The basis of Islamic Banking is based on the premises of the existence of an underlying asset. The asset itself must have the following attributes:
- Firstly, the asset must exist. Therefore, an asset which does not exist at the time of sale cannot be sold.
- Secondly, the seller should have acquired the ownership of that asset. Therefore, if the asset exists, but the seller does not own it, he has no right to sell it.
- Thirdly, mere ownership is not enough. It should have come into the possession of the seller, either physically or constructively. If the seller owns an asset, but he has not taken its delivery himself or through an agent, he cannot sell it.
The only exception to this rule is the contract of Bai Salam (Trust Sale) and Bai Istisna (Order Sale). These two contracts deal with the sale transaction involving an asset which is at the point of contract, is non-existance.
Filed under: Bai Istisna, Bai Salam, Islamic Banking, Istisna
salam…can you give me some proof about bai’ salam?
Alaikumsalam Sue,
Not sure what you mean by more proof about bai’salam. Are you looking for a specific hadith or verse? Nevertheless, if its explanation you want, you can also visit the excellent site of Meezan Bank as below.
Meezan Bank guide to Salam
or continue reading my entry (click on the blue header above for the proper page). Thanks.