Community Magazine March 2014

44 COMMUNITY MAGAZINE Maurice arrived to his scheduled appointment at the office of his old friend, Albert, and before settling down for the meeting, Albert gave Maurice a brief tour of his newly decorated office. Maurice took a liking to a piece of art painted by a well-known Judaic artist and asked Albert to sell him the painting. Albert refused, declaring that it was not for sale. The two resumed their discussion, and then Maurice suddenly interrupted the conversation and pulled out a wad of $100 bills. He put the stack on the table and offered it to Albert for the painting. Albert at first hesitated, but, enticed by the wad of cash, readily pocketed the money. Mauricewas pleasedwith the sale, until he realized that he paid Albert with the wrong wad of cash. Appearing in Bet Din, he claimed that he accidentally paid Albert $5000 instead of $3000, which he had in his other pocket. Albert responded that since no mention was made of the dollar amount being transferred, the sale is final and he is unwilling to return the funds. Maurice further explained that the painting was still in Albert’s office, and by not yet taking physical possession, he is legally entitled to renege on the sale even if he had paid the intended amount. According to the ruling of the Shulhan Aruch , the sale of merchandise is finalized only after a buyer takes the item into his physical possession. Hence, even if merchandise is paid for in full, prior to shipping, either party can legally withdraw from the transaction. Nevertheless, by rabbinical law, reneging on a deal after funds are transferred subjects the reneging party to a pronounced curse which is formally delivered to him by a panel of three judges. This enactment was instituted in order to prevent a party from reneging on a deal, and has been proven to be a very effective method of upholding ethical business standards. Moreover, there are numerous instances where the transfer of funds alone is sufficient to finalize a transaction. One such instance is when a seller agrees to receive a blind cash payment for the sale of a product, by not bothering to quote a price for the item he is selling. Since this is an unusual form of payment, the cash transaction is binding and final. The legal requirement of taking physical possession is relaxed in such a case since both parties agreed to deal in an uncommon manner. Due to their bizarre fashion of trade, they are no longer governed by the norms requiring a buyer to take physical possession of merchandise for a deal to be final. The Shulhan Aruch rules that price fraud is illegal, and when violated, it may render a sale null and void. Overcharging or underpaying an amount exceeding one-sixth of the true value of the transacted item constitutes price fraud, enabling either party to void the sale. While this law has many far-reaching applications, it is subject to numerous conditions. For example, an overcharged consumer reserves the right to reverse a sale only when he purchases from a merchant. If he made the purchase from somebody selling his personal property, the sale is not governed by the laws of price fraud. The rationale behind this distinction is that people feel a close connection to their personal belongings, and therefore somebody selling personal items is expected to sell them for far more than their actual worth. A buyer purchasing outside a commercial framework is assumed to have been aware of the price increase, and thus from a legal standpoint, he is considered as though he had been informed that he was being overcharged. Hence, since he consented to the sale, no claims of price fraud are applicable. Contemporary leading halachic authorities discuss the application of price fraud claims in commercial markets in which prices vary significantly from one vendor to the next. Factors such as store location and the product’s accessibility could cause a drastic disparity in pricing, and merchandise such as fine art, designer jewelry, and other custom-made items generally demand exorbitant prices. When dealing with transactions of this nature, a buyer is viewed as though he was informed of the exorbitant rate, and may not subsequently reverse the sale. By Torah law, in the event a buyer claims to have mistakenly paid for a purchase, he is not necessarily believed unless he can validate his claim. Therefore, unless the seller acknowledges the buyer’s claim, a Bet Din will discard the buyer’s request to void a sale due to an unproven error. COMPULSIVE SHOPPING Rabbi Max Sutton, Rosh Bet Din Aram Soba, Jerusalem, Israel FROM THE FILES OF THE Bet Din Torah Law photo by: Abraham Amzalak The Case Verdict: HASTE MAKES WASTE The Bet Din ruled in favor of Albert, allowing him to withhold the cash, thereby forcing Maurice to honor the sale. Albert did not believe Maurice had mistakenly paid with the wrong wad of cash, but rather sensed that Maurice attempted to renege on the deal immediately after he coaxed him to sell. With no proof to reverse the sale, the Bet Din honored the transaction. Furthermore, upon inquiry, it was determined that the art purchased by Maurice is likely to be worth close to what he had paid. Although Albert had purchased the painting for a substantially cheaper price, prices in the fine art industry can vary drastically, and therefore Maurice cannot claim that the amount he paid constituted price fraud. In addition, Maurice initiated the purchase of Albert’s personal property and thereby expected the price to be well over market value. Finally, although Maurice did not take possession of the painting, nevertheless, the transaction is final. As mentioned in Torah law, since both Albert and Maurice agreed to the transaction without first determining the price, the transfer of funds alone is sufficient to finalize their transaction. Sources: Shulhan Aruch Hoshen Mishpat 204, 199:1 and Bet Yosef 199:1 ; Shulhan Aruch Hoshen Mishpat 227:23,24; Pit’hei Hoshen 10:1(1); Shulhan Aruch Hoshen Mishpat 207:4, 227:21; Kesot Hahoshen 227:5.