• November 27, 2022
  • 2 5783, Kislev
  • פרשת וארא

Laws of Honesty and Fraud

Laws of Honesty and Fraud

Jewish law informs all parts of our day to day lives, including how we run our businesses. In this course Rabbi Dr. Stuart Fischman will delve into the laws surrounding commerce. What is considered fraud? How can we ensure we are being as honest and ethical as possible?

October 28, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 1
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The Talmud describes Rav Safrah as a person who possessed “fear of Heaven.” What did he do to earn this distinctive title?  Rav Safrah was once approached by someone who wished to purchase some merchandise that Rav Safrah was selling. The purchaser offered to buy Rav Safrah’s goods at a certain price. At that moment Rav Safrah was reciting the שמע ישראל prayer and would not interrupt his prayer to respond to the offer made by the purchaser. The purchaser mistook Rav Safrah’s silence to be a refusal of the offer, so he raised his offer. Rav Safrah, who was still in the middle of his prayer, maintained his silence. The purchaser raised his offer again and again. Finally, when he finished his prayer, Rav Safrah addressed the purchaser and agreed to sell the merchandise at the original price. The purchaser was amazed that Rav Safrah was willing to forego the profit that he could make by selling at the higher price. Rav Safrah explained that in his mind he agreed to the original offer, but he could not interrupt his prayers to close the deal. His sense of fairness would not allow him to profit by reneging even upon an unspoken agreement.

The Talmud says that Rav  Safrah lived by the words of ספר תהלים:

תהלים פרק טו

(א) מִזְמוֹר לְדָוִד ה’ מִי יָגוּר בְּאָהֳלֶךָ מִי יִשְׁכֹּן בְּהַר קָדְשֶׁךָ:

(ב) הוֹלֵךְ תָּמִים וּפֹעֵל צֶדֶק וְדֹבֵר אֱמֶת בִּלְבָבוֹ:

If Rav Safrah would have sold his wares at the highest price offered the purchaser would not have complained and no court would have levied sanctions against Rav Safrah. But Rav Safrah learned from these verses in Tehillim that to be honest in the eyes of God means to have total integrity. God expects us to treat even our unspoken agreements as binding.

Today was the first shiur in a series titled “Laws of Honesty and Fraud.” When I think about the word “laws” I think of regulations which are enforceable and to be respected by everyone. In the Halacha’s system there certainly are laws of fraud and honesty which meet that definition. But we learn from the story about Rav Safrah that the Halacha is also an ethical system which describes behavior to which we should aspire.

In order to understand division of the Halachot into absolute requirements and ethical suggestions we need knowledge of the laws of transactions. Transactions involve stages. They are:

1)negotiation

2)agreement upon price

3 (in the case of cash transactions) the money is given to the seller

4) the purchaser receives the merchandise.

The Halacha has a series of sanctions which increase in severity depending upon where in the series of stages the infraction occurred. The most severe sanction, the awarding of damages to the aggrieved party, is imposed if one of the parties to the transaction was the victim of fraud. Fraud of this nature is known as אונאה and we will בלי נדר discuss it in later shiurim. By its nature אונאה is a crime committed during the last (fourth) stage of the transaction when one party unjustly profits from the transaction.[1] Failure to abide by agreements reached during earlier stages of the transaction do not normally lead to monetary compensation for the aggrieved party. Rather the party who reneges on an agreement is subject to social/religious described in the Gemarah.

The Gemarah tells the story of Rav Kahana who dealt in flax. Rav Kahana agreed to deliver flax to a customer at a later date and accepted a sum of money on deposit. Between the time that Rav Kahana accepted the deposit and the date of delivery the price of flax rose. Rav Kahana asked his teacher, Rav, if he could renege on the agreement.

Rav  replied that he should deliver the amount of flax covered by the amount of the deposit and he is free not to deliver the balance . Rav held that Rav Kahana was obligated to honor the deposit because once the seller accepts payment, even though this does not create a legal obligation to deliver the merchandise[2], failure to do so subjects the seller to a sanction known as מי שפרע. מי שפרע  is a curse that the court places upon the seller who backs out of a deal after receiving payment for the merchandise. As far as the promised merchandise is concerned, Rav held that there is no sanction at all imposed upon a party who reneges on a verbal agreement when market situations change.

The Gemarah then reports the opinion of Rabbi Yochanan who holds that people who renege on verbal agreements are labelled as untrustworthy (מחוסרי אמנה). Even though Rabbi Yochanan labels people as untrustworthy he may permit a person who promised to present someone with a gift to renege. The reason is that labelling someone as untrustworthy is a reflection of the injured party’s disappointment. In commercial agreements each party expects the other side to treat the agreement seriously. In the realm of gifts, the potential recipient does not entirely rely on his benefactor. Depending upon the size of the promised gift the recipient may or not be disappointed if he does not receive the gift. It follows, that according to Rabbi Yochanan, if a person reneges on the promise to make a large gift he may renege without being labelled untrustworthy. If a person promises to make a modest gift, then reneging will cause him to be labelled as untrustworthy.

So this is a summary of today’s shiur. Thanks to everyone who participated in the shiur. Stuart Fischman

[1]  We commonly associate fraud with unscrupulous merchants, but in the Halacha if a purchaser takes advantage of a naïve seller and pays less than fair value for an object that is also considered fraud.

[2] In the Halacha’s system, acceptance of cash by a seller does not create a binding obligation and the merchandise does not become the property (and responsibility) of the purchaser. The reason for this is that the Sages were concerned that if the payment of cash would complete the transaction the seller, having been paid, would fail to adequately guard property which is no longer his. By enacting the rule that payment does not complete the transaction, the seller is responsible to deliver intact goods to the purchaser. If the goods would be damaged before delivery the purchaser would be entitled to satisfaction or to have his money returne

November 4, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 2
November 11, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 3
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Hello Everyone,

We opened today’s shiur by looking at how two important Rishonim understand commercial law in the Halachic system.

The prohibition against fraud appears in this verse:

ויקרא פרק כה

(יד) וְכִי תִמְכְּרוּ מִמְכָּר לַעֲמִיתֶךָ אוֹ קָנֹה מִיַּד עֲמִיתֶךָ אַל תּוֹנוּ אִישׁ אֶת אָחִיו:

The words ” אל תונו ” clearly mean “do not defraud.” There is however a dispute between the Rambam and the Sefer Hachinuch[1] over what we learn from the words “.וכי תמכרו” According to the Rambam (in his ספר המצוות as well as in his introduction to הלכות מכירה) these words embody a mitzvah to conduct commercial activity according to Torah law. In other words, the modes of transaction ( קנינים ) discussed in the Gemarah are the means by which the Jewish people are expected to conduct business.

The Sefer Hachinuch interprets this verse differently. Instead of seeing these words as a commandment to the individuals, he sees it as a commandment to the courts. The Sefer Hachinuch writes that the transactions described in the Gemarah were created by the Sages and are not Biblically ordained. The mitzvah contained in this verse is the mitzvah for the courts to adjudicate when buyers and sellers disagree. The Torah dispalys no particular interest in the arrangements for transferring ownership reached between parties to an agreement. However the Torah is interested in creating an honest and just society and that is role that judges fill in our society. This is the mitzvah of “וכי תמכרו”

We then began our discussion of fraud–אונאה by studying the introduction of the ערוך השלחן to these laws.

The Aruch Hashulchan explains that the there are two types of fraud forbidden by the Torah. One type of fraud is misrepresenting the nature of the merchandise being sold. The other type of fraud involves deviating from the accepted price for the merchandise.

It is important to point out that the laws against fraud are not only meant to protect the consumer, they are meant to protect the seller as well. Many societies have consumer protection laws because consumers often do find themselves alone when confronting large corporations. The laws of אונאה are different in that respect since they are meant to insure fairness in the marketplace. Just as the seller may not take advantage of the naiveté of the purchaser, the purchaser may not take advantage of the seller’s naiveté. If a person who knows nothing about the car market would be sold a ten year old Toyota Corolla for $80,000 we would all agree that this person was cheated and should be able to seek redress in the courts. But let’s look at the case of a person would enter a Toyota dealership and happen to deal with a new worker who knows nothing about cars and their prices.  If this lucky (and shrewd) customer manages to negotiate a price of $400.00 for a new Toyota would we be outraged at his trickery or we would we perhaps admire his ability to “outsmart” a corporation as large as Toyota? The Halacha prohibiting אונאה would void both of these transactions since the Halacha of אונאה applies equally to buyers and sellers.

“Price fraud’ presupposes an objective price for the object in question. New cars have sticker prices and there are guides for used car prices as well. However many items don’t have set prices. In today’s shiur I showed a picture of an 18th century “wimple.” A “wimple” is a long cloth which is used in German-Jewish communities to wind Torah scrolls. Mothers embroider these cloths in honor of the birth of a child and donate them to their synagogue. A collector of antique Judaica bought a collection of wimples from a dealer for $10,000. After buying these wimples the purchaser had them appraised and he was told that they were only worth $3000. The buyer sued the dealer for אונאה. The question of course is whether wimples (which are hand-made) have an objective “price” which could provide a reference point for any claim of אונאה.  As we study more of the laws of אונאה we will understand how the judges analyzed this case and arrived at a verdict.

Thanks to everyone who participates in the shiur. Stuart Fischman

[1]  The Sefer Hachinuch is anonymous work written in 13th century Spain. It reviews the 613 mitzvot according to the weekly Torah portions.

November 18, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 4
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Hello Everyone,

Today we continued with the discussion of fraud-אונאה- in the Halacha.

The prohibition against committing fraud appears in פרשת בהר  in the context of the laws of יובל:

ויקרא פרק כה

(יג) בִּשְׁנַת הַיּוֹבֵל הַזֹּאת תָּשֻׁבוּ אִישׁ אֶל אֲחֻזָּתוֹ:

(יד) וְכִי תִמְכְּרוּ מִמְכָּר לַעֲמִיתֶךָ אוֹ קָנֹה מִיַּד עֲמִיתֶךָ אַל תּוֹנוּ אִישׁ אֶת אָחִיו:

(טו) בְּמִסְפַּר שָׁנִים אַחַר הַיּוֹבֵל תִּקְנֶה מֵאֵת עֲמִיתֶךָ בְּמִסְפַּר שְׁנֵי תְבוּאֹת יִמְכָּר לָךְ:

(טז) לְפִי רֹב הַשָּׁנִים תַּרְבֶּה מִקְנָתוֹ וּלְפִי מְעֹט הַשָּׁנִים תַּמְעִיט מִקְנָתוֹ כִּי מִסְפַּר תְּבוּאֹת הוּא מֹכֵר לָךְ:

The simple, straightforward reading of this passage seems to prohibit fraud when selling land. That is how Rashi explains the parsha. The laws of יובל require the return of land to the seller when the יובל arrives. Therefore the price paid for land must  reflect the amount of time remaining until the coming יובל. As Rashi explains, פסוק יד (which contains the prohibition of fraud) is the preface to the next two פסוקים which explain the appropriate calculation of land prices when יובל is observed.

The Ramban acknowledges that Rashi’s explanation of these verses is the clearest. However, the Gemarah says that the laws of fraud do not apply to real-estate transactions ((אין אונאה בקרקעות. As Jews we accept that Torah is truly interpreted by the Sages who received the Divine interpretation of the Torah which is recorded in the Talmud. So, even though the passage presents the prohibition of fraud adjacent to the regulations for selling land these three verses need to be interpreted separately. פסוק יד is to be read in isolation. It refers only to items transferred by hand from the seller to buyer. פסוקים יד-טו describe a law unique to the laws of יובל and  is not meant to be an example of the more general rules against fraud. This is how the Ramban reads this passage from פרשת בהר in accordance with the interpretation of חז”ל.

The Ramabn goes on to make another point. The laws of fraud have two components. The first component is the actual prohibition and the second component regulates the mechanism for compensating the victims of fraud. When חז”ל ruled אין אונאה בקרקעות  they were not saying that it is permitted to deliberately swindle someone in a real-estate deal. Chazal never meant to totally isolate פסוק יד from the following פסוקים . What Chazal meant by saying אין אונאה בקרקעות is that the rules of indemnity do not apply to real-estate transactions.

What are the rules of indemnity? Transactions involving fraud are judged by the degree of the fraud as follows:

  1. a) if the price paid or received deviates by more than 1/6 from the “fair price[1]” the victim of the fraud ( whether it is the seller or buyer) can ask to have the sale nullified .
  2. b) if the price paid or received deviates  by exactly 1/6 from the fair price the sale is valid and the victim is entitled to be compensated so that he pays ( or receives in the case of the seller having been cheated) the fair price.
  3. c) if the price paid or received deviates by less than 1/6 then the sale is valid and no compensation is paid.

This method of assessing the severity of the fraud was established by Chazal by observing the markets. They concluded that for moveable goods (goods, to use the language of the Tanach, which are transferred “from hand to hand”) there is a “fair price” against which transactions can be judged. On the other hand, Chazal describe real-estate as something for which there is no “fair price.” In the words of Chazal, real-estate is “דבר השוה לכל כסף.[2]” It follows that it is certainly forbidden to take advantage of someone’s ignorance or naiveté  in a real-estate transaction. However once a transaction is completed the party who fell victim to fraud cannot seek redress in the courts since real-estate is held to be worth whatever was paid for it.

We concluded the shiur with an interesting ruling of the Rambam.  The Rambam rules that the laws of fraud do not apply to barter transactions. As the Rambam puts it, even if a person exchanges a suit of armor for a pin he cannot appeal to the courts to have the sale overturned. The reason for this is that at the time of the transaction the person clearly wanted the pin more than the armor so the transaction did not involve any deceit.

The question that one could ask is why is there any difference between an unfair cash transaction (where the laws of fraud apply) and a barter transaction (where the rules of fraud do not apply)[3]? The Aruch Hashulchan provides an insightful answer to this question.[4] Fraud exists only when there is a “sale” because in a sale the merchandise is exchanged for a precise quantity of cash which can be compared to the accepted fair price. Deviations from the fair price constitute fraud. Barter exchanges are inherently different. Each party to a barter transaction views the object which he is receiving as being of greater value or utility than the object from which he is parting. This valuation is subjective. As the Rambam says someone may have greater need for a pin than for a suit of armor and so willingly exchange the armor for the pin. He cannot claim that he was cheated in that exchange.[5]

Thanks to everyone who participated in today’s shiur. Our prayers are with the families and friends of the victims of today’s terrorist attack in Yerushalayim. Stuart Fischman.

 

[1]  How the “fair price” is calculated is a subject which we will study.

[2] בבא קמא יד עמוד ב

[3] Or to use the Rambam’s example, why don’t we say a seller wanted a ten-cent piece more than he wanted his Ferrari?

[4] This is how I understand the Aruch Hashulchan and I may be wrong of course.

[5] If anyone wants to see an economist’s analysis of this Aruch Hashulcahn I suggest that Prof. Aaron Levine’s Free Enterprise and Jewish Law-Aspects of Jewish Business Ethics (pages102-3) be consulted.

November 25, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 5
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Hello Everyone,

In yesterday’s shiur we saw more fundamental ideas in הלכות אונאה.

The shiur began with the writings of the Sefer HaChinuch on our subject. The Sefer HaChinuch[1] explains that the Torah’s prohibition against fraud is one of the rational prohibitions which any society would enact. The lesson ( or message) of this prohibition is that no one should try to enrich himself by exploiting the ignorance or inexperience of others. People should be satisfied with what Hashem gives them through their honest efforts.

The Chinuch reviews the laws of fraud and makes an interesting point. Fraud is a form of theft but there is a point of law in which fraud differs from theft. With regard to theft , the thief has an obligation to return the stolen item to its owner. We learned last week that this is not always the law in cases of fraud. The laws of fraud have a “1/6 rule.” If the sale price deviated by more than 1/6 from the fair price then the victim of the fraud can ask that the sale be nullified. If the deviation equals 1/6 then the sale stands but the victim of the fraud receives that 1/6 price deviation in return. Finally, if the deviation from the fair price is less than 1/6 the sale stands and no compensation is made at all.

This raises the question of why there is no compensation made for deviations of less than 1/6? In cases of theft the stolen property is always returned. Since fraud  is simply a particular form of unjust enrichment (albeit a non-violent one) why is the perpetrator of the fraud permitted to keep the illegitimate profit?

The Chinuch writes that not only is the illicit profit left in the hands of the fraudster, the Halacha actually permits such activity. In other words, a clever person (  the seller or buyer) may try to gain a price advantage of less than 1/6 of the “fair” price and keep that profit. The Chinuch explains that the laws against fraud are meant to ensure that commerce is conducted fairly and smoothly. By permitting people to profit in excess of the “fair” price by this small margin of less than 1/6 the Halacha is ensuring that trade will flourish and that goods will be found for sale in the markets.

The Rosh (another 13th  century authority) disagrees with the Chinuch. He writes that it is forbidden to deliberately deviate from the fair price by less than 1/6. It is true that the Halacha permits a person to keep that profit if it happens that he either overcharged or underpaid by that amount, but one may not  deliberately plan to do so. Any deviation from the fair price is theft and theft is absolutely forbidden. The Rosh gives two explanations for the permissibility of keeping the illicit profit. The first explanation is that it is impractical if not impossible to expect every transaction to be in perfect accord with the fair price. Since commerce needs to carried out efficiently  there is a societal agreement that when the sale price deviates by less than 1/6 the aggrieved party will not contest the transaction. This acquiescence to the price deviation is known as מחילה. The second reason for allowing deviations of less than 1/6 is that sometimes transactions are carried out under duress. Sometimes the purchaser needs an item desperately or a seller needs cash desperately. In these cases the desperate party willingly yields on the fair price by less than 1/6 and these agreements are not the result of fraud.

The Gemara discusses what sort of transactions are not governed by the laws of fraud. We saw last week that based on the word “מיד” which appears in the verse which prohibits fraud the Gemara learns that real-estate transactions are not subject to the rules of fraud. The Gemara mentions the opinion of Rabbi Yehudah who says that there are other goods as well that are not subject to the laws of fraud. Specifically those goods are Torah scrolls, farm animals and precious stones. Torah scrolls are priceless because of their sanctity. Farm animals and precious stones are impossible to assess because they “are part of a pair.”  What does this mean? Farm animals (e.g. donkeys, oxen, horses etc.) are draught animals; they work in pairs to pull wagons and plows. Once a farmer finds an animal that can work in tandem with another animal he will willingly pay more than the fair price for that animal. Similarly jewelers seek out stones that can be assembled to form a pleasing pattern. A jeweler who needs a particular stone to complete a pattern will pay a premium in order to obtain the stone that he needs. This being the case neither farmers nor jewelers can claim that their having paid more than the fair price is proof of fraud by the seller.

The Gemara also brings the opinion of Rabbi Yehudah ben Batteirah. That Tannah held that the laws of fraud do not apply to armaments. In a time of war having the “right” sword or helmet is literally a matter of life and death and soldiers willingly pay extra to obtain what  they need.

The Halacha in Shulcahn Aruch is not in accordance with either of these of opinions and it rules that the sale of all moveable items is regulated by the laws of fraud. We learned in the פתחי תשובה   about a city where the primary occupation was trade in precious stones. It happened that that there was a rash of fraud claims against the city’s merchants and this threw the city into a state of upheaval. The town’s merchants asked the rabbis to establish rules based on the Halacha which would limit the ability of people to file fraud claims against the merchants. The rabbis of the city obliged and issued a proclamation that no claims of fraud could be brought against sellers of precious stones. It then happened that a merchant sold a precious stone for less than half of its worth and he filed a fraud claim against the purchaser. The case was brought to the author of כנסת יחזקאל for resolution. The כנסת יחזקאל ruled in favor of the merchant. He reasoned as follows. The edict forbidding claims of fraud was enacted “in accordance with the Halacha.” But how could that be? The Shulchan Aruch rules against Rabbi Yehudah and allows claims of fraud in the purchase of precious stones. Apparently the rabbis of the town saw that if  the rash of fraud claims was not reined in the town’s economy would collapse. In such a situation the rabbis have the right to rule according to opinions rejected by Shulchan Aruch. In this particular instance, the rabbis ruled like the 11th century authority Rabbeinu Chananel who accepted the opinion of  Rabbi Yehudah as the Halacha. This being the case the edict was legitimate. Furthermore, the edict forbade complaints of fraud brought by purchasers but the case brought before the כנסת יחזקאל  was brought by the seller . Therefore the כנסת יחזקאל found for the seller.

Thanks to everyone who participated in the shiur. Stuart Fischman

[1] The Sefer haChinuch is an anonymous work written in Spain in the 13th century.

December 2, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 6
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Hello Everyone,

In yesterday’s shiur on הלכות אונאה we studied some of the issues involved in assigning value to an item.

Since אונאה  (fraud) is defined as the deviation from the “fair price” of an item, there must exist such a “fair price” in order for a claim of fraud to be successfully pursued. We learned last week that even though people willingly pay more than the fair price for certain items (e.g. jewels and farm animals ) claims of אונאה  can be made when these items are sold for more than the fair price.

Yesterday we studied a passage from masechet Kiddushin with the commentary of the Ritva who makes an important observation. The Gemarah in Kiddushin discusses a law regarding the mitzvah of פדיון הבן. The mitzvah of פדיון הבן  is that the parents of a first-born son give to a Kohen the sum of five שקלים or merchandise of equal value and so “redeem” their son. The Gemarah tells the story of Rav Kahanah and a scarf. In the days of the Talmud scholars would not leave home without wearing a distinctive scarf which denoted their status as scholars. Rav Kahanah accepted such a scarf as payment for פדיון הבן even though it was not worth five שקלים. He remarked at the time that in his eyes it was worth the necessary sum- “.לדידי חזי לי” Apparently the fair price of an object is whatever a buyer willingly pays.

This raises the question of why in last week’s suggyah the purchaser who willingly paid a high price for a jewel could claim he was victim of  אונאה despite the fact that he clearly thought the precious stone was worth that price. Why can’t the seller in that case defend himself by saying that the purchaser obviously thought לדידי חזי לי thus validating the sale price?

The Ritva writes on this suggyah that in cases of לדידי חזי לי  there is no אונאה because the buyer willingly pays the higher price. He contrasts this with cases in which people are coerced or compelled by emergencies[1] to pay higher than usual prices in which instances the Gemarah permits the purchaser to refuse to pay the high price.

The Ritva does not compare the case in Kiddushin ( Rav Kahanah and the scarf) to the case in Bava Metziah ( the case of the precious stone). The question of the Ritva would explain the apparent contradiction was raised by the Ktzot HaChoshen. He writes that he does not understand how the Ritva would explain the Gemarah in Bav Metziah and leaves the question unanswered.

One answer to the question is given by the Machaneh Efraim. He writes that in Kiddushin, Rav Kahanah explicitly said לדידי חזי לי . By saying this Rav Kahanah acknowledged that he was willingly accepting the scarf as being worth 5 שקלים even though its fair price was less. In the suggyah in Bava Metziah, even though the person paid more than the fair price for the jewel there is no proof that he willingly and knowingly paid more than the fair price.

We next studied a case that brought to Rav Menashe Klein zt”l and was recorded in his work משנה הלכות. A man loaned $3.00 to someone and the borrower repaid the loan by giving the lender a book. The borrower and lender agreed that the book is adequate for this purpose despite neither party’s knowing the actual value of the book and neither party will have any claim against the other party in this regard.

The lender examined the book later and noticed that there were many comments written in its margins. He brought the book to an expert on manuscripts for examination and it was discovered that the notes were written by the great 18th century scholar מרן החיד”א  and that מרן החיד”א actually signed the fly-leaf of the book. The lender realized that far from being a $3 book the book was worth at least $1000.00.  The lender who was apparently an honest man asked Rav Menashe Klein if he could keep the book or if the transaction was void because of אונאה.

The lender raised three arguments for being allowed to keep the book but Rav Klein rejected all of them. However Rav Klein ruled that the lender could keep the book anyway. Rav Klein noted that אונאה only applies to objects which have a “fair price.” Manuscripts have no “fair price.” Their sale depends on finding a collector interested in the particular author of the manuscript and then finding out how much he or she is willing to pay. This being the case there was no אונאה because there was no fair price against which the sale price could be compared. The seller (=the borrower) could not claim that he was cheated since he did not know the true worth of the book. This is because he had the book in his possession for many years before using it to repay the $3 loan. He had every opportunity to have the marginal notes examined by an expert (as the lender did) but he chose to ignore them and has only himself to blame for this laziness.

Thanks to everyone who participated in the shiur. Stuart Fischan

[1] The cases are escaping prisoners who pay inflated fees to ferry operators to be taken across a river or women who are forced to pay exorbitant sums in order to obtain a חליצה allowing them to marry the man of their choice.

December 9, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 7
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Hello Everyone,

In yesterday’s shiur we saw how the Halacha regulates markets. The laws of אונאה relate to objects for which there exists a price which is agreed upon by everyone who deals in that sort of merchandise. Whether we are discussing apples or oranges if there is an agreed upon price for the object its sale is subject to review under the rules of אונאה.

Since the laws of אונאה  address deviations from the “consensus” price we need to know how this consensus price is calculated. The Halacha entrusts the courts with the authority to set prices and profits. The Halacha also instructs the courts to appoint inspectors who enforce these prices.[1] The court assesses the costs and labor of the retailer or wholesaler and after calculating these expenses the court arrives at a price for the merchandise which will allow the seller to make a profit of 1/6 above the total costs.

This system of price regulation only exists in the market for “essentials.[2]” Whereas the Halacha opposes profiteering[3] in the market for “essentials” merchants are free to make as much as profit as they can in the market for non-essentials.[4] The Halacha prohibits dealers in essential commodities from charging more than the permitted 1/6 profit.

This system of regulation can only be effective when all the merchants in the area recognize the authority of the courts. The 12th century authority Rabbeinu Meir HaLevi Abulafia ( the רמ”ה ) writes that where there are merchants who do not obey the courts then observant merchants are free to charge what their neighbors are charging. Rabbeinu Meir HaLevi says that the Halacha has no interest in penalizing merchants who obey the Halacha. The Beit Yosef writes that this view of the Halacha is very sensible.

The Aruch Hashulchan (who wrote in the late 19t century and early 20th century) makes an observation which I think is very relevant for our society. He writes that price supervision is also intended to set minimum prices as well. He writes that there are merchants who set their prices at below the market rate (presumably in order to attract customers away from their competitors). He writes that this marketing tactic is forbidden because it upsets the markets and only increases poverty in the long run (presumably because it is meant to drive other merchants out of business). This was true in late 19th century Russia and it is true today. We see that large corporations use their power to squeeze smaller competitors out of business. The Halacha does not approve of treating commercial life as a battlefield.[5]

So are these halachot relevant today. Does an observant grocer need to limit his profits to 1/6? Rav Chalfon HaCohen zt”l of Djerba observed that even though the Jewish community of Djerba was well-organized, neither its merchants nor its courts paid any attention to this rule. He wrote  that since in Djerba there were non-Jewish merchants who were not obligated to limit their profits to 1/6, and there were non-Jews who shopped in Jewish stores, if the Jewish merchants would limit their profits to 1/6 their merchandise would be snapped up first, and then the non-Jewish merchants would be free to raise their prices even more. Therefore (based on the רמ”ה) there is perhaps no need for the Jewish merchants to limit themselves to the 1/6 profit of the Halacha. Despite this reasoning, the issue bothered him and he ends his discussion with a צריך עיון.

In our time Rav Wosner שליט”א in his work שבט הלוי also addresses this issue. He was bothered by the profiteering of Jewish shopkeepers. He held that the leniency of the רמ”ה should only apply in a place where Jews are competing with non-Jews. He writes that the courts in Israel should be more aggressive in enforcing the 1/6 rule and he bemoans the fact that this Halacha is ignored.

Thanks to everyone who participated in the shiur. Stuart Fischman

 

[1] This explanation is based on the רמב”ם הלכות מכירה יד-ב and שלחן ערוך חו”מ, רלא-כ. For a different view on the subject see Rabbeinu Gershom to Babba  Batra. 89a and Dr. Itamar Warhaftig’s article inתחומין כרך א’.

[2] “דברים שיש בהם חיי נפש” to quote the Rambam and  Shulchan Aruch. The Kesef Mishneh writes that according to the Rambam all food items are considered “essential.” The סמ”ע, רלא, ס”ק לו writes that there “essential” foods whose permitted profit margin is 1/6 and “non-essential/non-luxury” items whose permitted profit margin is capped at 100%.

[3] רמב”ם הלכות מכירה פרק יד

ולא יהיה כל אחד ואחד משתכר כל מה שירצה אלא שתות בלבד יפסקו להם בשכרם, ולא ישתכר המוכר יתר על שתות.

[4] רמב”ם הלכות מכירה פרק יד

הלכה ב

במה דברים אמורים בדברים שיש בהם חיי נפש כגון יינות שמנים וסלתות, אבל העיקרין כגון הקושט והלבונה וכיוצא בהן אין פוסקין להם שער אלא ישתכר כל מה שירצה.

[5] See the article by Dr.Warhaftig (footnote 1) who discusses the Aruch Hashulchan (in chap.4 para. 4 of his essay).

December 16, 2014 5:00 pm - 6:00 pm
Laws of Honesty and Fraud: Lesson 8
Class description

I think that at one time or another we have all heard someone make the excuse, “If everyone else is doing it why can’t I?” This excuse is usually made by children. Parents and teachers do not take it very seriously. When it is a matter of  one person being singled out for punishment then this excuse can be raised as a defense[1] but it does not change the fact that the person making the claim did something wrong. So the “everybody’s doing it” defense may save the perpetrator from punishment but it does not change the act itself into something which is permitted.

In today’s shiur we saw a surprising application of the “everybody’s doing it” defense by one of the greatest commentators to the Shulchan Aruch, Rav Yehoshua Volk-Katz, the author of the Sema.[2] The Gemara, in the course of the discussion of the laws of fraud, describes what steps merchants may and may not take to attract customers and to further the sale of their wares. The Gemara prohibits any action which makes merchandise more attractive if such an action hides defects or misrepresents the merchandise. Among the prohibited actions is the soaking of meat into order to make it appear larger or fresher than it is in reality.

The Sema makes a surprising (to me, at least) observation. He writes that if all the butchers in a town soak their wares then they are not guilty of fraud because the customers know of this practice.

סמ”ע על שולחן ערוך חושן משפט הלכות אונאה ומקח טעות סימן רכח סעיף ט

טז] ואין שורין הבשר כו’. והיינו דוקא במקום שאין המנהג כן, (אלא) [אבל] אם המנהג של הקצבים לשרותו כדי שיראה לבן מותר, דאין מאנה בו דהרי הכל יודעין דדרך הקצבים לשרותו….

The 19th century authority, Rabbi Malkiel of Lomza[3]  opposed this ruling of the Sema.

In the opinion of the Divrei Malkiel there can never be any justification for disguising the true nature of goods in order to mislead customers. The few instances in which the Talmud permits “improving the looks” of merchandise are cases where the customer can easily ascertain the true nature of the goods (for example a person purchasing wine can taste the wine and tell immediately if it was diluted). When butchers soak meat the purchaser has no way to tell the actual volume or weight of the meat (less the volume and weight of the water absorbed by the meat). The Divrei Malkiel concludes that since the Sema permits this practice it would be difficult to rule against the butchers should such a case come to trial. He suggests that community rabbis point out to their congregants that the butchers’ handling of the meat is unhygienic and potentially hazardous.[4] The people will then stop buying meat which has been tampered with.

We then studied the more modern question[5] of whether used-car salesman can paint their cars to look “brand-new.” Rav  Yitzchak Zilberstein[6]  addresses this issue from two perspectives. Used items are painted to look like new and/or to hide flaws. In either case painting the used items is forbidden because it deceives the buyer. However in the case of cars even the best paint work cannot deceive the buyer about the age of the car since cars are sold with registration papers which state the model year of the car. However paint-jobs can certainly hide serious flaws in the car’s body. Therefore, Rav Zilberstein rules that if painting the car will not conceal any flaws in the car it can be painted prior to its being sold.

The last aspect of these laws which we studied was one area regarding fair competition between merchants. The Mishnah records a dispute between the Sages and Rabbi Yehudah. We have seen that in times of the Talmud  there was a “fair market” price for commodities. Rabbi Yehudah forbids a merchant to lower his prices in the interest of attracting new customers. The Sages permit this and actually bless the merchant who does this. The Aruch Hashulchan explains that the Halacha is as interested in the welfare of small merchants as it is in the interest of the consumers. Therefore the Sages only permit unilateral steps to lower prices in the case of basic food items  since these steps will discouraging hoarding. In general merchants can only take steps which their competitors can take as well.

Paul Terman asked if this ruling of the Aruch Hashulchan is still applicable. Dr. Itamar Warhaftig  an expert on the application of Halacha to the legal system of the State of Israel) wrote an essay on this subject in the inaugural edition of the annual Halacha publication, תחומין.[7] He writes that in modern economies it is not forbidden to offer discounts and sales in order to attract customers. With regard to the question of caring for the needs of small retailers who compete with large chains he says that the matter requires further study.

ד. הוזלת מחירים. יש אומרים כי המוכרים מוגבלים גם בכיוון ההפוך, היינו שלא יוזילו מחירים בצורה כזו שתפגע בחבריהם הסוחרים. לעצם המגמה כי אדם ירויח כראוי ולא יתחסד עם קוניו על חשבונו הוא, יש מקור בגמרא (ב”מ מ, א, ראה פ”ב, 8). אך חששו של ערוך השולחן כי הוזלה תביא לקלקול דרך המסחר ותקפח פרנסת האחרים, אינו מובן בשוק של היום. ובדרך כלל נראה כי מבצעי הנחה, מכירת סוף העונה וכד’, של חנויות מסוימות הם רצויים. בהקשר זה עולה שאלה אחרת, היינו קיום חנויות ענק, כשק”ם והמשביר לצרכן, שסוחפות את רוב הצרכנים ובמידה זו או אחרת פוגעות במוכר הקטן. מבחינת המחיר בדרך כלל בחנויות הענק המחיר גבוה יותר, להוציא מבצעי סוף העונה וכדו’, אלא שרמת השרות, המבחר הגדול ועוד, מושכים אליהם את רוב הציבור. בעיה זו דורשת עוד מחקר, בין כך היא שייכת בעיקרה לשאלת היחסים בין המוכרים וחורגת מתחום נושאנו.

So that was today’s shiur, and it was the last in this series. I learned a great deal from preparing and delivering the shiurim. I hope I succeeded in my goal of demonstrating that the Halacha’s principles of commercial law are relevant today. Certainly the concern expressed by the Aruch Hashulchan for the small merchant of Czarist-era Russia is real for today’s small merchants who face competition from huge corporations such as Wal-Mart and Amazon. The rules for fair trade practice in the Halacha are meant to protect all the players in the marketplace.

Thanks to everyone who participated in the shiurim.

חנוכה שמח!

Stuart Fischman

[1] http://en.wikipedia.org/wiki/Selective_prosecution

 

October 28, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

    The Talmud describes Rav Safrah as a person who possessed “fear of Heaven.” What did he do to earn this distinctive title?  Rav Safrah was once approached by someone who wished to purchase some merchandise that Rav Safrah was selling. The purchaser offered to buy Rav Safrah’s goods at a certain price. At that moment Rav Safrah was reciting the שמע ישראל prayer and would not interrupt his prayer to respond to the offer made by the purchaser. The purchaser mistook Rav Safrah’s silence to be a refusal of the offer, so he raised his offer. Rav Safrah, who was still in the middle of his prayer, maintained his silence. The purchaser raised his offer again and again. Finally, when he finished his prayer, Rav Safrah addressed the purchaser and agreed to sell the merchandise at the original price. The purchaser was amazed that Rav Safrah was willing to forego the profit that he could make by selling at the higher price. Rav Safrah explained that in his mind he agreed to the original offer, but he could not interrupt his prayers to close the deal. His sense of fairness would not allow him to profit by reneging even upon an unspoken agreement.

The Talmud says that Rav  Safrah lived by the words of ספר תהלים:

תהלים פרק טו

(א) מִזְמוֹר לְדָוִד ה’ מִי יָגוּר בְּאָהֳלֶךָ מִי יִשְׁכֹּן בְּהַר קָדְשֶׁךָ:

(ב) הוֹלֵךְ תָּמִים וּפֹעֵל צֶדֶק וְדֹבֵר אֱמֶת בִּלְבָבוֹ:

If Rav Safrah would have sold his wares at the highest price offered the purchaser would not have complained and no court would have levied sanctions against Rav Safrah. But Rav Safrah learned from these verses in Tehillim that to be honest in the eyes of God means to have total integrity. God expects us to treat even our unspoken agreements as binding.

Today was the first shiur in a series titled “Laws of Honesty and Fraud.” When I think about the word “laws” I think of regulations which are enforceable and to be respected by everyone. In the Halacha’s system there certainly are laws of fraud and honesty which meet that definition. But we learn from the story about Rav Safrah that the Halacha is also an ethical system which describes behavior to which we should aspire.

In order to understand division of the Halachot into absolute requirements and ethical suggestions we need knowledge of the laws of transactions. Transactions involve stages. They are:

1)negotiation

2)agreement upon price

3 (in the case of cash transactions) the money is given to the seller

4) the purchaser receives the merchandise.

The Halacha has a series of sanctions which increase in severity depending upon where in the series of stages the infraction occurred. The most severe sanction, the awarding of damages to the aggrieved party, is imposed if one of the parties to the transaction was the victim of fraud. Fraud of this nature is known as אונאה and we will בלי נדר discuss it in later shiurim. By its nature אונאה is a crime committed during the last (fourth) stage of the transaction when one party unjustly profits from the transaction.[1] Failure to abide by agreements reached during earlier stages of the transaction do not normally lead to monetary compensation for the aggrieved party. Rather the party who reneges on an agreement is subject to social/religious described in the Gemarah.

The Gemarah tells the story of Rav Kahana who dealt in flax. Rav Kahana agreed to deliver flax to a customer at a later date and accepted a sum of money on deposit. Between the time that Rav Kahana accepted the deposit and the date of delivery the price of flax rose. Rav Kahana asked his teacher, Rav, if he could renege on the agreement.

Rav  replied that he should deliver the amount of flax covered by the amount of the deposit and he is free not to deliver the balance . Rav held that Rav Kahana was obligated to honor the deposit because once the seller accepts payment, even though this does not create a legal obligation to deliver the merchandise[2], failure to do so subjects the seller to a sanction known as מי שפרע. מי שפרע  is a curse that the court places upon the seller who backs out of a deal after receiving payment for the merchandise. As far as the promised merchandise is concerned, Rav held that there is no sanction at all imposed upon a party who reneges on a verbal agreement when market situations change.

The Gemarah then reports the opinion of Rabbi Yochanan who holds that people who renege on verbal agreements are labelled as untrustworthy (מחוסרי אמנה). Even though Rabbi Yochanan labels people as untrustworthy he may permit a person who promised to present someone with a gift to renege. The reason is that labelling someone as untrustworthy is a reflection of the injured party’s disappointment. In commercial agreements each party expects the other side to treat the agreement seriously. In the realm of gifts, the potential recipient does not entirely rely on his benefactor. Depending upon the size of the promised gift the recipient may or not be disappointed if he does not receive the gift. It follows, that according to Rabbi Yochanan, if a person reneges on the promise to make a large gift he may renege without being labelled untrustworthy. If a person promises to make a modest gift, then reneging will cause him to be labelled as untrustworthy.

So this is a summary of today’s shiur. Thanks to everyone who participated in the shiur. Stuart Fischman

 

 

[1]  We commonly associate fraud with unscrupulous merchants, but in the Halacha if a purchaser takes advantage of a naïve seller and pays less than fair value for an object that is also considered fraud.

[2] In the Halacha’s system, acceptance of cash by a seller does not create a binding obligation and the merchandise does not become the property (and responsibility) of the purchaser. The reason for this is that the Sages were concerned that if the payment of cash would complete the transaction the seller, having been paid, would fail to adequately guard property which is no longer his. By enacting the rule that payment does not complete the transaction, the seller is responsible to deliver intact goods to the purchaser. If the goods would be damaged before delivery the purchaser would be entitled to satisfaction or to have his money returned.

 

 

November 4, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

 
שלחן ערוך מי שפרע.docx
חושן משפט הלכות מקח וממכר סימן קפט.docx
תשובות והנהגות breaking a promise.docx
פסק דין בענין מחוסר אמנה.docx
משנה הלכות 1.docx
משנה הלכות 2.docx
תשובות והנהגות breaking a promise.docx
November 11, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

Hello Everyone,

We opened today’s shiur by looking at how two important Rishonim understand commercial law in the Halachic system.

The prohibition against fraud appears in this verse:

ויקרא פרק כה

(יד) וְכִי תִמְכְּרוּ מִמְכָּר לַעֲמִיתֶךָ אוֹ קָנֹה מִיַּד עֲמִיתֶךָ אַל תּוֹנוּ אִישׁ אֶת אָחִיו:

The words ” אל תונו ” clearly mean “do not defraud.” There is however a dispute between the Rambam and the Sefer Hachinuch[1] over what we learn from the words “.וכי תמכרו” According to the Rambam (in his ספר המצוות as well as in his introduction to הלכות מכירה) these words embody a mitzvah to conduct commercial activity according to Torah law. In other words, the modes of transaction ( קנינים ) discussed in the Gemarah are the means by which the Jewish people are expected to conduct business.

The Sefer Hachinuch interprets this verse differently. Instead of seeing these words as a commandment to the individuals, he sees it as a commandment to the courts. The Sefer Hachinuch writes that the transactions described in the Gemarah were created by the Sages and are not Biblically ordained. The mitzvah contained in this verse is the mitzvah for the courts to adjudicate when buyers and sellers disagree. The Torah dispalys no particular interest in the arrangements for transferring ownership reached between parties to an agreement. However the Torah is interested in creating an honest and just society and that is role that judges fill in our society. This is the mitzvah of “וכי תמכרו”

We then began our discussion of fraud–אונאה by studying the introduction of the ערוך השלחן to these laws.

The Aruch Hashulchan explains that the there are two types of fraud forbidden by the Torah. One type of fraud is misrepresenting the nature of the merchandise being sold. The other type of fraud involves deviating from the accepted price for the merchandise.

It is important to point out that the laws against fraud are not only meant to protect the consumer, they are meant to protect the seller as well. Many societies have consumer protection laws because consumers often do find themselves alone when confronting large corporations. The laws of אונאה are different in that respect since they are meant to insure fairness in the marketplace. Just as the seller may not take advantage of the naiveté of the purchaser, the purchaser may not take advantage of the seller’s naiveté. If a person who knows nothing about the car market would be sold a ten year old Toyota Corolla for $80,000 we would all agree that this person was cheated and should be able to seek redress in the courts. But let’s look at the case of a person would enter a Toyota dealership and happen to deal with a new worker who knows nothing about cars and their prices.  If this lucky (and shrewd) customer manages to negotiate a price of $400.00 for a new Toyota would we be outraged at his trickery or we would we perhaps admire his ability to “outsmart” a corporation as large as Toyota? The Halacha prohibiting אונאה would void both of these transactions since the Halacha of אונאה applies equally to buyers and sellers.

“Price fraud’ presupposes an objective price for the object in question. New cars have sticker prices and there are guides for used car prices as well. However many items don’t have set prices. In today’s shiur I showed a picture of an 18th century “wimple.” A “wimple” is a long cloth which is used in German-Jewish communities to wind Torah scrolls. Mothers embroider these cloths in honor of the birth of a child and donate them to their synagogue. A collector of antique Judaica bought a collection of wimples from a dealer for $10,000. After buying these wimples the purchaser had them appraised and he was told that they were only worth $3000. The buyer sued the dealer for אונאה. The question of course is whether wimples (which are hand-made) have an objective “price” which could provide a reference point for any claim of אונאה.  As we study more of the laws of אונאה we will understand how the judges analyzed this case and arrived at a verdict.

Thanks to everyone who participates in the shiur. Stuart Fischman

 

 

 

 

 

 

 

 

 

 

 

[1]  The Sefer Hachinuch is anonymous work written in 13th century Spain. It reviews the 613 mitzvot according to the weekly Torah portions.

 

 

November 18, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

Hello Everyone,

Today we continued with the discussion of fraud-אונאה- in the Halacha.

The prohibition against committing fraud appears in פרשת בהר  in the context of the laws of יובל:

ויקרא פרק כה

(יג) בִּשְׁנַת הַיּוֹבֵל הַזֹּאת תָּשֻׁבוּ אִישׁ אֶל אֲחֻזָּתוֹ:

(יד) וְכִי תִמְכְּרוּ מִמְכָּר לַעֲמִיתֶךָ אוֹ קָנֹה מִיַּד עֲמִיתֶךָ אַל תּוֹנוּ אִישׁ אֶת אָחִיו:

(טו) בְּמִסְפַּר שָׁנִים אַחַר הַיּוֹבֵל תִּקְנֶה מֵאֵת עֲמִיתֶךָ בְּמִסְפַּר שְׁנֵי תְבוּאֹת יִמְכָּר לָךְ:

(טז) לְפִי רֹב הַשָּׁנִים תַּרְבֶּה מִקְנָתוֹ וּלְפִי מְעֹט הַשָּׁנִים תַּמְעִיט מִקְנָתוֹ כִּי מִסְפַּר תְּבוּאֹת הוּא מֹכֵר לָךְ:

The simple, straightforward reading of this passage seems to prohibit fraud when selling land. That is how Rashi explains the parsha. The laws of יובל require the return of land to the seller when the יובל arrives. Therefore the price paid for land must  reflect the amount of time remaining until the coming יובל. As Rashi explains, פסוק יד (which contains the prohibition of fraud) is the preface to the next two פסוקים which explain the appropriate calculation of land prices when יובל is observed.

The Ramban acknowledges that Rashi’s explanation of these verses is the clearest. However, the Gemarah says that the laws of fraud do not apply to real-estate transactions ((אין אונאה בקרקעות. As Jews we accept that Torah is truly interpreted by the Sages who received the Divine interpretation of the Torah which is recorded in the Talmud. So, even though the passage presents the prohibition of fraud adjacent to the regulations for selling land these three verses need to be interpreted separately. פסוק יד is to be read in isolation. It refers only to items transferred by hand from the seller to buyer. פסוקים יד-טו describe a law unique to the laws of יובל and  is not meant to be an example of the more general rules against fraud. This is how the Ramban reads this passage from פרשת בהר in accordance with the interpretation of חז”ל.

The Ramabn goes on to make another point. The laws of fraud have two components. The first component is the actual prohibition and the second component regulates the mechanism for compensating the victims of fraud. When חז”ל ruled אין אונאה בקרקעות  they were not saying that it is permitted to deliberately swindle someone in a real-estate deal. Chazal never meant to totally isolate פסוק יד from the following פסוקים . What Chazal meant by saying אין אונאה בקרקעות is that the rules of indemnity do not apply to real-estate transactions.

What are the rules of indemnity? Transactions involving fraud are judged by the degree of the fraud as follows:

a) if the price paid or received deviates by more than 1/6 from the “fair price[1]” the victim of the fraud ( whether it is the seller or buyer) can ask to have the sale nullified .

b) if the price paid or received deviates  by exactly 1/6 from the fair price the sale is valid and the victim is entitled to be compensated so that he pays ( or receives in the case of the seller having been cheated) the fair price.

c) if the price paid or received deviates by less than 1/6 then the sale is valid and no compensation is paid.

This method of assessing the severity of the fraud was established by Chazal by observing the markets. They concluded that for moveable goods (goods, to use the language of the Tanach, which are transferred “from hand to hand”) there is a “fair price” against which transactions can be judged. On the other hand, Chazal describe real-estate as something for which there is no “fair price.” In the words of Chazal, real-estate is “דבר השוה לכל כסף.[2]” It follows that it is certainly forbidden to take advantage of someone’s ignorance or naiveté  in a real-estate transaction. However once a transaction is completed the party who fell victim to fraud cannot seek redress in the courts since real-estate is held to be worth whatever was paid for it.

We concluded the shiur with an interesting ruling of the Rambam.  The Rambam rules that the laws of fraud do not apply to barter transactions. As the Rambam puts it, even if a person exchanges a suit of armor for a pin he cannot appeal to the courts to have the sale overturned. The reason for this is that at the time of the transaction the person clearly wanted the pin more than the armor so the transaction did not involve any deceit.

The question that one could ask is why is there any difference between an unfair cash transaction (where the laws of fraud apply) and a barter transaction (where the rules of fraud do not apply)[3]? The Aruch Hashulchan provides an insightful answer to this question.[4] Fraud exists only when there is a “sale” because in a sale the merchandise is exchanged for a precise quantity of cash which can be compared to the accepted fair price. Deviations from the fair price constitute fraud. Barter exchanges are inherently different. Each party to a barter transaction views the object which he is receiving as being of greater value or utility than the object from which he is parting. This valuation is subjective. As the Rambam says someone may have greater need for a pin than for a suit of armor and so willingly exchange the armor for the pin. He cannot claim that he was cheated in that exchange.[5]

Thanks to everyone who participated in today’s shiur. Our prayers are with the families and friends of the victims of today’s terrorist attack in Yerushalayim. Stuart Fischman.

 

 

[1]  How the “fair price” is calculated is a subject which we will study.

[2] בבא קמא יד עמוד ב

[3] Or to use the Rambam’s example, why don’t we say a seller wanted a ten-cent piece more than he wanted his Ferrari?

[4] This is how I understand the Aruch Hashulchan and I may be wrong of course.

[5] If anyone wants to see an economist’s analysis of this Aruch Hashulcahn I suggest that Prof. Aaron Levine’s Free Enterprise and Jewish Law-Aspects of Jewish Business Ethics (pages102-3) be consulted.

 

 

November 25, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

Hello Everyone,

In yesterday’s shiur we saw more fundamental ideas in הלכות אונאה.

The shiur began with the writings of the Sefer HaChinuch on our subject. The Sefer HaChinuch[1] explains that the Torah’s prohibition against fraud is one of the rational prohibitions which any society would enact. The lesson ( or message) of this prohibition is that no one should try to enrich himself by exploiting the ignorance or inexperience of others. People should be satisfied with what Hashem gives them through their honest efforts.

The Chinuch reviews the laws of fraud and makes an interesting point. Fraud is a form of theft but there is a point of law in which fraud differs from theft. With regard to theft , the thief has an obligation to return the stolen item to its owner. We learned last week that this is not always the law in cases of fraud. The laws of fraud have a “1/6 rule.” If the sale price deviated by more than 1/6 from the fair price then the victim of the fraud can ask that the sale be nullified. If the deviation equals 1/6 then the sale stands but the victim of the fraud receives that 1/6 price deviation in return. Finally, if the deviation from the fair price is less than 1/6 the sale stands and no compensation is made at all.

This raises the question of why there is no compensation made for deviations of less than 1/6? In cases of theft the stolen property is always returned. Since fraud  is simply a particular form of unjust enrichment (albeit a non-violent one) why is the perpetrator of the fraud permitted to keep the illegitimate profit?

The Chinuch writes that not only is the illicit profit left in the hands of the fraudster, the Halacha actually permits such activity. In other words, a clever person (  the seller or buyer) may try to gain a price advantage of less than 1/6 of the “fair” price and keep that profit. The Chinuch explains that the laws against fraud are meant to ensure that commerce is conducted fairly and smoothly. By permitting people to profit in excess of the “fair” price by this small margin of less than 1/6 the Halacha is ensuring that trade will flourish and that goods will be found for sale in the markets.

The Rosh (another 13th  century authority) disagrees with the Chinuch. He writes that it is forbidden to deliberately deviate from the fair price by less than 1/6. It is true that the Halacha permits a person to keep that profit if it happens that he either overcharged or underpaid by that amount, but one may not  deliberately plan to do so. Any deviation from the fair price is theft and theft is absolutely forbidden. The Rosh gives two explanations for the permissibility of keeping the illicit profit. The first explanation is that it is impractical if not impossible to expect every transaction to be in perfect accord with the fair price. Since commerce needs to carried out efficiently  there is a societal agreement that when the sale price deviates by less than 1/6 the aggrieved party will not contest the transaction. This acquiescence to the price deviation is known as מחילה. The second reason for allowing deviations of less than 1/6 is that sometimes transactions are carried out under duress. Sometimes the purchaser needs an item desperately or a seller needs cash desperately. In these cases the desperate party willingly yields on the fair price by less than 1/6 and these agreements are not the result of fraud.

The Gemara discusses what sort of transactions are not governed by the laws of fraud. We saw last week that based on the word “מיד” which appears in the verse which prohibits fraud the Gemara learns that real-estate transactions are not subject to the rules of fraud. The Gemara mentions the opinion of Rabbi Yehudah who says that there are other goods as well that are not subject to the laws of fraud. Specifically those goods are Torah scrolls, farm animals and precious stones. Torah scrolls are priceless because of their sanctity. Farm animals and precious stones are impossible to assess because they “are part of a pair.”  What does this mean? Farm animals (e.g. donkeys, oxen, horses etc.) are draught animals; they work in pairs to pull wagons and plows. Once a farmer finds an animal that can work in tandem with another animal he will willingly pay more than the fair price for that animal. Similarly jewelers seek out stones that can be assembled to form a pleasing pattern. A jeweler who needs a particular stone to complete a pattern will pay a premium in order to obtain the stone that he needs. This being the case neither farmers nor jewelers can claim that their having paid more than the fair price is proof of fraud by the seller.

The Gemara also brings the opinion of Rabbi Yehudah ben Batteirah. That Tannah held that the laws of fraud do not apply to armaments. In a time of war having the “right” sword or helmet is literally a matter of life and death and soldiers willingly pay extra to obtain what  they need.

The Halacha in Shulcahn Aruch is not in accordance with either of these of opinions and it rules that the sale of all moveable items is regulated by the laws of fraud. We learned in the פתחי תשובה   about a city where the primary occupation was trade in precious stones. It happened that that there was a rash of fraud claims against the city’s merchants and this threw the city into a state of upheaval. The town’s merchants asked the rabbis to establish rules based on the Halacha which would limit the ability of people to file fraud claims against the merchants. The rabbis of the city obliged and issued a proclamation that no claims of fraud could be brought against sellers of precious stones. It then happened that a merchant sold a precious stone for less than half of its worth and he filed a fraud claim against the purchaser. The case was brought to the author of כנסת יחזקאל for resolution. The כנסת יחזקאל ruled in favor of the merchant. He reasoned as follows. The edict forbidding claims of fraud was enacted “in accordance with the Halacha.” But how could that be? The Shulchan Aruch rules against Rabbi Yehudah and allows claims of fraud in the purchase of precious stones. Apparently the rabbis of the town saw that if  the rash of fraud claims was not reined in the town’s economy would collapse. In such a situation the rabbis have the right to rule according to opinions rejected by Shulchan Aruch. In this particular instance, the rabbis ruled like the 11th century authority Rabbeinu Chananel who accepted the opinion of  Rabbi Yehudah as the Halacha. This being the case the edict was legitimate. Furthermore, the edict forbade complaints of fraud brought by purchasers but the case brought before the כנסת יחזקאל  was brought by the seller . Therefore the כנסת יחזקאל found for the seller.

Thanks to everyone who participated in the shiur. Stuart Fischman

[1] The Sefer haChinuch is an anonymous work written in Spain in the 13th century.

 

 

December 2, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

Hello Everyone,

In yesterday’s shiur on הלכות אונאה we studied some of the issues involved in assigning value to an item.

Since אונאה  (fraud) is defined as the deviation from the “fair price” of an item, there must exist such a “fair price” in order for a claim of fraud to be successfully pursued. We learned last week that even though people willingly pay more than the fair price for certain items (e.g. jewels and farm animals ) claims of אונאה  can be made when these items are sold for more than the fair price.

Yesterday we studied a passage from masechet Kiddushin with the commentary of the Ritva who makes an important observation. The Gemarah in Kiddushin discusses a law regarding the mitzvah of פדיון הבן. The mitzvah of פדיון הבן  is that the parents of a first-born son give to a Kohen the sum of five שקלים or merchandise of equal value and so “redeem” their son. The Gemarah tells the story of Rav Kahanah and a scarf. In the days of the Talmud scholars would not leave home without wearing a distinctive scarf which denoted their status as scholars. Rav Kahanah accepted such a scarf as payment for פדיון הבן even though it was not worth five שקלים. He remarked at the time that in his eyes it was worth the necessary sum- “.לדידי חזי לי” Apparently the fair price of an object is whatever a buyer willingly pays.

This raises the question of why in last week’s suggyah the purchaser who willingly paid a high price for a jewel could claim he was victim of  אונאה despite the fact that he clearly thought the precious stone was worth that price. Why can’t the seller in that case defend himself by saying that the purchaser obviously thought לדידי חזי לי thus validating the sale price?

The Ritva writes on this suggyah that in cases of לדידי חזי לי  there is no אונאה because the buyer willingly pays the higher price. He contrasts this with cases in which people are coerced or compelled by emergencies[1] to pay higher than usual prices in which instances the Gemarah permits the purchaser to refuse to pay the high price.

The Ritva does not compare the case in Kiddushin ( Rav Kahanah and the scarf) to the case in Bava Metziah ( the case of the precious stone). The question of the Ritva would explain the apparent contradiction was raised by the Ktzot HaChoshen. He writes that he does not understand how the Ritva would explain the Gemarah in Bav Metziah and leaves the question unanswered.

One answer to the question is given by the Machaneh Efraim. He writes that in Kiddushin, Rav Kahanah explicitly said לדידי חזי לי . By saying this Rav Kahanah acknowledged that he was willingly accepting the scarf as being worth 5 שקלים even though its fair price was less. In the suggyah in Bava Metziah, even though the person paid more than the fair price for the jewel there is no proof that he willingly and knowingly paid more than the fair price.

We next studied a case that brought to Rav Menashe Klein zt”l and was recorded in his work משנה הלכות. A man loaned $3.00 to someone and the borrower repaid the loan by giving the lender a book. The borrower and lender agreed that the book is adequate for this purpose despite neither party’s knowing the actual value of the book and neither party will have any claim against the other party in this regard.

The lender examined the book later and noticed that there were many comments written in its margins. He brought the book to an expert on manuscripts for examination and it was discovered that the notes were written by the great 18th century scholar מרן החיד”א  and that מרן החיד”א actually signed the fly-leaf of the book. The lender realized that far from being a $3 book the book was worth at least $1000.00.  The lender who was apparently an honest man asked Rav Menashe Klein if he could keep the book or if the transaction was void because of אונאה.

The lender raised three arguments for being allowed to keep the book but Rav Klein rejected all of them. However Rav Klein ruled that the lender could keep the book anyway. Rav Klein noted that אונאה only applies to objects which have a “fair price.” Manuscripts have no “fair price.” Their sale depends on finding a collector interested in the particular author of the manuscript and then finding out how much he or she is willing to pay. This being the case there was no אונאה because there was no fair price against which the sale price could be compared. The seller (=the borrower) could not claim that he was cheated since he did not know the true worth of the book. This is because he had the book in his possession for many years before using it to repay the $3 loan. He had every opportunity to have the marginal notes examined by an expert (as the lender did) but he chose to ignore them and has only himself to blame for this laziness.

Thanks to everyone who participated in the shiur. Stuart Fischan

[1] The cases are escaping prisoners who pay inflated fees to ferry operators to be taken across a river or women who are forced to pay exorbitant sums in order to obtain a חליצה allowing them to marry the man of their choice.

 

 

December 9, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

Hello Everyone,

In yesterday’s shiur we saw how the Halacha regulates markets. The laws of אונאה relate to objects for which there exists a price which is agreed upon by everyone who deals in that sort of merchandise. Whether we are discussing apples or oranges if there is an agreed upon price for the object its sale is subject to review under the rules of אונאה.

Since the laws of אונאה  address deviations from the “consensus” price we need to know how this consensus price is calculated. The Halacha entrusts the courts with the authority to set prices and profits. The Halacha also instructs the courts to appoint inspectors who enforce these prices.[1] The court assesses the costs and labor of the retailer or wholesaler and after calculating these expenses the court arrives at a price for the merchandise which will allow the seller to make a profit of 1/6 above the total costs.

This system of price regulation only exists in the market for “essentials.[2]” Whereas the Halacha opposes profiteering[3] in the market for “essentials” merchants are free to make as much as profit as they can in the market for non-essentials.[4] The Halacha prohibits dealers in essential commodities from charging more than the permitted 1/6 profit.

This system of regulation can only be effective when all the merchants in the area recognize the authority of the courts. The 12th century authority Rabbeinu Meir HaLevi Abulafia ( the רמ”ה ) writes that where there are merchants who do not obey the courts then observant merchants are free to charge what their neighbors are charging. Rabbeinu Meir HaLevi says that the Halacha has no interest in penalizing merchants who obey the Halacha. The Beit Yosef writes that this view of the Halacha is very sensible.

The Aruch Hashulchan (who wrote in the late 19t century and early 20th century) makes an observation which I think is very relevant for our society. He writes that price supervision is also intended to set minimum prices as well. He writes that there are merchants who set their prices at below the market rate (presumably in order to attract customers away from their competitors). He writes that this marketing tactic is forbidden because it upsets the markets and only increases poverty in the long run (presumably because it is meant to drive other merchants out of business). This was true in late 19th century Russia and it is true today. We see that large corporations use their power to squeeze smaller competitors out of business. The Halacha does not approve of treating commercial life as a battlefield.[5]

So are these halachot relevant today. Does an observant grocer need to limit his profits to 1/6? Rav Chalfon HaCohen zt”l of Djerba observed that even though the Jewish community of Djerba was well-organized, neither its merchants nor its courts paid any attention to this rule. He wrote  that since in Djerba there were non-Jewish merchants who were not obligated to limit their profits to 1/6, and there were non-Jews who shopped in Jewish stores, if the Jewish merchants would limit their profits to 1/6 their merchandise would be snapped up first, and then the non-Jewish merchants would be free to raise their prices even more. Therefore (based on the רמ”ה) there is perhaps no need for the Jewish merchants to limit themselves to the 1/6 profit of the Halacha. Despite this reasoning, the issue bothered him and he ends his discussion with a צריך עיון.

In our time Rav Wosner שליט”א in his work שבט הלוי also addresses this issue. He was bothered by the profiteering of Jewish shopkeepers. He held that the leniency of the רמ”ה should only apply in a place where Jews are competing with non-Jews. He writes that the courts in Israel should be more aggressive in enforcing the 1/6 rule and he bemoans the fact that this Halacha is ignored.

Thanks to everyone who participated in the shiur. Stuart Fischman

 

 

 

 

 

 

[1] This explanation is based on the רמב”ם הלכות מכירה יד-ב and שלחן ערוך חו”מ, רלא-כ. For a different view on the subject see Rabbeinu Gershom to Babba  Batra. 89a and Dr. Itamar Warhaftig’s article inתחומין כרך א’.

[2] “דברים שיש בהם חיי נפש” to quote the Rambam and  Shulchan Aruch. The Kesef Mishneh writes that according to the Rambam all food items are considered “essential.” The סמ”ע, רלא, ס”ק לו writes that there “essential” foods whose permitted profit margin is 1/6 and “non-essential/non-luxury” items whose permitted profit margin is capped at 100%.

[3] רמב”ם הלכות מכירה פרק יד

 

ולא יהיה כל אחד ואחד משתכר כל מה שירצה אלא שתות בלבד יפסקו להם בשכרם, ולא ישתכר המוכר יתר על שתות.

[4] רמב”ם הלכות מכירה פרק יד

 

הלכה ב

במה דברים אמורים בדברים שיש בהם חיי נפש כגון יינות שמנים וסלתות, אבל העיקרין כגון הקושט והלבונה וכיוצא בהן אין פוסקין להם שער אלא ישתכר כל מה שירצה.

[5] See the article by Dr.Warhaftig (footnote 1) who discusses the Aruch Hashulchan (in chap.4 para. 4 of his essay).

 

 

December 16, 2014 1:00PM – 2:00PM

Laws of Commerce and Fraud

  I think that at one time or another we have all heard someone make the excuse, “If everyone else is doing it why can’t I?” This excuse is usually made by children. Parents and teachers do not take it very seriously. When it is a matter of  one person being singled out for punishment then this excuse can be raised as a defense[1] but it does not change the fact that the person making the claim did something wrong. So the “everybody’s doing it” defense may save the perpetrator from punishment but it does not change the act itself into something which is permitted.

In today’s shiur we saw a surprising application of the “everybody’s doing it” defense by one of the greatest commentators to the Shulchan Aruch, Rav Yehoshua Volk-Katz, the author of the Sema.[2] The Gemara, in the course of the discussion of the laws of fraud, describes what steps merchants may and may not take to attract customers and to further the sale of their wares. The Gemara prohibits any action which makes merchandise more attractive if such an action hides defects or misrepresents the merchandise. Among the prohibited actions is the soaking of meat into order to make it appear larger or fresher than it is in reality.

The Sema makes a surprising (to me, at least) observation. He writes that if all the butchers in a town soak their wares then they are not guilty of fraud because the customers know of this practice.

סמ”ע על שולחן ערוך חושן משפט הלכות אונאה ומקח טעות סימן רכח סעיף ט

טז] ואין שורין הבשר כו’. והיינו דוקא במקום שאין המנהג כן, (אלא) [אבל] אם המנהג של הקצבים לשרותו כדי שיראה לבן מותר, דאין מאנה בו דהרי הכל יודעין דדרך הקצבים לשרותו….

The 19th century authority, Rabbi Malkiel of Lomza[3]  opposed this ruling of the Sema.

In the opinion of the Divrei Malkiel there can never be any justification for disguising the true nature of goods in order to mislead customers. The few instances in which the Talmud permits “improving the looks” of merchandise are cases where the customer can easily ascertain the true nature of the goods (for example a person purchasing wine can taste the wine and tell immediately if it was diluted). When butchers soak meat the purchaser has no way to tell the actual volume or weight of the meat (less the volume and weight of the water absorbed by the meat). The Divrei Malkiel concludes that since the Sema permits this practice it would be difficult to rule against the butchers should such a case come to trial. He suggests that community rabbis point out to their congregants that the butchers’ handling of the meat is unhygienic and potentially hazardous.[4] The people will then stop buying meat which has been tampered with.

We then studied the more modern question[5] of whether used-car salesman can paint their cars to look “brand-new.” Rav  Yitzchak Zilberstein[6]  addresses this issue from two perspectives. Used items are painted to look like new and/or to hide flaws. In either case painting the used items is forbidden because it deceives the buyer. However in the case of cars even the best paint work cannot deceive the buyer about the age of the car since cars are sold with registration papers which state the model year of the car. However paint-jobs can certainly hide serious flaws in the car’s body. Therefore, Rav Zilberstein rules that if painting the car will not conceal any flaws in the car it can be painted prior to its being sold.

The last aspect of these laws which we studied was one area regarding fair competition between merchants. The Mishnah records a dispute between the Sages and Rabbi Yehudah. We have seen that in times of the Talmud  there was a “fair market” price for commodities. Rabbi Yehudah forbids a merchant to lower his prices in the interest of attracting new customers. The Sages permit this and actually bless the merchant who does this. The Aruch Hashulchan explains that the Halacha is as interested in the welfare of small merchants as it is in the interest of the consumers. Therefore the Sages only permit unilateral steps to lower prices in the case of basic food items  since these steps will discouraging hoarding. In general merchants can only take steps which their competitors can take as well.

Paul Terman asked if this ruling of the Aruch Hashulchan is still applicable. Dr. Itamar Warhaftig  an expert on the application of Halacha to the legal system of the State of Israel) wrote an essay on this subject in the inaugural edition of the annual Halacha publication, תחומין.[7] He writes that in modern economies it is not forbidden to offer discounts and sales in order to attract customers. With regard to the question of caring for the needs of small retailers who compete with large chains he says that the matter requires further study.

ד. הוזלת מחירים. יש אומרים כי המוכרים מוגבלים גם בכיוון ההפוך, היינו שלא יוזילו מחירים בצורה כזו שתפגע בחבריהם הסוחרים. לעצם המגמה כי אדם ירויח כראוי ולא יתחסד עם קוניו על חשבונו הוא, יש מקור בגמרא (ב”מ מ, א, ראה פ”ב, 8). אך חששו של ערוך השולחן כי הוזלה תביא לקלקול דרך המסחר ותקפח פרנסת האחרים, אינו מובן בשוק של היום. ובדרך כלל נראה כי מבצעי הנחה, מכירת סוף העונה וכד’, של חנויות מסוימות הם רצויים. בהקשר זה עולה שאלה אחרת, היינו קיום חנויות ענק, כשק”ם והמשביר לצרכן, שסוחפות את רוב הצרכנים ובמידה זו או אחרת פוגעות במוכר הקטן. מבחינת המחיר בדרך כלל בחנויות הענק המחיר גבוה יותר, להוציא מבצעי סוף העונה וכדו’, אלא שרמת השרות, המבחר הגדול ועוד, מושכים אליהם את רוב הציבור. בעיה זו דורשת עוד מחקר, בין כך היא שייכת בעיקרה לשאלת היחסים בין המוכרים וחורגת מתחום נושאנו.

So that was today’s shiur, and it was the last in this series. I learned a great deal from preparing and delivering the shiurim. I hope I succeeded in my goal of demonstrating that the Halacha’s principles of commercial law are relevant today. Certainly the concern expressed by the Aruch Hashulchan for the small merchant of Czarist-era Russia is real for today’s small merchants who face competition from huge corporations such as Wal-Mart and Amazon. The rules for fair trade practice in the Halacha are meant to protect all the players in the marketplace.

Thanks to everyone who participated in the shiurim.

חנוכה שמח!

Stuart Fischman

 

[1] http://en.wikipedia.org/wiki/Selective_prosecution

[2] SEFER ME’IRAT ENAYIM (SEMA)

R. Yehoshua Volk b. R. Alexander haCohen (Katz) was born c. 1555 in Poland. He was a disciple of R. Shlomo Luria (MaharShal) and R. Moshe Isserlis (Ramah). His father-in-law, the wealthy R. Yisrael b. R. Yoseph, built a study hall in Lemberg for him and aided in publishing his books, and in his honor R. Yehoshua named a series of his books Beit Yisrael. He became famous for his two compilations on the entire Tur: the Prishah (a brief commentary) and the Drishah (an extensive discussion of the Tur and the Beit Yosef), as well as additions to R. Moshe Isserlis’ Darkei Moshe, and his Sefer Me’irat Einayim (Sema), an important commentary to the Shulkhan Aruch Choshen Mishpat, as well as other works. He was a leader of the Council of the Four Lands. His disciples were leading luminaries of the next generation, including R. Yehoshua Harif of Krakow, author of the Maginei Shlomo, R. Yissachar Eilenburg, author of Be’er Sheva, and R. Shabtai Sheftil Horowitz, son of the Shela, author of Vavei Amudim. He passed away in 1614. The data banks contain the Morasha leHanchil edition of the Sema, Jerusalem 5752 (1992). Also included are the Prishah and Drishah, from the revised publication of Tur by Machon Yerushalayim and Shirat Devorah, Tel Aviv 5772 (2012).

[3] DIVREI MALKIEL

Rabbi Malkiel Zvi b. R. Yonah haLevi Tannenbaum was born in Poland, in 1847, and was recognized as a child prodigy. At the age of 26, in 1873, he was appointed as rabbi in the city of Budki, near Grodna. From 1887 until his death, he was the rabbi of Lomza. He was considered one of the leading responders of his generation. Active in communal affairs, he died on the way home from a rabbinical assembly in St. Petersburg in 1910. He published his responsa in his series Divrei Malkiel of which five volumes where published in his lifetime, starting from 1891 (in different cities). Two more volumes from his estate were published by Mossad haRav Kook in 1970 and 1976.

[4] In the Divrei Malkiel’s case, the butchers were “inflating” the meat. I imagine the butchers did this by inflating the intestines, but I may be wrong.

[5]  Processed meat that I have seen for sale is labelled as being 10% water so this eliminates the fraud issue.

[6] HASHUKEI HEMED

Rav Yitzchak Zylberstein was born in Poland in 1934 and emigrated to the Holy Land while a child. He studied in Yeshivat Slobadka in Bnei Brak, and was a disciple of R. Yechezkel Abramsky and R. Shmuel Wozner. He married R. Yosef Shalom Elyashiv’s daughter and is quite close to his father-in-law, as well as his brother-in-law, R Hayyim Kanyavsky, and often cites their rulings. He is Rosh Kollel of Beit David in Hollon, and the rabbi of the Ramat Elchanan neighborhood of Bnei Brak. He extensively deals with issues of Jewish Law and medicine and gives lectures in various forums. He authored a number of book, some from his lectures by various editors. Famous is his Torat haYoledet written together with Dr. Moshe Rothchild, founder of the Ma’ayanei haYeshua hospital in Bnei Brak. Another important volume is Shabbat Shabbaton, laws of the sick person on Yom Kippur. Another volume is Hashukei Hemed edited from his lectures on the Talmud, with practical laws, arranged according to the Talmud folios and in his unique style.

[7] תחומין / כרך א / ד”ר איתמר ורהפטיג / הגנת הצרכן לאור ההלכה/ עמוד 255

 

 

 

 

Rabbi Dr. Stuart Fischman graduated from Yeshiva University in 1980 and the dental school of Columbia University in 1985. In 1989 he began studying and teaching at Yeshivat Hamivtar and now studies and teaches at Yeshivat Machanaim in Efrat. He has rabbinic ordination from Rav Zalman Nechemia Goldberg.