TABLE OF CONTENTS

1.0 INTRODUCTION................................................................................................ 2
2.0 DEFINITION OF BAY AL-SALAM CONTRACT.....................................................3
3.0 CONDITION OF CONTRACT............................................................................... 4
3.1 THE FIRST: THE SELLER....................................................................................4
3.2 THE SECOND: THE BUYER.................................................................................4
3.3 THE THIRD: PRICE / CAPITAL............................................................................ 5
3.4 THE FORTH: ORDERED GOODS.........................................................................5
4.0 APPLICATION OF BAY AL-SALAM CONTRACT...................................................9
5.0 E-COMMERCE TRANSACTION ISSUE IN SYARIAH PERSPECTIVE.....................10
6.0 REFERENCE.................................................................................................... 11

1.0 INTRODUCTION
Muamalat are all about Shari'ah law concerned with the affairs of a person's life
events such as buying and selling, lending and borrowing and so on. It is also a procedure or
regulation in human relations among people to meet their individual needs are based on the
laws of God S.w.t. that involves in economic and Islamic social. As we know, humans have
basic needs to run their daily lives. For basic needs like food, shelter and clothing, they need
to go through a day of transaction and Muamalat. And process these transactions must be in
line with the requirements of Islamic law to ensure justice and harmony in society.
It aims to be in human life will not happen something wrong such as seizures, aggression, and
deception and so on. Islamic Shariah also prohibits any fraudulent activity, extortion,
oppression, injustice, corruption, usury and so on. The process allowed in Islamic Muamalat
is the process of buying and selling transactions and away from riba-based fraud and
oppression. This is in accordance with the word of Allah SWT, In Surah al-Baqarah, verse
275:

And God permitted trade and forbidden usury."

Accordingly, the transaction is also divided into several types of transactions that are required
in Islam to practice it. Among them is bay Al-Salam or better known as forward sale.

2.0 DEFINITION OF BAY AL-SALAM CONTRACT

Bay Al Salam means an agreement by which the payment is made prior to delivery of
the goods specified in the future. It is selling the goods are not available at the time of the
sale, but will be delivered in the future at a fixed future date. However, the price will be paid
immediately during the sales contract was made. Bay al Salam is also the sale of a deferred
item in exchange for an immediate and forward price. Bay Al-Salam also known as sales
liability whose characteristics are described in the exchange prices or capital sums paid in
advance.
Salam is valid even if it is subject to the terms of the sale and purchase that item exist
when the sales of the session, but the quantity and type of matter, time, place of delivery and
the price are clearly established at the time of contract. So, Bay Al-Salam is protected from
the activities of uncertainty.
Normally, bay Al-Salam used to acquire assets such as working capital with an
advance payment at a discount and then sell the property during transmission. When it was
sold for the price agreed upon with immediate payment for the one thing that has been set,
then it will be sent in the future at a fixed date (Nawawi, 1999). Maliki has defined bay alSalam as a sale in which the capital-sum (price) paid in advance and the object of sale
postponed for an appointed time. Whereas, Shafi'i and Hanbali as forward contracts that are
defined as contracts of sale of goods described as outstanding liabilities on the one hand, in
exchange for an acceptable price during the contract.
Bay 'al-Salam is one of the types of transactions permitted under Islamic law to the
benefit of mankind. Many in the community who have been practicing bay 'Al-Salam in life,
but they are not aware of it. This is because many among us who lack the knowledge and
awareness of the concept of contract bay Al-Salam. Even in banking affairs, bay Al-Salam
application is widely used, especially in nowadays international community increasingly
accepts the Islamic economic system. It is therefore necessary for us to understand the
concept of Bay al-Salam.

3.0 CONDITION OF CONTRACT

There are five pillars that must be included in the purchase, it is similar to al-Salam
bay but the situation is different. Pillars is divided into five, namely, seller, buyer, sighah,
paid in capital and reserve items. The pillars included under certain conditions:

3.1 THE FIRST: THE SELLER

The seller is the person who offers goods for sale to the buyer. Therefore, the
seller must notify the buyer of the goods to be sold the information in detail to the
buyer, whether in colour, shape, size and so on of the goods. Sellers also are
individuals who received the money as payment for the items that will be given to
the booker. Sellers also must be sufficient conditions of a legal transaction, such
as understanding, puberty, not forced to sell their goods and so on.

3.2 THE SECOND: THE BUYER.

Buyer is a booker or a person who advances or give their money to get the
things they want. As the seller, the buyer also needs to meet the conditions of a
legal transaction, can think and understanding, puberty, voluntary buy the goods
and the ability to manage the money that is not forced. Even so, the ability to see
not a requirement in Bay Al-Salam contract. And the blind eyesight allowed to
perform the contract bay Al-Salam. The reason, usual purchase is required to see
the goods purchased but otherwise just selling regards the properties of the goods.
And it can be achieved by listening. They may delegate to the literate to receive
ordered goods to ensure that goods are actually exists.

3.3 THE THIRD: PRICE / CAPITAL

Capital is a price to be paid by the buyer as an advance payment to the seller.
And the requirements are as below:
I.

Content and form of payment must be known by both parties.

It is whether payments are made in currencies Malaysia, it is the
Malaysian ringgit (MYR) or in the form of US Dollar (USD).
For capital goods paid as measured by measurement or weight, need to be
weighing 2kg and other such qualities even mentioned once in the
contract.
If payment can be seen for example the buyer to pay RM100 for certain
goods or buyers using the dirham, the buyer is required to state the amount
of the payment but did not have to mention the nature, type and
specification of these items as evidence sufficient to sight.

II.

Submission and acceptance of capital should be done during the

ceremony.
Buying and selling greeting would not exist if payment is not made. In
addition, the acceptance must be acceptance of the essentials. If the capital
was moved to the third parties that owe the buyer, to be paid to the seller,
then it is not valid. This is due to the transfer of loans not included in
category receive.

3.4 THE FORTH: ORDERED GOODS

It is the goods sold in the contract and the seller promised to deliver it to the
buyer as a reply in kind to the capital paid by the buyer at the time of sale session.
Among the conditions are below:
I.

Items must be declared properties and characteristics.

Booking items must be in accordance with the buyer to avoid
confusion and also dealt with items that range is also available with other
types of goods that can be stated specifications.
If the specification is difficult to say it is not valid on Bay Al-Salam.
This will lead to gharar or fraud. Included in the sense items that cannot
expressed specifications clearly like food and its preparation, involves the
use of fire either baked or fried or cooked for the use of fire would give a
5

different impression and certainly cannot be clearly stated. Thus it is not

appropriate to deal in Bay Al-Salam.
II.

The item must be identified type, quantity and nature by both

parties.
For example type is clothes or books. While in terms of quality
whether imported or locally, if by weight can be calculated if according to
the number or size if measurable weight. Nature is seen through colour,
engraving, or thick or thin the other properties that vary according to user
requirements.

III.

The goods are not to be confused with another item of a different

type.
Examples of food mixed with barley or a perfume mixed with musk
and so on. While the mixture is unknown. If the content of the mixture can
be found easily and the mixture is to enable genuine goods more quality and
durable as preservatives in food, it is allowed and valid in Bay Al-Salam.

IV.

The goods must be declared status would only debts and without
referring to the nature of the goods.
To explain this feature, this goods sold should not have been when the
sale and purchase conducted. If the goods is there in contract session, the
contract is not counted as bay al-Salam but regular purchase. This is
contrary to the concept of Bay Al-Salam the items in debt.

V.

These items can be delivered

The ability to deliver the goods subject to specified types of goods and
the period prescribed. If these are the kinds of things that did not exist at the
time specified as lost or was not found for instance that the Bay Al-Salam is
not valid.
In the case of goods which rarely exist or are likely to be found are rarely as
possible affected by epidemics plants that cause the nonexistence of such
plants. Unlike the case with items that are readily available but cannot be
found on time, the contract will continue to run until salutation investors or
buyers make the choice to cancel the contract and take back the submitted
payment to the seller.

It should be noted that the reserve of goods cannot be exchanged for other
goods until the buyer to cancel the old contract and take the money paid and
establish a new contract to buy other items from the seller.
In this case, the buyer may retain the money paid was in the hands of the
seller. Here sellers have the option either to sell other goods to the buyer or
refund the money.
VI.

Delivery deadline should be set

Duration of the goods required to be stated clearly and precisely. Rather
than the time period can be influenced by the environment and times such as
harvest time, the beginning of the month, end of the month and so on. But it
must be stated clearly and specific and that period will not be questioned by
both contracting parties so that no dispute or misunderstanding arose
between the two parties.
In addition, if the goods are brought by the seller before the promised time,
then the buyer can receive as long as it does not involve the transfer of
expenses.

VII. The place of delivery must be determined

The place should be appropriate and to get to where they do not involve
expenditure. And also required the stipulated or agreed in the contract.
3.5 THE FIFTH: OFFER AND ACCEPTANCE
Offer and acceptance are from both parties. For example, the buyer said: I give
priority RM1000 to get the 100 shirts that its properties as follows. While the seller,
said: I agree or I received the first payment.
However, it also requires a number of conditions that must be followed to
ensure the peace agreement was valid. Among them must be in the same location, as
well as between consent and acceptance must have similarities in terms of meaning.
One thing to remember most significant difference between the usual sale and
purchase with Bay Al-Salam or salutation must use the word Salaf means the
advance. So, if a word other than the two words, it does not affirm the contract.
Similarly, invalid if it contains option conditions. Option conditions exist
only in sale and purchase agreement is average. This is due option capital
requirements will prevent the recipient from receiving the full rights to the capital. In
other words, the acceptance of the capital just as a shadow, and this will cause the two
sides parted ways before the contract was perfectly sealed.

Meanwhile, the council also allowed khiyar in this regards because khiyar
contract will expire after the two sides split at the same time marks the contract or the
contract expires.

4.0 APPLICATION OF BAY AL-SALAM CONTRACT

Bay 'Al-Salam is not the same as the purchase of plants before harvest, because the
Bay Al-Salam concerned about quality and quantity of goods and delivery time is specified
and agreed in advance, so there is no gharar. Therefore, when the time of harvest, when the
fruit is less, the seller must fulfil it from other trees. But if so, then it becomes a seller's
advantage.
While in the Islamic banking system, Bay Al-Salam is normally set to purchase
working capital such as agricultural equipment, industrial goods, and the basic needs of the
household. The entrepreneurs or who need funding the factory to manufacture industrial
goods, can apply for funding from the Islamic bank with the Bay Al-Salam scheme. Bank in
this position as a buyer of goods to be produced by traders or entrepreneurs. Therefore, banks
pay the price in cash. At the appointed time, traders or entrepreneurs will deliver the ordered
items to the bank. Then, the bank may appoint distributors or dealers as its representative to
sell the goods to a third party for cash. Banks can also resell the goods to entrepreneurs or
traders who produce goods that are tough (bay bithaman ajil), taking particular advantage. In
reality, the bank is not easy to deliver the goods to a third party.

5.0 E-COMMERCE TRANSACTION ISSUE IN SYARIAH

PERSPECTIVE
E-commerce is a manufacturers and service provider with help of computer network,
named internet and as intermediaries with that kind of business-related activity that
concerned with consumers. The use of internet is like technological advancement to support
the whole spectrum of commercial activity. This issue was discuss because the concept of Ecommerce was similar with concept Bay Al-Salam. Community was questioned weather Ecommerce system is allowed in Islamic Shariah.
A few things that E-commerce similar with Bay Al-Salam, in aspect parties that
involved in transactions are customers and merchant as subjects and the product as object of
transaction. But payment gateway, acquirer and issuer that can be regarded as witness and
representatives in E-commerce between merchant and customer. While in Bay Al-Salam the
witness is not compulsory but strongly recommended to avoid future disputes.
In medium of transactions, both parties normally agreed on the quantity and quality
product, payment and delivery for both transactions E-commerce and Bay Al-Salam. Ecommerce used internet as their infrastructure and payment, but for Bay Al-Salam the
payment was conducted in ways agreed by both transaction parties such as face to face or
either party appoint their representative.
Then, for the both transactions, mode payment is made in advance. Thus, mode of
delivery for e-commerce is the digital product, it can be delivered right away once payment
done. Whereas the non-digital product will be delivered via courier service as agreed prior to
E-commerce transactions. While, Bay Al-Salam payment either made in advance or product
is delivered first before the payment.
There are similarities and differences between E-commerce and Bay Al-Salam. The
processes of buying and selling must get deal with each other. Besides, e-commerce
sometimes arise such as gharar issue and mode of payment that has element of riba should
be scrutinize further by the Islamic jurist and scholar in order to provide a better alternative
for the community.

10

6.0 REFERENCE
1. Mohd Zulkifli Muhammad, Rosita Chong. (2007). The Contract of Bay Al-Salam And
Istisna In Islamic Commercial Law: A Comparative Analysis. Labuan e-Journal of
muamalat and society, Vol. 1, 2007, pp. 21-28
2. Ainnur Hafizah Anuar Mokhtar, Tamrin Amboala, Mohd Zulkifli Muhammad, Mohd
Sarwar E-Alam. (2013). Bai As-Salam and E-commerce: A Comperative Analysis From
Shariah Perspectives. Proceedings of the 2nd Applied International Business Conference
(AIBC2013) 7 8 December 2013
3. Norazlina Zainul, Fauziah Osman, Siti Hartini Mazlan. (2004). E-commerce From An
Islamic Perspective. Electtonic Commerce Research and Applications 3 (2004) 280-293
4. M. Umer Chapra. (1998). The Major Modes of Islamic Finance. Presentation at the 6th
Intensive Orientation, course on Islamic Economics, Banking and Finance held at the
Islamic (Foundation, Leicester, U.K., on 17th 21st September 1998)
5. Mahmoud A. El-Gamal. (May 2, 2001).An Economic Explication of the Prohibition of

Gharar in Classical Islamic Jurisprudence. Prepared for the 4th International Conference
on Islamic Economics to be held in Leicester, UK, 13-15 August 2000.

11