Al-Baraka Bank – Features of Murabaha and Leasing: Istisna’

Istisna

Another exception to the general rule is the sale of ‘Istisna’. In this type of sale the buyer asks a manufacturer to manufacture some specified goods for him. The sale in this case may be effected by the offer and acceptance even when the commodity is not in existence. Advance payment is also not necessary. The sole condition for the validity of this sale is that the commodity intended to be manufactured should be specified with all necessary particulars in a way that the possibility of a dispute is totally avoided. If the manufacturer produces the goods in accordance with the specifications mentioned in the contract, the buyer is bound to accept it and he does not have the option to cancel the contract unilaterally except if the manufactured goods are not in accordance with the agreed specifications or they are defective.

This piece is taken from the website of Al-Baraka Bank.

See on-line at: http://www.albaraka.co.za/Islamic_Banking/Features_of_Marabaha_and_Leasing/Istisna.aspx

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