Istisna’a (or commissioned manufacture) is a contract of sale (ba’i) in which the seller undertakes to manufacture or construct specified items according to particular specifications. The seller (manufacturer or builder or in Arabic al-sani’) is under obligation to deliver the object of sale to the buyer (in Arabic, al-mustasni’) at, or by, a preset future date. The seller expects to earn a profit on the contract, expressed as:

Profit = price of istisna’a – cost of istisna’a

Parallel istisna’a (or al-istisna’a al-muwazi), on the other hand, is a modern application of istisna’a which represents an inverse istisna’a contract. For example, an Islamic bank may enter into an ordinary istisna’a contract with a customer in which the bank acts in the capacity of a manufacturer. In order to procure the object of istisna’a, the bank enters into a parallel istisna’a contract with a manufacturer, acting in the capacity of a purchaser. By the second contract, the bank can fulfill its contractual obligations towards the customer in the first contract. The first and second contracts should never be connected, i.e., the fulfillment of the first cannot be made contingent on the fulfillment of the other. The bank expects to earn the spread between the price of the first contract and the price of the other:

Profit = price of istisna’a – price of parallel istisna’a