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Fatwa: Transfer of Istisna' Contract to a Third Party

IM Insights
By IM Insights
1 year ago
Fatwa: Transfer of Istisna' Contract to a Third Party


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  1. Fatwa Database https ://islamicmarkets.com/publications Topic: Transfer of Istisna' Contract to a Third Party Question: Is it permissible to execute a sale contract with a governmental department after the tender is awarded, considering that the required commodity is not yet possessed, but there is a promise to purchase from the exporter or producer to import, possess and hand the commodity over? Answer: It is not permissible to execute a sale contract for goods owned by the seller at contracting time which were not manufactured, unless in case of Salam (which is a sale of products under liability with instant payment of all price). However, it is permissible to sell the manufactured product even if it is not possessed by the seller. The same applies if the product is manufactured by the seller or otherwise, for example if it is purchased ready manufactured then sold it to the one who contracted with him before, provided it was based on specifications. This transaction is a case of Istisna'. In case the goods are not manufactured they may be purchased from the producer or exporter with the condition of option (The right to rescind within a particular due date). When the bid is awarded to the seller, his right to option is dropped (then the goods become under his possession) and signs the sale contract with the entity with which he is dealing. Compiled & Classified By: Dr Ahmed Mohieddin Ahmed Source: Reviewed by: Dr Abdul Sattar Abu Ghuddah Shariah Fatwas in economic issues book– part (1), (2) and (3) – Kuwait Finance House, Fatwa No. 348.