Their Islamic identity to organise their collective life in accordance

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Parallel salam is allowed with a third party only. The seller in the first contract cannot be made purchaser in the parallel contract of salam, because it will be a buy-back contract, which is not permissible in Shari‘ah. Even if the purchaser in the second contract is a separate legal entity, but it is fully owned by the seller in the first contract the arrangement will not be allowed, because in practical terms it will amount to ‘buy-back’ arrangement. For example A has purchased 1000 bags of wheat by way of salam from B, a joint stock company. B has a subsidiary C, which is a separate legal entity but is fully owned by B. A cannot contract the parallel salam with C. However, if C is not wholly owned by B, A can contract parallel salam with it, even if some share-holders are common between B and C.

Istisna’

‘Istisna’’ is the second kind of sale where a commodity is transacted before it comes into existence. It means to order a manufacturer to manufacture a specific commodity for the purchaser. If the manufacturer undertakes to manufacture the goods for him with material from the manufacturer, the transaction of istisna’ comes into existence. But it is necessary for the validity of istisna’ that the
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price is fixed with the consent of the parties and that necessary specification of the commodity (intended to be manufactured) is fully settled between them.

The contract of istisna’ creates a moral obligation on the
manufacturer to manufacture the goods, but before he starts the work, any one of the parties may cancel the contract after giving a notice to the other.¹² However after the manufacturer has started the work, the contract cannot be cancelled unilaterally.

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Keeping in view this nature of istisna’ there are several points of difference between istisna’ and salam which are summarized below:

1. 
   The subject of istisna’ is always a thing which needs
   

manufacturing, while salam can be effected on any thing, no matter whether it needs manufacturing or not.

2. 
   It is necessary for salam that the price is paid in full in advance, while it is not necessary in istisna’.
   
3.