"With technological development and increasing needs of societies, new economical transactions have been formed in societies in which risk has been embedded in the heart of these transactions. Risk in its literal meaning is “The danger resulting from uncertainty about a Full Text
"With technological development and increasing needs of societies, new economical transactions have been formed in societies in which risk has been embedded in the heart of these transactions. Risk in its literal meaning is “The danger resulting from uncertainty about a possible occurrence of an incident in future”. Risk is a necessity for most of national and international commercial activities.
In addition, in ethical perspective, humans’ development in individual, social, and economical, etc. aspects are guided by human’s behavior and decisions. It is obvious that realization of this aim is possible in certain and usual situations. However, in risky situations where a human is uncertain about or unaware of the consequences of his action, it seems difficult to make a decision that is in line with ethical norms.
Hence, the present study in addition to analyzing business risk and comparing it to Gharar , aims at answering this fundamental question: what are the fundamentals of jurisprudential legitimacy and ethical narrative of revenue generating risk?
The current study by using a descriptive-analytical method will show that: first, Gharar arises from ignorance or risks related to the pillars of contract and its outcome in transactions is the unfair increase in ones’ wealth to the detriment of the other one in the contract. However, risk in business is related to the future of invested capital and it has no relation with pillars of contract. Meanwhile, any profit or loss from business risk is a consequence of economic changes in supply and demand. Second, legitimacy of revenue risk as the superstructure can be inferred from the analysis of general jurisprudential rules on revenue generating risk with the centrality of the rule “Al-kharaj bial-ziman (profits against liability)”. Third, in ethical perspective, a risk is considered legitimate if it is taken wisely and fairly and is based on individual and social interests.