Riba is not the only thing a contract has to avoid: gharar is the second prohibition.
Riba is not the only thing a contract has to avoid: gharar is the second prohibition. Gharar is 'uncertainty, hazard, chance or risk' — 'a negative element in mu'amalat fiqh (transactional Islamic jurisprudence), like riba (usury) and maisir (gambling).' Jurists split it into 'gharar fahish ("excess" gharar) ... prohibited (haram)' and 'gharar yasir ("light" gharar) ... small or trivial amounts of gharar which are tolerated (halal)', and its prohibition rests on hadith 'declaring as forbidden ... the sale of things like "the birds in the sky or the fish in the water"'. 'Orthodox Islamic scholars argue that commercial insurance ... contains gharar and is haram', and 'Bans on both maisir and gharar tend to rule out derivatives, options and futures' (Wikipedia, 'Gharar' and 'Islamic banking and finance')
What this source says
Almost every entry in this corpus turns on riba — the prohibition of interest — because riba is the reason the site exists. But a contract can be free of interest and still be forbidden, and the reader building a genuinely halal financial life needs to know the second prohibition by name: gharar. The reference defines it as 'uncertainty, hazard, chance or risk', and a second, independent reference translates the same term as 'uncertainty' or 'ambiguity'. It is, in the words of the first source, 'a negative element in mu'amalat fiqh (transactional Islamic jurisprudence), like riba (usury) and maisir (gambling)' — one of the three classic defects that can invalidate a transaction. Where riba is a defect of return (a fixed increase on money lent), gharar is a defect of knowledge: the parties do not truly know what they are buying, whether it exists, whether it can be delivered, or what its consequence will be. The reference captures this as 'the sale of a thing which is not present at hand, or the sale of a thing whose aqibah (consequence) is not known'. Honesty about the two prohibitions also means honesty about their weight relative to each other, and the source is candid: 'gharar is considered to be of less significance than Riba', and 'there is much less material available about gharar in the literature of Islamic economics and finance than there is on riba'. This corpus reports that ranking rather than inflating gharar into riba's equal — it is the second prohibition, not a rival to the first. Crucially, gharar is not all-or-nothing. The jurists draw a line the reference states plainly: 'Gharar fahish ("excess" gharar) (also gharar-e-kathir, "too much" gharar) is prohibited (haram)', while 'Gharar yasir ("light" gharar) (also gharar qalil, "nominal" gharar) refers to small or trivial amounts of gharar which are tolerated (halal)'. This matters because ordinary commerce is never perfectly certain — a builder cannot promise the exact grain of every plank — so the rule targets excessive, transaction-defining uncertainty, not the ordinary imperfection of real life. The prohibition is scripturally grounded, and the corpus states the grounding exactly as the sources give it, without inventing collection numbers. The second reference records that the 'prohibition of gharar is based on hadith declaring as forbidden gharar, the sale of things like "the birds in the sky or the fish in the water"' — you cannot sell what you do not yet possess and may never catch. The first reference gives a fuller narration, attributing it as 'Ahmad and Ibn Majah narrated on the authority of Abu-Said al-Khudriy' that 'The Prophet (pbuh) has forbidden the purchase of the unborn animal in the 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.' Read the list and the logic is clear: every item is a thing whose existence, quantity or deliverability is unknown at the moment of sale. That principle is why gharar reaches into modern finance in ways that surprise people. The second reference notes that 'Bans on both maisir and gharar tend to rule out derivatives, options and futures' — instruments whose payoff depends on unknown future states and which supporters of Islamic finance believe 'involve excessive risk and may foster uncertainty and fraudulent behaviour such as are found in derivative instruments'. And it reaches conventional insurance: 'Orthodox Islamic scholars argue that commercial insurance (as opposed to social or cooperative insurance) contains gharar and is haram (forbidden)' — because the policyholder pays a known premium for an unknown, contingent payout. This is exactly why the takaful entry already in this corpus exists: the reference notes that 'takaful or cooperative insurance' — 'built on principles of voluntary contribution and mutual cooperation' — 'has been proposed' as the gharar-free alternative, reframing insurance as mutual donation and shared risk rather than a wager on an uncertain event. So gharar completes the picture the site has been building one mechanism at a time. Riba explains why the financier's return must come from a real sale, lease or partnership; gharar explains why the underlying transaction must itself be over something real, known and deliverable. A product can clear the first test and fail the second. The honest question to ask of any 'Islamic' contract is therefore twofold: is the return a trading return rather than interest (no riba), and is the subject of the deal known and genuinely owned rather than a speculation on the unknown (no excessive gharar)? Both must hold.
Wording inside quotation marks is quoted from the source. The rest is this notebook’s summary of it — read the original before relying on it.
Provenance
- Compiled from
- Compiled from two neutral third-party references cross-read: Wikipedia, 'Gharar' and Wikipedia, 'Islamic banking and finance' (both drawing on transactional Islamic jurisprudence and the hadith narrations they cite)
- Source
- DEFINITION ('uncertainty, hazard, chance or risk'; separately 'uncertainty' or 'ambiguity'; 'a negative element in mu'amalat fiqh ... like riba (usury) and maisir (gambling)'; 'the sale of a thing which is not present at hand, or the sale of a thing whose aqibah (consequence) is not known') + RELATIVE-WEIGHT ('gharar is considered to be of less significance than Riba'; 'much less material available about gharar ... than there is on riba') + CLASSIFICATION (gharar fahish '"excess" gharar ... prohibited (haram)' vs gharar yasir '"light" gharar ... small or trivial amounts ... tolerated (halal)') + HADITH GROUNDING ('the sale of things like "the birds in the sky or the fish in the water"'; Ahmad and Ibn Majah on the authority of Abu-Said al-Khudriy: unborn animal in the womb / milk in the udder without measurement / spoils of war prior to distribution / charities prior to receipt / the diver's catch) + MODERN REACH ('Bans on both maisir and gharar tend to rule out derivatives, options and futures'; commercial insurance 'contains gharar and is haram'; takaful 'built on principles of voluntary contribution and mutual cooperation' proposed as the alternative) — two neutral encyclopaedia pages, verbatim, cross-read on two genuinely DIFFERENT articles 2026-07-02: [1] Wikipedia, 'Gharar' (https://en.wikipedia.org/wiki/Gharar) — verbatim: 'Uncertainty, hazard, chance or risk'; 'a negative element in mu'amalat fiqh (transactional Islamic jurisprudence), like riba (usury) and maisir (gambling)'; 'gharar is considered to be of less significance than Riba'; 'Gharar fahish ("excess" gharar) (also gharar-e-kathir, "too much" gharar) is prohibited (haram)'; 'Gharar yasir ("light" gharar) (also gharar qalil, "nominal" gharar) refers to small or trivial amounts of gharar which are tolerated (halal)'; 'Ahmad and Ibn Majah narrated on the authority of Abu-Said al-Khudriy' the forbidding of 'the unborn animal in the 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'; 'Orthodox Islamic scholars argue that commercial insurance (as opposed to social or cooperative insurance) contains gharar and is haram (forbidden)'; takaful 'built on principles of voluntary contribution and mutual cooperation'. [2] Wikipedia, 'Islamic banking and finance' (https://en.wikipedia.org/wiki/Islamic_banking_and_finance) — verbatim: gharar 'Usually translated as "uncertainty" or "ambiguity"'; 'Bans on both maisir and gharar tend to rule out derivatives, options and futures'; 'Prohibition of gharar is based on hadith declaring as forbidden gharar, the sale of things like "the birds in the sky or the fish in the water"'; instruments that 'involve excessive risk and may foster uncertainty and fraudulent behaviour such as are found in derivative instruments'.
- School / basis
- Comparative / foundational (gharar as the SECOND prohibition alongside riba and maisir — 'uncertainty, hazard, chance or risk'; excessive gharar fahish forbidden, trivial gharar yasir tolerated; grounded in hadith forbidding the sale of what is not present or whose consequence is unknown — 'the birds in the sky or the fish in the water', the unborn animal, the diver's catch; the reason orthodox scholars hold commercial insurance and derivatives/options/futures impermissible, and the reason takaful was proposed as the gharar-free cooperative alternative)
- Captured
- 2026-07-02
- Added
- 2026-07-02
- Trust
- Useful and cited, but with an editorial or commercial lean worth cross-checking.
Compiler’s note
First DEDICATED GHARAR (excessive-uncertainty) entry in the corpus, and the first entry on the PROHIBITIONS side that is a conceptual COMPANION to riba rather than a financing/deposit mechanism. Every prior mechanism entry (qard hasan, takaful, waqf, sukuk, murabaha, mudaraba, ijara, salam, istisna, tawarruq, hawala, diminishing musharaka, wadiah/amanah) describes how money is financed, moved or held without interest; riba itself is covered site-wide; gharar — the SECOND classical defect that can invalidate a transaction — had no dedicated explainer. Grep-confirmed before writing: `ls content/articles | grep -iE 'gharar|maisir|maysir|gambling|uncertain|speculat'` returned NOTHING. VERIFICATION: every load-bearing quote verified BY ME 2026-07-02 across TWO genuinely different Wikipedia pages (one WebFetch each), verbatim and mutually consistent — the 'uncertainty, hazard, chance or risk' definition (cross-confirmed as 'uncertainty'/'ambiguity' on the second page), the 'negative element ... like riba ... and maisir' framing, the honest 'less significance than Riba' / 'much less material' relative-weight statements, the gharar-fahish (haram) vs gharar-yasir (halal) classification, the 'birds in the sky or the fish in the water' hadith wording, the fuller Abu-Said al-Khudriy narration attributed to 'Ahmad and Ibn Majah', the derivatives/options/futures ban, and the commercial-insurance-is-haram + takaful-as-alternative point. TRUST 'medium' (two well-corroborated encyclopaedia pages that themselves draw on transactional fiqh + the cited hadith, NOT a primary read of a fiqh-council resolution or an AAOIFI standard). DELIBERATELY DROPPED / NOT ASSERTED per the no-fabrication rule: (a) any hadith COLLECTION NUMBER — the sources attribute the narration to Ahmad and Ibn Majah on the authority of Abu-Said al-Khudriy but give NO number, so none is invented; (b) any Qur'anic verse number for gharar (the sources ground the prohibition in hadith, not a numbered ayah, so no ayah is claimed); (c) any AAOIFI standard number or named fiqh-council resolution on gharar (none returned/verified); (d) any market/volume figure; (e) any claim gharar outranks riba — the body faithfully carries the source's OWN statement that gharar is 'of less significance than Riba'. FRESHNESS-HONEST: all claims are structural/definitional/scriptural, no volatile dated statistic. JSON-only per the established article convention (content/articles/*.json feed app/lib/corpus.ts + the /corpus stats badge + Phase-2 retrieval; NOT rendered as individual routed cards), so no SourceCard/route/href added and internal-link integrity is unaffected. Articles 42->43, corpus total 140->141 (articles 43 + books 23 + youtube 23 + curated 52 = 141). This entry pairs with tawarruq (the contested-contract counter-example) and the takaful mechanism entry to give the corpus its first explicit statement that a contract must clear BOTH tests — no riba AND no excessive gharar. NEXT natural candidate for a future run: a dedicated maisir (gambling/speculation) explainer as the third classical prohibition, or wakalah (agency) as the fee-for-service contract underlying much of modern Islamic banking operations.
Topics
islamic-financeghararribamaisirgamblinguncertaintyambiguityspeculationexcessive-riskgharar-fahishgharar-yasirprohibitionmu-amalatinsurancetakafulderivativesoptionsfuturesshariah-compliancesubstance-over-form
This is source material, not a ruling. The corpus records what a named source actually said, so that you can read it yourself and take it to a scholar you trust. Ask the corpus to search all entries at once, or return to the library.