Condition of Bay Al Salam or Forward Sale

Yurizk Islamic Finance, Islamic Finance Instruments Leave a Comment

Definition of Bay Al Salaam: A forward sale contract where advance payment is made for goods to be delivered later.

There are two fundamental exceptions to the general condition in a sale contract that the commodity should exist at the time of concluding the contract. One is ‘Istisna’, and the other is ‘bay al salam’.

Source: Introduction to Islamic Banking & Finance (Hassan, Kayed, Oseni)

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