SALAM - An Islamic Service

What is Salam?

1.  Seller undertakes to supply specific goods to the buyer at a future date in exchange of an advanced price fully paid at spot.
2. Price is in cash but the supply of goods is deferred.

Purpose of use of Salam?

1. To meet the need of small farmers who need money to grow their crops and to feed their family up to time of harvest.
2. To meet the need of traders for import and export business.

Conditions of Salam?

1. It is necessary for the validity of salam that the buyer pays the price in full to the seller at the time of effecting sales.
2. In the absence of full payment, it will be tantamount to sale of a debt against a debt which is expressly prohibited by the Holy Prophet ( PBUH).
3. The basic wisdom for allowing salam is to fulfill the instant need of the seller. It its not paid in full, the basic purpose will not be achieved.
4. Only those goods can be sold through a salam contract in which the quantity and quality can be exactly specified. Precious stone cannot be sold on the basis of salam because each stone differ in quality , size, weight and their exact specification is not possible.
5. Salam cannot be effected on a particular commodity or on a product of a particular field or the fruit of a particular tree since there is a possibility that the crop is destroyed before delivery and given such possibility, the delivery remains uncertain.
6. All details in respect to quality of goods must be expressly specified leaving no ambiguity which may lead to a dispute.
7. It is necessary that the quantity of the commodity is agreed upon in absolute terms.
8. The exact sate and place of delivery must be specified in the contract.

Posted By : Ramsha Amir