No penalty for backing out of marriage agreement in Islamic law
5-10-2016 | IslamWeb
Question:
There was an agreement between the parents of a boy and a girl to marry their children; the would-be couple also agreed, but the parents of the boy have revoked it without a genuine reason and backed out from the agreement. Now the Intizamia Committee have asked for the penalty in cash from the parents of the boy for his backing out, which he has agreed to pay. Now we request to know what we can utilize this money for if the parents of the girl say that they do not want to accept this money but that it should be used for the local mosque and 'Darasgah'. Can we use it for the mosque and Darasgah? Please advise at your earliest convenience.
Answer:
All perfect praise be to Allaah, The Lord of the worlds. I testify that there is none worthy of worship except Allaah and that Muhammad 
is His slave and Messenger.
We believe that it is impermissible to oblige the boy to pay a penalty to the girl for backing out of the engagement. Hence, it is impermissible for her parents to take this money or to spend it for the benefit of the mosque, school, or any other charitable institution. For more benefit, please refer to fatwa 82215.
What should be done is to return the money to the boy. However, if he willingly pays a sum of money to the girl, then there is no harm in accepting the gift in this case. When she accepts the money, she has the right to spend it in charity for the benefit of the mosque, school, or any other institution.
Allaah knows best.