An Arabic term (الغرم) that literally denotes damage or loss (or a cost incurred). In a more specific context, it refers to liability for loss or damage or performance shortfall. For example, a contractor will be liable for contractual performance (performance as defined in the contract) in case performance turns out to be below the level defined in the contract. This may also include the liability of a debtor (madeen), i.e., al-gharim, for any loss (khasarah– خسارة) or damage caused by any factor other than dishonesty or fraudulent by the debtor.

Ghurm may also imply risk taking- that is, bearing the responsibility for loss which provides the basis for entitlement to gain or profit (ghunm)- according to the shari’ah maxim (qa’edah shar’iyyah– القاعدة الشرعية) stating “al-ghunm bil ghurm– الغنم بالغرم): there is, or there shall be, no return without risk (mukhatarah). An example is the entitlement of a seller to the profit (ghunm) owning to liability for losses (ghurm) associated with ownership of the goods involved (which includes standing ready to bear any losses that may arise while the goods remain in the seller’s hold and guarantee, etc.)