SS 31 – Controls on Gharar in Financial Transactions

This standard aims at defining Gharar (uncertainty), indicating its types and impacts and emphasizing controls that need to be applied when Gharar is to the extent which nullifies transactions.

Scope of the Standard

This standard covers the impact of excessive, medium and minor Gharar on transactions performed by Islamic financial institutions (Institution/ Institutions). In this respect the standard will set out the Shari’ah rulings pertaining to the case when Gharar is involved in exchange- based based contracts/commutative contracts ( contracts/commutative contracts (’Uqud al-Mu’awadat ’Uqud al-Mu’awadat) including ) including partnerships, and the case when Gharar is involved in donation contracts/ non-commutative contracts ( non-commutative contracts (’Uqud ’Uqud al-Tabarru’at al-Tabarru’at). The standard will also ). The standard will also make special reference to the case when Gharar is involved in a contract’s condition. 2. Definition and Types of Gharar