Definition for : Istisna'a

This is an agreement under which one of the parties (Moustasni'i) requests the other party (Snai'i) to manufacture or build an asset which is paid for in advance, in instalments or on completion. This is a variation which is similar to the Salam contract, except that the object of the transaction is the delivery of finished products that have undergone a transformation process, and not goods purchased as is. Istisna'a thus provides medium-term financing to cover financing requirements for the manufacture, construction and supply of finished products.
(For more, see the Newsletter, November 2006)
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