Overcharging and Deception - Rabbi Yisrael Meatuf shlita

00:02 Speaker 1 You’re listening to “Lema’an Yishme’u,” a podcast from Machon Halacha Chabad.

00:09 Speaker 2 Today we’ll have a lesson that’s a kind of review. We’ve done this a few times before: we take real stories and analyze them based on what we’ve learned. So, time permitting, we have three stories. The first is about someone who rented space for a four-species stall, and then various things changed. How? Yes, Sukkos is coming up soon. The second story: someone bought an apartment with an option to expand it, or so he was told, and in the end he discovers it isn’t quite so. And the third story: someone bought a store on paper, before it had been built. They agreed on its size and everything. In practice, when they built the store, it was smaller than he had requested. Okay, those are the three cases we mentioned. Let’s begin with the first story, recall some of the things we learned, and analyze it in light of them. Here’s the story: there’s an area next to a shul. You can picture it here, too; it happens here a lot. Next to the shul is an area for selling the four species. A group of people wanted to rent the space and establish a claim to it. They approached the gabbaim and rented the entire area for three years. There were four of them in all. Each had four stalls, and there were still spaces left for more stalls. They looked for other people to bring in and advertised. Several people approached them. They took in two of them and gave each two stalls. The price they themselves paid was three and a half thousand shekels per stall. This is a true story, yes—three and a half thousand shekels per stall. They asked the newcomers for four thousand shekels per stall. They told them, “That’s what we charge everyone: three and a half thousand for the stall itself, and another five hundred for a fund for the whole market. The market needs support; things have to be done for its benefit.”

02:29 Speaker 2 So far, so good. As they began preparing for the market, they suddenly saw—there had been room for seventeen stalls. There were six of them, two each, twelve—no, perhaps some had more. There were seventeen stalls. Then they suddenly saw an eighteenth stall set up right in a central spot in the market, perhaps by the entrance, somewhere very prominent. People went to the person in charge and said, “What’s this? He’ll draw all the customers to himself. We don’t want that.” So he told them, “Listen, our group got together and rented the area from the shul. This man wanted to rent the whole area and charge more for the rights to the stalls. We wanted to get him out of the way, so we told him, ‘We’ll give you a central spot,’ and that’s how we got him out of the picture.” So he—the group, that is.

03:44 Speaker 3 The group.

03:44 Speaker 2 Yes, the head of the group wanted to get this competitor out of the way. Someone had come and tried to persuade the gabbaim to rent him the space for a higher price. He wanted to make money from the space, so they wanted to get him out of the deal. They offered him, “Take this spot and keep quiet.” So the head of the group was telling the newcomers, “I did it for your benefit, for all of us here. If he had taken the space, it would have cost all of us more.” That was his claim.

04:16 Speaker 3 No, that way we charged more. What did he say?

04:19 Speaker 2 We charged—he claimed he told them that they charged everyone four thousand, including the original members.

04:26 Speaker 3 Ah, that’s what he said.

04:26 Speaker 2 That’s what he told them. They claim that wasn’t the case. There are a lot of details to this story, but... Now, what else happened? We have more stories, and we’ll have to analyze all of this. That fellow who had the stall there was a bigger operator. He opened a huge sales area outside the market. He opened it there—

04:50 Speaker 3 The one with the central spot.

04:51 Speaker 2 Yes, the one who had the spot there also opened outside. It’s a large area.

04:56 Speaker 3 Not in the...

04:58 Speaker 2 In [unclear].

05:00 Speaker 3 The shul?

05:00 Speaker 2 No, nothing to do with the shul.

05:02 Speaker 3 On the street, too.

05:04 Speaker 2 Yes, on the street.

05:05 Speaker 3 The sidewalk.

05:06 Speaker 2 Yes, he opened—

05:06 Speaker 3 Here, too, there’s—

05:07 Speaker 2 Here, too, right. Besides the market area, some people set up on the street.

05:10 Speaker 3 The sidewalk.

05:11 Speaker 2 Yes.

05:11 Speaker 3 They rent out space.

05:12 Speaker 2 So he opened there. They rent out space here, too, around this time. Now, they saw that. And not only that—one last thing happened. In the end, on Erev Yom Tov, the head of the group was next to that newcomer—I don’t know what to call him, that intruder. The intruder who had also set up outside. The head of the group was next to him and added a table, because it was Erev Yom Tov and there were lots of customers. So the newcomers said, “Wait, why are you adding a table?” He said, “You can add one too. It’s Erev Yom Tov; there are lots of customers. I’ll help you add one as well.” But that fellow beside him, the intruder, got upset. “Why are you adding a table?” They started arguing, and then he said, “I’m lowering prices here. I’ll wreck the market for you.” He lowered his prices there, and the whole—

06:07 Speaker 3 The intruder?

06:08 Speaker 2 That intruder. He drove down the market prices, and there was a whole commotion. Now, those newcomers—let’s call them newcomers for our purposes—had actually rented their stalls for one year. Not the group; the group had rented the area for three years. They came to beis din with a whole list of claims. They said, “We rented a space here,” and it turned out—

06:28 Speaker 3 They lost money.

06:29 Speaker 2 They lost money altogether. They didn’t make a profit; they really came out at a loss. They want their money back, and they want compensation, and they want what they could have earned, and so on. Now let’s recall what we learned. There are actually several issues here that are very similar to each other. Today we’ll try to sort them out a little. It’s a bit confusing: someone buys something and then has various claims. One claim concerns the price you charged me: you charged me quite a high price. We discussed this in a lesson; it’s the subject of ona’ah, overcharging. Ona’ah means that the price is such-and-such, and you charged me more. Another issue is a defect: you sold me something defective. What do you do when there’s a defect? In halacha, if a person buys a product and discovers that it’s defective, he returns it.

07:31 Speaker 3 That’s true under the law, too, isn’t it?

07:33 Speaker 2 Yes, of course.

07:34 Speaker 3 If it’s worn out or broken, why—

07:36 Speaker 2 Under current law, you can return anything within fourteen days, even if it has no defect. But according to halacha, once the acquisition has been made, you can’t return it. If there was no defect, you can’t return it; if there is a defect, you can. A third issue is that you received a different product. You ordered one thing and received another. There’s nothing wrong with it; it’s perfectly fine, but it isn’t what I wanted.

08:01 Speaker 3 Right.

08:02 Speaker 2 A mistaken purchase. That’s called a mistaken purchase, and that, too, can be canceled. You can undo the transaction. A fourth case is a mistake in quantity, measurement, weight, or count: they gave you less than you asked for. What do you do then? They make up the shortfall. If they can’t, they refund part of the money; it depends. There are a lot of complicated laws here. Sometimes, once even a small part is missing, the item is no longer useful to you. For example, someone sells you a certain system, but something is missing and you can’t operate it, or it’s no longer worthwhile for you. There are many, many details. But generally, if someone bought, say, a hundred mice and was given ninety—okay, so what difference does it make to you whether it’s ninety or a hundred? He reduces the price, and that’s fine; you’ll manage with your ninety. Now let’s use the presentation to briefly revisit what we learned then. Regarding the first issue we mentioned, the price—we won’t go into it at length, just touch on it. We said then that there are two ways to set a price: based on the market, or based on what the item is worth to you. There’s cost-based pricing and market-based pricing. Cost-based pricing means, “I spent this much on it, and I need to make such-and-such a profit.” That’s cost-based pricing. Market-based pricing means that perhaps I spent only one shekel on it, but there’s demand in the market and I can sell it for a thousand shekels. Those are the two approaches. Now, I don’t want to discuss excessive price increases; that’s a separate subject. We spoke about it in connection with the cost of living, food, and so on. We’re not discussing that now. The laws of ona’ah—and this is important to know, because many people don’t know it—aren’t concerned with how much profit you make.

10:05 Speaker 2 It doesn’t bother me if you bought something for a shekel and make a hundred shekels on it. If that’s the market price, that’s the market price. In other words, for ona’ah, I look at the market-based price. I look at what the market—

10:18 Speaker 4 Says.

10:18 Speaker 2 What the market says. I don’t care how much profit you make. And by the way, there are two—

10:22 Speaker 4 You can’t go without telling the market.

10:24 Speaker 2 Yes, without telling him. If you tell him, that’s fine, but if you don’t, you’re misleading him, because people don’t do a price comparison every time. He’s relying on you. But this applies to a Jew, yes? The laws of ona’ah, unfair pricing, apply only to a Jew. And by the way, that goes both ways. You might buy something for one shekel instead of a thousand, and that’s perfectly fine because that was the market price. Or the reverse could happen: someone misleads you and sells it to you for a thousand when the market price is five hundred. There’s nothing you can do about that. If you want to sell it for a thousand, you have to tell the buyer. If you don’t, that’s a problem. Just because someone misled you doesn’t mean you can do the same to others.

10:59 Speaker 4 Meaning, he was made to sell it for...

11:02 Speaker 2 Yes. Say he bought it for a thousand. If the market price is five hundred, he has to tell the buyer. He has to say, “Listen, I paid a high price for it, and I want to sell it for a high price.”

11:10 Speaker 4 Who tells people that nowadays?

11:11 Speaker 2 What?

11:12 Speaker 4 Who tells people that nowadays?

11:13 Speaker 2 Nobody does. Right?

11:14 Speaker 4 Right. “I bought it for a thousand, and I want...”

11:19 Speaker 2 Yes. In general, you could say that people are starting to say... I once walked into a store and saw a sign by the register. It said something like, “Yes, at such-and-such supermarket it costs more, uh, or less,” and “Don’t ask me about it,” something like that. The seller was probably a little irritated and couldn’t deal with all the people bothering him. But it was something along those lines. No, you’re right, it’s very rare. Very rare. Now, there are rules for ona’ah. Less than one-sixth is considered waived. One-sixth—

11:57 Speaker 4 In places like... You go into a grocery store, and each product costs a certain amount. Then you go somewhere else and see, I don’t know, products for five or ten shekels, or even more.

12:07 Speaker 2 Right. So now—

12:07 Speaker 4 You know.

12:08 Speaker 2 Right, here’s how it works. If there’s a posted price, you go by the place and time. You can’t base the price on what it was yesterday. You look at today’s price, and you can’t say, “Over there it costs this much,” because it depends on the location. Now, what defines the location? If you have a neighborhood and a supermarket outside it, that supermarket doesn’t determine prices in the neighborhood. As we said, prices in the neighborhood are higher because proximity is part of what you’re paying for. It’s close to you, so you pay for that convenience. But even then, you have to assess how much more you can charge. For example, in Rechovot, someone bought a great many neighborhood grocery stores and raised the prices very sharply. I understand that they’re grocery stores, but there’s still a limit to how much you can raise the price.

12:58 Speaker 4 And on Levinsky Street and places like that, too. You’re not asking about some big store there; prices there are higher. Or in Netanya.

13:05 Speaker 2 Yes.

13:06 Speaker 4 You see that there’s a market there.

13:07 Speaker 2 Right. In the central area, prices are higher for various products.

13:10 Speaker 4 Because of the market.

13:11 Speaker 2 So the market determines—

13:13 Speaker 4 The market is a falafel stand.

13:15 Speaker 2 Yes, yes.

13:16 Speaker 4 The whole falafel shop.

13:17 Speaker 2 Yes. The location.

13:18 Speaker 4 It also depends a lot on whether there’s competition or not. That’s true of the chains.

13:23 Speaker 2 Yes. Because the point is that if this person hadn’t come into your store, he would have gone into another one. I’ll give you an example. There are things whose prices we know and things whose prices we don’t know. I once went in to buy a spigot for a hot-water urn. I rushed in and asked, “Do you have a spigot for an urn?” “Yes,” he said, and quoted me a price. I had no idea what an urn spigot costs. I bought it and left. It could be that he knew the going price and deliberately charged me more. That would be a problem.

13:52 Speaker 4 The spigot should cost thirty-five shekels.

13:54 Speaker 2 Yes, okay. Now—

13:57 Speaker 4 Twenty, twenty shekels. What? Twenty, twenty shekels. Do you know how much a spigot like that costs? Ah.

14:05 Speaker 2 Now, that’s the first aspect of unfair pricing. Next is the issue of misleading someone, which is more closely related to a defect. We said there are two kinds of misleading: in a sale and with a gift. Right now, we’re not discussing gifts. What does misleading someone in a sale mean? You withhold information from the buyer. That’s misleading someone in a sale. How? You can withhold all kinds of information about a product. You can hide a flaw—there’s a defect in the product, and you don’t tell the buyer. And you can also actively—

14:38 Speaker 4 Make it look better.

14:39 Speaker 2 Make it look better, do various things to make it appear to be something it isn’t. We discussed this at length—painting a car and things like that. When is it permitted? We’ll finish with that and move on to the case we discussed. If you improve a product, and you genuinely improve it. We spoke about someone who puts together beautiful mishloach manos, all sorts of attractively designed packages. He charges more than the contents are worth, but the presentation has value, and the buyer is willing to pay for that beauty. Second, if everyone knows. For example, oversized packaging when everyone knows there’s less inside than the package suggests, or when everyone checks. We spoke about selling wine when everyone tastes it before buying. If you mixed something in, you could even mix in water. If the water can be detected in the taste and everyone checks, there’s no problem: you haven’t misled anyone.

15:37 Speaker 4 It tastes good.

15:38 Speaker 2 Yes. Now let’s move on to our case, which involves several of the things we’ve learned. We’ll analyze it step by step. They rented stalls for three thousand five hundred shekels per stall, plus another five hundred, they were told, to improve the market. Okay? But before the market began, they discovered that things weren’t as they had been told. Now, we could look at this as a case of unfair pricing. How? They could say: a stall in a market where everyone is set up equally costs three hundred and fifty, but when there’s suddenly one central vendor and all the others are like appendages, it’s no longer worth three hundred and fifty. It’s worth less. That would be an unfair-pricing claim. But they can’t make that claim here. Why? Because the law is that ona’ah does not apply to real estate. With an object, you can claim unfair pricing after the sale. But with a place, ona’ah does not apply to real estate. Why? Because a place might suddenly be worth more to one person than to another. It’s also a Scriptural decree. Ona’ah does not apply to real estate. They can’t make an unfair-pricing claim here, but that doesn’t mean they can’t make any claim at all. They can say, “This isn’t the product we were promised.” Now, in what way isn’t it the product they were promised? Here we come to several things we discussed. Notice that he added that central stall. He knew about it, and once he knew, he could have told them.

17:20 Speaker 5 That we’ve added this.

17:21 Speaker 2 Yes, that it had been added. He should have given them the option to cancel or not, but he chose not to tell them, and they found out at the last minute. So he withheld information. I don’t know if you can call it a defect, because it isn’t exactly a defect. It’s a different kind of product, a less attractive one. So he withheld that information from them.

17:47 Speaker 5 Because then it wouldn’t be a business. Okay.

17:50 Speaker 2 Right. Meaning, it could be—and by the way, they claim they wouldn’t have wanted such an arrangement at all. Had they known, they wouldn’t have wanted it. Now, what did we say? What happens if there’s a defect, or it’s a different product? What’s the law? The sale is void from the outset. Say I buy something in a store and the scroll wheel doesn’t work. I bought a mouse, and the scroll wheel doesn’t work, only the buttons do. The seller says, “You don’t want it? Return it.” And I say, “No, I do want it. Just take twenty shekels off the price.” That doesn’t work. It doesn’t work. It’s explicit in the Shulchan Aruch. You can’t demand compensation. Either you buy it or you don’t. Now, what happened here?

18:35 Speaker 5 It was only discovered when—

18:36 Speaker 2 Exactly, exactly.

18:38 Speaker 5 It was only discovered—

18:39 Speaker 2 It was discovered when it was already too late. They said, “We’ve already ordered merchandise. We can’t just say now, ‘You don’t want it?’ We’ve ordered merchandise; we have to sell it. We can’t cancel now.” This situation is similar to a halachic case where someone sold another person food, and it later turned out not to be kosher—but the buyer had already eaten it. So here’s what they say. There are many, many details and reasons involved, and disagreements about the reasoning. Generally speaking, if the prohibition is from the Torah, the seller has to return the money. If the prohibition is—what?

19:22 Speaker 5 He has to.

19:22 Speaker 2 He has to return the money, because actually, one of the halachic authorities explains that there’s a question of benefit here. When a person has eaten something forbidden by Torah law, he says, “It’s as if I got no benefit from it. I’d want to throw it all up.” So he has to return the money. But with a rabbinic prohibition, he doesn’t have to return the money, because, so to speak, he did it inadvertently. The person ate it inadvertently. Now, when he inadvertently violated a Torah prohibition, he violated a prohibition of the Torah. But when he inadvertently violated a rabbinic prohibition, it’s as if the Sages waive that prohibition for him, because in the first place they didn’t establish it for someone who did it inadvertently. They instituted these safeguards to protect the Torah’s prohibitions. So, in a sense, he doesn’t—

20:09 Speaker 5 They waive it for him.

20:10 Speaker 2 What?

20:11 Speaker 5 They waive it for him, so to speak.

20:12 Speaker 2 Yes, in a sense they waive it for him, and he doesn’t need atonement. All he did was make an inadvertent mistake, and... So in this situation he will have to pay the money.

20:19 Speaker 5 Poultry, I think that—

20:22 Speaker 2 Yes, that misled a lot of people.

20:23 Speaker 5 Yes, right. They brought the whole... town to the shul here.

20:27 Speaker 2 Here.

20:28 Speaker 5 [unclear], that’s exceptional. [unclear] is a Torah prohibition, a prohibition of the Torah.

20:37 Speaker 2 Yes. There’s another similar example, not involving a defect or a mistaken purchase, but price fraud: someone overcharged another person, who has already eaten what he bought. Here too, he overcharged him by a large amount—more than a sixth, which, as we said, normally voids the sale. But here too, he can’t void the sale.

20:56 Speaker 5 They refund him the excess.

20:57 Speaker 2 Now they refund the excess. That’s the explicit halachah: they refund the excess. But that’s more about—

21:01 Speaker 5 Because he discovers it after he’s eaten it?

21:04 Speaker 2 Yes, that’s when it comes to light.

21:05 Speaker 5 Then he’ll say, “Fine, I paid the price.” Look—

21:07 Speaker 2 No, he knew what price he was paying. He paid and ate it, and only afterward did he suddenly discover that it was an exorbitant price—the price they had set. So here too, you could say the same thing. True, there was a defect, and you could say, “Don’t leave yet,” but it’s already too late for that. So that’s what the beis din ruled as well: they would reduce the price of each stall by five hundred shekels.

21:38 Speaker 5 From the three and a half, because of the defect, and when—

21:41 Speaker 2 Five hundred shekels out of the three and a half. Now, regarding the five hundred shekels charged for these improvements, what did he claim? I haven’t told you what he claimed. He said: “They saw that we didn’t improve anything, didn’t advertise anything, didn’t do anything with that money. But we collected five hundred shekels for the needs of the market. In practice, among all the people who were supposed to pay, there was someone who insisted on not paying. We couldn’t collect from him, and there was a dispute about it and so on. So what did we do? We took money from the fund and covered it. We had to pay the gabbaim here. We were two thousand shekels short, and we covered it from this money. So that was for the needs of... that’s part of the market’s needs.” That was his claim.

22:24 Speaker 5 To bring proof?

22:25 Speaker 2 The beis din didn’t accept that argument. They said: “You bring someone in for just one year and tell him the money is for improving the market. The fact that you didn’t pay the gabbaim is of no concern to him. You sort that out with the gabbaim. If you want this to work for you in future years, then find another way to sort it out.” That isn’t their concern. They want to see that their money actually did something. Now, what do you do in a situation like that? A person ordered a service and didn’t receive it; you give him his money back. So those five hundred shekels are refunded too. Instead of four thousand, they’ve now paid three thousand for each stall. The question now concerns the last two things that happened. What else was there? A large canopy was put up outside. They looked into what had happened and saw that there had been stalls outside in previous years too, but it hadn’t been organized like it was now. This time, that person came and made it official: he put up a canopy and set it up properly. So they said to him, “Why didn’t you tell us there were stalls outside?”

23:30 Speaker 5 Who?

23:31 Speaker 2 What?

23:31 Speaker 5 Who challenged him about the money?

23:32 Speaker 2 The head of the group—the one who came and added them. They said, “Why didn’t you tell us?” That’s one issue. And the other is what we mentioned: someone opened a stall, added a table and painted it. Yes, and that led all the sellers to... So they also sued for the damage that caused them, and so on. Here’s how it goes. Let’s start with the first issue: “You didn’t tell us.” We’ve already learned about that.

24:00 Speaker 5 The prohibition of price fraud—that’s exactly what was happening.

24:03 Speaker 2 What?

24:04 Speaker 5 The verse about the prohibition of price fraud.

24:05 Speaker 2 Yes.

24:07 Speaker 5 They eat and... Yes, and then it already—

24:08 Speaker 2 That’s really it, yes. When we spoke before about the various laws of returns, price fraud, and markets, we said that stores today aren’t like they used to be. For one thing, each store is far from the next, and there’s also a law allowing you to return a product within fourteen days, and so on. If you want to see all the laws you learn in halachah applied in practice, it’s at the arba minim market. That really is a market. You can see it with the aravos on Hoshana Rabbah. How much does a Hoshana Rabbah bundle cost? Notice that the price changes every year. It starts out... then it gradually drops. Why does it drop? Because of the market, because of competition.

24:51 Speaker 5 Also because they have stock left over, and...

24:56 Speaker 2 Exactly. Now, I think last year—

25:00 Speaker 5 They always sell them.

25:01 Speaker 2 Yes, throughout that whole... Right up to the final hours. I think that last Hoshana Rabbah there weren’t many stalls here. There were only a few, and the price stayed fairly high right to the end. A price of five—I don’t remember—but it didn’t drop any further. In other words, it all depends on supply and demand.

25:19 Speaker 5 Fifteen is the cheapest; that’s what they sell them for.

25:21 Speaker 2 No, fifteen sounds very high to me.

25:24 Speaker 5 Fifteen, fifteen.

25:27 Speaker 2 Yes. So we mentioned two things. We mentioned the extra table he added—that’s the second issue. The first issue is the selling outside. Regarding the selling outside, he says, “I know you”—the head of the group is speaking—“one of you sold there last year.” So you knew what the situation was. All right, you didn’t know? You should have asked him. In other words, this is like what we said about something everyone knows, something you can check. So why are you coming to me with complaints?

26:01 Speaker 5 If they had set up the aravos there, the aravos from the... [unclear].

26:05 Speaker 2 No, he means, “Why didn’t you tell me that people also sell outside this area?”

26:13 Speaker 5 He didn’t have a place.

26:14 Speaker 2 Apparently they didn’t have a place. They didn’t have a place, but he says—this is what he claimed—“I know one of them—”

26:20 Speaker 5 What? You come and ask them.

26:22 Speaker 2 No, he himself sold outside there. The second—what was it? He wasn’t selling for himself; someone hired him. In short, he worked at one of the stalls there. So he says one knew and the other didn’t. The other says, “I didn’t know.” So he tells him, “Then you should have asked your friend. You should have checked.” At the very least, when you come to rent a place, you ask people what’s going on. So this was something you could have checked—like wine you can taste—and something everyone knew about. In a case like that, you can’t claim it was a defect. [unclear] So that issue was off the table. Now for the final issue: someone opened up an extra table, and so on. The beis din asked these newcomers, “Are you saying there was no such practice? Are you disputing that people would set up a table?” They said, “We don’t know either way.” All right, so opening up the table wasn’t itself a problem. What happened afterward is called grama in halachah—indirect causation—or even less than grama. There’s a person with free choice who could have chosen to behave differently, and he chose to act that way. It isn’t the fault of the person who set up that table, so that whole issue was off the table. Now let’s move on to the next story. A person bought an apart—an apartment with an option to extend it.

27:59 Speaker 5 An apartment.

28:00 Speaker 2 An apartment, advertised as having an option to add sixteen square meters and a storage room. That’s how it was advertised. He came and made inquiries. The option to extend it was very important to him, so he asked the seller about it. “Is there really an option to extend it?” “Yes, there is, and everything’s in order.”

28:18 Speaker 6 And it’s in order.

28:19 Speaker 2 He said to him, “Are you sure?” He replied, “You can go and check at the municipality.” He didn’t have time to check, but he didn’t entirely trust him, so he asked the real estate agent. The agent told him, “Yes, I know there’s an option to extend it.” They went ahead and signed a contract. In the contract, they wrote that the buyer had checked the issue of the option to extend it and had no claims regarding it, and so on.

28:45 Speaker 6 What’s that?

28:46 Speaker 2 The contract says the buyer checked the option of expanding and had no complaints about it, and they signed, and everything was fine. In practice, he later went to check with the municipality and saw that it wasn’t approved. He approached the seller, who told him, “I’ve already gotten all the neighbors to sign. It’s something they’re sure to approve for me,” and so on. In short, this is a very complicated matter. This case is very, very complicated halachically. On the one hand, there’s clear deception here. On the other hand, there’s a signature.

29:19 Speaker 6 Both parties signed.

29:20 Speaker 2 He signed the contract saying he had no complaints.

29:25 Speaker 6 But they lied there. In practice, they lied.

29:27 Speaker 2 Yes.

29:28 Speaker 6 I had a case like that. I had [unclear] with the rabbi in Kiryat Gat, with the rabbi in Kiryat Gat. I bought an apartment from him. There was a pergola in the apartment then, and when I bought it I asked him, “Is the pergola approved? Are there permits for it?” He said, “Yes, I got the permits. I went to court,” and so on. Later, when I came to sell the apartment, and I needed to provide the documents establishing my rights—by then I’d lived there for five, ten, eleven years—I went to provide the documents to someone else, including the permit for the pergola. But what about the pergola? The rabbi had told me there was a permit. So I ran to the rabbi and said to him, “[unclear].” And he said, “No, what are you talking about? I don’t remember telling you that. I don’t remember.” We went to the beis hora’ah there in Kiryat Gat, to one of the dayanim at the time. It was Rabbi Yossi, a student of Rabbi Ozeri, who was a rabbi there in Kiryat Gat. In short, the bottom line was that because it wasn’t written in the contract, I was stuck with it.

30:37 Speaker 2 Right, he denies it, and there’s no way to prove it. That’s the problem in most cases.

30:42 Speaker 6 There was some fine from the municipality. The municipality imposed a fine for the pergola that had to be paid, and the person who bought from me said, “Come on, what are you talking about? I don’t remember. I bought a place with a pergola; don’t bother me.”

30:59 Speaker 2 To get it approved.

31:01 Speaker 6 To get it approved, they charged a fine of six-thousand-something shekels. That was even after pulling strings, and that rabbi arranged things at the municipality, and so on. There was another person there, 15 tenants. After all that, they came up with almost five hundred thousand, and gave me about five hundred.

31:20 Speaker 2 All right, so let’s see, let’s—

31:21 Speaker 6 But it was written there.

31:22 Speaker 2 Yes, that’s the problem. Now here it says, here it says, here it says something to the buyer’s disadvantage. It says he checked—

31:28 Speaker 6 He didn’t check anything.

31:29 Speaker 2 What?

31:29 Speaker 6 According to Torah law, it wasn’t written in the contract.

31:32 Speaker 2 I didn’t understand.

31:33 Speaker 6 According to Torah law, it’s invalid because it wasn’t written in the contract.

31:35 Speaker 2 No, no, no, no. By the way, no, it doesn’t have to be written in the contract. There’s a concept in civil law of a verbal contract, and there is in halachah too. If it was stated explicitly—

31:42 Speaker 6 That was because if—

31:43 Speaker 2 But that’s just it: there’s no proof. If he had—

31:45 Speaker 6 They didn’t testify for you.

31:47 Speaker 2 Yes.

31:47 Speaker 6 It’s not that they testified. He said, “I don’t remember telling you anything like that.” That I’d been to court—he said, “Yes, I went to court. They told me everything was fine.” So I relied on that, but I had no way to prove it because it wasn’t written in the contract.

32:02 Speaker 2 If someone admits, “I told you that,” it’s like a contract, if it was part of the deal and not something he said in passing.

32:09 Speaker 6 That was a lie too.

32:11 Speaker 2 That’s his story. Here, yes, yes, it was a lie. It was a lie.

32:14 Speaker 6 A lie.

32:15 Speaker 2 It was a lie, and now you’ve signed, as it were.

32:17 Speaker 6 He had him sign something else.

32:19 Speaker 2 It says there—looking at it—“checked.”

32:22 Speaker 6 “Checked,” yes.

32:23 Speaker 2 The buyer checked the option of expanding and had no complaints about it. What can be done? Could we—let’s—

32:33 Speaker 6 He checked, he checked—but where did he check? He didn’t check with the municipality.

32:37 Speaker 2 He checked through the real-estate agent, but the contract doesn’t—

32:39 Speaker 6 In other words, the real-estate agent lied to him about the, about the...

32:42 Speaker 7 They didn’t tell him, perhaps. The real-estate agent didn’t—

32:46 Speaker 2 Apparently. Now, generally speaking, signing all kinds of terms is binding. Even if someone claims, “I don’t know the language, and I signed something I didn’t understand,” they tell him, “That’s your problem. Why did you sign?”

33:00 Speaker 6 That’s halachah.

33:00 Speaker 2 That’s—yes, halachah. There’s, uh...

33:04 Speaker 6 They did that abroad too.

33:05 Speaker 2 Yes, you signed. You have to take into account that... yes. Now, this case is a little different. How do I define the signature here? How do I define the signature here? The signature here is a kind of waiver. “I knew the situation.” In fact, everyone now admits that there is no approved option to expand. Everyone admits that. So what are they telling him? They’re telling him, “You’re stuck with it.” So this signature is essentially a waiver, okay? But what kind of waiver? A waiver made under a mistaken assumption. In other words, unlike other kinds of terms, where you say, “You agreed, you agreed,” here we know exactly what this waiver was based on, and that basis was mistaken. In other words, the waiver was made by mistake.

33:58 Speaker 6 They know that.

33:59 Speaker 2 Yes. In other words, even though the agreement is an agreement, an agreement based on a mistake can be reversed. That’s different from other situations. But if you say, “I didn’t know it was written there,” that’s no longer an argument.

34:13 Speaker 6 He should have read it.

34:14 Speaker 2 You should have read it. But here he didn’t claim, “I didn’t know it was written there.” He knew it was written there, but he—and now they admit it. Now they admit it. If they hadn’t admitted it, it would be different. If, for example, they had told him, “We didn’t tell you anything. We told you to check with the municipality, and you checked,” then he really wouldn’t have had anything he could do, because he has a document here that works against him. But because they admit that they told him that, it was possible—in fact, what happened was that they canceled the sale. Yes, that’s what they did there.

34:43 Speaker 6 On what basis?

34:43 Speaker 2 What?

34:44 Speaker 6 On what basis?

34:44 Speaker 2 He didn’t want that. He wanted an apartment—

34:46 Speaker 6 With an extension.

34:47 Speaker 2 With an extension. He didn’t want a small apartment. From the outset, he was counting on that extension.

34:50 Speaker 7 Wait, so what was the decision based on? On which...

34:55 Speaker 2 Which clause?

34:56 Speaker 7 Yes, on what?

34:56 Speaker 2 A waiver made under a mistaken assumption.

34:57 Speaker 7 Huh?

34:58 Speaker 2 A waiver made under a mistaken assumption. In other words, there’s a clear, demonstrable mistake here. It’s true that anyone who signs something can’t say, “I didn’t read it.” But even if someone agreed—there’s a concept, for example, of a transaction made under a mistaken assumption. Someone agreed to buy, performed the kinyan, did everything, and suddenly discovered that he’d been misled about something. The kinyan is automatically void. So this is along those lines: it’s like a waiver made under a mistaken assumption. It rests on a mistake.

35:25 Speaker 6 Who waived what?

35:26 Speaker 2 He supposedly waived his claim when he signed that. “I checked”—after all, if you read the page, it says, “I checked,” and so on. If you checked with the municipality, what would you hear? That there’s no option to expand. So he writes that he checked and had no complaints. In other words, “I accept that there’s no option to expand.” That’s effectively what he’s writing here, but it’s really a waiver.

35:48 Speaker 6 Someone was accustomed to—what?

35:50 Speaker 2 There’s also a general law regarding a defect. What happens if I sell something to someone? I tell him, “Buy this on condition that you won’t make any claims against me about defects in the product.”

36:02 Speaker 6 He tells you.

36:03 Speaker 2 On condition, on condition. In the end they discover defects, and he can still back out. Why? Because he says, “I didn’t know what defects meant. I thought you meant minor defects, and suddenly I discover a major defect. I need to understand exactly what—or approximately what—I’m waiving my claim to, not just in a general way.” So if you tell him—let’s put it this way—I tell him, “I’m selling you the computer. It’s secondhand. You should know that a computer like this costs four thousand, yes? I’m selling it to you with a thousand-shekel discount for various defects it has. I’m not going to start listing the defects for you now.” Yes, but when you check it, you find that a thousand shekels is a reasonable discount. So here he knew what he was waiving. He knows he’s waiving a claim worth a thousand shekels. You have to know what you’re waiving, because if you don’t know what you’re waiving at all, that’s a problem. And that’s why, in this case, it isn’t considered a waiver. What can be canceled?

36:45 Speaker 8 Something significant.

36:47 Speaker 2 Yes. All right, we won’t get to the third case, but perhaps I’ll just mention the main point. There was a store. Someone ordered a store from a contractor; it hadn’t been built yet. The contractor, for engineering reasons, had to reduce the store’s floor area, and now the buyer is getting a smaller store. This is similar—we mentioned four types of issues then. We said it could be overcharging, a defect, something I didn’t ask for, or a change in quantity. Here, this smaller store is still a usable store, and it’s just a little smaller. It can still serve the purpose for which he wanted the store. He’s essentially received a smaller quantity. So what happens here? If they can make up the difference for him, they do. In this case they can’t make up the floor area, so they’ll have to refund him the reduction in value.

37:47 Speaker 8 No, can’t he give up on it?

37:49 Speaker 2 If he has a claim that it isn’t suitable for what he wanted.

37:54 Speaker 8 We haven’t found a change.

37:56 Speaker 2 Right, but that’s a claim about the dimensions. It’s not a different purchase; it’s essentially the same thing. It was a little smaller here, a little smaller there. He was talking about sixty centimeters in each direction. It’s not a completely different product. You can do the same things, the same tasks. That’s no longer considered a mistaken purchase. If he can perhaps prove that he needed those exact dimensions, that he had already bought equipment and whatnot and it won’t fit there, that might be a different matter. But in practice, this is not a case of a mistaken purchase; it’s a difference in size.