Ghubn (غبن) denotes the meanings of fraud, inequality, deceit, cheating, etc. In the context of mu’amalat, ghubn may arise from the difference, in either way, between the price at which a transaction is executed and the fair price. In other words, if a commodity has been sold for $100, while its fair price is $60, then the seller is said to have deceived the buyer by the difference. Likewise, if it has been sold for $20, at a time its fair price is $60, then the buyer is said to have deluded the seller by the difference.

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). Generally speaking, in financial and commercial transactions, anything that causes injustice in any form to any of the parties is considered gharar.

The presence of ghubn renders a transaction unethical, while the effect of gharar on a transaction varies depending on its degree. Excessive gharar (gharar fahish) is typically forbidden by shari’a and would render a transaction invalid/void. Minor gharar (gharar yaseer) could usually be overlooked or ignored (it would have no effect on a transaction) due to insignificance.