فِقهُ الاِستِصنَاعِ وَالسَّلَم — عَقدَانِ آجِلَانِ فِي الفِقهِ الإِسلَامِيّ: كَيفَ يَختَلِفُ السَّلَمُ وَالاِستِصنَاعُ فِي المَوضُوعِ وَتَوقِيتِ الدَّفعِ وَطَبِيعَةِ الإِلزَامِ وَلِمَاذَا يُهِمُّ هَذَا التَّمييزُ لِصُكُوكِ البُنيَةِ التَّحتِيَّةِ وَتَمويلِ السِّلَع
Fiqh al-Istisna' wal-Salam (فِقهُ الاِستِصنَاعِ وَالسَّلَم — Jurisprudence of the Two Forward Contracts; both salam and istisna' are contracts for future delivery; both were exceptional concessions to necessity in Islamic commercial law [normally, selling what you don't have is prohibited as *bay' al-ma'dum*]; they differ in critical ways: [1] Salam [السَّلَم — advance purchase]: object must be a fungible, countable commodity [wheat, dates, metals] — not a specific manufactured item; price must be paid in full at time of contract [the 'salam' or advance payment justifies the future-delivery exception]; delivery date is fixed; binding on both parties; Prophetic hadith: 'Whoever does salam, let it be in a known amount, a known weight, and for a known term' [Bukhari]; [2] Istisna' [الاِستِصنَاع — commission to manufacture]: object is a manufactured/constructed item specified by description but not yet in existence [a house, ship, machine, building]; payment may be deferred or in installments [unlike salam]; may be cancelled before manufacturer begins work [unlike salam]; AAOIFI Standard 10 governs; key distinction: in salam the seller may source the commodity from anywhere; in istisna' the manufacturer must make the specified item themselves [or subcontract as parallel istisna']; major modern application: istisna' for infrastructure [the government commissions a bank to build a hospital via istisna', finances it, and leases it back] underpins much Islamic project finance) are the two foundational tools for Islamic forward financing.
The Comparison Table
| Feature | Salam | Istisna’ |
|---|
| Object | Fungible commodity (wheat, metals) | Manufactured/constructed item |
| Price payment | Full at contract | Installments permitted |
| Delivery date | Must be specified | Need not be specified at contract |
| Cancellation | Not permitted once contracted | Permitted before work begins |
| AAOIFI Standard | 17 (within sukuk framework) | Standard 10 |
Salam was originally the vehicle for financing farmers. A trader pays for wheat in advance; the farmer uses the payment to fund the growing season; the trader receives the wheat at harvest. Both parties benefit: the farmer has liquidity, the trader has a known supply.
The key requirements prevent abuse: the commodity must be precisely described (type, quality, quantity, weight), the price must be fully prepaid (preventing the transaction from becoming a debt-for-debt swap), and the delivery date must be fixed.
Istisna’ was originally applied to manufactured items — a customer commissions a shoemaker to make shoes to specification. The modern extension to large-scale construction is AAOIFI Standard 10’s primary contribution.
Parallel Istisna’: In Islamic project finance, a bank receives an istisna’ commission from a customer (build me a hospital), then contracts its own istisna’ with a construction company. The bank sits between two contracts, using the second to fulfil the first. AAOIFI requires disclosure of this arrangement.
See also: Fiqh Al Ijarah Al Mawsufah Fi Al Dhimma, Fiqh Al Sukuk Al Ijara, Fiqh Al Gharar, Fiqh Al Murabaha Al Amr Bil Shira, Fiqh Al Kafalah