Muslim (1513) narrated from Abu Hurayrah (may Allaah be pleased with him) that the Prophet (peace and blessings of Allaah be upon him) forbade gharar (ambiguous) transactions).
Gharar in Arabic means a risk which is not certain; it may happen or not, such as selling fish in the water or birds in the air, because the purchaser may or may not get it.
Al-Azhari said: Gharar transactions include any transactions in which something is not known.
Mu’jam Maqaayees al-Lughah (4/380-381); Lisaan al-‘Arab (6/317).
Al-Nawawi said in Sharh Muslim:
With regard to the prohibition on gharar transactions, this is one of the important principles in the book of financial transactions, and it includes many issues, such as selling something that is not there or is unknown, or selling an animal that is still in the womb. All such transactions are invalid because it is unnecessary ambiguity.
Some transactions may include some element of ambiguity out of necessity, such as not knowing about the foundations of a house, or selling a pregnant sheep or one with milk in its udders. These sales are valid. Similarly the Muslims are unanimously agreed that it is permissible to sell things in which there is slight ambiguity, such as selling a quilter garment with its filling, but if one is buying the filling separately, that is not permissible. And they agreed that it is permissible to rent out a house, an animal or a garment etc for a month, even though the month may be thirty days or it may be twenty-nine. And they agreed that it is permissible to sell admission to bath-houses for a certain amount even though people will differ in how much water they use and how long they stay. And they agreed that it is permissible to drink from a waterskin in return for payment even though it is not known how much is drunk and the habits of those who drink vary. End quote.
It says in al-Mawsoo’ah al-Fiqhiyyah (31/151):
In order for ambiguity to have an effect, it should be great. But if the ambiguity is slight, then it does not affect the transaction. Al-Quraafi said: ambiguity and unknown matters – i.e., in selling – are of three types: a large degree is forbidden according to consensus, such as selling birds in the air; a small amount is permissible according to consensus, such as the foundations of a house and cotton filling of a quilted garment; there is a difference of opinion concerning a moderate amount, is it regarded as the former or the latter?
Ibn Rushd al-Hafeed said: the fuqaha’ are agreed that a large degree of ambiguity in transactions is not allowed, and that a little is permissible. End quote.
What some restaurants do, offering an “all-you-can-eat” meal for a fixed price, seems to fall under the heading of slight ambiguity which does not affect the validity of the transaction. It is akin to what al-Nawawi (may Allaah have mercy on him) mentioned about entering bath-houses for a fixed price, even though it is not known how much water will be used, or drinking from a waterskin even though it is not known how much water will be drunk.
But if a person knows that he will eat an extraordinary amount of food, then he should mention that to them, because then this is a great ambiguity.
Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) said: There are stores that sell food and say, “Pay twenty riyals and eat all you want”. He said: It seems that this may be tolerated, because the size of an average meal is known and this is something that is allowed by custom. But if a person knows that he eats a lot, then he must tell the restaurant owner, because people vary. End quote from al-Sharh al-Mumti’ (4/322), Fajr Centre edition.
And Allaah knows best.