Firstly: Trade by sample [1711] A “sample” is an example of the thing, and its form is for the seller or broker to carry a small quantity from the measure or the weighted item (a sample) to the buyer until he sees it. If he likes it, he buys it. For example, coming to him with a bushel or a quarter bushel of wheat, saying, "I sell to you a similar quantity of wheat for such and such a price," and the contract is completed for the purchase of a similar quantity to the sample that the buyer saw. See Al-Qamus al-Muhit (1/208), Taj al-`Arus (6/249, 250), Tabyin al-Haqa’iq by Zayla`i (4/26), and Al-Sharh al-Mumti` by Ibn `Uthaymin (8/151).
Trade by sample is valid, and this was the position of the majority – the Hanafis, [1712] Tabyin al-Haqa’iq by Zayla`i (4/26) and Al-`Inayah by Babarti (6/342). Malikis, [1713] Sharh al-Zurqani `ala Mukhtasar Khalil (5/63) and Minah al-Jalil by `Ulaysh (4/484). Shafi`is [1714] It is valid according to the Shafi`is if the sample is included in the sale. Rawdat al-Talibin by Nawawi (3/373), Al-Majmu` by Nawawi (2/298), and Nihayat al-Muhtaj by Ramli (3/419, 420). – and a view in the Hanbali school of thought. [1715] Al-Mubdi` by Burhan al-Din Ibn Muflih (3/363) and Al-Insaf by Mardawi (4/213). This is because it is a customary practice for knowledge of some of a particular category to suffice for knowledge of the whole. [1716] Tabyin al-Haqa’iq by Zayla`i (4/26)
Secondly: The manufacturing (istisna`) contract
1. Defining “the manufacturing contract”
Linguistically: “Istisna`” is derived from the declension “sana`a”, “yasna`u”, “sun`a”, “fa huwa masnu`”, and a “sun`a” is a “work” or “action”, as in the Statement of Allah Exalted: “That is the work of Allah, who has perfected everything.” [1717] al-Naml, 88. “Istisna`” is the “ifti`al” form of “sani`ah”, and it implies “giving”, “honouring”, and “benevolence”. [1718] See Lisan al-`Arab by Ibn Manzur (8/208) and Taj al-`Arus by Zabidi (21/363).
Technically: It is an agreement for a commodity under guarantee, with performing the work set as a condition. Others said it is an agreement with craftsmen to produce something. [1719] See Bada’i` al-Sana’i` by Kasani (5/2) and Majallat al-Ahkam al-Adliyyah, p. 31 (entry no. 124). The elements of the contract of manufacturing are as follows: 1. The Manufacturer (As-Sani'): This is the person responsible for preparing the raw materials and actively engaging in the work either personally or through delegated representatives. 2. The Client (Al-Mustasni'): This is the one seeking the manufacturing service. The product resulting from the manufacturing process is called "Al-Masnou'" or the manufactured item. 3. The Price (Ath-Thaman): This is the payment made by the person seeking the manufacturing service in exchange for the manufactured item. See Majallat al-Ahkam al-Adliyyah, p. 31 (entry no. 124). For example, a manufacturer could agree a contract with the customer to manufacture a specific thing, such as building a dwelling, or manufacture some furniture for the home, such as the details for a sitting room.
2. Ruling on manufacturing
Manufacturing is permissible according to its conditions, [1720] In a manufacturing contract, it is required to state the kind, type, quantity, and required descriptions of the manufactured item, and to specify the term. and this was the position of the Hanafis, [1721] According to Hanafis, if the term (Ajal) is mentioned in the context of manufacturing, the contract transforms into a sale contract (Salam). In this case, the conditions of a Salam contract are considered applicable. Tabyin al-Haqa’iq by Zayla`i (4/123) and Al-Bahr al-Ra’iq by Ibn Nujaym (6/185). the basis for the decision of the Islamic Fiqh Academy, [1722] A decision was issued by the Islamic Fiqh Council approving the permissibility of the manufacturing contract. The text of the decision is as follows: Decision No: 67/3/7 “The assembly of the Islamic Fiqh Academy, convened in its seventh session in Jeddah, Kingdom of Saudi Arabia, from 7-12 Dhu al-Qa`dah 1412 AH / 9-14 May 1992 CE., after reviewing the research submitted to the Academy on the topic of ‘the manufacturing contract’ and after listening to the discussions surrounding it and considering the objectives of Shariah in the interests of the servants and the jurisprudential rules of contracts and transactions, and recognizing that the manufacturing contract plays a significant role in promoting industry and opening wide avenues for Islamic finance and economic development, it has been decided: 1. The manufacturing contract, which involves work and a specific product, is binding for both parties if its pillars and conditions are met. 2. The following conditions are required in the manufacturing contract: (a) Specification of the manufacturer's type, kind, quantity, and required characteristics. (b) Definition of the term. 3. It is permissible in the manufacturing contract to delay the entire price or distribute it into known instalments for specified periods. 4. The manufacturing contract may include a penalty clause according to what the parties agree upon unless there are compelling circumstances. Allah knows best. Through the manufacturing contract, Islamic financial institutions can contribute to revitalizing industries, agriculture, and crafts in the Islamic market. Islamic banks, contracting with a client for construction, establishment of factories, or the supply of goods under Shariah-compliant conditions, may also enter into a parallel manufacturing contract with another contractor under the same conditions, executing the contract at a lower price. The profit for the Islamic bank would then be the difference between the two contracts, and Allah knows best.” and the preferred opinion of Ibn `Uthaymin, [1723] Ibn `Uthaymin was asked about a man who owns a furniture store. Sometimes, a buyer comes to him and requests the customization of a living room. The buyer needs to go to another city for this customisation, and then they agree on the price, and perhaps the down payment is received before going for customisation, and he responded: “Yes, there is nothing wrong with this because he did not sell a specific item to him. Instead, they agreed on the manufacturing of a specific item. The correct view is that there is nothing wrong with it, and there is no objection. This is binding on him, and he should fulfil the terms of the contract accordingly.” Liqa’ al-Bab al-Maftuh (no. 131). and a practical consensus was reported to that effect. [1724] Kasani said: “It is permissible and commendable, as there is consensus among people on this. They commonly engage in such practices without objection in various transactions.” Bada’i` al-Sana’i` (5/2). Zayla`i said: “As for manufacturing, there is a consensus established through continuous practice from the time of the Prophet g until today.” Tabyin al-Haqa’iq (4/123). Ibn Nujaym said: “Its evidence is consensus by action, and it is established to be a commendable action.” Al-Bahr al-Ra’iq (6/185).