ONLINE CONTRACT AND THE ISSUES OF GHARAR AND UNCERTAINTY

Abstract

The use of internet as a medium of communication has widened the scope of contract formation. Sale and purchase activities are held online either for performance of contract through the internet itself or to be performed outside the cyber world. Under Islamic Law there are several areas of uncertainty which will have significant impacts on electronic contracting according to Shariah. This is considered as a very fundamental issue especially in the online contract which implies the non physical presence of the parties. In fact if certain fundamental issues in the online contract are not resolved, then the dominant entry of the principles of gharar (uncertainty) arises, and this will make online contracts in Islamic Shariah not feasible. This article seeks to examine what is actually meant by gharar and how it affects the enforceability of the electronic contract in the Shariah. It also discusses the issue of uncertainty under Common Law with a view to ascertain its implications.