---
title: "What is Parallel salam? | IslamicOpenFinance™"
description: "A separate, independent salam with a third party that lets a party to a first salam offset its position in the same goods."
url: https://islamicopenfinance.com/glossary/parallel-salam/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sale-based contracts](https://islamicopenfinance.com/glossary/#sales)

Sale-based contracts

# Parallel salam

A separate, independent salam with a third party that lets a party to a first salam offset its position in the same goods.

Parallel salam is a separate salam contract with a third party for goods of the same description as those in a first salam. AAOIFI's salam standard allows the buyer in the first contract to sell such goods by salam, and the seller in the first contract to buy them, but forbids linking the two so that performing one depends on the other. If one counterparty defaults, the injured party cannot pass that loss to its counterparty in the parallel contract, so each delivery must be performed in its own right.

## Sources

- [AAOIFI Shari'ah Standards, English edition (full text, PDF): Shari'ah Standard No. 10, Salam and Parallel Salam](https://aaoifi.com/wp-content/uploads/2017/12/Shariaa-Standards-ENG.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Salam** A forward sale: the full price is paid at signing for precisely specified goods to be delivered later.](https://islamicopenfinance.com/glossary/salam/) [**Parallel istisna** A second, independent istisna in which a bank that has agreed to deliver an asset orders it from a manufacturer or contractor.](https://islamicopenfinance.com/glossary/parallel-istisna/) [**Majlis al-aqd (contract session)** The session in which a contract is concluded; some exchanges, such as currency trades and salam payments, must complete within it.](https://islamicopenfinance.com/glossary/majlis-al-aqd/) [**Gharar** Excessive uncertainty in a contract, about the object, price, quantity or delivery, which can make the contract invalid.](https://islamicopenfinance.com/glossary/gharar/)

**Sale-based contracts**

1. [Murabaha](https://islamicopenfinance.com/glossary/murabaha/)
2. [Musawamah](https://islamicopenfinance.com/glossary/musawamah/)
3. [Bay al-muajjal (deferred-payment sale)](https://islamicopenfinance.com/glossary/bay-muajjal/)
4. [Salam](https://islamicopenfinance.com/glossary/salam/)
5. [Istisna](https://islamicopenfinance.com/glossary/istisna/)
6. [Tawarruq](https://islamicopenfinance.com/glossary/tawarruq/)
7. [Bay al-sarf (currency exchange)](https://islamicopenfinance.com/glossary/bay-al-sarf/)
8. [Murabaha to the purchase orderer](https://islamicopenfinance.com/glossary/murabaha-purchase-orderer/)

[All 221 terms](https://islamicopenfinance.com/glossary/)