Salam is the sale of a commodity that will be delivered at a future date for a specific price paid in advance. In other words, it is a financial transaction (literally an upfront-payment forward sale) whereby price is paid in cash at the date of contract to the seller who pledges to deliver the commodity according to the specifications set out in the contract. The deferred commodity is a specified fungible commodity to be delivered by the seller whether it is produced or procured by him.
Murabaha refers to the selling of a commodity for a given price plus a certain profit margin as agreed upon by the seller and buyer. The profit margin can either be a percentage of the purchase price or a lump sum amount.
The main differences between salam and murabaha are summarized below:
| Salam | Murabaha |
| It entails the deferred delivery of underlying goods, while the price is paid in advance. | It involves the immediate delivery of purchased goods, while the price may be either paid immediately or deferred to a future date. |
| The price has to be paid in full, i.e., no percentage of the price can be paid in advance, while deferring the remaining percentage. | The price may be paid immediately or in installments or in one future balloon payment. |
| The underlying of salam should be subject to specification (fungible goods/units) and can be recognized as a debt (dayn fi zhimmah). | In principle, murabaha involves non-fungible commodities/assets (a specific car, machine, etc). |
| Salam cannot be concluded on objects which must be delivered on spot (ribawi items such as dates, wheat, barely, etc). | The underlying of murabaha can be objects that require immediate or deferred delivery. |
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