What Are the Conditions and Contemporary Applications of a “Salam” Sale?

Answered by Shaykh Dr. Muhammad Abu Bakr Badhib

Question

Could you explain the conditions for a “salam” sale and its contemporary applications according to the Shafi‘i School?

Answer

In the name of Allah, and all praise is due to Allah, and blessings and peace be upon our master Muhammad, the Messenger of Allah, his Family, his Companions, and those who follow him.

The “salam” contract is a permissible type of sale under Islamic law, falling within the general permissibility of trade as indicated by Allah’s statement:

“Allah has permitted trading.” [Quran, 2:275]

Definition of Salam in the Shafi‘i School

In the Shafi‘i School, “salam” is defined as a sale involving an advance payment for goods that are described and agreed upon but will be delivered at a later date. [Nawawi, Minhaj al-Talibin]

It is also referred to as “salf” or “salam”, and is essentially a forward sale. Unlike ordinary sales, “salam” involves the purchase of goods that are not currently in the seller’s possession but will be delivered later.

Conditions of Salam

The Shafi‘i scholars outline seven essential conditions for the validity of a “salam” contract, as mentioned in “al-Minhaj”:

• Immediate Payment of the Price: The full payment (capital) must be made at the time the contract is concluded.
• The Sold Item Must Be a Debt: The goods to be delivered must be a debt on the seller’s part, i.e., not currently available but to be delivered later.
• Specification of the Delivery Place: The location where the goods will be delivered must be clearly specified.
• Capability of Delivery: The seller must be capable of delivering the goods at the agreed time.
• Quantifiable Goods: The goods must be clearly measurable by weight, volume, or count.
• Defined Characteristics: The goods must be described with sufficient detail to avoid ambiguity, such as quality and specifications that materially affect the buyer’s purpose.
• Not Rare or Unavailable: The goods should not be of a nature that they are rarely or inconsistently available. [Ibid.]

Contemporary Applications of Salam

Modern applications of “salam” have been discussed and endorsed in various Islamic jurisprudential assemblies, such as the International Islamic Fiqh Academy, which highlighted several areas where “salam” can be effectively utilized:

• Agricultural Financing: Islamic banks can engage with farmers by advancing funds for future crop yields. This helps farmers overcome financial difficulties during the planting season and provides security for both parties. If the farmer cannot deliver from their crops, they can procure the goods from other sources to fulfill the contract.
• Industrial and Agricultural Production: Salam can be used to finance both agricultural and industrial activities, particularly in the pre-production phases of goods and their subsequent export. By purchasing goods on a salam basis, they can be resold at profitable prices once they are delivered.
• Support for Artisans and Small Producers: Islamic financial institutions can support small-scale producers by providing them with the necessary tools, machinery, or raw materials. This is done in exchange for a portion of their future output, which can then be marketed by the financier. [Majalla Majma‘ al-Fiqh al-Islami al-Duwali]

Further Applications of the Salam Contract

• Ensuring Liquidity for Beneficiaries: Salam can be effectively used in banking operations to provide liquidity. Banks may advance a specified sum of money to the client, who in turn commits to delivering a described product at a future date.
• Prepaid Cards: This is another contemporary example of salam, where a person pays upfront for a card’s value and then utilizes it incrementally over time for goods or services. [Qaradaghi, al-Salam wa Tatbiqatuh al-Mu‘asara]

These are just some of the modern applications of the salam contract. Delving into more details would be quite extensive. For those seeking further information and deeper understanding of salam and its contemporary applications, the following references are recommended:

• “Al-Salam wa Tatbiqatuh al-Mu‘asara” (Salam and its Contemporary Applications: A Comparative Jurisprudential Study), by Dr. Ali Muhyiddin al-Qaradaghi.
• “Buhus Fiqhiyya fi Qadaya Iqtisadiyya Mu‘asara” (Jurisprudential Studies on Contemporary Economic Issues), by various authors.
• “Al-Salam fi al-Buyu‘ al-Iliktruni” Salam in E-commerce by Ziyad Ibn Salih Ibn Hamoud al-Tuwayjiri, published in the Islamic Research Journal issued by the General Secretariat of the Council of Senior Scholars, Issue 124, 1442 AH.
• “‘Aqd al-Salam wa Tatbiqatuh” (Salam Contract and Its Contemporary Applications in the Banking Sector), by ‘Usama Muhammad al-Sulabi, published research.

May Allah guide us and grant success on the straight path.

[Shaykh] Dr. Muhammad Abu Bakr Badhib

Shaykh Dr. Muhammad Abu Bakr Badhib is a prominent Islamic scholar from Yemen. He was born in Shibam, Hadhramaut, in 1976. He received his degree in Shari‘a from Al-Ahqaf University, a master’s degree from the Islamic University of Beirut, and a PhD in Usul al-Din from Aligarh Muslim University (AMU).

He studied under great scholars such as Shaykh al-Habib Ahmad Mashhur al-Haddad, Shaykh Fadl Ba‘ fadl, Habib Salim al-Shatiri, Habib Ali Mashhur bin Hafeez, and others. He has served as the Director of Publications at Dar al-Fiqh, the former Deputy Director of Cultural Relations at Al-Ahqaf University, a former Assistant for Employee Affairs at Atiyah Iron Company, a researcher at the Sunna Center affiliated with the Dallah al-Baraka Foundation, and a researcher at Al-Furqan Foundation’s Makka al-Mukarrama and Madina al-Munawwara Encyclopedia branch.

Currently, he is a researcher at Al-Furqan Foundation’s Makka al-Mukarrama and Madina al-Munawwara Encyclopedia branch, teaches traditionally through the Ijaza system at Dar al-Fuqaha in Turkey, supervises the Arabic department at Nur al-Huda International Institute (SeekersGuidance), and is a member of the Board of Trustees of the Manuscript House in Istanbul.

His works include “The Efforts of Hadhramaut Jurists in Serving the Shafi‘i School,” “Contributions of Hadhramaut Scholars in Spreading Islam and its Sciences in India,” “Hada’iq al-Na‘im in Shafi‘i Fiqh,” in addition to verifying several books in Fiqh, history, the art of biographies, and Asanid (chains of narration).