Q: I entered an agreement to form a partnership, but have not yet begun the work. Am I allowed to renege?
A: The binding power of an agreement depends on the customary commercial practice. Thus, if, for example, you signed a contract and such a contract is considered binding in commercial practice, you are not permitted to renege without the customary penalties associated with this (see Responsa Rashba 3:397).
If the agreement was verbal, or in the absence of a clear commercial practice, there are numerous opinions as to what makes the agreement binding. The Rambam and Mechaber require a binding kinyan, whereas other Rishonim and the Rema maintain that even a verbal agreement can have legal significance. B’ezras Hashem, we will discuss these opinions in the coming weeks.
Regardless, one who reneges even from a verbal commitment is considered mechusar amanah, lacking trustworthiness. If there was a significant change of circumstances or change regarding agreements of davar shelo ba l’olam this may not apply (C.M. 204:7-8; Mishmeres Shalom 209:3; Yad Avraham, Y.D. 264:1)