Feature of a Valid Salam Contract

Conditions related to the price (ras al-mal)

The price must be clearly determined and paid in full by the buyer at the time of undertaking
the sale to avoid later dispute
The seller must take possession of the price in full before departing one another
other!ise it !ill be similar to the sale of debt for a debt !hich is prohibited"
#aliki $urist allo!ed it to be paid !ithin fe! days as long as it is not stipulated as
conditions"
%f the price is riba!i item& it is not allo!ed to be e'changed for another riba!i item to
avoid riba" (g) !heat !ith barley" Cash payment is not necessary in Salam the price can
be credited to the sellers account"
Conditions related to the purchased commodity (mussalam fih)
Salam can be effected on commodity !hose *uality and *uantity can be clearly specified
commodities !hich *uality and *uantity cannot be specified cannot be sold through salam"
The commodity must be vastly available in the market at the time of contract until the time
of delivery& to ensure the capability of the trader to deliver the product"
The *uantity& !eight and measure of the commodity must be agreed upon in e*uivocal
terms"
Conditions related to the date and place of delivery
The e'act date and place of delivery must be specified in the contract
Scholars differ on the shortest duration of time of delivery either + days& more than half a
day thirty days or up to the contracting parties to decide"
,hiyar (option) in salam
-fter taking delivery& the purchaser has the .option of defect/ (,hiyar-e--ib)" 0ot .option
of seeing/ (,hiyar-e-ruyat)
1evoking the Salam contract
-fter e'ecution of Salam agreement& it cannot be revoked unilaterally !ithout mutual
consent of both parties"
2enalty for non performance Seller can undertake in the Salam agreement that in case
of late delivery of Salam goods& he shall pay to the charity account maintained by the bank a
sum calculated on the basis of3"4 per annum for each day of default& bank !ill spend this
amount in charity purpose on behalf of the client"
This undertaking is infact a sort of self-imposed penalty to keep oneself a!ay from
default"
Salam in currencies
The ma$ority of $urists do not allo! Salam in gold& silver& currencies or monetary units&
although a fe! $urists have allo!ed it and& as such& a fe! %slamic banks have been using
Salam in currencies as an alternative to bill discounting"
5old& silver and other metallic money like Fulus of copper or other metals can be used
for some purposes other than for making payments hence& they can be traded keeping in
mind the Shar6ah principles" 7o!ever& paper money can be used only in payment of a price&
it cannot serve as a commodity to be sold