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What is your legal guidance regarding the agreed-upon method for a manufacturing contract (Istisna'), where a ton is calculated at one thousand Riyals, provided that 1700 Riyals are paid for each ton produced?

1 min readAlso available in العربية

Paying for raw materials to a factory to process them into pellets is a permissible forward lease (ijarah) contract with a known wage, and not a manufacturing (istisna') contract. This is because an ijara contract is for the work of the laborer without obligating him to provide the manufacturing materials, whereas istisna' obligates the manufacturer to provide both the materials and the labor.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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