Salam and istisna: paying in advance for goods to be delivered or made
AmanaFi team · Updated · 1 min read
Salam is a sale where you pay now for a precisely described good to be delivered later; istisna is a manufacturing-to-order contract. They are two recognised exceptions to the rule of not selling what you do not yet own.
Salam
The price is paid in full at signing, and the goods, well described, are delivered on a set date.
- Precise description: kind, quality, quantity.
- A known delivery date.
- Payment of the price at signing.
Istisna
The customer orders the making of a good to specifications. Payment may be staged according to progress, and the maker delivers the finished work. It is commonly used for building or made-to-measure equipment.
Why it is useful
These contracts finance producers without an interest-bearing loan: a farmer receives the price before harvest, a craftsman funds production. For individuals, they are mostly visible in off-plan home purchases. Read the delivery guarantees and the description of the good before committing.
Frequently asked
Can I buy an off-plan home with these contracts?
Formulas close to istisna are used for off-plan sales. Check the description of the property, the schedule and the guarantees before paying.
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