Difference between revisions of "Bai Salam by Mufti Mujeeb"

Latest revision as of 05:09, 10 November 2017

Top 20 FREQUENT WORDS

salam 59 commodity 24 delivery 17 murabaha 14 price 14 seller 14 goods 11 agreement 10 sale 8 contract 6 buyer 5 crops 5 date 5 farmers 5 parallel 5 purchaser 5 taking 5 commodities 4 executed 4 paid 4 possession 4 purchase 4 risk 4

DOCUMENT KEY POINTS

• a c definition concept a c seller agrees to supply specific goods to the buyer at a future date in exchange of an advanced price fully paid at spot
• a c price is in cash but the supply of goods is deferred

• background of salam a c before prohibition of interest farmers used to get interest based loans for growing crops and harvesting
• the caravans used to get interest based loans for purchasing the commodities

• purpose of salam a c to meet the needs of small farmers who need money to grow their crops and to feed their family up to the time of harvest
• a c to meet the need of working capital a c to meet the needs of liquidity problem

• conditions of salam it is necessary for the validity of salam that the buyer pays the price in full to the seller at the time of effecting the sale because the basic wisdom for allowing salam is to fulfill the instant need of the seller
• only those goods can be sold through a salam contract in which the quantity and quality can be exactly specified e

• g supply of wheat of a particular field or the fruit of a particular tree since there is a possibility that the crop is destroyed before delivery and given such possibility the delivery remains uncertain
• it is necessary that the quantity of the commodity is agreed upon in absolute ter miss it should be measured or weighed in its usual measure

• the commodity of salam contract should remain in the market right from day of contract up to the date of delivery or at least at the date of delivery
• salam cannot be effected in respect of things which must be delivered at spot

• difference b w salam murabaha salam murabaha a c in salam a c in murabaha purchased goods purchased goods are deffered price are delivered at is paid on spot
• spot price may be either on spot or a c in salam price has differed

• difference b w salam murabaha salam murabaha a c salam is not executed in a c murabaha can be the particular commodity executed in particular but commodity is commodity
• a c salam cannot be effected in respect of things a c murabaha can be which must be delivered executed in those at spot

• a c transferring of risk and authority of use and utilization consumption are the basic ingredients of constructive possession
• delivery of salam goods a c before delivery goods will remain at the risk of seller

• khiyar option a c after taking delivery the purchaser has the option of defect khiyare aib
• not option of seeing khiyar e ruyat

• parallel salam after the execution of salam agreement with one party buyer or seller executes another salam agreement with third party conditions for parallel salam a there must be two different and independent contracts these two contracts cannot be tied up and performance of one should not be contingent on the other
• options available for purchaser after taking delivery

• agency agreement a c if the bank has no expertise to sell the commodities received under salam contract then the bank can appoint the customer as its agent to sell the commodity in the market third party subject to salam agreement and agency agreement are separate from each other
• a c a price must be determined in agency agreement on which the agent will sell the commodity but if the price is increased the benefit can be given to the agent

• promise to purchase a c before maturity bank can take promise to purchase from a third party after taking delivery bank will sell the same commodity to the promissee and he will be bound to purchase the same according to his undertaking
• a c this promise should be unilateral

• salam combining with murabaha a c bank can sell the salam commodity to the seller of salam on murabaha subject to following terms a salam agreement and murabaha agreement should be independent not contingent and with free will of the parties
• d bank cannot take undertaking from seller of salam that he will purchase the salam commodity from bank on murabaha basis

• a c penalty for non performance a c seller can undertake in the salam agreement that in case of late delivery of salam goods he shall pay to the charity account maintained by the bank a sum calculated on the basis ofa
• a c this undertaking is infact a sort of yameen nazar which is a self imposed penalty to keep oneself away from default

• in the case of default in delivery the guarantor may be asked to deliver the same commodity and if there is a mortgage the buyer can sell the mortgaged property and the sale proceeds can be used either to realize the required commodity by purchasing it from the market or to recover the price advanced by him
• security a security in the form of a guarantee mortgage or hypothecation may be required for a salam in order to ensure that the seller shall deliver the commodity on the agreed date

• a c salam sale is suitable to finance the agricultural operations where the bank can transact with farmers who are expected to have the commodity in penalty during harvest either from their own crops or crops of others which they can buy and deliver in case their crops fail
• scope and potential of salam a c the salam sale has the flexibility to cover the needs of various sectors of people such as farmers industrialists contractors exporters or traders

• a c salam sale is also used to finance the commercial and industrial activities especially in phases prior to production and export of commodities and that is purchasing it on salam and marketing them for lucrative prices
• a c the bank in financing craftsman and small producers applies the salam sale by supplying them with the inputs of production as a salam capital in exchange of some for their commodities to market

Please note, This is an auto generated summary based on sentances position in the document and other factors

DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\islamic banking

KeyWords

contract price sale asset financing lease client purchase ijarah payment profit musharakah lessee amount commodity housing agreement contracts ownership project

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DOCUMENT REFERENCES

Number of Pages

24

Published Date

2016-09-17 00:25:17

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