Gharar

Excessive uncertainty or ambiguity in a contract. One of the three major prohibitions in Islamic finance (alongside riba and maysir). Contracts must have clearly defined terms, subject matter, price, and obligations.

Gharar is prohibited because it can lead to exploitation, disputes, and injustice. Minor uncertainty (gharar yasir) is tolerated in everyday transactions, but major uncertainty (gharar fahish) — such as selling goods that don't yet exist or whose quality is unknown — invalidates a contract. Conventional insurance is often cited as containing gharar because the outcome (claim payout) is uncertain.