Salam Rail

Forward sale contract endpoints for commodity and agricultural financing.

Overview

The Salam rail provides:

Forward sale contract creation and management
Advance payment processing with deferred delivery
Commodity specification and quality validation
Parallel Salam (back-to-back) contract support

Salam is a forward sale contract where the buyer pays the full price in advance at the time of contracting, and the seller undertakes to deliver a specified commodity of defined quantity and quality at a future date. It is one of the few exceptions in Islamic finance where selling something not yet in possession is permitted.

This contract is widely used in agricultural financing, commodity trading, and working capital provision. The advance payment provides the seller with capital to produce or procure the goods, making it a critical tool for financing farmers and producers.

Parallel Salam allows the institution to enter a separate Salam contract with a third party to hedge delivery risk, provided the two contracts are independent and not conditional upon each other.

Endpoints

Create Salam Contract

POST /v1/rails/salam/contracts

const contract = await iof.salam.create({
  commodity: "Wheat - Grade A, Hard Red Winter",
  quantity: 5000,
  quantity_unit: "metric_tons",
  price_per_unit: 320,
  currency: "USD",
  delivery_date: "2025-06-15",
  delivery_location: "Port of Jeddah, Warehouse B",
  counterparty_id: "cpty_farm_coop",
  quality_specifications: {
    grade: "A",
    moisture_content_max: 0.13,
    protein_content_min: 0.12,
  },
});

Response:

{
  "id": "slm_xyz",
  "type": "salam",
  "status": "DRAFT",
  "commodity": "Wheat - Grade A, Hard Red Winter",
  "quantity": 5000,
  "quantity_unit": "metric_tons",
  "total_price": 1600000,
  "currency": "USD",
  "delivery_date": "2025-06-15",
  "advance_payment_status": "PENDING",
  "created_at": "2024-01-15T10:30:00Z"
}

Get Salam Contract

GET /v1/rails/salam/contracts/:id

List Salam Contracts

GET /v1/rails/salam/contracts

Execute Salam Contract

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

Confirm Delivery

POST /v1/rails/salam/contracts/:id/confirm-delivery

Contract Status

Status	Description
`DRAFT`	Contract created, pending review
`PENDING_SHARIAH_REVIEW`	Awaiting Shariah board approval
`SHARIAH_APPROVED`	Approved by Shariah board
`ACTIVE`	Advance payment made, awaiting delivery
`DELIVERY_DUE`	Delivery date approaching
`COMPLETED`	Commodity delivered and accepted
`TERMINATED`	Contract terminated early

Shariah Compliance

The full purchase price must be paid in advance at the time of contract
The commodity must be clearly specified in type, quality, quantity, and grade
The delivery date and location must be fixed and known
Salam cannot be used for gold, silver, or currencies (these require spot exchange)
The seller is not required to deliver from their own production
Parallel Salam contracts must be independent and unconditional

Webhooks

Event	Description
`salam.contract.created`	Contract created
`salam.contract.executed`	Advance payment made
`salam.delivery.due`	Delivery date approaching
`salam.delivery.confirmed`	Commodity delivered
`salam.contract.completed`	Contract fulfilled

Standards

Next Steps

Istisna Rail - Manufacturing/construction contracts
Murabaha Rail - Cost-plus financing
Contracts Rail - General contract management