Istisna Al-Istisna
Istisna’a is a sale contract between the FIM as Al-Sani (the seller) and the customer as Al-Mustasni (the ultimate purchaser) whereby the FIM.
It is defined as “a contract with a manufacturer to make something “or” a contract on a commodity on liability with the provision of work.” A more complete and precise definition by Mustafa Ahmed Zarqa” a contract of selling a manufacturable thing with an undertaking by the seller to present it manufactured from his own material with specified description at a determined price.”
The person who manufactured the thing is called “Soni” and the person who ordered its manufacture.
Steps of Istisna’a Transaction:
- based on the order from the customer
- undertakes to have manufactured or otherwise acquire the subject matter (Al-Masnoo) of the contract
- according to specifications stipulated by the customer and
- sells it to the customer for an agreed upon price and method of settlement whether that be in advance, by installments or deferred to a specific future date.
Parallel Istisna’a
Parallel istisna’a is the second sale contract entered into by the FIM with the subcontractor in order to fulfill its contractual obligations in the first contract to the customer. It is assumed that the FIM will always enter into a parallel istisna’a contract in order to satisfy its contractual obligations towards the Istisna’a agreement with the customer. The subcontractor (seller or Al-Sani) in the parallel Istisna’a contract has no direct legal relationship with the FIM’s customer in the Istisna’a contract. Parallel Istisna’a is not a contingent transaction on the first Istisna’a contract.