Salam and Istisna'
Salam and Istisna' — The Lawful Forward Sale
📖 Scene: The Market of Medina — First Year of Hijra
The Messenger of Allah ﷺ arrived in Medina and found its inhabitants practicing transactions they had known in the pre-Islamic era. One of them would go to the farmer and give him money in advance in exchange for a harvest he would receive in a year or two...
The Ansari: (approaching a farmer in the market)
O Abu So-and-so, I have fifty dinars. I give them to you now, and you give me the dates of your palm tree next year.
The Farmer: (needing money to provide for his family)
Yes, this is what we are accustomed to doing. But... (looking around hesitantly) the Prophet ﷺ has come among us, let us ask him about the ruling on this.
The Messenger of Allah ﷺ: (hearing their question and answering)
"Whoever makes a Salam sale, let him do so with a known measure, a known weight, until a known term."
Thus the Prophet ﷺ regulated the Salam transaction: he did not prohibit it because people needed it, but he set conditions that preserve everyone's rights.
Part One: The Salam Sale
Definition of Salam
📜 Juristic Definition
Linguistically: Salam and Salaf have the same meaning, which is advancement — meaning to advance payment.
Technically:
Sale of a described commodity guaranteed by the seller, for a price paid in advance
That is: paying the price now, in exchange for a described commodity to be delivered later.
Salam Contract
Buyer
Pays full price now
Immediate payment
💰 Now
Seller
Delivers described goods later
Legitimacy of Salam
📜 Proof from the Quran
Allah says: ﴾O you who have believed, when you contract a debt for a specified term, write it down﴿ [Al-Baqarah: 282]
Ibn Abbas رضي الله عنهما said:
"I testify that the guaranteed Salaf until a specified term, Allah has made it lawful in His Book and permitted it."
📜 Proof from the Sunnah
Narrated by Ibn Abbas رضي الله عنهما: The Prophet ﷺ came to Medina while the people were making Salam on fruits for one or two years, he said:
"Whoever makes a Salam sale, let him do so with a known measure, a known weight, until a known term."
[Bukhari and Muslim]
Evidence for Salam Legality
When you contract a debt
Ibn Abbas hadith on salaf
Scholars agree on its permissibility
Conditions for Valid Salam
📖 Scene: A lesson in a fiqh study circle
The Sheikh: O students of knowledge, Salam has conditions on three axes. Listen carefully...
First: Conditions Regarding the Price (Salam Capital)
Price Conditions (Capital)
Must be known
In quantity and quality
Must be received in session
According to majority (or within 3 days for some)
⚠️ Why advance? If both deferred = debt for debt (prohibited)
Second: Conditions Regarding the Commodity (Object of Salam)
Goods Conditions (Salam Object)
Must be described
Description that eliminates uncertainty
Must be a debt
✗ Wrong: this specific car | ✓ Correct: Toyota 2024 model
Must be specifiable
Like grains and fabrics | ✗ Not: rare gems
Must mention genus, type and quantity
Ex: Egyptian wheat, 1000 kg, grade 1
Third: Conditions Regarding the Term
Term Conditions
Must be known
✓ Correct: in 6 months | ✗ Wrong: when convenient
Must be determined not contingent
✓ Correct: next Ramadan | ✗ Wrong: when it rains
What Is Not Valid in Salam
❌ What Invalidates Salam
Type
Specific items
What cannot be specified
What varies greatly
Reason
Salam = described debt, not specific
Leads to uncertainty and conflict
Disagreement: animals allowed by some
Rules of Salam
1. Delivery of the Salam Object
Delivery Rules in Salam
| Élément | Statut | Notes |
|---|---|---|
| Timely delivery | ✅ Halal | Obligatory for seller |
| Delay with valid excuse | ⚪ Mubah | Buyer waits |
| Complete inability to deliver | 🔄 Disputé | Buyer can cancel or wait |
2. Selling the Salam Object Before Receipt
Can Salam Be Resold Before Receipt?
❌ Sale
Forbidden before receipt
Prophet ﷺ forbade profit without liability
✅ Cancellation
Cancellation allowed
And refund to buyer
3. Taking a Substitute
Substitution According to Hanbalis
Substitution of another type allowed
At day's price (not contract price)
Buyer must not profit
Ex: 100 kg wheat unavailable, can take 100 kg rice at today's price
Part Two: The Istisna' Contract
📖 Scene: Kufa — The Era of Imam Abu Hanifa
A man enters the workshop of a famous carpenter in the Kufa market...
The Man: Master, I would like you to make me a bed of walnut wood, with these dimensions (showing him a paper), and I want it in a month.
The Carpenter: The price is twenty dinars. Do you pay now or at delivery?
The Man: Half now, and half at delivery.
The Carpenter: It's agreed. (shaking his hand)
This is the form of Istisna' that Imam Abu Hanifa رحمه الله authorized, saying: "People have been practicing it from the time of the Prophet ﷺ until today without objection."
Definition of Istisna'
📜 Juristic Definition
Linguistically: Requesting fabrication.
Technically:
A contract for a guaranteed commodity that requires work
The manufacturer makes it with his own materials.
Istisna Contract
Orderer
Requests custom manufacturing
Price (flexible)
💰 Before / after / installments
Manufacturer
Provides materials + work
Difference Between Salam and Istisna'
Comparison: Salam vs Istisna
Salam
Price paid upfront (required)
No work required
Term is validity condition
Goods usually exist
Ex: buying wheat in advance
Istisna
Price can be deferred
Work required (manufacturing)
Term not required
Goods custom-made
Ex: ordering furniture
Legitimacy of Istisna'
Evidence for Istisna Legality
Custom and usage
People ordered manufacturing since the Prophet's ﷺ time
Pressing need
Indispensable (who builds their house? furniture?)
Practical consensus
Practiced in all eras without scholars' objection
Conditions for Valid Istisna'
Istisna Validity Conditions
Specify genus and type
Ex: car, house, clothes, furniture
Specify important attributes
Dimensions, materials, color, design
Knowledge of price
Must be determined (advanced or deferred)
Knowledge of term if specified
Not required, but if mentioned must be respected
Forms of Istisna'
Forms of Istisna Contract
Orderer → Manufacturer (direct)
Orderer → Intermediary → Manufacturer
Rules of Istisna'
1. Binding Nature of the Contract
Is Istisna Binding?
Hanafi School (adopted view)
✅ Binding for both parties
Most correct for benefit
Another view
Can be cancelled before starting
4. Delivery Delay
Delay Rules in Istisna
| Élément | Statut | Notes |
|---|---|---|
| Manufacturer delay without excuse | ❌ Haram | Orderer can cancel or wait with compensation |
| Delay with valid excuse | ⚪ Mubah | Orderer waits (no compensation) |
Contemporary Applications
Salam in Agricultural Products
🌾 Contemporary Agricultural Salam
📅 Today: The buyer pays the price in full to the farmer
📅 After Harvest: The farmer delivers the harvest
Required conditions:
- ✓ Specify type: Egyptian wheat first quality
- ✓ Specify quantity: 100 tons
- ✓ Specify quality: humidity < 14%
- ✓ Specify date: August 1st
- ✓ Receive price: immediately or within 3 days
Istisna' in Real Estate
🏗️ Real Estate Istisna' (Off-Plan Sale)
Buyer ←← Developer ←← Contractor
- Buyer: Pays the price (installments)
- Developer: Supervises and guarantees
- Contractor: Builds per specs
📋 Required:
- Detailed plans and drawings
- Schedule of stages and deliveries
- Quality guarantees
- Penalty clauses for delay
💰 Payment method:
20% Contract → 30% Foundations → 30% Structure → 20% Delivery
Istisna' in Industry
🏭 Industrial Istisna'
Forms of industrial Istisna':
- 🏭 Ordering special machines or equipment
- 👔 Ordering custom-made clothes
- 🚗 Ordering customized vehicles
- ✈️ Ordering aircraft or ships
Special rules:
- ✅ Installment payments permitted
- ✅ Modifications by agreement permitted
- ✅ Guarantee by manufacturer until delivery
- ✅ Client's right to refuse non-conforming products
Role of Salam and Istisna' in Islamic Finance
Salam and Istisna': Islamic Finance Tools
| Benefits of Salam | Benefits of Istisna' |
|---|---|
| 💰 Liquidity for producers | 🏗️ Project financing |
| ⚖️ Fair price for both | 🎯 Customized products |
| 📦 Guaranteed availability | 💳 Payment flexibility |
Islamic banks use these two contracts for:
- Financing farmers (Salam)
- Financing construction (Istisna')
- Financing factories and equipment (Istisna')
📖 Stories from the Salaf
📖 Ibn Abbas Testifies to Salam's Legitimacy
Imam Bukhari reports in his Sahih...
Abdullah ibn Abbas رضي الله عنهما: (standing in a knowledge gathering)
I testify that the guaranteed Salaf until a specified term, Allah has made it lawful in His Book and permitted it.
One of those present: What is your proof, O Ibn Abbas?
Ibn Abbas: (reciting with humility)
﴾O you who have believed, when you contract a debt for a specified term, write it down﴿
Then he said: The Prophet ﷺ came to Medina while the people were making Salam on fruits for one, two, and three years. The Prophet ﷺ regulated this transaction without prohibiting it, but set conditions saying: "with a known measure, a known weight, until a known term."
📖 The Wisdom of Imam Abu Hanifa on Istisna'
In his circle at the Kufa mosque, Imam Abu Hanifa رحمه الله was asked...
The questioner: O Imam, some say: Istisna' is selling what you don't have, how is it permitted?
Abu Hanifa: (smiling)
My son, people have been practicing it from the time of the Prophet ﷺ until today without objection, so it is a practical consensus.
The questioner: How so?
Abu Hanifa: Look around you in the Kufa market. People ask craftsmen for:
- The making of swords and armor
- The making of shoes and clothes
- The building of houses and furniture
And they pay them the price in advance or at term, and no scholar has criticized them. This is the consensus of the Ummah through practice, and it is stronger than consensus through statement.
🎯 Contemporary Cases
Case One: Phone Pre-orders
📱 Case: Pre-order for the new phone
Question: Apple announced a new iPhone and opened pre-orders. Is it permitted to pay now and receive in two months?
Answer: ✅ Permitted — as a form of Salam
Conditions fulfilled:
- ✓ Precise specifications (type, capacity, color)
- ✓ Determined delivery date
- ✓ Price received at order
- ✓ Described good in liability (not a specific phone)
Case Two: Crowdfunding
💡 Case: Kickstarter for a smartwatch
Question: Kickstarter presents a project to manufacture a smartwatch. Buyers pay now and the product will be made and delivered in 8 months. What is the ruling?
Answer: ✅ Permitted — as a form of Istisna'
Provided that:
- ✓ Product specifications are precise
- ✓ Manufacturer commits to the delivery date
- ✓ Manufacturer bears the risks of production
⚠️ Note: If the project fails and nothing is produced → money must be refunded to buyers
Case Three: Buying an Off-Plan Apartment
🏠 Case: Buying an apartment under construction
Question: A real estate company sells apartments that will be built in two years. What is the Sharia-compliant method for contracting?
Answer: ✅ Permitted — as a form of Istisna'
Legal conditions:
- Specifications via plans and drawings
- Schedule of construction stages and partial deliveries
- Installment payments permitted
- Developer's guarantee until final delivery
- Buyer's right to cancel if non-conformity
Payment method: 20% Contract → 30% Foundations → 30% Structure → 20% Delivery
Case Four: Advance Crop Reservation
🌾 Case: Buying wheat before harvest
Question: A merchant wants to buy a wheat harvest from a farmer six months before harvest. How is the contract valid?
Answer: ✅ Permitted — as a form of Salam
| Element | Detail |
|---|---|
| 💰 Price | Paid in full at contract |
| 📦 Quantity | 100 tons |
| 🌾 Type | Egyptian wheat first quality |
| 📅 Date | After harvest in August |
| 📍 Location | Merchant's warehouse in such city |
Case Five: Custom Furniture Manufacturing
🪑 Case: Ordering a bedroom set from a carpenter
Question: I ordered a bedroom set with a custom design from a carpenter. We agreed on the price and delivery in a month. Is it permitted to pay half in advance?
Answer: ✅ Permitted — this is Istisna'
Advantage of Istisna' regarding price: Price in Istisna' is flexible:
- ✓ Pay all in advance
- ✓ Pay all at term
- ✓ Pay in installments
(Unlike Salam which requires advancement)
💡 Pause and Reflect
📜 Question for Reflection
In our era, crowdfunding platforms that finance projects that don't yet exist have spread.
Reflect on these questions:
1️⃣ How can we benefit from the fiqh of the Salaf on Salam and Istisna' to regulate these transactions?
2️⃣ What is the difference between lawful investment and gambling on these platforms?
3️⃣ Does the presence of clear conditions and guarantees transform the transaction from gharar to permissibility?
The Answer:
The more precise the specifications, the clearer the guarantees, and the more defined and known the risks, the closer the transaction is to permissibility and further from prohibited gharar.
Lesson Summary
🎯 Summary: Salam and Istisna
| Élément | Statut | Notes |
|---|---|---|
| Salam = deferred sale with upfront payment | ✅ Halal | |
| Upfront payment required in Salam | ✅ Halal | |
| Term required in Salam | ✅ Halal | |
| Istisna = manufacturing contract | ✅ Halal | |
| Price flexible in Istisna | ✅ Halal | |
| Both exempted from "selling what you don't own" | ✅ Halal |
Rabbi Zidni 'Ilman — Lord, increase me in knowledge