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ISTISNA'A
SALE
Definition:
The
majority of the jurists consider Istisna'a as one
of the divisions
of Salam, therefore it is subsumed under the
definition of Salam.
But the Hanafite school of jurisprudence makes
Istisna'a an independent and distinct contract.
The jurists of the
Hanafite school have given various definitions
to Istisna'a, some of which are: "That it is
a contract
with a manufacturer to make something" and
"It is a
contract on a commodity on liability with the
proviso of work".
The
purchaser is called "mustasnia"
contractor and the seller is
called "sania" maker or manufacturer and
the thing is called "masnooa"
"manufactured, built, made".
Istisna'a
combines two distinctive traits:
*
The distinctive trait of Salam as to its
permissibility even though
the subject of the contract is not existing at the
time of
contract.
*
And the distinctive trait of the ordinary absolute
sale whereby
the price is fiduciary not necessarily be advanced
as in Salam. Because
Istisna'a involves labour besides the materials,
it becomes akin to "Ijara" in which
deferment of payment
is permissible.
The bank can
utilize Istisna'a in two ways:
*
It is permissible for the bank to buy a commodity
on Istisna'a
contract then sell it after receipt for cash
installed or
deferred price.
*
It is also permissible for the bank to enter into
Istisna'a contract
in the capacity of seller to those who demand a
purchase of a
particular commodity and then draw a parallel
Istisna'a contract
in the capacity of a buyer with another party
to make manufacture
- the commodity agreed upon in the first
contract.
The
first Istisna'a can be immediate or deferred (the
payment). The
payment in the second Istisna'a can be cash or
deferred.
Stated
below are the practical steps which the bank
applies in the
modes of Istisna'a sale, parallel Istisna'a with
reference to the
non-existence of any legal relation or financial
obligation between:
*
The purchaser requesting Istisna'a (the end user)
in the first contract.
*
The (maker), manufacturer, (builder) (the seller)
who manufactures
the article in accordance to the parallel
Istisna'a contract.
So
any disagreements that may arise are settled under
each contract
separately according to the provision therein.
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