Gharar (غرر) is the hazard or uncertainty that arises due to a state of ambiguity engulfing the subject matter (object of exchange) or the price in a commutative contract (aqd mu’awadhah). Gharar may also arise in the case of selling an item which is not present at hand or whose attainment (delivery or taking delivery) is not certain (the sale of fish in water or birds in the sky).

Khatar (خطر) is a type of gharar that arises if liability of any of the parties to a commutative contract is, or becomes, uncertain or contingent on some unforeseen/uncontrollable event. Khatar may also arise if delivery of one of the countervalues (in a commutative contract) is uncontrollable by any party, or if the subject of sale or the amount of payment is undetermined.

In concept, gharar is broader than khatar, though both involve some degree of uncertainty as to the subject matter of the contract. However, excessiveness of gharar determines whether it would be illegal (and hence renders a contract void/ invalid) or not. Minor gharar (gharar yaseer) can usually be overlooked or ignored as it would have a very limited effect on the contracting outcome. Khatar is typically associated with a harmful or dangerous degree of risk.