Story Line‘We Already Settled!’Rabbi Meir Orlean
The Millers rented an apartment for Sukkos in Yerushalayim. Before leaving, they came to pay the landlord.
“We owe you $1,500 for the apartment,” said Mr. Miller.
“How many were you?” asked the landlord.
“We were six,” replied Mr. Miller.
“The apartment was $1,500 plus an additional $250 for each person beyond four,” replied landlord. “The total is $2,000.”
“I don’t remember that,” said Mr. Miller. “I remember that my wife told me $1,500.”
“The price is for four people,” replied the landlord. “That is what I tell everyone when they call. I assume that I told her also.”
“We had asked you to send an email confirmation of the price and you didn’t,” said Mr. Miller. “At this point, there’s no record of what we arranged. I’m willing to split the difference with you and pay $1,750.”
“OK,” agreed the landlord.
When the Millers returned home, they tried to locate their initial communication with the landlord. Finally, Mrs. Miller found a paper with various rental options and price quotes. “I see that I wrote $250 per additional person,” she said. “We owe the landlord another $250.”
“At this point, it’s over,” said Mr. Miller. “We already compromised with the landlord and settled with him.”
“Do you think that’s fair?” asked Mrs. Miller.
“All compromises are like that,” he answered Mr. Miller. “You might gain; you might lose.”
“But the compromise was a mistake,” said Mrs. Miller. “Had we had this paper with us, we never would have questioned the price. He wouldn’t have settled for $1,750.”
“I hear your point,” said Mr. Miller, “but I’m not sure it matters. I’ll consult Rabbi Dayan.”
Mr. Miller called Rabbi Dayan. “I had a dispute with the landlord about the rent,” said Mr. Miller. “We settled with a compromise, but I later discovered that he was right. Must I pay the remainder?”
“The Gemara (B.M. 66b; B.B. 41a) teaches that mechilah b’ta’us (forgoing in error) is not valid,” explained Rabbi Dayan. “For example, a person who drew his property line in error does not forgo that property to his neighbor” (C.M. 142:2; 241:2).
“Similarly, if a person compromises in error, the compromise is void, since compromise entails mechilah,” continued Rabbi Dayan. “Thus, Rashba (Responsa 2:278) rules that if someone denies a claim and the plaintiff had to settle, the defendant is not exempt klapei Shamayim (as far as the Heavenly Court is concerned). The plaintiff was forced to settle to partially recoup what was being denied. Furthermore, the compromise was in error, since the plaintiff was not aware that he had proof, documentation or witnesses. The same is true if the defendant later concedes” (C.M. 12:14-15; Aruch Hashulchan, C.M. 12:13).
“I acted in good faith, though,” noted Mr. Miller. “I wasn’t aware of what was written.”
“Indeed, Nachalas Shivah (24:4.2) writes that it is considered ta’us only if one party was aware and misled the other party,” replied Rabbi Dayan. “However, if both parties were unaware of the facts and settled, it is not considered a compromise in error, since both entered the compromise with this intention, to gain or lose partially.
“Zichron Yosef disagrees and maintains that even if neither party knew, it is considered ta’us and void, like the case in the Gemara where the property line was drawn in error,” added Rabbi Dayan. “This is assuming that the information existed at the time of the mechilah or settlement, but the parties were unaware of it. However, events that occurred afterward do not render the mechilah in error” (Pischei Teshuvah, C.M. 241:3; 12:20).
“What about our case?” asked Mr. Miller.
“According to Nachalas Shivah, since both of you were unaware, it is not considered mechilah b’ta’us; according to Zichron Yosef, it is,” replied Rabbi Dayan. “On account of the dispute, you are not required to pay the difference. It is questionable, though, whether there is a moral obligation” (Pischei Choshen, Halvaah 2:33).
From the BHI HotlineGuarantor’s Collateral
A friend contacted a gemach to borrow a large sum of money. The gemach agreed to lend him the money but demanded a lien on his house and insisted on a guarantor.
Q: If I agree to guarantee the loan and my friend is unable to repay the loan, could the gemach collect from me even before exercising their lien and collecting from the value of the house?
A: A potential guarantor must realize that the lender will issue a loan because he relies on the credibility and responsibility of the guarantor. Guaranteeing a loan is a commitment to repay the lender if necessary. A guarantor may not take steps to avoid paying. If one is concerned that the borrower will not be able to repay the loan and he is not prepared to pay it himself, he should not guarantee the loan. Never guarantee a loan which you are not prepared to repay (Yevamos 109a; Rambam, Hil. Dei’os 5:13).
There are two categories of guarantors, an arev stam and an arev kablan. An arev stam agrees to repay the loan only after the lender has exhausted all in his power to collect from the borrower. For example, if the borrower does not have assets to use to repay the loan, the lender may seek collection from the arev stam (C.M. 129:8).
An arev kablan agrees to repay the loan, even if the lender does not exhaust all available means to collect from the borrower. Moreover the lender may seek collection from the arev kablan without even endeavoring to collect from the borrower first. It is considered as though the arev kablan is the one who borrowed the money (C.M. 129:15).
Generally, a gemach demands an arev kablan since they do not want to have to exhaust all available means before contacting the guarantor. Therefore, if they used ‘arev kablan’ language, they have the halachic right to seek payment from you without attempting to collect from the borrower or his property.
Q: If I have to repay the loan, do I acquire a lien in the borrower’s property or do I have to make that stipulation before the loan is issued?
A: In most situations, these matters are negotiated between the interested parties before the loan is issued so that everyone understands their rights, responsibilities and what they are getting themselves into. This is obviously preferred and will prevent disagreements and misunderstandings from arising if something goes wrong. We will address the halachah when the loan is issued informally, as with a gemach.
Poskim disagree whether the borrower becomes obligated to the guarantor at the time of the loan. Some maintain that the obligation begins only when the guarantor pays the lender. The obligation is therefore an undocumented loan (milvah al peh) and the lender’s lien does not transfer to the guarantor. If the guarantor wants a lien on the borrower’s property, he must ensure that the lien that was issued is transferred to him.
This can be done in one of two ways. The original loan document can be conveyed to the guarantor from the lender, using the general method for transferring ownership of a legal document. This is done by handing the guarantor the loan document together with a note that states, “This document and all associated liens are hereby conveyed” (C.M. 66:1 and 6, which states that even a handwritten note is effective). Alternatively, the borrower can write a note granting the guarantor an immediate lien when the loan is initially issued so that when the guarantor pays the lender, it will be considered as though the guarantor issued the loan to the borrower (C.M. 130:4; see also Radvaz 1:456).
Money mattersTraffic Tickets and Copyright#428
Q: I received a traffic ticket. Does halachah recognize the validity of such fines?
A: The government is empowered to establish laws that are necessary for the proper functioning of society, such as traffic regulations. A king or government is allowed to punish one who violates these laws and impose a fine on him or confiscate his assets (C.M. 369:8,11).
Thus, halachah also recognizes the validity of the ticket. However, you may contest the ticket and avail yourself of any loopholes to avoid payment, even on technical grounds, such as mistaken information entered on the ticket.
Similarly, many Poskim rule that copyright law is binding based on dina d’malchusa, since it is necessary for proper functioning of society (Beis Yitzchak, Y.D. 2:75).
On the other hand, laws dealing with monetary matters between individuals are not included in dina d’malchusa, and are often not halachically binding between Jews when in conflict with halachah. On certain issues, the Poskim dispute whether it is considered a personal matter or one of a societal nature.