Jurisdiction(s):
United Kingdom

Key definition

Purchase price definition

What does Purchase price mean? The price paid by a receivables purchaser to the client for the transfer (assignment/assignation) of a receivable. In receivables finance (factoring, invoice discounting and securitisation), the purchase price is commonly structured as: (i) an initial advance (a percentage of the invoice face value, the advance rate); and (ii) a deferred balance payable as and when debtor receipts are collected, calculated net of the purchaser’s discount, fees and agreed adjustments (for example credit notes, dilutions, set-off, disputes, or recourse/chargeback). Many facilities therefore determine the final purchase price retrospectively by reference to actual collections towards discharge of the receivable, less accrued discount...

Bai salam and parallel salam: Shari'ah requirements, drafting and documentation (master and stand‑alone), delivery and default mechanics, agency arrangements, security and insurance

Published by a LexisNexis Banking & Finance expert

Practice notes

Key elements of bai salam

As set out in greater detail in the Practice Note: The structure and required elements of a bai salam transaction, in particular with respect to the differing views amongst Shari'ah schools of thought, there are several essential conditions that must be satisfied for a valid bai salam contract to stand:

payment of the full purchase price by the buyer to the seller at the moment the contract is concluded and the sale takes effect
precise, unequivocal description of the asset’s quality and quantity, generally by reference to recognised trade standards, with all possible particulars expressly set out
the contract must not relate to a specific or unique asset
clear delivery provisions, in particular the date and location for delivery

Additional requirements apply to a parallel bai salam:

the parallel bai salam must be completely independent of, and separate from, the initial contract; each party’s rights, obligations and liabilities are separate under each respective contract
delivery of the asset under the parallel contract must not be linked to, or made conditional upon, the delivery terms under the first contract...

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Web page updated on 21/05/2026

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