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Bai Salam

Bai salam is a contract where advance payment is made for goods that will be delivered later. It allows a seller to receive full payment at the time of contract in exchange for delivering specified goods of a defined quality and quantity to the buyer at a future date. Several conditions must be met for a valid bai salam contract, including full prepayment to the seller, unambiguous specification of goods to prevent disputes, and defining delivery details like date, place and item specifics.

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285 views2 pages

Bai Salam

Bai salam is a contract where advance payment is made for goods that will be delivered later. It allows a seller to receive full payment at the time of contract in exchange for delivering specified goods of a defined quality and quantity to the buyer at a future date. Several conditions must be met for a valid bai salam contract, including full prepayment to the seller, unambiguous specification of goods to prevent disputes, and defining delivery details like date, place and item specifics.

Uploaded by

kanwal1234
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Bai salam

Bai salam means a contract in which advance payment is made for goods to be delivered later
on. The seller undertakes to supply some specific goods to the buyer at a future date in exchange
of an advance price fully paid at the time of contract. It is necessary that the quality of the
commodity intended to be purchased is fully specified leaving no ambiguity leading to dispute.
The objects of this sale are goods and cannot be gold, silver, or currencies based on these metals.
Barring this, Bai Salam covers almost everything that is capable of being definitely described as
to quantity, quality, and workmanship.

Basic features and conditions of Salam

1. The transaction is considered Salam if the buyer has paid the purchase price to the seller
in full at the time of sale. This is necessary so that the buyer can show that they are not
entering into debt with a second party in order to eliminate the debt with the first party,
an act prohibited under Sharia. The idea of Salam is to provide a mechanism that ensures
that the seller has the liquidity they expected from entering into the transaction in the first
place. If the price were not paid in full, the basic purpose of the transaction would have
been defeated. Muslim jurists are unanimous in their opinion that full payment of the
purchase price is key for Salam to exist. Imam Malik is also of the opinion that the seller
may defer accepting the funds from the buyer for two or three days, but this delay should
not form part of the agreement.
2. Salam can be effected in those commodities only the quality and quantity of which can be
specified exactly. The things whose quality or quantity is not determined by specification
cannot be sold through the contract of salam. For example, precious stones cannot be sold
on the basis of salam, because every piece of precious stones is normally different from
the other either in its quality or in its size or weight and their exact specification is not
generally possible.
3. Salam cannot be effected on a particular commodity or on a product of a particular field
or farm. For example, if the seller undertakes to supply the wheat of a particular field, or
the fruit of a particular tree, the salam will not be valid, because there is a possibility that
the crop of that particular field or the fruit of that tree is destroyed before delivery, and,
given such possibility, the delivery remains uncertain. The same rule is applicable to
every commodity the supply of which is not certain.
4. It is necessary that the quality of the commodity (intended to be purchased through
salam) is fully specified leaving no ambiguity which may lead to a dispute. All the
possible details in this respect must be expressly mentioned.
5. It is also necessary that the quantity of the commodity is agreed upon in unequivocal
terms. If the commodity is quantified in weights according to the usage of its traders, its
weight must be determined, and if it is quantified through measures, its exact measure
should be known. What is normally weighed cannot be quantified in measures and vice
versa.
6. The exact date and place of delivery must be specified in the contract.
7. Salam cannot be effected in respect of things which must be delivered at spot. For
example, if gold is purchased in exchange of silver, it is necessary, according to Shari'ah,
that the delivery of both be simultaneous. Here, salam cannot work. Similarly, if wheat is
bartered for barley, the simultaneous delivery of both is necessary for the validity of sale.
Therefore the contract of salam in this case is not allowed.

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