Gharar means excessive uncertainty or ambiguity in a contract. In Islamic finance, any transaction where the terms, subject matter, or outcome are unclear or deceptive is considered Gharar — and it is prohibited.
Simple examples: selling fish still in the sea, selling fruit before it ripens, or an insurance contract where you pay premiums but may never receive anything. The buyer does not know exactly what they are getting, and the seller may not be able to deliver.
Minor Gharar (like not knowing the exact weight of fruit at purchase) is tolerated. But major Gharar — where the uncertainty fundamentally affects the contract — invalidates the transaction. This principle pushes Islamic finance toward transparency and fairness in every deal.