A Salam contract is a type of forward contract in Islamic finance, where payment is made in advance for goods or services to be delivered in the future.

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It is primarily used in Islamic banking to facilitate transactions without violating the principles of Riba (interest) or Gharar (excessive uncertainty).

In a Salam transaction, the buyer makes full payment upfront for specified goods to be delivered at a later date, allowing the seller to secure immediate financing. This contract is commonly used for agricultural products or commodities.

Parallel Salam is a variation where the buyer enters into two Salam contracts for different goods, with the intention of covering risks and enhancing liquidity. Salam delivery refers to the agreed-upon delivery of goods within the stipulated time frame.

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