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Search Fatawaa


Subject : Ruling on the Istisna` Contract of Sanadcom for Business Finance

Fatwa Number : 3679

Date : 01-02-2022

Classified :

Fatwa Type : Search Fatawaa


Question :

What is the ruling of Sharia on the Istisna` contract of Sanadcom for Business and Finance (a copy of which being attached hereto)?


The Answer :

All perfect praise be to Allah the Lord of the Worlds. May Allah`s peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

Having examined the purchase promise for the asset requested to be manufactured and the Istisna`  contract of Sanadcom for Business and Finance , a copy of which being attached hereto, it was made clear that this contract contains no violations of the rules of Sharia. However, the proper application is the liability of the parties to the contract as well as Sanadcom`s management. Thus, we advise clients to read the contract carefully before signing it so that the contracting process is conducted on the basis of informed consent and full knowledge as there are some consequences of the contract on them. And Allah the Almighty knows best. 

 

[1] Istisna’ means asking someone to construct, build or manufacture an asset. In Islamic finance, istisna' is generally a long-term contract whereby a party undertakes to manufacture, build or construct assets, with an obligation from the manufacturer or producer to deliver them to the customer upon completion. In practice, the key advantage of an istisna’ contract is that it can provide flexibility to the customer, where payments can be made in installments linked to project completion, at delivery or after project completion. In contrast to istisna', for salam contract the payment has to be made in full, in advance.






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