage or a similar contract are not seeking a financial gain, as is the case with

a sale contract, for instance. Therefore, if one of them were to miss some of the expected

material gain, they would not be regretful if they had attained the primary objective of the

contract. That is because the nature of the contract they have undertaken involves forgiveness

and magnanimity when it comes to the financial aspect.

4. The Amount of Gharar That Invalidates a Contract

4.1 Jurists agreed that excessive gharar invalidates a contract while minor gharar does not

affect the validity of a contract at all. The differences of opinion among jurists regarding

many cases of gharar are not due to disagreement about this basic rule but, rather, to

disagreement about its application. The dispute occurs in intermediate cases where it is

not clear whether the gharar is excessive or minor. Some jurists will consider gharar in

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a particular case to be excessive and thus rule that it nullifies the contract; while other

jurists will consider the gharar minor and thus validate the contract.

Examples where it is agreed that gharar is minor and thus does not affect the validity of

the contract:

1. Sale of a quilted jacket filled with down that cannot be viewed.

2. Sale of a house, even if the foundation is not visible.

3. The fees for using a public bath where the time of using the bath may vary from

one person to another; also, drinking from a waterseller where the amount of

water may vary.15

4. The fee for leasing a house for a lunar month, which could be either 29 or 30

days.16

Examples where it is agreed that gharar is excessive and thus affects the validity of the

contract:

1. bay’ al-ÍaÎÉh17

2. Sale of unknown items

3. Sale of an unborn animal when the sale does not include the mother

4. Sale of fruits before they have appeared on the tree.

These examples show that there is a vast divide between the excessive and minor

gharar that all jurists agree about. Between the two is a category of intermediate

gharar. The effect of the latter on the validity of the contract is a matter of debate.

Examples of intermediate gharar:

1. Sale of things buried in the earth.

15

Editor’s note: In days gone by a waterseller would walk through the marketplace with a waterskin on his shoulder,

and it was customary for buyers to pay a fixed price for the right to drink until their thirst was quenched. 16

Al-FurËq, vol. 3, p. 265, and al-MajmËÑ, vol. 9, p. 258 & 301. 17

Editor’s note: One of the prevalent business practices of pre-Islamic Arabia was for the buyer to toss a pebble at

the goods for sale. Whatever the stone touched, its transaction became binding. There are some other explanations

for the meaning of “a transaction determined by stones.” One is that a person would agree to buy land at a certain

price, but the exact amount of land would be determined by how far he could throw a rock while standing at one of

its boundaries. Another is that the price of a commodity would be decided by the buyer grabbing a handful of

pebbles and agreeing to pay a dirham for each pebble in his hand. Abu al-ÑAbbÉs al-QurÏubÊ, al-Mufhim, 4:362.

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2. Sale of milk in the udder.

3. Sale at a future price determined in the market.

4. Sale of absent items.

4.2 Is It Possible to Set a Standard to Determine Excessive and Minor Gharar?

The amount of gharar in any given case is a relative matter that varies from time to

time, place to place, and from one opinion to another. That makes it difficult to set a

definitive dividing line between excessive gharar that affects a contract and minor

gharar that does not. This is why jurists have differing opinions on issues involving

gharar.

Some jurists, like al-BÉjÊ, tried to establish a standard to distinguish between excessive

and minor gharar. He stated that minor gharar is that which is present in virtually any

contract, while excessive gharar is that which constitutes a dominant feature of the

contract, such that the contract can be described as a gharar contract.18

It is clear that

this definition does not provide a clear dividing line between minor and excessive

gharar because the difference between the two is wide enough to leave room for

disagreement.

MuÍammad ÑAlÊ, who abridged al-QarÉfÊ’s al-FurËq, categorized gharar into three

types:

1. Gharar due to which the object of sale is not acquired at all.

2. Gharar due to which only a negligible portion of the object of sale is acquired

3. Gharar despite which most of the object of sale is acquired.

He said the first two must be avoided while the last is excusable.

This categorization is similar to the previous one in that the first two types correspond

to excessive gharar and the last one corresponds to minor gharar. However, ÑAlÊ‟s

18

Al-MuntaqÉ, vol.1, p.44. Ibn Rushd al-Jadd agrees with al-BÉjÊ in the definition of minor gharar, defining it as

“that which cannot be removed from sales”; al-MuqaddimÉt, vol.1, p.222. Al-DasËqÊ states that minor gharar is

what people customarily tolerate. ×Éshiyat al-DasËqÊ, vol.3, p.52.

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categorization is not conceptually clear; moreover, it does not cover all types of

gharar―as far as I can see―because it revolves around receiving or not receiving the

object. In other words, it seems that he is only discussing gharar regarding the existence

of the object.

My opinion

I believe it is not easy to set a standard that precisely demarcates excessive gharar from

minor gharar. That is because, no matter what we do, we will identify the two extremes

but leave the intermediate zone undetermined, which will inevitably lead to

disagreement. Therefore, I think one of the following approaches should be followed.

First: We leave these flexible standards (excessive, minor, and intermediate gharar) as

they are and interpret them according to the circumstances and views of every era. This

approach has its advantages, for it makes the theory of gharar flexible enough to keep

pace with the developments of civilization in every era, which makes it fit to remain

permanently applicable in every time and place. Dr. SanhËrÊ supported this approach

and considered it an advantage of Islamic jurisprudence.

He said in his book MÉÎadir al-×aqq:

We must acknowledge that one of the virtues of Islamic jurisprudence is its

adoption of flexible standards for gharar, which has made it possible to

change the solutions for different cases in different circumstances. By

setting such standards, Islamic jurisprudence has been able to keep pace

with the evolution of civilization throughout the ages. Obviously, a legal

system‟s adoption of flexible standards―instead of imposing unchanging

[detailed] rules―is an indication of its sophistication and its ability to keep

pace with new developments. It is also a sign of a great vitality that enables

the system to survive in later eras.19

Second: We set a standard for excessive gharar only and declare this gharar to be what

affects the validity [of a transaction] while anything outside it has no effect. The best

standard is the one suggested by al-BÉjÊ: Excessive gharar is that which constitutes a

dominant feature of the contract, such that the contract can be described as a gharar

19

MÉÎadir al-×aqq, vol.3, p.56.

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contract. The advantage of this standard, besides flexibility, is that it greatly reduces the

controversy on the amount of gharar that affects a contract‟s validity.

The characterization of a contract as being a gharar contract will definitely be affected by

variations of environment and time. Societies are the [actors] who designate contracts as

being gharar contracts. Pre-Islamic Arab society identified certain contracts as being of

this type; e.g. pebble sales (bay’ al-ÍaÎÉh), touch sales (mulÉmasah), and toss sales (al-

munÉbadhah). That is why the Prophet (peace be upon him) forbade these sales in

particular and gharar sales in general.

The term “gharar sale” indicates that a prohibited sale is what contains such substantial

gharar that it is identified in terms of it. Perhaps this consideration is what led al-BÉjÊ to

his interpretation of the substantial gharar that affects the vaidity of the contract.

We can see the application of this standard during the era of the Prophet (peace be upon

him) in the sale of unripe fruits. People used to routinely sell immature fruits [before he

came to MadÊnah], and they continued to do so until the conflicts proliferated among

them as a result. That is because such fruit was frequently beset with blights, etc., and it

was clear that this kind of sale involved gharar. Therefore, the Prophet (peace be upon

him) forbade them from it.

Also during the lifetime of the Prophet (peace be upon him), landowners used to rent land

for the produce that would grow by the irrigation ditches and was watered by them. The

terms of such arrangements were that the landowner would get the produce of those

[choice] parts of the land while the renter would get the produce from other parts.

However, sometimes one portion of the crop would be destroyed while the other would

survive, or vice versa. People would thus dispute and would bring their disputes before

the Prophet (peace be upon him). He (peace be upon him) forbade renting land by this

arrangement since it is a contract of gharar.

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5. Gharar in an Auxiliary to the Fundamental Object Of Sale Does Not Affect the Validity

of the Contract.

The validity of contract is only affected by the gharar associated with the fundamental object of

sale, not in any auxiliaries to the basic objective of the transaction. This rule is based on the legal

maxim that states, “Things can be excused in auxiliary matters that are not excused in principal

matters.”

Examples of this are plentiful; they include:

a. Sale of unripe fruits along with the tree.

It is not permissible to sell unripe fruit by itself because of the gharar involved. However, if it is

sold along with the tree, the sale is valid, based upon the statement of the Prophet (peace be upon

him): “If anyone buys a palm tree after it has been pollinated, the fruit belongs to the seller who

has sold it unless the buyer stipulates otherwise.”

In other words, the buyer of a pollinated palm tree can stipulate that its fruit go to him along with

the tree. If the seller accepts, the sale contract would include the tree and its fruit, although the

fruit is not yet ripe. Ibn QudÉmah said, “If he sells unripe fruit along with its tree, [the seller] gets

the fruit as a bonus to the basic sale; therefore the possibility of gharar entails no harm.”20

b. Sale of unripe fruit by itself to the owner of tree

There are two ways such a sale could occur:

i. The buyer of a pollinated palm tree does not stipulate possession of its unripe fruit. In

such a sale, the tree belongs to the buyer, and the fruit belongs to the seller, who may

later sell it to the buyer of the tree.

ii. If the owner makes a bequest of the fruits of his tree to a particular person, and the

beneficiary then sells the fruit to the heirs [of the original owner], who are the [new]

owners of the tree.

The latter case is intermediate between selling the fruit by itself to someone other than the owner

of the tree and selling the tree along with its fruit. If it was sold to the [new] owner of the tree, it

20

Al-MughnÊ, vol.4, p.82.

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would be similar to a case in which the buyer buys the fruit along with the tree. That is why

jurists differed over the validity of the sale in Case B. Some scholars allowed it while others

prohibited it. The basis of the controversy is whether or not the fruit in this case should be

considered an auxiliary to the fundamental object of the sale.

Ibn QudÉmah reported the controversy thus:

Third: selling the fruit by itself to the owner of the tree. There are two opinions about

it:

i. The sale is valid. It is the majority opinion of the MÉlikÊs and one of two

opinions of the ShÉfiÑÊs. That is because delivery of the object in full is

guaranteed since the buyer owns the tree. Moreover, it is valid based on

analogy with the sale of the tree along with its fruit.

ii. The sale is invalid. This is the second opinion of the ShÉfiÑÊs. That is because

the contract is specifically for the fruit, and gharar in the main object of the

sale renders it invalid, just as it would if the fruit were sold to a third party.

Also, the general wording of the prohibition applies to it. That is different

from a case in which the sale is to the new owner, for the ÍadÊth makes an

exception for it. Also, [in the exceptional case] the fruit enters into the sale as

an auxiliary, and gharar is allowed in an auxiliary that would not be allowed

in the principal object of a sale.” 21

c. Sale of existent crops along with what is nonexistent.

Some jurists, like the MÉlikÊs and Abu Bakr al-BukhÉrÊ (a ×anafi), ruled that the sale of an

existent crop along with a nonexistent one is valid when the crop becomes ripe bit by bit in a

single season, e.g. cucumbers. Abu Bakr al-BukhÉrÊ said, “Make the existent crop at the time of

the contract the fundamental object of sale and what grows after it an auxiliary.”22

Those who

prohibit the sale do not accept this reasoning because what is nonexistent cannot be a valid

auxiliary.23

d. Sale of an unborn animal with its mother.

Sale of an unborn animal without sale of its mother is invalid because of the gharar involved. As

for selling the fetus along with its mother, [it could take two forms]:

21

Al-MughnÊ, vol.4, p.82. 22

Al-MabsËÏ, vol.12, p.197. 23

Al-MughnÊ, vol.4, pp.90 & 91.

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i. Sale of the mother without mentioning its fetus in the contract. The sale is valid, the fetus

enters into the sale, and the gharar involved entails no harm because the fetus is purely

auxiliary to the main object of sale.

ii. Sale of the mother with explicit mention of the fetus as part of the sale. Jurists have

differed over the validity of the sale. Some jurists ruled that the sale is invalid because an

unknown (the fetus) was made the object of the sale along with the known object (the

mother). On the other hand, some jurists validated the contract as being similar to the first

case. They interpreted mention of the fetus in the contract to be simply a matter of

affirmation and added information.24

In my opinion, the opinion that the sale is valid is stronger. That is because mentioning

the fetus does not change its status as an auxiliary. Since we have established that gharar

is excused in an auxiliary, there is no basis for revoking the permission after having

affirmed it. Moreover, if the seller and buyer know that the animal is pregnant, it makes

no difference whether or not the fetus is mentioned because the price will include the

mother and the fetus in both cases. If the first case is valid, then the second case should be

valid as well because primary consideration [in such matters] is given to the meaning

rather than the wording.

e. Sale of an animal along with the milk in its udder

This sale is similar in its ruling to the sale of a fetus along with the ewe. The validity of selling

milk in the udder is even more confirmed because it is evidenced by a text that supports the

earlier legal maxim. Al-NawawÊ said, “Jurists ruled that the sale of animal with milk in its udder

is valid, even though the milk is unknown, because it is a part of the animal, as evidenced by the

ÍadÊth of muÎarrÉh.”25

24

Al-MajmËÑ, vol. 9, p. 323 & 324. 25

Ibid., p. 326. Editor’s note: MuÎarrÉh refers to an animal that has been left unmilked for several days before its

sale so as to give potential buyers the false impression that it produces a large quantity of milk. Allah’s Messenger

(peace be upon him) said, “Do not stop milking a sheep or camel before selling it. One who buys such an animal has

two choices after milking it. If he is satisfied with it, he may keep it. And if he is dissatisfied, he should return it

along with a measure of dates.” ØaÍÊÍ al-BukhÉrÊ and ØaÍÊÍ Muslim, (Siddiqi trans. ÍadÊth no. 3620).

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6. The Need (×Éjah) for a Contract Containing Gharar Causes It not to Spoil the

Contract

In order for gharar to have the effect of spoiling a contract, people should not be in need of that

contract. If there is such a need, gharar does not affect the contract‟s validity, whatever the type

of the gharar and whatever the type of the contract. That is because contracts were legalized to

fulfill people‟s needs. One of the comprehensive principles of the SharÊÑah, which all scholars

agree to, is that hardship should be removed. As Allah says, “Allah has not laid upon you in

religion any hardship” [SËrah al-×ajj: 78].

There is no doubt that preventing people from contracts they are in need of may cause them

hardship. It is, therefore, a manifestation of Allah‟s justice and mercy that He has allowed people

to practice contracts that satisfy their needs despite the presence of gharar.

6.1 The Definition of Need (×Éjah)

Al-SuyËÏÊ defined ÍÉjah as a case in which if the individual does not engage in the

prohibited activity, he will face great hardship but will not perish.26

The need for a particular

contract is manifested in a case where if a person does not engage in the contract, he will

face hardship because he may miss a benefit that is recognized by the SharÊÑah.

An example is the salam contract, for which there is genuine need. A farmer may not have

enough capital to prepare his land and tend his crop until it is harvested, and he may not find

anyone to lend to him. He is in need of an arrangement by which he can get the funds he

needs. Otherwise, he will lose the chance to make the land productive and will be placed in

great hardship. It is because of this that salam was legalized.

6.2 Need (×Éjah) Is a Level Lower than Necessity (ÖarËrah)

It may be noticed that in his definition of ÍÉjah, al-SuyËÏÊ used the phrase “but will not

perish” to differentiate between need and necessity. Necessity, as defined by al-SuyËÏÊ, is “a

26

Al-AshbÉh wa al-NaÐÉ’ir, p. 77.

15

case where, if the individual does not make use of what is prohibited, he will perish or come

close to it”.27

Coming close to death does not mean being on the very verge of dying; it is

sufficient that the individual fears he will perish, even if he is not certain.

6.3 Jurists’ Use of the Word ÖarËrah in Place of the Word ×Éjah

I have noticed that many jurists do not differentiate between the words ÌarËrah and ÍÉjah in

addressing the issue of gharar, using ÌarËrah where ÍÉjah is intended. In fact, ÌarËrah, as

defined earlier, rarely occurs in the topic we are discussing; therefore, I did not stipulate it as

a condition. I can say that wherever jurists used the word ÌarËrah in their discussions of

gharar, they actually meant ÍÉjah. Indeed, some jurists interpreted ÌarËrah as difficulty

(Íaraj) only, which is the meaning of ÍÉjah.

For example, al-DardÊr, in his commentary on MukhtaÎar KhalÊl, used the word ÌarËrah in

place of ÍÉjah when he said, “It is valid to sell and buy a container of objects based on their

descriptions written in the bill of lading,28

based upon ÌarËrah.” Al-DasuqÊ explained al-

DardÊr’s statement thus: “‘Based upon ÌarËrah’ means that opening the container will entail

hardship and difficulty for the seller in that it will cause the objects to be soiled.”29

Other jurists use the word ÌarËrah to explain the word ÍÉjah. Al-DardÊr, for example

explained KhalÊl’s statement, “Minor gharar is excused in case of ÍÉjah”, saying, “That is,

ÌarËrah”.30

We also see some jurists using the word ÍÉjah to explain the permissibility of

gharar in a certain contract while other jurists use the word ÌarËrah to explain the same

rule. It can be concluded from this that jurists use the two words interchangeably for one

meaning: ÍÉjah, as was mentioned earlier.

I would like to mention that the scholar who most strictly adheres to use of the word ÍÉjah is

the ShafiÑÊ jurist al-ShÊrÉzÊ. Whenever he mentions an issue prohibited due to gharar, he

27

Al-ZarqÉnÊ said “The demarcator of necessity is that the individual knows or believes he will perish. It is not

necessary that he be on the verge of death.” SharÍ al-ZarqÉnÊ ÑalÉ MuwaÏÏa’ MÉlik, vol. 3, p. 95. 28

Editor’s note: The actual term is barnÉmij (program). This is a MÉlikÊ term for a list describing the contents of a

container of objects of sale (e.g. clothes) which were not inspected by the buyer. See: Financial Transactions in

Islamic Jurisprudence, vol. 1, p. 111. 29

×Éshiyat al-DasËqÊ, vol. 3, p. 24. 30

Ibid., 3:52.

16

comments, “…[when] there is no need (ÍÉjah)”. The MÉlikÊs, on the other hand, are the

most prone to using the word ÌarËrah.

6.4 Examples of Jurists’ Use of ÖarËrah and ×Éjah

Ibn Rushd says, regarding the [sale of] crops that put out fruit continually over an entire

season:

The reason jurists differed over the case is due to [their disagreement as to]

whether or not the gharar is of the type that affects the validity of contract. They

agreed that gharar is classified into two categories. The kind that does not affect

the contract is when it is minor, or when is dictated by necessity, or a combination

of the two.31

Al-NawawÊ says:

The basic rule is that a gharar sale is invalid, due to this hadÊth. What is meant

[by it] is when the gharar is manifest and it is possible to avoid it. However, there

are cases in which there is a need and it is difficult to avoid gharar, such as the

foundation of a house; buying a pregnant animal with the possibility that the fetus

could be male or female, or be sound or deformed; and buying a sheep that has

milk in the udder. Such sales are valid by consensus.32

Ibn Taymiyyah says:

The negative consequence of gharar is less than that of ribÉ. Because of that, the

[prohibition of] gharar was relaxed in cases of need because if gharar were

totally prohibited, that would be more harmful than the gharar itself. For

example: sale of a house as an entire unit [is allowed], even though knowledge

about the foundation and insides of the walls is unavailable; also, sale of a

pregnant ewe along with the lamb in the womb, or sale of milch animal, although

the dimensions of the fetus and the quantity of milk are unknown, and even

though the sale of a fetus by itself is prohibited. Most jurists also prohibit sale of

milk in the udder by itself.33

31

BidÉyat al-Mujtahid, vol. 2, p. 157. See also: al-MuqadimÉt, vol. 2, p. 305, and TahdhÊb al-FurËq, vol. 1, p. 17.

Noted that these books use word “necessity” instead of “need”. 32

Al-MajmËÑ, vol. 9, p. 258. Note that al-NawawÊ used the word “need” and Ibn Rushd used “necessity”, even

though they were referring to the same thing. 33

Al-QawÉÑid al-NËrÉniyyah, p.118. See also pp. 132, 133, 135, and 137. Note that of the examples that al-NawawÊ

and Ibn Taymiyyah mentioned, I quoted some of them for minor gharar and others for gharar in an auxiliary [to the

contract]. In my opinion, what I did is more appropriate because the examples used to illustrate what is lawful due to

17

Al-KÉsÉnÊ said, regarding the option to anull (khiyÉr al-sharÏ): “The basic rule is that an

option to anull [should be] prohibited because it contains an element of gharar and conflicts

with the nature of the [sale] contract. However, khiyÉr al-sharÏ was permitted by a specific

text due to the need to prevent [either party from] being duped by [having a period] to think

about the contract.”34

Ibn ÑÓbidÊn said in clarifying the rule of sharecropping: “AbË ×anÊfah ruled that muzÉraÑah

is invalid, based on analogy with hiring a person to grind wheat, with payment in the form of

a share of the flour. MuÍammad ibn al-×asan and AbË YËsuf ruled that muzÉraÑah is valid.

The latter is the preferred opinion, based upon ÍÉjah.”35

Al-BÉjÊ said, “JuÑl (a named reward to perform a particular task) was permitted in cases of

unknown work and gharar because ÌarËrah calls for it.”36

Al-SuyËÏÊ said regarding leases:

Analogy requires forbidding leasing because it is a contract to hire a non-

existent usufruct. However, it was allowed to meet a general need (ÍÉjah) for it.

If a need becomes general to all people, it will be considered like necessity

(ÌarËrah).37

Al-SuyËÏÊ also made the same statement on ÍawÉlah (transferal of a

debt) because it is a sale of a debt for a debt [which is prohibited].38

Ibn QudÉmah also argued:

It is permitted that the task of jiÑÉlah to be unknown due to need. A task may be

unknown, e.g. returning a runaway slave or animal, and thus a lease contract

cannot be used for it [because everything in the lease should be known], and it

may be that no one can be found to do it voluntarily. Therefore, ÍÉjah calls for it

to be valid to pay a reward for an unknown task.39

need should be different from the examples of what is lawful due to minor gharar or because it is in a contractual

auxiliary. 34

BadÉ’iÑ al-ØanÉ’iÑ, vol. 5, p. 174, al-MabsËÏ, vol. 13, p. 40. 35

Radd al-MuÍtÉr, vol. 5, p. 239. 36

Al-MuntaqÉ, vol. 110, p. 110 & 112, al-JÉmiÑ li-AÍkÉm al-Qur’Én, vol. 9, p. 232, al-MuqÉdimÉt, vol. 2, p. 305.

All these books use the word “necessity”. 37

Al-AshbÉh wa al-NaÐÉ’ir, p. 79. 38

Ibid. 39

Al-MughnÊ, 5:656-657.

18

On the topic of leasing a stud for copulation, al-ÑAmilÊ said “The objective of the copulation

is, admittedly, the semen [which involves gharar]; however, it is allowed due to ÌarËrah.”40

Al-MurtaÌÉ said “JiÑÉlah is valid due to the pressing need (ÍÉjah) for the return of a lost

animal and the like; making it similar to a lease [in being permitted despite its contravention

of a general principle].”41

6.5 The SharÊÑah Grants Consideration to Both General and Particular Needs

There are three types of need:

1. General: a need that affects all people.

2. Particular: this affects a group of people; e.g. inhabitants of a city or practitioners of

a particular trade.

3. Individual: a need particular to an individual or a group of individuals who have

nothing else in common.

We are talking about the first two categories: public or particular need, which should be

treated like ÌarËrah, as jurists have stated. Al-Majallah declares, “×Éjah, whether of a

public or particular nature, is dealt with like ÌarËrah.”42

6.6 Need Is Not Given Legal Consideration Unless It Is the Only Option

A condition of the ÍÉjah that makes gharar irrelevant is that it must be the only option. In

other words, all legal means to satisfy the need must be exhausted before resorting to a

contract that involves substantial gharar. If the need can be satisfied by another contract

devoid of gharar, there is no true need to execute the contract that involves substantial

gharar.

Therefore, it is not valid to lease a ewe to drink its milk, and is not permissible to sell its

milk in the udder because that is not the only way to fulfill the need. That is because it is

40

MiftÉÍ al-KarÉmah, vol. 4, p. 144. 41

Al-BaÍr al-ZakhkhÉr, vol. 4, p. 62. 42

Al-Majallah, Legal Maxim 32. See also: al-AshbÉh wa al-NaÐÉ’ir, p. 79, al-Fiqh al-IslÉmÊ, vol. 1, p. 667.

19

possible to buy the milk after the sheep has been milked. However, jurists ruled that hiring a

wet-nurse is valid because it is the only way to feed an infant. Therefore, the need for this

contract is specific.

Similarly, the ×anafÊs ruled that purchasing unripe fruit or leasing a tree until the fruit is

fully mature is not valid because these are not the only means to fulfill the need. It may also

be satisfied by purchasing the tree along with the fruit.

Ibn al-HumÉm says:

In case a seller sells, without any conditions, fruit that has not yet reached its full

size, and the buyer leaves it [with the seller, there are several possibilities]:

a) He did it with the plain permission of the seller.

b) The permission is implicit in a lease; i.e., he has leased the trees until the

fruit is mature.

c) He did it without permission.

In the first two cases, the increase and its consumption are both lawful for him.

In case it was done with permission, that is obvious. In the case of the lease, it is

because the lease contract is invalid, since leasing trees is not customarily

practiced, and there is no need for that contract in particular. The need would

only become certain if leasing was the only solution. However, in this case the

buyer could purchase the tree with the fruit and then leave the fruit on it.”43

Obviously, the proposed solution involves considerable difficulties, as Ibn al-HumÉm

himself pointed out: “The buyer may not need the tree, or he may not have enough money to

buy it, or the seller may not want to sell it.” I quoted this text only because it contains an

explicit mention of the fiqh principle, even though the example [of its application] is not

acceptable, in my opinion.

What made the ×anafÊs adopt this view is that they consider an unqualified sale to require

that the fruit be harvested immediately [after concluding the contract. If the buyer orders an

immediate harvest of unripe fruit,] the contract would then be valid. The majority of jurists

hold the opposite view. They consider an unqualified sale [of fruit that has begun to ripen]

implies that there be a wait to harvest until the fruit is fully ripe. [On the other hand, buying

43

FatÍ al-QadÊr, vol. 5, p. 103.

20

it before it has begun to ripen] is not allowed because one can wait until the fruit has begun

to ripen and then purchase it.

Another example is ImÉm MÉlik‟s ruling that musÉqÉh is permissible while muzÉraÑah is

invalid.44

He considered musÉqÉh permissible because the owner of trees is not allowed to

sell the intended benefit from the trees, i.e., their fruit, before they ripen. However,

muzÉraÑah is not allowed because a landlord can lease the land for a certain amount of

money. What that means is that ImÉm MÉlik sees a need for musÉqÉh in particular because

there is no way to take benefit from the trees before their fruit begins to ripen except through

musÉqÉh. On the other hand, there is no need for muzÉraÑah in particular because the

landlord can rent out his land by a lease contract, which is free of gharar, in MÉlik‟s

opinion.45

6.7 Need is Appraised according to Its Degree

A well-known legal maxim is that need should be appraised according its degree; i.e., when

something is allowed due to ÍÉjah, its use should be limited to what dispels the need without

going beyond it. An example of the application of this maxim to our topic is what the

×anafÊs have mentioned regarding a specification option (khiyÉr al-taÑyÊn).46

They stated

that a buyer may exercise the option to select one of at most three objects because the need

can be satisfied by investigating a maximum of three objects of high, medium, or low

quality.

Al-KasÉnÊ says, “Things are either of high, medium, or low quality, and hence the need can

be dispelled by investigating an object from each category. The rule for anything beyond

44

Editor’s note: MuzÉraÑah and musÉqÉh are both types of sharecropping contracts. In muzÉraÑah, the owner of a

piece of land allows a farmer to grow a crop on it in return for a specified fraction of the total yield (not the yield

from a certain part of the land). In musÉqÉh, the owner of an orchard turns over a specified number of planted, fruit-

bearing trees to someone who will tend them in exchange for a specified portion of the total yield of the trees (not

the yield of certain trees). 45

Al-Gharar wa Atharuhu fi al-ÑUqËd, p. 478 & 481. 46

Editor’s note: KhiyÉr al-taÑyÊn is the right of the buyer, within a certain period, to specify one subject matter from

the unspecified subject matters of the contract

21

that returns to the basic principle.”47

The basic principle here is prohibition because [the

excess] leads to the object of sale being unknown.

Moreover, only the buyer is allowed to stipulate the specification option because the seller

already knows his product and, thus, has no need for the option. Ibn al-HumÉm says,

The specification option was legalized because the buyer needs to select what is

most useful and beneficial to him, whether it is present or absent. Therefore, it is

not valid for the seller to use the specification option because he has no need to

choose what is most useful and beneficial, and the objects of the sale were

already with him before the sale, and he knows very well which of them is

appropriate for him.48

The implication of the reason given for the ruling is that the seller could be allowed this

option if he has a need to choose what is most useful, which is conceivable though rare. The

×anafÊ scholar al-KarkhÊ stated the same.

Another example is the ruling of ImÉm AbË ×anÊfah and Zufar that the period of the

anullment option in a sale (khiyÉr al-sharÏ) cannot be more than three days because the

option was legalized to meet the need to avoid being duped by [having time] to reconsider.

Three days are enough for that purpose, and there is no [criterion for a] limit to anything

more than that.49

Another example is that jiÑÉlah is permissible even if the task is unknown, while it is not

permissible if the reward is unknown. That is because need dictates that the task be unknown

while there is no need for the reward to be unknown. Al-BÉjÊ says, “It is not permissible for

the reward of jiÑÉlah to be unknown because there is no need that calls for that. The only

reason that it is allowed for the task to be unknown is that necessity does call for it.” Ibn al-

ÑArabÊ adds, “[When a stricture] is dropped due to necessity, the process should not go

beyond it to areas where there is no necessity.”50

47

BadÉ’iÑ al-ØanÉ’iÑ, vol. 5, p. 157. 48

FatÍ al-QadÊr, vol. 5, p. 131. 49

BadÉ’iÑ al-ØanÉ’iÑ, vol. 5, p. 174. 50

Al-MuntaqÉ: SharÍ al-MuwaÏÏa’, 5:113; AÍkÉm al-Qur’Én, 3:1085. Note that, in both texts, “necessity” is used to

mean “need”.

22

Another example is the dominant opinion in the the MÉlikÊ School that a requirement for the

validity of jiÑÉlah is that the payer of the reward should derive a benefit from the task, as in

the return of a lost animal. JiÑÉlah is not valid if the payer of the reward does not derive a

benefit from the task; e.g., to have someone climb a mountain.51

That is because jiÑÉlah was

legalized to satisfy a need, but in this case jiÑÉlah does not secure any benefit for the payer

of the reward.

6.8 The Relationship between Need, Standard Practice, and Juristic Preference

(IstiÍsÉn)52

I have noticed that the ×anafÊs jurists often say, regarding gharar contracts, “This contract is

lawful due to standard practice,” or custom, or istiÍsÉn. They sometimes combine istiÍsÉn

and standard practice [as the rationale] or combine one of them with ÌarËrah or ÍÉjah, or

they may use the three terms in a single phrase.

Ibn ÑÓbidÊn says:

It is valid to lease a public bath for two reasons: (i) the Prophet (peace be upon

him) entered a public bath in [the town of] al-JuÍfah; and (ii) custom. It is valid

also to build a public bath to be used by men and women due to the need.

Moreover, hiring a wet-nurse is valid due to the common practice. By contrast, it

is not lawful to lease animals for milking, because that is not common practice.53

AbË MuÍammad al-BaghdÉdÊ says, “ImÉm AbË ×anÊfah ruled that muzÉraÑah is totally

invalid (bÉÏil) whereas AbË YusËf, MuÍammad ibn al-×asan and the majority of the ×anafÊs

permitted it due to common practice and the need for it.”54

Ibn ÑÓbidÊn quotes from al-×ÉwÊ:

51

×Éshiyat al-DasËqÊ, 4:59; al-MuqaddimÉt, 2:307. Note that “necessity” is used to mean “need”. 52

Editor’s note: The ×anafÊ scholar al-KarkhÊ, defined it as “departure from an established precedent in favour of a

different ruling for a reason stronger than the one obtained in that precedent”. Al-SarakhsÊ defined it as “setting

aside qiyÉs in favour of that which is more suitable for the people”. The MÉlikÊ scholar Ibn al-ÑArabÊ defined it as:

“abandoning, as an exception, what is required by the law because applying the existing law would lead to a

departure from one of its own objectives.” 53

Ibn ÑÓbidÊn, al-×Éshiyah, vol. 5, pp. 43 & 44. He commented on the statement “due to the common practice”,

saying, “This is the justification for the ruling of permissibility, and it is istiÍsÉn.” 54

MajmaÑ al-ÖamÉnÉt, p. 314.

23

MuÍammad bin Maslamah was asked about the wage of a broker, and he said: “I

expect that there is no harm in it because it is a common practice, even though

the basic rule is that it is invalid. [It is allowed] because it is the widespread

practice. Many of these [contracts] are not permitted, but [scholars] allowed

them due to people’s need for them; for example, [the fee for] using a public

bath.”55

ImÉm MuÍammad ibn al-×asan al-ShaybÉnÊ says:

If an individual purchases two dresses for 10 dirhams each, and takes possession

of them on the condition that he will choose one of them [within a period of

three days]; once he has chosen, he must pay its price and return the other in

good condition. The default status of such a sale is that is should be invalid

because the object of sale is unknown and undetermined. However, I allow it on

the basis of istiÍsÉn, in case of a sale of two or three dresses, if the buyer takes

possession and selects one.56

Al-ZaylaÑÊ says, regarding sale of a crop that comes into existence bit by bit over time,

“Some said that it is permitted if the existent part is the majority. In this case, the

nonexistent would be considered an auxiliary of the existent. The validity of the sale is based

on istiÍsÉn due to necessity and common practice.”57

Are common practice and istiÍsÉn, then, two other factors that make gharar of no effect [in

invalidating a contract] in the same way that ÍÉjah does?

In fact, common practice and istiÍsÉn are not independent factors; rather, their effect is

derived from ÍÉjah, which is explained as follows.

6.8.1 Common Practice Is an Indicator of Need

It is obvious that people do not deal in contracts unless there is some need that calls them to

do so. Therefore, their practice is an indicator that a need exists for the deal they engage in.

Likewise, the lack of practice is an indicator of a lack of need.

55

×Éshiyah Ibn ÑÓbidÊn, vol. 5, p. 53 & 39. 56

Al-AÎl, p. 135 & 136. 57

[The documentation was missing in the Arabic.]

24

Practice could be common when the need is general, or it could be particular when the need

is particular. These are the two types of custom (Ñurf) that are given legal consideration.

They strongly correspond to the two types of ÍÉjah that are given legal consideration. First,

a need arises; then the practice follows it. It is inconceivable that there would be a

widespread practice without a need for it. Likewise, general and particular ÍÉjah can only be

known by way of common and particular practice.

What I said is supported by the statements of some ×anafÊ jurists such as al-KÉsÉnÊ. He

explained the legality of the specification option by saying: “…because of the practice of

people, due to their need for it.”58

Another example is Ibn al-HumÉm’s statement on the invalidity of leasing a tree without its

fruit: “Comprehensive principles dictate that any kind of lease should be invalid. However,

the SharÊÑah permits leases due to the need for them, when there is a common practice.

[However,] leasing a tree alone is a transaction that people do not practice; [therefore, the

lease is not valid].”59

This means that need alone is not enough to legalize a transaction; rather it should be

accompanied by a common practice. Therefore, lease of land for agriculture is valid because

people need it and it is their practice. Likewise, any type of lease is valid if people

customarily practice it.

On the other hand, if a type of lease is not practiced by people, the lease is invalid. For

example, if an individual purchases unripe fruit and leases the tree on which it is growing

until it is ripe, the lease contract is invalid because people do not practice leasing trees by

themselves.

Further examples of invalid leases:

1. Leasing a tree to dry clothes on.

2. Leasing pegs to hang things on.

3. Leasing a book to read it.

58

FatÍ al-QadÊr, vol. 5, p. 103. 59

FatÍ al-QadÊr, vol. 5, p. 103; BadÉ’iÑ al-ØanÉ’iÑ, vol. 5, pp. 166 &173.

25

These leases are invalid because people do not practice them, although a particular lessee

may be in need of one of them. However, this is an individual need, which is not legally

recognized. Needs are recognized by the SharÊÑah when they are either prevalent in a whole

society or particular to some group. The indicator of that need is that it be accompanied by a

general or particular practice.

6.8.2 The Legality of IstiÍsÉn is Based upon Need or Common Practice

IstiÍsÉn must be backed by a proof, called “wajh al-istiÍsÉn”, from which it derives legal

authority. I have traced what the ×anafÊs have written about istiÍsÉn with reference to our

topic and found that sometimes they justify it by need and sometimes by customary practice.

As we have seen, customary practice is derived from need, and thus, istiÍsÉn is also derived

from need.

These examples clarify what I said:

Al-KÉsÉnÊ said:

There are two cases where the sale is defective:

1. If a seller offers to sell one of four dresses for a certain amount, whether

or not he mentions the selection option, or

2. If he offers to sell one of two or three dresses for a certain amount and

does not mention the selection option.

The sale in both cases is defective because the object of sale is unknown. [On

the other hand,] if he gives the option to select one among [up to three] garments

at a predetermined price and return the rest, the sale should, on the basis of

comprehensive principles (qiyÉs), be defective. However, based upon istiÍsÉn, it

is not.

The way that comprehensive principles require the invalidity of the sale is that

the object of the sale is unknown, in that one of a group of objects is being sold

without specifying which one. That prevents the sale from being valid. As for

the first case, even if he gives the option, the sale is defective [because the legal

range of the option is limited to three objects].” The justification for istiÍsÉn

here is analogy with the annulment option (khiyÉr al-sharÏ). The common factor

between them is the great need to ward off deception. This is a sale that was

26

legalized, although it contains an element of gharar, based on juristic istiÍsÉn

that is justified by need.60

Al-SarkhasÊ said, regarding the sale of fruit:

If the fruit have reached their full size but are not yet fully ripe; in this case:

1. If he buys it on the condition that the fruit be immediately harvested, or

no stipulation is made, the sale is valid.

2. If the buyer stipulates that the fruit be left on the tree, the sale is

defective, according to AbË ×anÊfah and AbË YusËf, based on the basic

principle (qiyÉs). MuÍammad ibn al-×asan permitted the sale based on

istiÍsÉn because people practice the sale and the period of leaving the

fruit [until it is fully mature] is short. A short period may be tolerated,

unlike a long period.61

Thus, the sale is valid, in MuÍammad ibn al-×asan‟s opinion, based on istiÍsÉn and the

minor nature of the gharar.

Al-KÉsÉnÊ says, “Fundamental legal principles require that istiÎnÉÑ be rejected because it is a

sale of what doesn’t exist. However, it is valid based on istiÍsÉn because people have used it

down through the ages without any objections to it, which is consensus from them about its

legality.”62

This is istiÎnÉÑ justified by collective practice.

7. Conclusion

We can sum up, from what has been discussed, that gharar does not invalidate a contract unless

four conditions are all present (in the way that has been discussed):

1. The contract is a contract of exchange.

2. The gharar is substantial.

3. That it is fundamental to the contract.

4. There is no need for the contract.

60

BadÉ’iÑ al-ØanÉ’iÑ, vol. 5, p. 157, FatÍ al-QadÊr, vol. 5, p. 130. 61

Al-MabÎËÏ, p. 195 & 196. 62

BadÉ’iÑ al-ØanÉ’iÑ, vol. 5, p. 209 & 2.

27

The first condition was taken from the MÉlikÊs, while the rest are agreed to by all schools of

jurisprudence.

8. The Application of Gharar Theory to a Number of Contemporary Gharar Contracts

Most of the civil laws of Arab countries mention four contracts under the title of “gharar

contracts”: gambling, betting, lifetime income, and insurance. The laws forbid gambling and

betting, with some exceptions, and allow lifetime income and insurance. I will apply the theory

of gharar to insurance to see whether Islamic fiqh allows it or forbids it.

Egyptian law (Article 747) has defined an insurance contract as:

A contract that obligates the insurer to pay the insured or the beneficiary designated

in the contract an amount of money, a regularly scheduled set of payments, or some

other monetary compensation, in case of an accident or the occurrence of a risk

stipulated in the contract. This is in return for regularly scheduled payments, or some

other payment method, made by the insured party to the insurer.63

Ž

The definition clarifies the following:

1. Insurance is a contract of exchange concluded between two parties: the insurer, who is

the insurance company, and the insured, who is the customer. The insured pays a sum of

money to the insurance company in return for a guarantee from the company to pay

compensation to the insured in case the risk occurs.

Each of the two contracting parties gets something in return for what they provide. The

amount paid by the insurer is not a contribution because the insured is obligated to pay

the insurance premium. The fact that the insured does not get anything in some cases

does not exclude the insurance contract from being a commutative contract because it is a

type of probabilistic contract. A characteristic of probabilistic contracts is that one of the

contracting parties might not receive the counter-value.

2. Insurance is a gharar contract because it is a contract whose consequences are hidden. At

the time the contract is concluded, neither party knows how much they will give or

receive. An accident may occur after the insured makes the first payment, which makes

him eligible to receive compensation from the insurer. On the other hand, the insured

63

See Financial Transactions in Islamic Jurisprudence, vol. 1, p. 90.

28

may make all the payments without any accident occurring; in which case, he gets

nothing.

In the same manner, the insurer cannot know what amount it will have to pay for any

particular contract, although it can estimate the total amount of all contracts based on

actuarial statistics. The gharar is present in an insurance contract because payment of one

of the counter-values is made contingent upon an event that may or may not occur, and if

it does occur, there is no way to know when.

3. Insurance contains substantial gharar; even the civil codes describe it as a gharar

contract.

4. The gharar is fundamental to the contract; it is not linked to an auxiliary of the contract.

One question remains: Is there a need for the commercial insurance contract that will cause the

gharar in the contract to be excused?

There is a need, but commercial insurance, which the civil codes have made lawful, is not the

only way to fulfill it. There is a SharÊÑah alternative, cooperative insurance, which Islamic

countries can apply. It is insurance based upon voluntary donation that performs the same

function as commercial insurance.

Sudan has implemented this alternative since a quarter of a century, when FayÎal Islamic Bank of

Sudan was founded. The management of the bank requested the SharÊÑah Supervisory Board to

allow insuring the bank‟s business with commercial insurance companies. The Board, which I

chair, did not allow them, on the basis that the bank can establish a cooperative insurance

company based on donation rather than an exchange contract.

In 1977, the bank established the first Islamic insurance company, which worked alongside

commercial insurance companies. After the SharÊÑah was implemented in Sudan, the government

issued, in 1992, a decree to convert all commercial insurance companies to work according to the

SharÊÑah, based on the cooperative system.

All praise is for Allah, who guided us to this, and we could not have been guided if Allah had not

guided us.

29

May Allah bless and send peace upon our master, MuÍammad, and upon his family and

companions.

9 JamÉdÊ al-Ókhir, 1425 AH

26/7/2004 CE

Dr. al-Øiddiq MuÍammad al-AmÊn al-ÖarÊr

Professor of SharÊÑah

College of Law – Khartoum University