Circle the letter next to the most accurate answer.

1. In an Istisna contract the Mustasni is:

a. The asset
b. The buyer
c. The manufacturer
d. The seller
2. In an Istisna contract the Musania is:
a. The asset
b. The buyer
c. The manufacturer
d. The seller
3. In case of Istisna the Masnu is the:
a. Buyer
b. Manufacturer
c. Asset
d. Payments
4. In the Islamic finance contract of Istisna, ________ is a buyer and _________ is a
manufacturer.
a. Mustasni, Musania
b. Musania, Mustasni
c. Bank, client
d. Masnu, client
5. Which is the most appropriate definition of Istisna?
a. Istisna is a contract for producing or constructing goods, for future delivery;
payment can be during construction or deferred to the future
b. Istisna is a contract for producing or constructing goods, allowing cash payment in advance with
future delivery, but does not allow future payment with
future delivery
c. Istisna is an interest-free loan made for charitable purposes
d. Istisna is a contract where Islamic banks provide advice to customers
6. Istisna is most suited for the following activities except:
a. Project finance
b. Construction
c. Providing financial consultancy
d. The buy, operate, transfer mode of financing
7. Istisna is a product where:
a. The payment is made now, and the product delivered in the future
b. The product is manufactured and delivered in the future and payments
are deferred
c. The product exists now and is sold on a cost-plus basis
d. The product is rented to the customer
8. Istisna is an exception to the Shariah rulings related to sales contracts. Which statement below
is related to these exceptions?
a. The subject matter of the contract is not in existence at the time of the contract
b. The subject matter is in existence at the time of the contract
c. The seller sells from their ready stock of the subject matter
d. None of the above
9. Which of the following statement(s) is/are correct?
a. Istisna is most suitable for manufacturing projects
b. In Istisna the buyer buys the goods after they are constructed
c. Istisna is a contract for producing or constructing goods, for future delivery;
payment can be during construction or deferred to the future
d. All of the above

ANSWERS
d. The seller
c. The manufacturer
c. Asset
b. Musania, Mustasni
Istisna is a contract for producing or constructing goods, for future delivery; payment can be
during construction or deferred to the future.
Providing financial consultancy
The product is manufactured and delivered in the future and payments are deferred.
The subject matter of the contract is not in existence at the time of the contract.
All of the above.

T.F statement with Justification

1. In Istisna the buyer buys the goods after they are constructed.
2. Normally, Shariah does not allow selling goods that are not in existence.
3. Normally, Shariah allows selling goods that are still not in the possession of
the seller.
4. In parallel Istisna, if the manufacturer delivers faulty goods or does not deliver
them on time, the client who is the buyer in the Istisna contract can hold the
bank liable.
5. A major difference between Murabaha and Istisna is that in Istisna goods can be
purchased only after they have been manufactured.
6. In Istisna the item needs future manufacturing while in Salam it does not.
7. In a Salam contract the price is paid on delivery or in deferred instalments
like Istisna.
8. Istisna allows both deferred lump sum payment in full and deferred payment in
instalments.

1. T: In Istisna, the buyer places an order for the goods to be constructed and purchases the
goods after they are constructed.
2. T: Normally, Shariah does not allow selling goods that are not in existence, as it goes
against the principle of certainty (qaṭʿiyyat al-ʿilm).
3. F: Normally, Shariah does not allow selling goods that are still not in the possession of the
seller, as it goes against the principle of certainty (qaṭʿiyyat al-ʿilm).
4. F: In parallel Istisna, if the manufacturer delivers faulty goods or does not deliver them on
time, the client who is the buyer in the Istisna contract cannot hold the bank liable, as the
bank only acts as an intermediary in the transaction.
5. T: In Istisna, goods can only be purchased after they have been manufactured, while in
Murabaha, the goods have already been purchased by the seller before selling them to the
buyer.
6. T: In Istisna, the item needs future manufacturing while in Salam, the seller sells a
commodity that is not in his possession but promises to deliver it at a future date.
7. T: In a Salam contract, the price is paid on delivery or in deferred instalments like Istisna.
8. T: Istisna allows both deferred lump sum payment in full and deferred payment in
instalments.