Istisna Rail

Manufacturing and construction contract endpoints for project-based Islamic financing.

Overview

The Istisna rail provides:

Manufacturing and construction contract creation and management
Milestone-based progress payment scheduling
Parallel Istisna (back-to-back) contract support
Quality inspection and acceptance workflows

Istisna is a contract of sale where the buyer requests the manufacturer or builder to produce or construct an asset according to agreed specifications. Unlike Salam, payment in Istisna can be made in installments aligned with project milestones, and the delivery date can be flexible.

This contract is essential for financing large-scale construction projects, real estate development, shipbuilding, and custom manufacturing. It allows Islamic financial institutions to finance the production of assets that do not yet exist at the time of contracting.

Parallel Istisna enables the institution to enter a separate Istisna contract with a subcontractor to fulfill the manufacturing obligation, provided the two contracts are independent of each other.

Endpoints

Create Istisna Contract

POST /v1/rails/istisna/contracts

const contract = await iof.istisna.create({
  project_description: "Residential tower - 20 floors, Al Reem Island",
  total_price: 15000000,
  currency: "USD",
  counterparty_id: "cpty_developer",
  specifications: {
    asset_type: "residential_building",
    floors: 20,
    units: 80,
    total_area_sqm: 12000,
  },
  milestones: [
    { name: "Foundation", percentage: 15, due_date: "2025-03-01" },
    { name: "Structure", percentage: 35, due_date: "2025-09-01" },
    { name: "MEP Works", percentage: 25, due_date: "2026-03-01" },
    { name: "Finishing", percentage: 25, due_date: "2026-09-01" },
  ],
});

Response:

{
  "id": "ist_xyz",
  "type": "istisna",
  "status": "DRAFT",
  "total_price": 15000000,
  "currency": "USD",
  "milestones": [
    { "name": "Foundation", "amount": 2250000, "status": "PENDING" },
    { "name": "Structure", "amount": 5250000, "status": "PENDING" },
    { "name": "MEP Works", "amount": 3750000, "status": "PENDING" },
    { "name": "Finishing", "amount": 3750000, "status": "PENDING" }
  ],
  "created_at": "2024-01-15T10:30:00Z"
}

Get Istisna Contract

GET /v1/rails/istisna/contracts/:id

List Istisna Contracts

GET /v1/rails/istisna/contracts

Execute Istisna Contract

POST /v1/rails/istisna/contracts/:id/execute

Complete Milestone

POST /v1/rails/istisna/contracts/:id/milestones/:milestone_id/complete

Accept Delivery

POST /v1/rails/istisna/contracts/:id/accept

Contract Status

Status	Description
`DRAFT`	Contract created, pending review
`PENDING_SHARIAH_REVIEW`	Awaiting Shariah board approval
`SHARIAH_APPROVED`	Approved by Shariah board
`ACTIVE`	Construction/manufacturing in progress
`INSPECTION`	Asset ready for quality inspection
`COMPLETED`	Asset delivered and accepted
`TERMINATED`	Contract terminated early

Shariah Compliance

The asset specifications must be clearly defined at inception to avoid disputes
The price may be paid in advance, in installments, or deferred (flexible unlike Salam)
The manufacturer bears the risk until delivery and acceptance
Either party may cancel the contract before manufacturing begins
After work commences, the contract is binding on both parties
Parallel Istisna contracts must be independent of each other

Webhooks

Event	Description
`istisna.contract.created`	Contract created
`istisna.contract.executed`	Manufacturing commenced
`istisna.milestone.completed`	Milestone completed
`istisna.inspection.requested`	Quality inspection requested
`istisna.contract.completed`	Asset delivered and accepted

Standards

Next Steps

Salam Rail - Forward sale contracts
Ijarah Rail - Islamic leasing
Contracts Rail - General contract management