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Contracting with Gharar (Uncertainty) in forward contract: What does Islam says?

The forward contract is one of derivative instruments. The value of this contract is derived from the values of underlying assets such as commodities, equities, and currencies. Muslim scholars differ on the permissibility of forward contracts. Among the key issues raised in the forward contract is t...

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Main Authors: Nadhirah, Nordin, Normadiah, Daud, Sumayyah, Abdul Aziz
Format: Article
Language:English
Published: Canadian Center of Science and Education 2014
Subjects:
BP Islam. Bahaism. Theosophy, etc
HB Economic Theory
Online Access:http://eprints.unisza.edu.my/5442/1/FH02-FKI-14-01055.jpg
http://eprints.unisza.edu.my/5442/
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spelling my-unisza-ir.54422022-09-13T04:40:14Z http://eprints.unisza.edu.my/5442/ Contracting with Gharar (Uncertainty) in forward contract: What does Islam says? Nadhirah, Nordin Normadiah, Daud Sumayyah, Abdul Aziz BP Islam. Bahaism. Theosophy, etc HB Economic Theory The forward contract is one of derivative instruments. The value of this contract is derived from the values of underlying assets such as commodities, equities, and currencies. Muslim scholars differ on the permissibility of forward contracts. Among the key issues raised in the forward contract is the issue of gharar. In general, gharar means an excessive uncertainty and risk. However, not all contracts containing the element of gharar void the contract. This article attempts to formulate a parameter for gharar that voids the contract based on the opinions of classical and current scholars. It also analyses the elements of gharar that exist in forward contracts of crude palm oil in Malaysia. This study uses a thematic analysis approach to explain the data collected through secondary sources and interviews with few individuals involved in this industry. Based on the analysis of forward contracts on the parameter of gharar, the finding of this research indicates that the issue of gharar exists in forward contracts does not void the contracts. Canadian Center of Science and Education 2014-07 Article PeerReviewed image en http://eprints.unisza.edu.my/5442/1/FH02-FKI-14-01055.jpg Nadhirah, Nordin and Normadiah, Daud and Sumayyah, Abdul Aziz (2014) Contracting with Gharar (Uncertainty) in forward contract: What does Islam says? Asian Social Science, 10 (15). pp. 37-47. ISSN 19112025 [P]
institution Universiti Sultan Zainal Abidin
building UNISZA Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Sultan Zainal Abidin
content_source UNISZA Institutional Repository
url_provider https://eprints.unisza.edu.my/
language English
topic BP Islam. Bahaism. Theosophy, etc
HB Economic Theory
spellingShingle BP Islam. Bahaism. Theosophy, etc
HB Economic Theory
Nadhirah, Nordin
Normadiah, Daud
Sumayyah, Abdul Aziz
Contracting with Gharar (Uncertainty) in forward contract: What does Islam says?
description The forward contract is one of derivative instruments. The value of this contract is derived from the values of underlying assets such as commodities, equities, and currencies. Muslim scholars differ on the permissibility of forward contracts. Among the key issues raised in the forward contract is the issue of gharar. In general, gharar means an excessive uncertainty and risk. However, not all contracts containing the element of gharar void the contract. This article attempts to formulate a parameter for gharar that voids the contract based on the opinions of classical and current scholars. It also analyses the elements of gharar that exist in forward contracts of crude palm oil in Malaysia. This study uses a thematic analysis approach to explain the data collected through secondary sources and interviews with few individuals involved in this industry. Based on the analysis of forward contracts on the parameter of gharar, the finding of this research indicates that the issue of gharar exists in forward contracts does not void the contracts.
format Article
author Nadhirah, Nordin
Normadiah, Daud
Sumayyah, Abdul Aziz
author_facet Nadhirah, Nordin
Normadiah, Daud
Sumayyah, Abdul Aziz
author_sort Nadhirah, Nordin
title Contracting with Gharar (Uncertainty) in forward contract: What does Islam says?
title_short Contracting with Gharar (Uncertainty) in forward contract: What does Islam says?
title_full Contracting with Gharar (Uncertainty) in forward contract: What does Islam says?
title_fullStr Contracting with Gharar (Uncertainty) in forward contract: What does Islam says?
title_full_unstemmed Contracting with Gharar (Uncertainty) in forward contract: What does Islam says?
title_sort contracting with gharar (uncertainty) in forward contract: what does islam says?
publisher Canadian Center of Science and Education
publishDate 2014
url http://eprints.unisza.edu.my/5442/1/FH02-FKI-14-01055.jpg
http://eprints.unisza.edu.my/5442/
_version_ 1744358525351493632
score 13.211869

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