What is the ruling on converting a commodity sale from installment to spot sale, with agreement on the term and price?

If the buyer and seller agree to rescind the first contract by mutual consent, there is no objection. Then, they may conclude a new contract for the same commodity at a spot price. This is considered a legitimate Islamic solution (makhraj shar'i) to the issue of "give a discount for prompt payment" (da' wa ta'ajjal), which is forbidden in Islamic law by the majority of scholars, as it is considered usury (riba). It is not permissible to agree to discount a debt in exchange for prompt payment, unless the creditor voluntarily waives a part of the debt at the time of payment without prior collusion or custom. A condition for the legitimate Islamic solution, after rescinding the first contract, is that there must be no prior agreement on the new sale. This is supported by the prophetic tradition that guided Bilal to first sell the inferior dates and then buy good quality dates with their price, in order to find a legitimate Islamic solution to usury.