Option Contracts in Shari[ahjahalah because they serve a valid purpose. They defeat the risk of
fraud, misrepresentation, loss and damage. Since individuals are in
need to defeat the economic impacts of these events, options are
legalized for the superiority of defeating these events over the
existence of gharar and jahalah in the contracts. This is because the
underlying objective of options is not to deal in gharar and jahalah,
but rather to minimize the impact of these events on the contractual
relationships.^125. Parameters of a Valid Option
The jurists are accustomed to mention certain properties or qualities that
are necessary for the validity of options. When one explores the fiqh literature
in respect to options, it becomes clear that a valid option need to meet certain
parameters, among others, the following:
a) The general view of the jurists is that an option should be a quality
that exists simultaneously with the subject matter of the contract at
the time of its stipulation. This is because an option portrays a
contract and it is not practical to agree on the described (mawsuf) (the
contract) without features or qualities. The Hanafis argued that an
option may be stipulated before or after the conclusion of the
contract.
b) The option should be beneficial to the contracting parties or either of
them.
c) The option agreement should not be in conflict of the contract in
which it is stipulated.
d) The option agreement should not violate basic principles of Islamic
commercial law, such as riba, gharar and exploitation.
e) The option agreement should bring about benefit to the contract
even if it is not relevant to the contract such as deferment of
payment or delivery and guarantee. The reason is that the law allows
stipulation of these events in the contract.6. The Risk Management of Shari[ah Options
The above basic features of Shari[ah options suggest that these options,
if put together, manage a wide range of risks including the following: