From Mecca to San Francisco
Harmonizing Shari'a-Compliant Contractual Remedies with California Law
Angelo L. Rosa
Posted Sunday, January 1, 2006
6 U.C. Davis Bus. L.J. 5 (2005)


In an increasingly multicultural business climate, investment takes on additional dimensions that were previously obscure at best. The desire of many investors wishing to conform their financial activity to their religious beliefs has become proliferate in recent times. A worthy example is in the Muslim community. Investment in assets and real estate between Muslim and non-Muslim parties pursuant to contracts that conform to the Shari'a (Islamic law) is growing in utility. While this growth is inspiring, there is an equally strong apprehension by parties unfamiliar with Islamic law to engage in the negotiation of terms that, at first glance, are unconventional in the Western sense. Overcoming such doubts requires, in part, reconciling Western and Islamic beliefs about investment through the formulation of mutually-beneficial contractual terms defining the nature and scope of remedies available to the parties.

The array of damages-based remedies available under Islamic jurisprudence is limited in comparison to its Western counterparts. Limitations on the assumption of risk and speculation require remedies to be directly related to ascertainable costs and penalties. The remedy most compatible between conventional Western principles and the Shari'a is that of liquidated damages. The purpose of this article is to show that thoughtfully bargained liquidated damages provisions will satisfy the religious requirements of Shari'a-compliant contract formation while providing assurances of recourse to non-Muslim parties in the event of breach. Additionally, the intent is to offer the practitioner both a theoretical understanding of the contractual relationship from a dual perspective while providing practical points of reference. This paper will first analyze the theoretical underpinnings of both Islamic and traditional (i.e. Western) contractual relationships. Then, a universal model of damages calculation will be analyzed in the context of defining a quantum of damages that is acceptable to both Muslim and non-Muslim systems. Next, the intersections between the Shari'a. and California law will be discussed as they relate to practical research, negotiation and drafting concerns.

Theoretical Backdrops

Economic interaction based upon legal commitments that straddle two distinct legal systems requires a theoretical understanding of the concept of the contract, its benefits and its burdens as perceived by both Muslim and non-Muslim parties. With such points of reference in mind, the contracting parties and their counsel can proceed to craft particular duties and assurances.

Contractual Duties

In essence, the theoretical principals justifying the impositions of damages, in the event a contract is breached, is identical in both Anglo-Saxon jurisprudence and the Shari'a. The concept of a party's duties under a contract implicates a burden of good faith and trust in the performance under its terms. Under California law, this principle takes shape as an implied covenant of good faith and fair dealing.[1]

In the Muslim world, Islamic societal constructs acknowledge a necessary reliance upon the market as an institution that supports and sustains the community.[2] Concomitant with this reliance is the acknowledged importance of contracts and the moral obligations of the contracting parties to honor them.[3] Under an Islamic system, two similar relationships between contracting parties are contemplated. One is the notion of a trustee (or amin), meaning simply that the person is trustworthy. Under a contract governed by the Shari'a, the parties are in trust to one another.[4] A trustee's action is unlawful if such action is in breach of trust under a contract. Second is the notion of a guarantor (or damin).[5] A guarantor bears a risk of loss under a contract similar to the owner of the object transferred under that contract. Accordingly, the moral and legal constructs governing contracts are similar between Islamic and conventional Western systems.

Contractual Damages

The concept of a breach of contract as the basis for an action for damages is similar under both Western and Islamic systems because the failure of one party to perform, the resulting damage to the non-breaching party and a causal link between the two are the essential elements of proof in both legal structures. However, differences exist in the extent of breach remedies. Under California law, the object of damages is compensation to the extent of making the injured party whole, as if the benefits of performance had been tendered.[6] Under the Shari'a, the same principles apply. However, the precise calculation of damages is where the distinction lies. Although under California law, damages for breach of contract must be clearly ascertainable[7], the point in time at which damage calculations take place varies. On the other hand, under Islamic law, all property is within the ownership of God. The role of man is merely as the trustee of such property[8]. Money therefore lacks any intrinsic value and is neither appreciable nor depreciable. Second, because money is viewed as having no intrinsic value, concepts of inflation and "time value" are artifices that have no legitimacy under an Islamic system. In recognition of this foundational concept, there is a strict prohibition on unreasonable speculation (or gharar).[9] This principle does not easily transfer to modern day economic settings, where market volatility and other external factors play into determinations of price and value. The prohibitions against gharar do not accommodate leaving the calculation of damages to such factors, which are considered unduly speculative. Therefore, damages must be fixed at the point of contract. It is with this consideration in mind that Muslim and non-Muslim contracting parties must identify a mutually acceptable quantum of damages.

Liquidated Damages in General

In general terms, a contractual provision for liquidated damages is one that specifies or provides a method of determining a sum which a contracting party agrees to pay, or a deposit which a contracting party agrees to forfeit, for the breach of some contractual obligation.[10] The theory behind such a provision is that the parties control exposure to risk by setting the payment for breach in advance in order to avoid the burdens of judicial recourse in determining actual damages, and potentially come to an agreement on a formula including damage elements too uncertain or remote for legal rules of damages to allow recovery.[11] The traditional character of a liquidated damages provision is the agreement that a fixed amount of damages will act to remedy a breach of contract.[12] The validity of such provisions depends on meeting two requirements: the amount of damage that would actually be suffered cannot be readily calculated[13]; and the amount of recoverable damages defined in the provision is not unduly large in comparison with actual damages or what could be reasonably anticipated from a breach.[14] Furthermore, liquidated damages are an exception to the concept that public law rather than private law ordinarily defines the remedies of the parties.[15]

In California, the provisions contained in the Civil Code, as well as the prevailing appellate guidance set forth a framework that should guide both Muslim and non-Muslim parties in the articulation of a valid liquidated-damages clause. The touchstone of a liquidated-damages provision is the uncertainty of, and difficulty in proving, actual loss and the corresponding reasonableness of the amount fixed vis-à-vis the liquidated-damages provision in a contract.[16] It is generally recognized that the amount of liquidated damages is reasonable if the sum specified is reasonably related to losses from a future breach of contract, which the parties could reasonably have anticipated, at the time the contract was executed.[17] Accordingly, if an aggrieved party can show that it would be impracticable or extremely difficult to fix actual damages, a liquidated damages provision will be upheld.[18] The precision of such a remedy resonates most harmoniously with the tenets of the Shari'a because the remedy is pre-calculated, defined at the time of contract formation and not left to speculation (which too easily may be defined as gharar by virtue of that speculative quality).

There is also a possibility that the private remedy of liquidated damages will stray too far from the legal principles governing compensatory damages, resulting in unfairness, that materializes as an objectionable attempt to unreasonably secure performance of the agreement or terms that, in effect, attempt to punish a party for breach. A balancing of these two sets of considerations frequently underlies the determination of the enforceability of a particular provision for liquidated damages. Negotiations between the parties as to the amount of liquidated damages will corroborate an offer of proof that a reasonable forecast or estimate of possible damages from a breach of contract exists and that there was an attempt by the parties to calculate such damages. The Islamic analog of these negotiations would be the contemplation of an amin assuming potential liability for any breach of contract. Alternatively, if a party is acting as guarantor (or damin), he or she will bear the risk of breach according the terms of the contract providing for the applicable amount of damages negotiated.[19]

A Universal Model of Fixed/Liquidated Damages

Damages, while seemingly innocuous by nature, raise a number of concerns for parties attempting to provide assurances of not only enforceability but acceptability in the quantum of damages where the Shari' concerned.

Standard Calculations

Formulaically, a liquidated damages model might be mathematically articulated as follows:

$D = $A + $E

Term "$D" is an amount fixed as the reasonably expected damages: the sum designed to compensate the non-breaching party in the event of a breach. Term "$A" represents an estimate of the basic known losses anticipated regardless of any speculative variables. Term "$E" represents the reasonable estimate of other, more speculative damages (e.g., market risk).

There is a certain degree of speculation in converting this equation into a bottom-line dollar amount. Reaching a reasonable estimate is the objective in negotiating a Shari'a-compliant contract. However, defining "$E" requires careful and reasonable calculation. If the expectation of breach rises, then $E will conceivably increase due to a contractually-defined variable (be it time for delay in consummation of the contract, such as, to use the example of a construction contract, a per diem penalty imposed for non-completion beyond the targeted completion date). If, however, $D decreases due to market stagnation, the quantum of damages will reflect a false gain due to lesser opportunity cost. Irrespective of these economic effects, it is worth remembering that such effects are considered an artifice under pure Islamic principles. Using the example of a real estate finance transaction, a quantum of damages based on what a seller "could have" sold the property for were it not for tying the property up in a transaction with a party who ultimately breached their agreement is a prohibition on speculation (or gharar) that may be considered speculative.

Alternatives to Liquidated Damages: Earnest Money/Deposit Forfeiture

The concept of an earnest-money, deposit-recovery remedy is one that has a long history in both Anglo-Saxon jurisprudence and under Islamic law.

Formulaically, an earnest money option might be expressed as follows:

$O = $A + $D

Under such a system, term "$O" is considered fixed to the amount of reasonably expected damages. The earnest money ($A) will include a sum designed to compensate the seller for the buyer's exclusive option to purchase the object in question and therefore compensates the seller for the lost opportunity ($O) cost of selling the property to another while the sale consummates and the property remains off the market. In addition to $A, an additional amount, represents damages ($D) reasonably calculated to arise out of the buyer's breach and intended as a deterrent against such a breach. The equivalent to such an arrangement under Islamic law is the `arbun, or conditional sales contract.[20] Under `arbun, an option is paid out of the overall purchase price as consideration for holding the right to purchase open exclusively to the option-holder for a certain period of time. When $D declines to parity with $E, notwithstanding $A, the buyer will hold a contractual right resembling an option (in substance, if not in form), though the main distinction between the two is that $A represents a non-refundable deposit under `arbun and an option is based on funds paid with the right of revocation. While the primary distinction between traditional Western options and `arbun is that the option is paid exclusive of the purchase price in the Western model (whereas under `arbun it is deducted from that price), the fundamental concept is the same. In this regard, certain schools of thought have condemned financial arrangements that resemble "wait and see" options in form, as well as those in contemplation of willful breaches inspired by a declining market.[21] However, because the concept of `arbun is potentially consistent with traditional Western conceptions of liquidated damages in the form of retention (in whole or in part) of an earnest money deposit, it may be a viable option, if the parties intend to honor the underlying agreement. In fact, some contemporary schools of Islamic thought condone the use of such provisions.[22] The validity of such a provision under California law depends on the articulation of the purpose of the earnest money in the contract itself rather than allowing the clause to merely serve as a potential prize that the non-breaching party seizes in the event of non-performance by the breaching party. Nevertheless, the objective of affixing a dollar amount on breach is accomplished through this model of damages. An option to terminate is distinct from actual full relinquishment of a deposit because a provision in a real property lease allowing for the forfeiture of a deposit will be upheld if the lessee voluntarily terminates the lease.[23] However, the crucial difference is the contemplation of possible termination in the contract as opposed to what might be a random breach not provided for in the contract.[24] Such a provision will be considered valid under the Shari'a because, although the eventuality of a termination may be uncertain, the economic consequences of that election are fixed and pre-calculated ab initio.

Moreover, California law makes the distinction that, in the absence of a valid liquidated damages provision, a seller may retain an earnest money deposit only to the extent that actual damages were incurred.[25] A simple liquidated damages provision is equally invalid if a sum is retained as security for the performance of contractual terms and is subject to summary forfeiture.[26] Therefore, the objective of any drafting will be to contemplate a possible breach and define the remedy in advance, thereby avoiding the speculation that will invalidate sweeping statements of remedies in contract language.

Harmonizing the Shari`a with California Law on a Practical Level.

The inter-relatedness of both traditional and more Islamic derivations of liquidated damages lay the foundation for determining the enforceability of various provisions under California law.

If the proper precautions are taken, either an earnest-money deposit or a liquidated damages clause will be upheld by a court scrutinizing the provision under California law, which provides a standard for proving up the validity of such pre-defined damages provisions as the two-pronged test of difficulty in anticipating loss and calculating actual damages.[27] The onus is therefore upon the party(ies) to a Shari'a-compliant contract alleging breach to show that these elements are satisfied.[28] The valid calculation of approximate loss is harmonious with the principles of the Shari'a, but the elements of a valid liquidated-damages provision must be proven in accordance with California law.

The risks in fixing damages at a certain point are likely to cause contracting parties some anxiety, if the tenants of the Shari'a are to be explicitly honored. In the context of a large construction project, breaches by contractors and subcontractors increase will result in delays in time for completion and costs of substituting alternative construction schemes. Furthermore, such breaches will pose difficulties in fixing the amount of damages as market fluctuations in the cost of supplies and labor imply. A possible solution is to over-estimate the cost of remedying a breach, subject to a provision for a reduction in the amount identified pending the ascertaining of actual costs at the time of breach. This is a compromise between fixing costs and labor at present value and leaving the quantum of damages open to a speculative adherence to market value of goods and labor at the time the breach may occur and necessitate alternatives as a matter of recourse. However, the downside to such an arrangement is the possibility that costs may exceed what might be considered a liberal estimate at the time the agreement is executed. Should the latter scenario unfold, the detriment will be to the non-breaching party who will have to make up the difference. Nevertheless, since contention at the time of breach is the precise circumstance that liquidated damages provisions are intended to avoid, it falls to the parties to make both reasonably and in good faith. Accordingly, the conventional consideration of reasonableness at the time the contract was executed is the nexus between acceptability under California law and acceptability under the Shari'a.[29] The negotiation process will therefore be the crucial element in fixing the appropriate quantum of liquidated damages.[30]

As has been shown, the principles of California law mirror the requirements of the Shari'a because damages must be calculated and not left to arbitrary definitions. However, the crucial distinction is that under traditional (Western) circumstances, damages are proven up at the time of breach; whereas under an Islamic system, damages must be calculated and estimated at the time of contracting. Therefore, if the parties to an agreement have gauged potential liability in the event of breach with a degree of certainty, an equitable provision of liquidated damages will provide the capacity to make the non-breaching party whole and will survive judicial scrutiny notwithstanding the less-conventional tone and timbre of a contract whose terms are said to be in compliance with the Shari'a. In reality, the spiritual restrictions of a Muslim system are harmonious with certain definitions of acceptable damages in the event of contractual breach.

Negotiation and Drafting

One of the primary objectives of the negotiation process will be to define a mutually-agreeable quantum of ascertainable damages and memorializing that calculation in a valid liquidated-damages provision that comports with the Shari'a and passes muster under California law. Under a Shari'a-defined trust-based scenario, the trustee will be liable for damages caused by his acting in breach of a provision of a contract or via his/her negligent conduct. Accordingly, in an 'arbun contract, a provision that fixes the total amount a seller can recover in the event of a breach, is near enough an analog to a conventional liquidated-damages provision in order to make the analysis interchangeable. Such a structure yields benefits that furnish assurances to the other party of the buyer's commitment to the transaction and compensate the seller for the market risks assumed by declining other offers, yet it also gives the buyer incentive to follow through on the transaction.[31] These hallmarks are not exclusive in their attraction to Shari'a-compliant agreements. Consequently, by structuring a transaction to allow for a valid payment of liquidated damages, this transaction will conform to the Shari'a and provide adequate remedial assurances to any non-Muslim parties and a guarantee of judicial recourse to all parties.[32]

The validity of liquidated damages provisions under judicial scrutiny will depend on the reasonableness of the provision. Among the factors considered in making such a determination is the comparative bargaining power of each party to the contract.[33] The unique nature of Shari'a­-compliant, transaction bargaining involves careful and deliberate consideration of each contractual element. Negotiating a liquidated-damages provision and noting that such provisions are among the precious-few, valid determinations of future relief that can be used should the unexpected occur are crucial to proving the validity of such a provision during litigation.

In addition to the foregoing theoretical underpinnings, the parties must pay equal deference to the requirements set forth under the California Civil Code in scenarios involving real property transactions, such as separate execution of provisions and font-size of provision language.[34] These provisions are particularly significant as the majority of Muslim investors, wishing to conform their transactions to the Shari'a, are individuals and families interested in purchasing homes and making property investments.


In theory, conceptions of equity through remedies for breach of contract transcend the space between Anglo-Saxon legal thought and the Shari'a. Consequently, reaching an accord as to the protections afforded to all parties will depend on a willingness to think through and negotiate the issue of remedies with deference to the desire of the Muslim parties to remain true to their faith in such dealings and desire of all parties to be protected in the event of a breach. Symbiosis, in this respect, is merely a question of openness in negotiations, sensitivity to the requirements of California law and receptiveness to the unconventional, yet fascinating challenges that Islamic law poses to business dealings. Harmony between the Shari'a and California law is indeed feasible. If negotiations succeed, the result will be a unique bridge between two legal systems, brought together by the common theories of risk management and remedies.

[1] California law imposes an implied covenant of good faith and fair dealing in every contract, the meaning of which is that neither party to the contract will deliberately act to deprive the other of the benefits of the agreement. Pasadena Live, LLC v. City of Pasadena, 111 Cal.App.4th 1089-1092-1094 (2004). The specific characteristics of the duty precipitated by this implied covenant is relative to the purposes of the contract. Ellis v. Chevron, 201 Cal. App. 3d 132 (1988). See also Sheppard v. Morgan Keegan & Co., 218 Cal. App. 3d 61, 66-67 (applying this duty to the specific purpose of a contract for employment).

[2] See Frank E. Vogel and Samuel L. Hayes, III, Islamic Law and Finance: Religion, Risk, and Return 64-65 (1998) (illustrating the first example of this reliance in the Prophet Muhammad's establishment of a marketplace upon his settlement with his followers at Medina, located in modern day Saudi Arabia).

[3] "O you who believe! Fulfill all covenants (`uqud). The Holy Qur'an at 5:1 (Presidency of Islamic Researchers ed., al-Madin'nah: King Fahd Holy Quar'an Printing Co. 1994) [hereinafter Qur'an].

[4] See Vogel & Hayes, supra note 2, at 112 (defining amin). See also Vogel & Hayes, supra note 2, at 112-113 (providing a comprehensive overview of the role of an amin in the contractual relationships contemplated under the Shari'a).

[5] See id. at 298 (defining damin). See also id. at 112-113 (contrasting the roles of an aminwith a damin in the context of the contract).

[6] Cal. Civ. Code § 3300 (West 2005). See also Richard A. Lord, 24 Williston on Contracts § 813 (2004). Beyond the statutory distillation of this well-established common law rule in California, the Restatement (2nd) of Contracts and the Uniform Commercial Code both premise the law governing contractual damages on this concept. See, e.g., Restatement (Second) of Contracts § 351, and U.C.C. §§ 2714(a), 2715(2) (a).

[7] Cal. Civ. Code § 3301 (West 2005).

[8] See generally Vogel and Hayes, supra note 2 at 87-89, 93 (outlining the general concepts that constitute prohibited gharar).

[9] The guidelines for determining gharar come mostly from the hadith (or teachings, which expound upon the text of the Qur'an) depicting transactions characterized by pure speculation, uncertain outcomes, and unclear future benefits. Classical interpretations of this prohibition have been applied to modern-day transactions to prohibit investment in futures and commodities options. However, a certain degree of flexibility is accorded in modern times in that contracts should define with a substantial degree of precision the subject-matter of the agreement and the manner in which the contractual relationship will be dissolved in the event of a breach. Id.

[10] ABI Inc. v. Los Angeles, 153 Cal. App. 3d 669 (1984).

[11] See supra note 6 at § 2.

[12] See generally Witkin Summary of California Law, Contracts §§ 503(3), (5) (9th ed. 1987) (encapsulating the foundational principles of the remedy of liquidated damages vis-à-vis California law).

[13] Cal. Civ. Code § 1671 (West 2005), Better Food Markets v. American Distr. Tel. Co., 40 Cal. 2d 179, 184 (1953). See generally Lord, supra note 6, § 65:27.

[14]Lord, supra note 6 at § 65:27.

[15] See Lord, supra note 6 at § 2.

[16] See generally Vrgora v. Los Angeles Unified School District, 152 Cal App3d 1178 (1984) (holding that, in the context of a public construction contract, contractor-induced damages as inconvenience and loss of use by public were incalculable and that liquidated damages were presumed valid unless manifestly unreasonable under circumstances existing at time contract was made).

[17]Lord, supra note 6 at § 6. Hanlon Drydock & Shipbuilding Co. v. McNear, 70 Cal.App. 204, 210 (1924).

[18] Better Food Markets v. American Dist. Tel. Co., 40 Cal.2d 179, 184 (1953).

[19] See generally Vogel and Hayes, supra note 2 at 112-113 (illustrating the dynamic of amin and damin with respect to the object of the contract).

[20] Under `arbun, a buyer advances a sum of money less than the purchase price under the condition that, should he/she elect to make the purchase in full, the price will reflect a deduction of the advance already paid. See Vogel and Hayes, supra note 2 at 156-158 (providing an overview of `arbun). Note that although `arbun is the closest construct to a conventional option in the Islamic contractual milieu, it is not universally accepted (the only Muslim school of thought that upholds `arbun as valid appear to be the Hanbalis). Id. at 157.

[21] The fourteenth-century Muslim scholar Ibn Qudama, of the Hanbali school of thought, contemplated `arbun as a second (distinct) transaction, in which a potential buyer pays a seller certain sum for the exclusive right of refusal. See id. at 161. Under operation of California law, such a transaction would be considered legally enforceable as an option to terminate if properly contemplated at the time of execution. Kuhlemeier v. Lack, 50 Cal.App.2d 802, 808 (1942).

[22] A Saudi Arabian fatwa contemplating construction contract delay penalties supports the `arbun model of damages. See 1 Majallat al-buhuth al-Islamiyya 6:61-144 (1975).

[23] Kuhlemeier v. Lack, 50 Cal.App.2d 802, 808 (1942).

[24] Id.

[25] In the context of a land purchase contract, this calculus is made with respect to section 3307 of the California Civil Code. However, a deposit has been determined to be a valid fund from which the seller may obtain partial or complete restitution for losses actually incurred and proven up. See generally Beason v. Griff, 127 Cal.App.2d 382 (1954).

[26] This rule of law is often expressed in cases involving leases of real property. Courts have held that actual damages of breach are considered readily susceptible of calculation and must therefore be proven up in order to be awarded. See Redmon v. Graham, 211 Cal. 491, 493 (1931). See generally Witkin, supra note 11, § 517.

[27] See supra.

[28] [I]n order to recover a contract provision for liquidated damages the plaintiff must plead and prove that at the time the contract was entered into damages in the event of a breach would be impracticable or extremely difficult of ascertainment; that the sum agreed upon represented a reasonable endeavor to ascertain what such damages would be; and that a breach of the contract had occurred. In other words, no actual damage is necessary in order to recover under a liquidated damages provision provided that the case is, in other respects, a proper one under the conditions set forth in section 1671 of the Civil Code.

McCarthy v. Tally, 46 Cal.2d 577 (1956) (articulating the elements of proof vis-à-vis the previous codification of the liquidated damages provisions of the California Civil Code).

[29] See generally Hong v. Somerset Associates, 161 Cal.App.3d 111 (1984).

[30] See Zlotoff v. Tucker, 154 Cal.App.3d 988 (1984).

[31] See Vogel and Hayes, supra note 2 at 158 (discussing the purposes of an earnest-money deposit).

[32] A useful hypothetical exists in the context of leasing, whereby a contract between lessor and lessee sets, through negotiation, an amount reasonably calculated to make the lessor whole in the event of a breach: recovery of rental payments and a payment of the balance of lease payments owed under the remaining term of the contract. In such a case, the arrangement will not be subject to scrutiny as a liquidated damages provision, but rather as a rent acceleration clause. See, e.g., Puritan Leasing Company v. August, 16 Cal. App. 3d 451, 456 (1976) (holding that a just criticism for a provision for liquidated damages in some cases may be that the amount fixed bears no relation to what the probable actual damages might be and that such damages are not difficult to ascertain. However, the court held that the balance of the rental payments, which respondents claimed to be liquidated damages, is in reality the amount which the lessees promised to pay. The balance of the rental due was considered to be equivalent to the value of lessor's bargain, or what it was entitled to receive under the contract.); cf. Newco Leasing, Inc. v. Hull, 167 Cal. App. 3d Supp. 1, 4-5 (1985) (construing Cal. Civ. Code § 3308).

[33] See California Law Review Commission Comment to Cal. Civ. Code § 1671(b) (West 2005) (acknowledging the intent of the Commission to give "considerable leeway" to parties to a contract including liquidated damages provisions).

[34] See, e.g., Cal. Civ. Code § § 1677(a), (b) (West 2005) (requiring separate signing or initialing of such provisions and printing of same in a contract in at least 10-point bold type or contrasting red print in at least 8-point type). As a practical consideration given the specialized nature of Shari'a-compliant agreements and the advisability of explicitly noting this compliance in the recitals and governing law provisions of the agreement, liquidated damages provisions should exist side-by-side with all other provisions in that the remedies are to be exclusive given the constraint imposed by the Shari'a.