Definition of Salam (Salaf) Sale

Definition of the Bay' Salam Contract and its Conditions

A Salam sale is the sale of a deferred-delivery commodity against a price paid in advance, or the sale of an obligation to deliver a specified commodity in the future in exchange for immediate payment. In other words, the purchase price is paid upfront, while the delivery of the commodity is deferred to a specified future date agreed upon by the parties. For example, one party may say to another: "Here is one hundred thousand Uzbek soums. In return, you will deliver to me, in July, a specified grade of wheat from Surkhandarya Region." This type of sale differs from ordinary sales transactions. As a general principle of Islamic law, it is not permissible to sell something that does not yet exist or is not owned by the seller at the time of the contract.

However, the Messenger of Allah (peace and blessings be upon him), recognizing people's need for such transactions, permitted the Salam contract. Like other sales contracts, Salam is concluded through offer and acceptance (ijab and qabul), that is, through the mutual expression of consent between the contracting parties. One party says: "Deliver to me a specified quantity of such-and-such goods," and the other party responds: "I undertake to deliver those goods for the agreed amount." According to the Hanafi school of jurisprudence, the offer and acceptance constitute the essential pillar (rukn) of the contract. According to the three other Imams (Malik, al-Shafi'i, and Ahmad), in addition to offer and acceptance, the Salam contract also consists of the following essential elements: the purchaser (Muslim), the seller (Muslamun Ilayh), the Salam capital or purchase price (Ra's al-Mal al-Salam), and the commodity to be delivered (Muslamun Fihi). In Islamic legal terminology, the purchaser is referred to as the Muslim or the owner of the Salam contract; the seller is called the Muslamun Ilayh; the commodity promised for future delivery is known as the Muslamun Fihi; and the price paid in advance is called the Ra's al-Mal al-Salam. According to the majority of Islamic scholars (Jumhur al-Ulama), it is permissible to conclude this contract using expressions such as "I have entered into a Salam contract," "I have entered into a Salaf contract," or "I have sold." However, according to Imam Zufar and the scholars of the Shafi'i school, since the transaction involves the sale of a commodity that is not yet available at the time of contracting, it should be concluded specifically using the terms Salam or Salaf. They base this on the fact that the Shariah explicitly permits this type of transaction under these specific contractual designations.

Evidence for its Permissibility in Shariah

يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنْتُمْ بِدَيْنٍ إِلَى أَجَلٍ مُسَمًّى فَاكْتُبُوهُ

"O believers! When you contract a debt for a fixed period, record it in writing..." (Surah Al-Baqarah, 2:282)

A disagreement arose between Abdullah ibn Shaddad ibn al-Had and Abu Burdah, the son of Abu Musa al-Ash'ari, regarding the Salam contract. Ibn Shaddad was inclined to think that Salam might not be permissible because the commodity being sold does not exist at the time of the transaction. Abdullah ibn Abi Mujalid narrated: "They both sent me to Ibn Abi Awfa. I asked him about the matter, and Ibn Abi Awfa replied: 'During the time of the Messenger of Allah (peace and blessings be upon him), Abu Bakr, and Umar, we used to enter into Salam contracts for wheat, barley, raisins, and dates.' I also asked Ibn Abza about it, and he gave the same answer."

Ibn Abbas (may Allah be pleased with them both) recited the aforementioned verse and said: "Allah has made lawful in His Book the sale involving an obligation to deliver goods at a specified future date, and I bear witness that He has permitted it." As for the evidence from the Sunnah, it is found in the following hadith narrated by Ibn Abbas (may Allah be pleased with them both): "When the Messenger of Allah (peace and blessings be upon him) arrived in Madinah, its people used to engage in Salam transactions for one, two, and three years. The Messenger of Allah (peace and blessings be upon him) said: 'Whoever enters into a Salam contract for anything must do so for a specified measure, a specified weight, and a specified term.'" Imam al-Bukhari (may Allah have mercy on him) narrated numerous hadiths concerning Salam transactions through various chains of transmission. In summary, these narrations establish that a Salam contract is permissible with respect to commodities that are measurable by volume or weight, provided that the delivery date is clearly specified and agreed upon.

Several conditions are stipulated in a Salam sale:

Conditions relating to the capital (price). There are six of them.

1. The Salam capital (advance payment) may consist of various forms of wealth, including cash, grain, agricultural produce, or other commodities. If the capital is represented by commodities rather than money — such as wheat, cotton, oil, cement, or similar goods — the type and category of the commodity must be clearly specified.
2. Where commodities such as cement, wheat, or cotton are used as the Salam capital, their source and origin must be clearly identified, including the location, region, or manufacturing plant from which they originate.
3. The quality of the capital must be specified. In other words, it should be clearly stated whether the commodity is of premium, medium, or lower grade quality.
4. The value of the Salam capital must be precisely determined. For example, if payment is made in money, the currency (whether Uzbek soums or another specified currency) and the exact amount must be clearly defined.
5. According to the opinion of Imam Abu Hanifah (may Allah have mercy upon him), if payment is made in gold or silver, the purity or fineness of the gold or silver must be specified. However, since modern transactions are generally conducted using paper currency, it is sufficient to clearly identify the currency used, whether local or foreign.
6. The Salam capital (Ra's al-Mal al-Salam) must be paid in full at the time of contracting, and the supplier must take complete possession of the payment before the contracting parties disperse from the contractual session. If the parties separate before the full payment has been delivered, the transaction would amount to a sale of a debt for a debt (bay' al-dayn bi al-dayn), since both counter-values would remain deferred obligations. The Messenger of Allah (peace and blessings be upon him) prohibited the exchange of one deferred obligation for another deferred obligation. Imam Malik (may Allah have mercy upon him) held that if the parties did not stipulate deferred payment at the time of contracting, but the payment was subsequently delayed for two or three days, the contract would remain valid. However, if the contract is concluded on the condition that the Salam capital will be paid after more than three days, the Salam contract becomes defective (fasid).

Source: fiqh.uz