What is the ruling on forward sale? And is it permissible to sell on installment based on it?

Al-Halabi : Today, a brother asked me a question. He said that farmers have a custom where they sell, for example, ten bags or sacks of wheat at the beginning of the season, to be delivered at the end of the season as twenty or twenty-five. What is the ruling?

The Shaykh : What is the name of this sale? It is a forward sale (salam) and a loan (sarf), both of which. Of course, this is permissible.
Al-Halabi : Well, Shaykh, some people use analogy to permit installment sales.

The Shaykh : That analogy is invalid. We have answered this more than once. The one who sells on installment guarantees three things, and from this comes the prohibition and the fact that it differs from a forward sale or a loan. He guarantees his principal, he guarantees the profit of the cash sale, and he guarantees the profit of the installment sale—three things. The one who sells via a forward sale or buys does not guarantee, at times, his principal.