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Bay Al-Salam (Forward Sale) - Coggle Diagram
Bay Al-Salam (Forward Sale)
Definition
Literally
: Salam means giving,advanced/leaving
Technically
: Sale contract whereby seller agreement to sell some specific commodities to buyer at agreed future date in exchange for price fully paid on spot basis.
Legal Evidence
Sunnah
Prophet SAW said, "whoever pays money in advanced for dates(to be delivery later) shpuld pay it for known specified weight & measure of dates.
Ijma
Ibnu Munzir, "every single jurist that we came across had given their consensus with regard to the permissiblity of Bay Al-Salam"
Al-Quran
(Al-Baqarah : 282) "O you who believe! Whenever you give or take credit for a stated term, set it down in writing.
Objectives
Benefit to trader/producer
It provide a legally &Islamically accepted financing alternative and avoid any involvement in riba.
Benefit to customer
It provides goods and products at a discount price in return for the willingness of the purchaser to help the financing of business venture.
Provide financing for small/medium enterprise
It appears clearly from legal terminology that the economic reality underlying the contract of Salam, the ordering of goods to be deliver later for a price in advanced was finacing business of small trader.
Basic rules/condition
Condition related to the purchase commodity
:green_cross: Must specific their type and kinds of good that will be trade.
:green_cross: Quantity and quality must clearly specified.
:green_cross: Must be available in market and can be measure.
Condition related to price
:green_cross: Must be determine and paid in full
:green_cross: It is not allowed to be exchenge with ribawi item based on salam contract to avoid riba al-fadl and riba al-nasiah.
Condition related to the date and place delivery
:green_cross: Must be specific in the contract.
:green_cross: The duration of the contract is up to both parties to decide.
Types of Salam Contract
Ordinary Salam Contract
:star: involves only two parties which is Buyer (Musalim) and Seller (Musliamilayh)
Parallel Salam Contract
:star: bank enter contract with seller and pay cash in full fix commodity to be delivered at agree time (First contract).
:star: Bank enter parallel salam with buyer who purchase the commodities from the bank where they delivered.
:star: Commodities delivered to bank
:star: Commodities delivered to the purchaser who pay at agreed price to bank.
Disadvantages
Duration
:red_cross: The duration of salam contract must be precise with a date of delivery anot no a vague period such as on summer/winter.
:red_cross: Dates are open t manipulations and different interpretation which will eventually lead to dispute and disagreement.
Postponed in delivery
:red_cross: Islam does not object the postponed in delivery of any products involved in a trading.
:red_cross: Must be done on the spot except for RM to DOLLAR.