What is the nature of a forward sale (salam)?

Question:
What is the nature of a forward sale (salam)?

Answer:
A forward sale (salam) is paying the price in advance and deferring the delivery of the item. You pay a person who has agriculture, a factory, or nothing at all, giving him money that he accepts from you for a specified period. When the period expires, he brings you the item you contracted for, such as dates, barley, wheat, vessels, cars, or anything else.
This is the forward sale (salam), and it provides a way for Muslims to avoid riba (usury or interest). It is a valid sale, and the Prophet (peace and blessings be upon him) approved it when he arrived in Madinah and found them making advance payments for fruits, as they were people of agriculture and palm trees. They were making forward sales for fruits for one or two years. So the Prophet (peace and blessings be upon him) said: "Whoever makes a forward sale, let him do so for a specified measure, a specified weight, and a specified period." He approved their practice, but with these conditions: that the price is known, the item is known, and the period is known.