Gharar in E-Commerce (Islamic Perspective) by Group 16

annaungkai — 2023-11-03 14:12:15 UTC

1. Gloria Alan 79483

2. Nur Ameera Qistina Binti Hashim 78357

3. Sitti Nursyahya Binti Hassan 78544

4. Agnethia Ariana Anak Tajai 78655

5. Anna Amella Anak Ungkai 78853

annaungkai — 2023-11-12 06:29:39 UTC

E-commerce ( electronic commerce ) buying and selling goods and services over the internet
Involves online transaction between consumer and business, between business, business and government, between consumer, consumer and government

Gharar

Arabic term that used in Islamic finance, refers to excessive, uncertainty, ambiguity, hazards and risk in a contract
Business term maintaining fairness, transparency and ethical business practices.

Types of gharar in general:

Excessive uncertainty (Gharar Fahish)
Uncertain pricing (Gharar Yaseer)
Ambiguous condition (Gharar Mustana)
Misrepresentation (Gharar Munazzar)
Speculative transactions (Gharar Shar'i)
Risk and Hazard (Gharar Mubhīth)
Uncertain subject matter (Gharar bi-al-Ma'dūm)

Al-Quran Surah Al-Jumuah: 10

فَإِذَا قُضِيَتِ الصَّلَاةُ فَانتَشِرُوا فِي الْأَرْضِ وَابْتَغُوا مِن فَضْلِ اللَّهِ وَاذْكُرُوا اللَّهَ كَثِيرًا لَّعَلَّكُمْ تُفْلِحُونَ

‘‘And when the prayer is finished, then you disperse through the land, and seek the Bounty of God, and remember God much, that you will prosper’’ (62:10).

pursue both religious duties and worldly affairs.
subject to adhere to the Islamic principles guided by the Quran and the Sunnah.
4 conditions for a valid contract
- Offer (ijab) and acceptance (qabul)
- Two contracting parties (bilateral)
- Subject matter
- Mode of expression (sigha)
Case: eBay International AG vs Creative Festival Entertainment Pty Ltd [2006] FCA
click button as agreeing to terms & conditions, payment and receive confirmation of order
In Islam, gharar is strictly prohibited in e-commerce.

2023-11-13 15:54:52 UTC

A form of cheating leads the customers to make hasty purchases.

Abu Hurairah r.a. reported: The Messenger of Allah (ﷺ), peace and blessings be upon him, said:

مَنْ غَشَّنَا فَلَيْسَ مِنَّا

"Whoever deceives us is not one of us (Muslims)." [ Sahih Muslim (101) ].

Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) received 6,466 of online transaction complaints in the first three months of 2021 in Melaka (Sinar Harian, 2021).
The customers who feel deceived when their purchases differ from what was pictured.
Example 1: (wrong sizes)
the sellers on Amazon purposely put a wrong measurement of a chair under the description to attract potential customers. One of the customers complaint the received item does not correspond to the chair's size based on the description provided on e-commerce platforms.
Example 2: (falsifying product's authenticity)
Mudah.my selling second-hand product and claimed that it was authentic in the product description but once it is delivered to the customer, it turns out to be a fake one although the seller set it at a price that is not compatible with the quality of the product.
Given that the buyer was ignorant of the contract's subject matter (Al-Ghalat), this would be regarded as gharar.
Agreement null and void

Al-Quran Surah An-Nisa: 58

۞ إِنَّ اللَّهَ يَأْمُرُكُمْ أَنْ تُؤَدُّوا الْأَمَانَاتِ إِلَىٰ أَهْلِهَا وَإِذَا حَكَمْتُمْ بَيْنَ النَّاسِ أَنْ تَحْكُمُوا بِالْعَدْلِ ۚ إِنَّ اللَّهَ نِعِمَّا يَعِظُكُمْ بِهِ ۗ إِنَّ اللَّهَ كَانَ سَمِيعًا بَصِيرًا

“Indeed, Allah commands you to render trusts to whom they are due and when you judge between people to judge with justice. Excellent is that which Allah instructs you. Indeed, Allah is ever Hearing and Seeing.” (4:58).

Every customer has the right to be informed and to see the exact picture and description of the goods via any e-commerce platforms.
It is required of the seller to disclose to the buyer any information.

2023-11-13 17:12:05 UTC

The selling price is linked to the market price of the goods.
It is determined at a future date, often upon the delivery of the goods or at a specified future time.
Both the buyer and the seller face uncertainty regarding the final selling price.
The contract must possess a clear and mutually recognised object (Hayati, S. & Fatarib, H., 2022)
Example 1: An online marketplace that connects farmers and buyers for the sale of agricultural produce, such as AgriBros Market.
A buyer agrees to purchase a quantity of a specific crop, say wheat, from a farmer, however, selling price is not fixed at the time of the agreement.
Selling price is determined at a later date, such as the time of harvest or a specified future date.
Influenced by factors:
- weather conditions
- demand-supply dynamics
- global market trends
Example 2: Artwork for online auction
Paintings, sculptures or limited-edition prints by renowned artists sold through online auction on Sotheby's ( antique, luxury/collection item )
https://www.sothebys.com/en/?locale=en
Involved bidders around the world/potential buyer or interested buyer can place bids or make an offer
Influenced by factors:
- highest bidder or negotiated offer that could acceptable to the seller after minimum price that set by seller
- the value of antique/collectible items to the buyer
- bids/offers that bidders willing to pay

Islamic perspective, auction is prohibited cause its involves gharar and gambling as well the online marketplace that did not have a fixed price for their sale item.

Al-Quran Surah Al-Baqarah: 188

 وَلَا تَأْكُلُوْٓا اَمْوَالَكُمْ بَيْنَكُمْ بِالْبَاطِلِ وَتُدْلُوْا بِهَآ اِلَى الْحُكَّامِ لِتَأْكُلُوْا فَرِيْقًا مِّنْ اَمْوَالِ النَّاسِ بِالْاِثْمِ وَاَنْتُمْ تَعْلَمُوْنَ 
۞

"And do not consume one another's wealth unjustly or send it [in bribery] to the rulers in order that [they might aid] you [to] consume a portion of the wealth of the people in sin, while you know [it is unlawful]." (2:188)

Consumer Protection:
- Highlights the ethical responsibility of individuals not to consume wealth in sin.
- Emphasizes honesty and fairness in financial transactions.
- Both parties must clearly agree on the price that should be decided at that time.

2023-11-14 07:02:02 UTC

The concept of gharar in Islamic finance or contract was related to the clarity and completeness of the description of the goods in a transaction. In Islam's perspective, the description must be free from uncertainty.
The uncertainty about the description will lead to the invalidity of the transaction or the purchasing contract. - A study conducted by Siddiq Mohammad Al-Ameen stated that knowledge about the goods to be purchased is one of the validations of the contract. He also states that the sale of unknown objects or goods (not specified in the description) is considered as Gharar.
In every sale, there must be an easy-to-understand list or description of the goods or the item.
Therefore, to avoid Gharar, sellers need to provide clear, accurate, and complete descriptions of their products, ensure the certainty of delivery, and uphold transparency and honesty in their dealings. This not only aligns with the principles of Islamic finance but also contributes to building trust and satisfaction among customers

2023-11-14 07:06:29 UTC

In conclusion, gharar is the Arabic language that presents uncertainty, deception, and risk.
more focused on Islamic finance and is used to measure the legitimacy of a risky investment. Gharar is prohibited or not allowed under Islam because there is a set of strict rules in Islamic finance against transactions that are highly uncertain or that may cause any injustice or deceit against any of the parties.
The term has been described as “the sale of what is not yet present”
In Islamic finance, most derivative contracts are forbidden and considered invalid because of the uncertainty involved in the future delivery of the underlying asset.

2023-11-14 07:07:35 UTC

1. Gloria Anak Alan 79483

This assignment make me know that e-commerce in Islamic prespective is crucial especially concerning transactions and contracts where details might be unclear or ambigous. Therefore, its need to be transparency in oder to build trust between seller and customers. Also, in digital age, new forms of transactions continually emerge, and its needs the seller or business to be more understand about gharar to ensure that they can adapt Islamic principles to modern e-commerce practices without compromissing on ethical and legal boundaries.
In this case also, my groupmates give the full commitment and contrtibution towards material that we used in this assignment and we has learn together and more understand about the application of Islamic principles in this e-commerce.

2. Nur Ameera Qistina Binti Hashim 78357

Gharar detection in e-commerce transactions has:

Engage our group in recognizing and debating numerous occurrences of gharar in e-commerce transactions. This might include circumstances such as ambiguous product descriptions, unspecified pricing, or questionable delivery dates.
Encourage the members to relate to personal experiences or illustrate new examples of gharar that may be experienced in doing internet transactions.
Investigate Islamic teachings on gharar, including Quranic texts, Hadiths, and academic analyses that forbid or advise against engaging in gharar deals.

3. Sitti Nursyahya Binti Hassan 78544

able to learn that contract agreements made on e-commerce platforms fulfilled all of the Islamic principles. However, it is considered void only if the buyer or seller acts dishonestly or if there is a sense of unfairness between the two parties involved.
able to embrace diversity in opinion and ideas to create an interactive environment. Being able to communicate openly helped us overcome difficulties and make wise decisions.
able to relate to the examples of gharar in e-commerce that actually happens in real-life context.

4. Agnethia Ariana Anak Tajai 78655

The group assignments taught me a lot about Gharar in Islamic Perspectives. Gharar can be consider as an uncertainty or uncleared in selling contracts. The uncertainty will lead to invalid selling contract also will called as gharar. So, in order to prevent gharar in selling, the seller need to make a clear descriptions about the items also make clear the selling contract for contract validity.

5. Anna Amella Anak Ungkai 78853

As a non-Muslim, this group's initiative allows me to understand the advantages of avoiding gharar aspects in e-commerce even from an Islamic perspective. This is because Gharar can result in misunderstandings, financial losses, fraud and abuse. Due to the violation of the ideals of justice, transparency, and mutual consent in contracts, gharar is forbidden in Islam. Muslims can benefit from e-commerce while upholding their moral and religious commitments by avoiding gharar in their transactions. E-commerce has the potential to advance the principles of justice, integrity, and trust in the global market in addition to improving the economic and social well-being of the Muslim community.

annaungkai — 2023-11-14 13:52:51 UTC

This type of gharar also may result in disagreements, discontent, and injustice between the parties
Example 1: When a seller offers a mystery box or grab bag filled with random items of unknown value and quality, and the buyer pays a fixed or variable price without knowing what he or she will receive
Example 2: When a buyer is required to pay an additional sum that may be unjustified or out of proportion to the cost of delivery because a seller has concealed or agreed upon a shipping fee in beforehand.
The seller and the buyer should agree on the terms of the contract such as the product, price, and delivery.