Istisna means asking someone to build, build or manufacture an asset. In Islamic finance, istisna` is usually a long-term contract by which a party undertakes to manufacture, build or build assets, with the obligation for the manufacturer or manufacturer to deliver them to the customer once completed. In practice, the main advantage of an Istisna contract is that it can offer flexibility to the customer, as payments can be made in tranches related to the closing of the project, delivery or after the project outcome. Unlike istisna`, the payment of the Salam contract must be made in full in advance. Salam`s conclusion: Like other sales contracts, a Salam contract can be entered into by offer and acceptance. However, it can be concluded by the word salam or salaf, or a sale or term indicating the sale of a prescribed commodity for deferred delivery in exchange for an immediate payment of the price. It can be initiated by several agreements or by the subscription of a general framework and a master`s contract. In practice, Istisna`s contracts can be concluded with other Sharia-compliant agreements, including: kafalah, takaful; Rahn; hamish gedyyah (caution), or arbun (down payment). This agreement exists between the bank and the customer and guarantees the obligation to pay in case of delay. This may include a mortgage or debt liabilities. After the execution of the Salam agreement with a party, the buyer or seller executes another Salam contract with third parties. The parallel contract is only allowed with third parties. There must be two separate and independent treaties, and these two treaties cannot be committed.
The agreement is signed between the bank and the customer, which defines the conditions for the manufacture of the goods, including the price of entry, place of delivery, quantity and quality. Bai-Al Salam, also known as Bai-salaf or Bai-mafalisa, is buying a commodity for deferred delivery for immediate payment. This is a type of sale in which the price, known as Salam Capital, is paid at the time of the contract, while the delivery of the item for sale, known as Al-Muslam Fihi (object of a salam contract), is postponed. The seller and buyer are known respectively as Al-Muslam Ilaihi and Al-Muslim and Rab al-salam. A treatise of Salam derives its legitimacy from the verse of the Koran. Salam is essentially a type of financing for farmers and small traders. The Salam of the Islamic Bank is used by microbanks and financial institutions to support small industry. The Salam contract is most often used for: object: the object of a salam contract may be goods that can be weighed, measured or counted and which cannot be admitted as a specific and specific material such as “this rice” or which cannot be defined as a production of certain land. The Salam object must also not be an item that cannot be delineated according to its description, such as jewellery and antiques.
This is the type of item for which a specification can be properly established, so that the seller can be held responsible for its compliance with the specifications and, under normal circumstances, may be widely available at the location where it is to be on the day of delivery. The buyer cannot sell the item until it is taken into possession, except through a parallel salam contract. Price: The price of salam products can be in the form of products such as wheat and other cereals or valuables such as livestock. It may also take the form of a usufruit of certain assets, but must be known to the parties and be paid in full to the seller at the time of the conclusion of the contract. “Anyone who pays money in advance for the fruit to be delivered later should pay for a known quality, some measure and, of course, the weight of the data or fruit, with the price and delivery time.” Prior to the interest ban, farmers went to harvest on interest rate credits; and caravans for the purchase of goods.