In last week’s article we discussed the extent of liability that a gemach that rents out clothing and costume jewelry may impose on a renter without violating ribbis when the rented item is damaged.
Is the renter’s verbal acceptance of liability sufficient?
Among the various obligations that one could place on a renter, some are binding even without any stipulation, some are binding with a mere verbal agreement, some require the renter to perform a kinyan, and others require very specific language.
Theft, loss, and oness. A renter is liable for negligence, theft, and loss but is exempt when an oness (circumstance beyond one’s control) occurs (C.M. 307:1). A renter can upgrade to a higher degree of liability, i.e., that of a shoel (borrower) to be liable in cases of oness (C.M. 305:4). In consideration of the fact that people will think that he is a shoel and thereby earn a reputation as a responsible, trustworthy person, he commits to the higher degree of liability (B.M. 94a). Since he receives something by accepting a higher degree of liability, his verbal agreement is binding.
Some contend that the above is limited to cases in which the custodian did not have to give the owner a security deposit. Since the custodian is trusted, he is willing to commit to a higher degree of liability. When the owner demands a security deposit, he demonstrates that he does not trust the custodian. Accordingly, a verbal agreement does not suffice and a kinyan is necessary for the custodian’s commitment to be binding (Beis Ephraim, C.M. 21, cited by Pischei Teshuvah, C.M. 305:2; Ketzos 291:16). Therefore, when a gemach demands a security deposit, a kinyan is necessary for the commitment to be binding.
Ba’alav Imo. When the owner demands a security deposit at the time of the rental, another issue arises that potentially exempts the renter even if the object is stolen, lost, or damaged from negligence. If one lends/rents an object to a friend and the owner was working for the borrower/renter at that time, the borrower/renter is exempt from liability. This Biblical exemption is called ba’alav imo (C.M. 346:1).
If a lender takes a security deposit, at the moment the borrower’s custodial responsibilities begin, the owner is “working” for the borrower in that he is a custodian of the borrower’s security deposit and thus the borrower is exempt from custodial responsibility (Tumim 72:18; Nesivos 305:3; Mishpat Shalom 185:7). Therefore, if the gemach demands a security deposit, it is a case of ba’alav imo, and the renter is exempt from liability. [There is a debate whether taking a check as a security deposit creates a circumstance of ba’alav imo (Mishpetei HaChoshen 346:42). The reason for this exclusion is that the renter does not essentially require the return of his check. His only concern is that someone else should not find it and cash it. Others disagree and claim that the fact that the gemach must protect the check so that the renter shouldn’t suffer a loss qualifies as ba’alav imo (see Alon HaMishpat #102).]
Some contend that in this case, a kinyan is necessary for the borrower to accept full liability because there is no reason to think that the owner considered him as trustworthy as a shoel, since even a shoel is exempt in a circumstance of ba’alav imo (Ketzos 291:18, Shaar Mishpat 346:1). Accordingly, it is necessary to perform a kinyan to obligate the borrower if the object is stolen, lost, or damaged from negligence.
Money Matters: Language Of Guarantor
Based on the writings of Rav Chaim Kohn, shlita
Someone consulted with me about a potential borrower, and I replied: “I guarantee that he’ll pay.” If the borrower defaults, am I liable as a guarantor?
We mentioned that a guarantor who was relied upon to grant the loan does not require a kinyan, so that a verbal commitment suffices. Nonetheless, the guarantor must commit in a language that clearly indicates that he accepts liability.
Thus, “Lend him and I am a guarantor” clearly expresses accepting liability. However, saying “I guarantee you that he’ll pay” is not a clear statement of accepting liability as a guarantor. Nonetheless, if you knew that the borrower is not reliable and misled the lender, you are liable for having caused him damage (garmi), since he relied on you to grant the loan (C.M. 129:2, 18; Pischei Choshen, Halva’ah 13:1, 3).
Language common in contracts, even if not parallel to the language mentioned in classic halachic sources, is binding, since the clear intention of the lender and guarantor is to commit in a meaningful manner (C.M. 61:16).
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 e‑mail email@example.com. To receive BHI’s free newsletter, Business Weekly, send an e‑mail to firstname.lastname@example.org.