What is the similarities and differences between Istisna and Salam contract?

Answer 1

Istisna and Salam are both Islamic financing contracts used for trade and manufacturing. The main similarity is that both involve advance payments for goods that are to be delivered at a later date, ensuring compliance with Islamic finance principles. However, the key difference lies in their application: Istisna is typically used for manufacturing goods, allowing for customization, while Salam is used for agricultural products or commodities that are usually standardized and delivered at a future date. Additionally, Salam requires full payment upfront, whereas Istisna can allow for partial payments or progress payments during the manufacturing process.