How Does the Shafi’i School Address “Gharar” (Uncertainty) in Contracts?
Shafi'i Fiqh
Answered by Shaykh Irshaad Sedick
Question
How does the Shafi‘i School approach the “Gharar” (uncertainty) issue in contracts, and what are the limits to acceptable uncertainty in a contract?
Answer
In the Name of Allah, the Most Merciful and Compassionate.
May Allah alleviate our difficulties and guide us to what pleases Him. Amin.
When there is sufficient gharar (uncertainty) in a contract, to the extent that the buyer, seller, or both do not know critical details of the transaction, such as which particular thing is being sold, how much it is, and what kind it is, this amounts to prohibited gharar, and Allah knows best. [Hammadi, Fath al-Wahhab al-Malik]
Shafi‘i Perspective on Gharar
Like other Sunni schools, the Shafi‘i School holds that contracts must be free from significant gharar to be considered valid. This principle is based on several ahadith of the Prophet Muhammad (Allah bless him and give him peace), which prohibits sales that involve gharar. Shafi‘i scholars interpret this to mean that any substantial uncertain factor in a contract that can lead to disputes or exploitation is not permissible.
The Prophet Muhammad (Allah bless him and give him peace) said,
“…Do not sell that which you do not possess.” [Tirmidhi, Nasa‘i, Abu Dawud, Ibn Majah]
Examples of Gharar
Typical examples of gharar in a contract that the Shafi‘i School would find objectionable include:
- Selling goods that are not present or have not yet been produced (e.g., selling fish that have not yet been caught).
- Selling goods when the specific characteristics and quantities are unknown.
- Contracts where the delivery or the specifications of the goods are uncertain.
- Insurance contracts (conventional commercial insurance) where the unknown payment depends on an uncertain event are generally considered to contain gharar and are thus problematic in traditional Islamic jurisprudence.
Limits to Acceptable Uncertainty
The Shafi‘i school does tolerate minor gharar, recognizing that complete certainty in all details of a commercial transaction is not always feasible. For instance:
- Minor uncertainties that do not impact the essence of the contract.
- Uncertainties that are customary in trade and do not lead to disputes.
The critical distinction is whether the uncertainty is substantial enough to affect the contract’s fairness or the involved parties’ decision-making process. If it does, then the contract may be invalid.
Practical Application
In practice, Shafi‘i jurists would evaluate the specifics of each case to determine whether the level of uncertainty is acceptable. This evaluation includes considering the nature of the transaction, the type of uncertainty, and the norms of the business environment. The goal is to ensure fairness, prevent deception, and avoid harm.
This nuanced approach allows for adapting Islamic legal principles to contemporary financial practices while striving to uphold the ethical standards prescribed by traditional Islamic law.
I pray this is of benefit and that Allah guides us all.
[Shaykh] Irshaad Sedick
Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar Shaykh Taha Karaan (Allah have mercy on him), where he taught.
Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Shaykh Muhammad Awama, Shaykh Muhammad Hasan Hitu, and Mawlana Abdul Hafeez Makki, among others.
He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has been the Director of the Discover Islam Centre, and for six years, he has been the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.
Shaykh Irshaad has fifteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic podcast, education, and media platform called ‘Isnad Academy’ and has completed his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy Prophetic living and fitness.
