2 – An istisnaʿ contract is valid only when the following conditions are met:
(a) the genus, type, quantity, and required specifications of the item to be manufactured are clearly defined;
(b) a definite delivery date is fixed.

3 – The price in an istisnaʿ contract may be deferred in full or divided into instalments with clearly stipulated due dates.

4 – The contract may contain a penalty clause in accordance with the parties’ agreement, provided that no force-majeure circumstances intervene.

And Allah knows best.

Resolution of the International Islamic Fiqh Academy on Supply and Tender Contracts: No. 107

The Council of the International Islamic Fiqh Academy, an affiliate of the Organisation of the Islamic Conference, convened at its twelfth session in Riyadh, Kingdom of Saudi Arabia, from 25 Jumada al-Akhirah 1421 AH to 1 Rajab 1421 AH (23–28 September 2000 CE),

after reviewing the papers submitted to the Academy on the subject of “supply and tender contracts,” and after listening to the discussions in which the Council’s members, its experts, and a number of jurists took part,

resolved the following:

1 – The supply contract:

First: A supply contract is an agreement whereby the first party undertakes to deliver specified goods, on a deferred and periodic basis over a defined period, to another party in return for a specified price, all or part of which is deferred.

Second: If the object of the supply contract is a commodity that requires manufacture, the contract is deemed an istisnaʿ to which