Book of Zakat

Advance Payment Sales

السَّلَمِ

Glossary

Advance Payment Sales (Salam [or Salaf]) ⁸³⁶

Ibn ‘Abbâs narrated that when Allah’s Messenger (SA) came to Madinah, the people were paying for fruits one and two years in advance, so he said, “Those who pay in advance for anything must do so for a specified measure or weight and for a definite time.” ⁸³⁷

عَنِ ابْنِ عَبَّاسٍ رَضِيَ اللهُ عَنْهُمَا قَالَ: قَدِمَ رَسُولُ اللهِ الْمَدِيْنَةَ، وَهُمْ يُسْلِفُوْنَ فِي الثِّمَارِ السَّنَةَ وَالسَّنَتَيْنِ، فَقَالَ: " مَنْ أَسْلَفَ فِي ثَمَرٍ فَلْيُسْلِفْ فِي كَيْلٍ مَعْلُومٍ، أوَ وَزْنٍ مَعْلُومٍ، وَإِلَى أَجَلٍ مَعْلُومٍ."

836. The salam or salaf sale involves the exchange of two items; one is called the merchandise, and the other is called the price. If we add the factor of time (the time of delivery), then we have four possibilities:
1) Immediate delivery of both items, which is the usual sale that is permissible by consensus.

2) Deferred payment of the price, which is the deferred payment sale (bay‘ al-âjil) that is permissible, according to the vast majority, with some conditions.

3) Deferred delivery of the merchandise, which is the salam (or salaf) transaction addressed here.

4) Deferment of both items, which is called bay‘ al-kâli’ (الكالئ) according to some, and it is forbidden according to the vast majority.

837. (Ag)
Notice that the Messenger of Allah (SA) rectified the transaction and did not forbid it. This is very common in the area of transactions. The wisdom here is that most human transactions exist because of a need. Islam also recognizes the ability of the human mind to discern between right and wrong, as well as between benefit and harm. The mind, however, is not capable of doing so in an unlimited manner, and the thoughts are often corrupted by human desires and biases. Therefore, the Sharia of the All-Wise approves of the correct human customs, repeals the corrupt ones, and rectifies those that are rectifiable.

Salam is permissible in commodities that have well-defined attributes on condition that:
1. Those attributes are delineated, ⁸³⁸
2. Its quantity is mentioned, in terms of the unit of measurement, whether volume, weight, cubit, or count;
3. The time frame is designated, and;
4. The price is paid before the separation of the buyer and the seller. ⁸³⁹

وَيَصِحُّ السَّلَمُ فِيْ كُلِّ مَا يُضْبَطُ بِالصِّفَاتِ:
١.إِذَا ضَبَطَهُ بِهَا
.٢. وَذَكَرَ قَدْرَهُ بِمَا يُقَدَّرُ بِهِ مِنْ كَيْلٍ، أَوْ وَزْنٍ أَوْ ذَرْعٍ أَوْ عَدٍّ،
.٣.وَجَعَلَ لَهُ أَجَلاً مَعْلُوْمًا
.٤.وَأَعْطَاهُ الثَّمَنَ قَبْلَ تَفَرُّقِهِمَا

The need for this transaction is obvious: it facilitates the investment of cash possessed by some people so that it can be used by others. A farmer may have the land and the skill to cultivate it, but he may lack the money to do so. Another person may have the money and need some crops in the future. Islam allows the owner of the cash to give it in advance to the producer of the product, for their mutual benefit and the benefit of the economy.
The Messenger of Allah (SA) in this hadith provided guidelines for the transaction, in order to protect it from the dangers of jahâlah (lack of knowledge about the details of the contract by one or both parties) and gharar (undue risk taking) resulting from the jahâlah.

838. Salam is invalid if the subject matter of the deal is not standardized by description, since this would lead to jahâlah and gharar. For example, two tons of a specific brand of wheat or corn is standard. There is controversy over the permissibility of salam in livestock. The popular position in the Ḥanbali madh-hab is to allow it.

839. This is true according to the majority. (A) + (+H, +S)
However, according to (-M), a payment made within three days of the contract is still considered immediate. In modern transactions, there may be a pressing need for this position, which does not seem to be in direct conflict with any clear sound text.

Salam sale is permissible in situations where the commodity is received as separate batches on predefined dates. ⁸⁴⁰

وَيَجُوْزُ السَّلَمُ فِيْ شَيْءٍ يَقْبِضُهُ أَجْزَاءً مُتَفَرِّقَةً فِيْ أَوْقَاتٍ مَعْلُوْمَةٍ.

It is not permissible to pay one price for two commodities in advance unless the price of each commodity is made clear. ⁸⁴¹

وَإِنْ أَسْلَمَ ثَمَنًا وَاحِدًا فِيْ شَيْئَيْنِ، لَمْ يَجُزْ حَتَّى يُبَيِّنُ ثَمَنَ كُلِّ جِنْسٍ مِنْهُمَا.

Other Conditions of Validity for Salam Transactions

5) One may not sell a particular item, such as the produce of a particular farm, with salam because there is no guarantee that this particular item will be deliverable on the due date. However, an accurately described item, such as a certain quantity of a specific type of dates, can be found with some other merchant and can be delivered. Another example is that one may sell two tons of a certain type of wheat but not necessarily the harvest of a particular farm. In this case, if the farm did not produce enough, the farmer could still get the wheat from other sources and deliver it to the purchaser on the date agreed upon.
This is the difference between salam (the advance payment sale of a describable good) and the sale of what one does not possess, in which the commodity is a particular item which one may or may not be able to deliver.
6) The commodity in salam must be one that is not rare in the location where the contract was made, because deliverability is an important requisite in such transactions.

840. This applies to the commodity; the price, in contrast, must be paid in full at the time of the transaction.

841. To avoid jahâlah and gharar, and the consequent disputation. Also, in case one commodity was undeliverable, the whole deal would become invalid due to the uncertainty about the price of each commodity separately.

Whoever buys something on the basis of salam should not change the deal to something else. ⁸⁴²

وَمَنْ أَسْلَفَ فِيْ شَيْءٍ، لَمْ يَصْرِفْهُ إِلَى غَيْرِهِ.

It is not permissible to sell what one buys through a salam transaction before receiving it, or to use it in debt transfer. ⁸⁴³

وَلَمْ يَجُزْ لَهُ بَيْعُهُ قَبْلَ قَبْضِهِ، وَلاَ الْحِوَالَةُ بِهِ.

However, cancellation [upon request from the other party] of the whole sale or part of it is permissible because it is a form of annulment. ⁸⁴⁴

وَتَجُوْزُ الإِقَالَةُ فِيْهِ، وَفِيْ بَعْضِهِ، لأَنَّهَا فَسْخٌ.

842. This statement has been reported by Abu Dâwood from the Prophet (SA), but with a chain deemed weak by the majority of scholars of Hadith. Still, the meaning is true, since in some of the narrations of the hadith mentioned at the beginning of the chapter, the Prophet (SA) said, “Those who pay in advance for anything must do so for a specified item.” If one specified dates, for example, one may not take wheat instead.

843. The party responsible for delivering the merchandise (seller) may not say to the purchaser, “Take your merchandise from another person (who owes the seller a similar amount).” Also, the buyer may not transfer their entitlement to the merchandise to someone else they owe money. The prohibition of both transactions is the madh-hab because debt transfer is legitimate only in settled debts, whereas salam transactions are subject to annulment. (t: both transactions are allowable because they are not sale of debts, but fulfillment of payments [istifâ’], freeing some parties from the burden of debt.)

844. This means that it is not a modification of the existing contract, but a complete cancellation. This is completely true in the cancellation of the whole deal. As for the cancellation of part of it, such as changing it from 10 tons of rice for $1000 to 5 tons for $500, there is some controversy within the Ḥanabali madh-hab. The position mentioned here is the preferred one.

Contemporary Applications

Would salam contracts apply to apartments and houses sold before construction is completed?
According to the majority of contemporary scholars, this is considered to be a manufacturing contract (‘aqd al-istiṣnâ‘). This transaction is considered a type of salam by (A) + (+M, +S), which means all of the conditions of salam will apply to it, including the immediate payment of the whole price (A) + (+S) or within three days (-M). There is an agreement of the four madh-habs, however, that salam is not acceptable in buildings, because their site must be specified, and if it is, then it is a particular (non-substitutable) item, and salam is not applicable to those.

However, (-H) considers it a separate contract, since, unlike salam, it involves the making of the commodity. This position allows the buyer to pay the price in installments. Yet, according to (H), this contract will turn into salam if a deadline is set for the submittal of the commodity. The two disciples of Abu Ḥaneefah held a different position, and allowed setting a deadline in the manufacturing (istiṣnâ‘) contract.

The Fiqh Assembly of the OIC (Organization of the Islamic Conference) indicated that a deadline should be set, and its appointment should not change the contract from istiṣnâ‘ to salam. The assembly approved the sale of homes before their construction and also paying the price in installments, as long as there is an accurate description of the property being sold. – Resolution # 65 (7/3), Sixth Annual Conference of the OIC, 1412 AH/ 1992 CE.
Would salam contracts apply to cars?

Yes, if they are new and accurately described in detail, including the make, model, year, options, and so on.

Advance Payment Sales

( Page : no 75)

Book of Zakat

Advance Payment Sales

السَّلَمِ

Introduction

The Book of Purification

The Book of Prayer

The Book of Funerals

The Book of Fasting

The Book of Hajj and 'Umrah

Book of Zakat

The Book of Selling and Commercial Transactions

The Book of Bequests

The Book of Inheritance

The Book of Marriage

The Book of Divorce

The Book of Sadaq

The Book of Dhihar

The Book of Lian

The Book of Foods

The Book of Oaths

Book of Fatal and Non-Fatal Assault

The Book of Indemnities

The Book of Hudood

The Book of Jihad

The Book of the Judiciary

The Book of Testimonies

Appendix

Glossary

Advance Payment Sales