Community Magazine April 2012

According to the ruling of the Shulhan Aruch , a potential buyer who picks up a product for inspection is liable for all damages causedwhile inhis possession. The logic behind this ruling is that since a potential buyer benefits from the right to inspect the product at no cost, he receives a legal status similar to that of a borrower. Hence, he is liable even for damages caused by circumstances beyond his control. Nevertheless, some restrictions do apply. First, the potential buyer assumes responsibility for damages only if the product is so desirable in the market that it could have easily been sold to another party. If, however, the product is one which is not readily sold, the owner may not collect payment for damages caused by an unforeseeable occurrence. For example, if the product is an outdated electronic device, then, in contrast to the situation mentioned above, it actually becomes considered a benefit to the seller that the buyer is even considering making the purchase, and thus the buyer is not considered a borrower when inspecting the product and does not bear liability for damages caused by circumstances beyond his control. It is important to note that this rule can be subject to customary store policies, and therefore one must consult a competent halachic authority before deciding whether a customer is liable for damages. On the other hand, in a similar ruling of the Shulhan Aruch , a customer who purchases goods on consignment is liable in a case of unforeseeable damage – even for merchandise which is undesirable. Despite the fact that the consignment customer did not finalize the sale and maintained the right to return the undesirable goods at his own leisure, he is nevertheless responsible for all damages. Leading halachic authorities explain that although buying merchandise on consignment bears some resemblance to picking up a product for inspection, there is a clear distinction. While in both instances the buyers are not under any obligation and may return the goods, one who simply picks up a product for inspection is merely a potential buyer, and the pending transaction is dependent on his decision. Hence, he is only deemed liable for damages if the product is desirable in the market, since only then can we assume that it is likely he would have ultimately made the purchase. By contrast, one who agrees to sell merchandise on consignment has effectively acquired the goods by his choice to sell them at a profit. Although he maintains the right to return the goods, he already owns them and is liable for all damages until their return. Other leading halachic authorities differ with the above ruling, and exempt a buyer of merchandise on consignment in instances of unforeseeable damage – unless the merchandise was desirable and could have been readily sold. Interestingly enough, many of the Torah precepts relevant to this issue have been adopted by the non-Jewish world. The Uniform Commercial Code [UCC 2-326 (1) (3)] differentiates between a sale contingent on the buyer’s approval, and a sale on consignment, with regard to the bearer of title and the risk of loss. Our Torah, brought to us by Moshe thousands of years ago, has set the framework for all judicial systems to emulate, for the wisdom of our Torah bears the truth of Hashem’s justice. It is our Torah obligation that all monetary disputes with fellow Jews be decided by a rabbinical court of law, where we can be assured that justice is based on Torah law. REMEMBER IRENE Rabbi Max Sutton, Rosh Bet Din Aram Soba, Jerusalem, Israel FROM THE FILES OF THE Bet Din Our Bet Din ruled in favor of Harry, awarding him a $7000 claim against Stanley. As mentioned in Torah Law, since Stanley agreed to sell the merchandise on consignment, he effectively acquired the goods by his choice to sell them at a profit. Although he maintained the right to return the goods, in the interim, for all practical purposes, they belonged to him, deeming him liable for all damages. This ruling was decided by our Bet Din after ascertaining that the merchandise in question was merchantable and very desirable in the commercial market. Hence, this decision concurs with the opinion of all halachic authorities. Nevertheless, the Bet Din suggested that Harry consider Stanley’s general financial difficulties and settle with him for a smaller sum. Harry complied and the two settled the matter peacefully. the case Stanley, a jobber, regularly buys and sells varied merchandise at a small profit. Upon striking a deal to purchase from Harry $7000 worth of goods, the two agreed that the sale would be on consignment. Stanley stored the merchandise in his private garage which was protected by a surveillance camera and a sophisticated alarm system. But when Hurricane Irene swept across the East Coast, a tree fell on the garage, starting an electrical fire which caused damage to the merchandise. Stanley immediately notified Harry of the unfortunate turn of events and told him that he had no intention of paying for the goods since they were bought on consignment. Harry did not respond to Stanley but rather summoned him to Bet Din claiming $7000 in compensation for the lost merchandise. In Bet Din, Stanley explained that although the merchandise was lost while in his domain, by definition of consignment, Harry had retained ownership of the goods until they were sold. Since Harry was the owner of the merchandise, he is to sustain the loss. Harry defended his claim stating simply that while Stanley maintained the right to return the merchandise at any time, if he fails to return the goods for any reason, he is liable for payment. How should the Bet Din rule – in favor of Stanley, or Harry? verdict: THE CALM AFTER THE STORM Sources: Shulhan Aruch Hoshen Mishpat 200:11 Ibid 186:2 Kenneset Hagedola, Hagahot Bet Yosef 186:3 Netivot Hamishpat 186:1 Even Haezel Hilchot Mechira 4 Kehilot Yaakov, Nedarim 24 West Business Law, ninth edition, pg.390. torah law 46 COMMUNITY MAGAZINE