Istisna

Istisna' is a contract to manufacture or construct, covered by AAOIFI Shariah Standard No. 11. It matters to the late-payment debate because it is on the permitted side of the line: the OIC Fiqh Academy's Resolution 109 (3/12) allows penalty clauses in construction, supply and manufacturing contracts, where the obligation is to do work rather than to pay a debt, and AAOIFI Shariah Standard No. 3 clause 2/3 agrees. That contrast is the clearest way to see why a card late fee is treated as riba while a builder's late penalty is not.