Gharar: final thoughts

Conclusion on Gharar

As has been seen, the Arabic-Arabic translation does not distinguish between misrepresentation and fraud and similar words such as cheating, deceit, lying, and so on. In this context, gharar cannot be considered to be risk or uncertainty. It should be noted that gharar will be applicable when one of the contracting parties tries to change facts, or does not give correct information related to the risk or uncertainty involved, convincing the other party that there is no uncertainty or the level of risk is very low, when in reality it is very high or excessive. Based on that, if a party induced the other to enter into a contract by providing a misleading evaluation, this would be considered gharar (misrepresentation). The legal effects of gharar would depend on the facts of the case, and these could make a contract void or voidable. This is because gharar is connected to fraud, or at least involved in fraud, which is one of the main reasons behind its prohibition. The reference to fraud here is based on the understanding that the contract involves fraud, involves an attempt to obtain property or money from another without having the legal right to do so (Hasan, 1994, p.41). This issue requires further research by contemporary Muslim scholars in order to properly classify the categories of gharar, and their legal effects with regards to contracts.

Under Islamic contract rules, gharar carries the meaning of misrepresentation, fraud, deceit, and similar terms. This, of course, contradicts most of Islamic jurisprudence and scholars’ writings, which deal with gharar in a way far from the Qur’anic context. The mission of the jurists or scholars should be to derive and organize rules of gharar as misrepresentation/fraud, and unify them under the same terms. The same applies to the English-Arabic translation and vice versa. This is very much needed, in order to bring an end to the confusion and contradictions with and between the non-Arabic speakers who are interested in Islamic contract law. It is also needed urgently, due to the notable emergence of Islamic financial contracts at an international level. A modernized understanding of the concepts underlying contracts is needed, in order to meet contemporary commercial demands while still complying with the Qur’anic teachings.

Gharar (misrepresentation) attracts a lot of interest and instigates wide-ranging discussions by writers on Islamic financial and commercial contracts. It is noted, however, that most of these writers have not derived their opinions from the Qur’an. Very few of them, when they did so, did not go directly to the verses that explain gharar and its derivative terms. It is also worth noting that those who have written about this subject, did not investigate the practical Arabic meaning of gharar, following respected Arabic linguistics and dictionaries. However, scholars and writers have to do so, as this would help to enhance and strengthen the knowledge and understanding of the realistic Islamic approach to Qur’anic teachings. Finally, gharar is very much comparable to the concept of misrepresentation under English contract law.


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