RESOLUTION No. 65/3/7
"AQD ISTISNA'A" (MANUFACTURE CONTRACTS)
Quote - The Council of the Islamic Fiqh Academy, in its seventh session held in Jeddah, Kingdom of Saudi Arabia, from 7-12 Dhul Qi'dah 1412H (9-14 May 1992).
Having considered the research papers received by the Academy on the subject, ''Istisna'a (Manufacture) contracts'',
Having listened to the discussions held about it, taking into consideration the purposes of Shari'a regarding the interests of people, and the rules of Fiqh regarding the contracts and transactions; and considering that Istisna (manufacture) contract plays and important role in stimulating industry and in opening up vast opportunities for financing and promoting Islamic economy,
First: That the Istisna'a (manufacture) contract
which has been mentioned with regard to work and goods on credit is
binding on both parties if it meets the basic requirements and
Second:The Istisna'a contract must stipulate the following:
a) The nature, type, amount and required specifications of the product to be manufactured.
b)The time limit shall be specified.
Third: In the Istisna's contract, payment may be deferred in full or scheduled according to pre-determined installments and specific due dates.
Fourth: The Istisna'a contract may include a penalty clause if so agreed by the two contracting
parties, subject to the case of force majeure.
Allah Knows best. - Unquote
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