By Rabbi Meir Orlian
Aryeh was cruising down the boulevard, following an old blue car. Traffic was moving at a brisk clip when the light ahead of them suddenly turned yellow and then red. Aryeh applied the brakes firmly, but not fast enough. He bumped gently into the blue car ahead of him.
After the light turned green, the two cars pulled over to the side of the road. Aryeh recognized the other driver as his neighbor, Zvi. The two men assessed the damage. There was a small dent in the back of the blue car. Not a big deal, but a dent nonetheless.
“Sorry about the dent,” Aryeh said. “The light turned red a little too fast to stop in time.”
“Well, you should have kept a larger trailing distance,” said Zvi. “I assume you have insurance to cover the damage?”
“Of course,” said Aryeh. “But I have a fairly high deductible. For a small dent like this, it’s not worth involving the insurance.”
Zvi thought for a moment. “I’m not sure I’m going to bother fixing the dent,” he said. “As you can see, the car has other dents.” Aryeh looked at the car. It had seen better days, and the new dent joined three other dents that had never been fixed.
“I owe you the money for the repair, regardless,” said Aryeh. “I ruined your car.”
“You didn’t exactly ruin my car,” said Zvi. “Another small dent is not going to make a difference to the value of the car. But if I’m not fixing it anyway, you didn’t cause me any real monetary damage.”
“I still owe you the full value of the repair as a cash payment,” insisted Aryeh. “What you do with the money is your choice.”
“Not if there’s no intent to repair and negligible depreciation,” said Zvi. “Maybe a small something, but no more! I don’t want to take money from you that you don’t owe according to halachah.”
“If you’ll feel better,” Aryeh said, “we can ask Rabbi Dayan how much I owe.”
The two came to Rabbi Dayan. “Aryeh dented my car slightly,” said Zvi. “Does he owe the value of the repair even if I don’t plan on repairing it?”
“One who damages has to pay the differential between the value of the item before and after the damage,” said Rabbi Dayan. “Thus, in principle, we should evaluate the depreciation of the car” (C.M. 387:1; 403:1).
“Then there would be almost no obligation of damage here,” said Aryeh. “The little dent has negligible impact on the value of the car!”
“It would seem that way,” said Rabbi Dayan. “However, the Shach (C.M. 387:1; 95:18) writes that this applies to something that cannot be repaired. However, when the item can be repaired, the one who damaged has to pay the repair; we do not look at the depreciation.”
“That’s exactly the point, though!” exclaimed Zvi. “I do not intend to repair the dent, so why should he pay its value?”
“That might be significant according to the Shach, who seems to maintain that the primary obligation of damage is to restore the initial state,” acknowledged Rabbi Dayan. “Presumably, if the cost of repair changed, he would also assess the cost at the current time.
“However, the Chazon Ish (B.K. 6:3) goes a step further. He maintains that the cost of repair is established as the monetary obligation for the damage. According to him, the repair cost is assessed at the time of damage, since this is his monetary obligation. As such, even if the damaged party has no interest in fixing the damaged item, the damager still owes the cost of repair. Even the Shach might agree as long as the damage can be repaired” (see Harav Chanoch Sanhedrai, Dvar Chok U’mishpat, p. 289).
“Aryeh owes the value of the repair,” concluded Rabbi Dayan, “whether Zvi chooses to repair the dent or not.”
Closing A Sale
Q. I signed a contract to close on my house in three months, the time the buyer needed to secure a mortgage. The buyer asked to move into the house before the closing, to which I agreed, but I want to charge him rent for those three months. He claims that since we are under contract and the house is not up for rent, he should not have to pay rent. May I charge him rent?
A. Before addressing your question, a common mistake must be noted. Usually when a contract to sell a house is drafted, the buyer puts aside money, usually in an escrow account, to ensure that he will not renege on his agreement to purchase the property. However, sometimes the seller may request permission to use that money immediately; if the buyer agrees, this money is not yet a payment for the sale but a loan to the seller, since the time to close has not yet arrived. Once the buyer becomes a lender, the seller (borrower) may not allow the buyer (lender) to live in the property for free since any additional benefit the lender (buyer) receives from the borrower (seller) violates the prohibition of ribis.
Even in a circumstance where the lender benefits from the arrangement at no cost to the borrower (zeh neheneh v’zeh lo chaseir), it is still prohibited since they have a lender/borrower relationship (Y.D. 166:1). Therefore, if the seller wishes to use the funds in the escrow account, they must draft a heter iska.
In a circumstance in which the seller does not wish to use the escrow money or if they arranged for a heter iska, since the house remains the possession of the seller until the closing, if someone wishes to live in his house, he has the right to charge rent.
Generally, when living on someone’s property, even if the parties did not structure a lease agreement, the tenant must pay rent for the time he is there.
These principles, however, apply to property that could be leased so that the owner loses by someone living on his property for free, but if one does not intend to rent the house, e.g., due to the fact that it is under contract, the tenant would be exempt from paying, similar to one who lives on a friend’s property without the owner’s knowledge in a circumstance in which the owner does not lose anything, and thus the “tenant” is exempt (C.M. 363:6).
Nevertheless, you have the right to stipulate before he moves onto the property that you are charging rent since you cannot be forced to accept a tenant on your property (Rema ibid.). In the event that you, the seller, did not stipulate that you will charge rent, the buyer cannot be forced to pay rent for the time he lived on the property before the closing, since by not stipulating beforehand you demonstrated that you were willing to forgo charging him rent in consideration of the fact that he is buying the house (see Rema ibid., 363:10).
Q. I bought something by check or credit card at a store that does not allow returns. Can I “cancel” the sale by stopping the check or instructing the credit card company to refuse payment?
A. If you already took the item, the transaction is finalized. You are not able to retract the sale; if you have not paid yet, you owe the seller payment. To stop the check or refuse payment is tantamount to refusing to pay what you owe, and is not allowed (C.M. 198:1).
If you did not receive the item yet, we learned that the Sages granted the legal ability to retract until taking the item, although they imposed a curse upon one who retracts after paying. A check or credit card should be no stronger than cash payment, so that it would seem possible to retract.
However, in a typical commercial setting nowadays, signing a formal order form or paying in the routine manner is considered a binding act of kinyan situmta if the common business practice is to consider such transactions as final. (It is illegal to stop a check or cancel credit card payment after the item has been shipped.) v
This article is intended for learning purposes and not to be relied upon halacha l’maaseh. There are also issues of dina d’malchusa to consider in actual cases.
Rabbi Meir Orlian is a faculty member of the Business Halacha Institute, which is headed by HaRav Chaim Kohn, shlita, a noted dayan. For questions regarding business halacha issues, or to bring a BHI lecturer to your business or shul, please call the confidential hotline at 877-845-8455 or eâ€‘mail firstname.lastname@example.org. To receive BHI’s free newsletter, Business Weekly, send an eâ€‘mail to email@example.com.