Salam Calculator
Calculate Islamic forward sale (Salam) transactions with profit margins and delivery schedules.
Islamic Salam Contract Calculator
Calculate your Salam (forward sale) transaction - pay now, receive goods later
Understanding Salam Contracts
What is Salam?
Salam is a Shariah-compliant forward sale contract where the buyer pays the full price at the time of contract for goods to be delivered at a specified future date. It is one of the oldest Islamic financial instruments, originally used to support farmers and manufacturers who needed upfront capital.
Key Requirements
- Full payment must be made at contract signing
- Goods must be clearly specified (type, quality, quantity)
- Delivery date and place must be fixed
- Goods must typically be available in the market
- Cannot be used for gold, silver, or currencies
Benefits of Salam
- For Buyers: Lock in lower prices, hedge against future price increases
- For Sellers: Receive capital upfront for production
- Shariah-compliant alternative to conventional forwards
- Supports real economic activity and production
Risks to Consider
- Buyer bears price risk if market prices fall
- Seller must deliver exact specifications
- Quality disputes can arise at delivery
- Seller default risk (inability to deliver)
- Storage and handling costs after delivery