Finalizing Terms Before a Sale - Rabbi Yisrael Meatuf shlita

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

00:09 Speaker 2 Today’s topic is, uh, making an agreement, sales, and buying on credit. By “making an agreement,” I mean how you agree on a sale, how you close a sale, how you settle the terms—and sales and credit. So first of all, what needs to be agreed on before you sell something? This applies to stores, to someone buying or selling in a store, and also to secondhand sales. People sell things now and then. Who is responsible for the various parts of the payment? There are all kinds of additional costs: VAT, taxes, delivery, assembly, and all kinds of fines that can suddenly come with an item. Who pays them—the seller or the buyer? How do you make a kinyan, a binding acquisition, completely and conclusively? For someone who wants to know that the deal is settled and there won’t be problems afterward. And there are the laws of sales and credit. There are several interesting laws here that are good to know. What? Okay. So before anything else, let’s start with something that perhaps not many people know. When you make a large transaction, something that extends a bit into the future, later on people might not remember exactly what was agreed. There’s a ruling about this from the Alter Rebbe. We won’t go into it at length. He’s speaking about a loan, but if you look at the reasoning, you see that it applies to many other things too. When one person borrows from another, or lends to another, there is an obligation—an obligation, because in the Alter Rebbe’s ruling it appears to be a Torah obligation—to make sure there’s proof of the loan. We’re not talking about amounts here.

02:06 Speaker 3 Proof of…?

02:07 Speaker 2 Proof that there was a loan, and of the amount of the loan.

02:11 Speaker 3 Even if I say I’ll forgive the debt afterward?

02:14 Speaker 2 Uh, that might help. If you tell yourself, “Worst comes to worst, I’ll forgive it,” that works for small amounts. You give a small loan, ten shekels, and tell yourself, “If he forgets, I forgive it.” But when it’s an amount you wouldn’t necessarily forgive, there’s an obligation to have proof of it. Let’s look at number one on the page. The Alter Rebbe says: “One who lends money to another should do so only in the presence of witnesses, even if the borrower is a Torah scholar and certainly would not knowingly deny it.” He’s lending to someone who certainly won’t lie. He trusts him; he’s a trustworthy person. “Nevertheless, there is reason to be concerned that, preoccupied with his studies, he may forget the loan and deny it.” Yes, the Alter Rebbe chooses the best possible case: a Torah scholar. But even he might be learning and forget about it, and afterward say, “Maybe it never happened; I don’t remember.” That’s why the loan should be made in the presence of witnesses. The Alter Rebbe continues: “Anyone who lends without witnesses transgresses ‘Do not place a stumbling block before the blind.’” And from the Alter Rebbe’s wording, it seems this isn’t only if the borrower actually ends up denying it. The very fact that you lend without witnesses in the first place creates the possibility of a stumbling block. So there’s a problem of “Do not place a stumbling block before the blind.” That’s how the Alter Rebbe’s wording appears. Now, you don’t have to start bringing two witnesses for everything. There are two other possibilities here. “Unless he lends against collateral.” Another option is to take collateral from him. The best option: “Nevertheless, lending with a written document is preferable, because with collateral the borrower may forget the amount of the loan, and with witnesses but no document, the witnesses may not be in the country when he comes to deny it.” In other words, the best option, the Alter Rebbe says, is—

04:12 Speaker 2 A written document. If you take collateral from someone, okay, you have collateral, but what exactly was the amount? You don’t know. You bring witnesses—but who says the witnesses will be here when you need them? You get a written document; that’s the best thing. Now.

04:27 Speaker 3 A friend gives you fifty shekels, so you give him five shekels.

04:30 Speaker 2 Right. Now, what is a written document? It sounds like something involving a quill and ink and two witnesses and a whole production. Basically, there are two kinds of documents. There’s a formal document, like we were talking about, with witnesses and everything, but there’s also a document in a person’s own handwriting. A document in someone’s handwriting obligates that person. Granted, it doesn’t allow collection from property subject to a lien, but in practice it does obligate the person. So very simply, you take this sheet of paper and cut off a piece.

04:57 Speaker 3 You don’t have a binding document—say I write you a WhatsApp message.

05:04 Speaker 2 So if it’s someone where you say to yourself, “If anything happens, I’ll just forgive the debt”—and by the way, nowadays this happens a lot. Someone borrows even a hundred or two hundred shekels from you, and people do forget. It happens. A person borrows, moves on, lives his life. If you’re really comfortable with it, you say to yourself, “He’s enough of a friend; worst comes to worst, I’ll forgive it.” That’s the idea he raised. It’s an excellent solution, but if not, then this is the solution.

05:29 Speaker 3 It’s not just something casual, like that.

05:30 Speaker 2 No, but the whole point is that it could be a stumbling block. If you forgive him, there’s no stumbling block here. It becomes a gift. It’s not a problem.

05:40 Speaker 3 There’s no stumbling block here, but much more, much more.

05:43 Speaker 2 Enough.

05:44 Speaker 3 Enough. What more do you need?

05:45 Speaker 2 Yes, yes, a bank transfer is a good example. A bank transfer is recorded. If it comes to that, you print it out and show him: here’s the transfer. There’s no problem with that.

05:54 Speaker 3 No, but even if, say, you have a hundred shekels. When you find the hundred shekels—did you give it to him or not? That’s part of the point. You know what I mean.

06:02 Speaker 2 Right. You’re saying maybe it’s a problem even if, in your heart, you’re uncertain.

06:07 Speaker 3 I don’t think that’s good. I’m not going to pay it back.

06:09 Speaker 2 That’s it. That’s it. Right, in a normal case. Right, right. In a normal case, it’s worth writing something down. A text message—yes, that’s an idea. Yes. WhatsApp. A text message to…

06:22 Speaker 3 A hundred and ten shekels.

06:24 Speaker 2 Right. Ten shekels or five shekels, you forgive from the outset.

06:26 Speaker 3 Yes.

06:27 Speaker 2 Simply, yes. Good, I brought this up as a sort of introduction. We’re talking now about people agreeing on something, agreeing on a transaction. So the Alter Rebbe writes that it’s proper from the outset to put it in writing—to write down the details, write things down. We’re talking about things that are a bit more substantial than something that just happens day to day. So it’s advisable to write it down. It’s not only advisable; it’s a kind of obligation. Now, how do you close a sale, and what’s included in the payment? For us, this isn’t so common, but it does happen. When you buy in a store—a grocery store and so on—you see the price and pay it. There’s no issue with that. Abroad, by the way, you see one price, then you get to the register and the price goes up—that’s the tax. That doesn’t happen here in Israel. But with a professional, or when it’s a sale of something a bit more substantial, they often quote a price before VAT. So generally speaking, if we look at it strictly from a halachic perspective: who is responsible? You were quoted a price, and now you come to pay and want to know how much to pay. He says, “Wait, is that before VAT or after VAT?” It’s simple: the burden of proof is on the seller. Why? Because you look at who is responsible for that payment. So with VAT, he has to say. He has to say whether the price excludes VAT, includes VAT, and so on. If he didn’t say, it falls on him.

07:56 Speaker 3 No.

07:57 Speaker 2 Uh.

07:58 Speaker 3 VAT.

07:58 Speaker 2 VAT is a tax.

08:01 Speaker 3 Including VAT.

08:02 Speaker 2 If he didn’t tell you—he quoted you a price, and then when you come to pay he says, “I meant excluding VAT,” and so on—then the problem is with the seller, because he didn’t state the final price. And both according to the law and according to common practice, even in places where prices are quoted without VAT, they say “excluding VAT.” They don’t just quote you a price like that.

08:21 Speaker 3 Here’s something that happened. I was driving, and my car broke down in the middle of the road. Someone stopped and said to me, “Let me fix it for you. It’ll cost fifteen hundred shekels.” I told him, “Go ahead.” I went back to the car, and when he came back from fixing it, he said to me, “That’s fifteen hundred shekels, not including VAT.” I paid him; I paid the VAT, and he went back.

08:39 Speaker 2 Ah, he went to—he went to fix something somewhere.

08:41 Speaker 3 Why did he do it right in the middle of it? I said to him, “No—I mean, what am I supposed to do with this?”

08:46 Speaker 2 Right. Basically, you have to say. You have to mention VAT. Basically, no. Look, that’s not the main point of the law. Ultimately, if the person forgot, there’s room to try to be accommodating, and so on, but—

09:00 Speaker 3 Interest?

09:00 Speaker 2 Not interest.

09:01 Speaker 3 What, there’s VAT, isn’t there?

09:03 Speaker 2 Interest applies when there is a delay in payment—when someone lets you hold on to the money—so there can be a problem of interest. But an ordinary payment does not pose a problem of interest. Other things connected with payment are delivery and assembly, things like that. This comes up a lot. Delivery and assembly: you buy a product, with or without delivery included. In principle, of course, everything needs to be agreed upon. But if they did not agree on who pays for it, here it is the other way around: the buyer pays. Because what are delivery and assembly? They are things the buyer needs done, so they fall on the buyer if nothing was agreed upon or written down. Unless—and this applies both here and to the previous case—there is an established custom. If everyone knows that when you buy a refrigerator, the seller pays for delivery, that is different. Whether the custom puts it on the buyer or the seller, it can even reverse the rule. With VAT, for example, if in a particular field everyone knows that a quoted price means before VAT—as in stores in America, where everyone knows the price is before tax—then everything follows the custom. These rules apply where there is no custom. Now, one last thing concerning the components of payment: fines, for example. If a car was somewhere and received a fine, or something similar, we need to look at the moment ownership was transferred. That moment determines it: payments connected with the car before that fall on the seller, and afterward on the buyer.

10:44 Speaker 3 Now, the seller parked it in that spot and, how do you say, an hour later—

10:49 Speaker 2 No, no, if it happened—

10:51 Speaker 3 If tomorrow he takes the car out, and he’s driving it and committing traffic violations, what, do I pay for that? Because ownership was transferred?

10:58 Speaker 2 No, the question is: what counts as transfer of ownership? What counts as transfer of ownership? According to Torah law, it is not necessarily what happens at the post office. Besides, even if we go by what happens at the post office, he is asking about the meantime: if he is still in the car, then—

11:13 Speaker 3 The day before, he drives it, comes back, lets him use it—that’s fine. The car was transferred as of this date, this time; there’s no need.

11:21 Speaker 2 Why? He’s driving it. So, to su— to sum up these components of payment: VAT and taxes generally fall on the seller, unless the custom is otherwise. As long as there is no clear custom and the seller did not specify otherwise, he is the one who has to bear them.

11:42 Speaker 3 The price—I told you, fine, that’s the price, but you’re paying cash. You want delivery? Give me—

11:48 Speaker 2 Again, it’s the same thing.

11:49 Speaker 3 So how is it the same thing?

11:50 Speaker 2 The same thing. No, cash. Okay, that’s also an example—

11:55 Speaker 3 Paying cash.

11:55 Speaker 2 Right, right. Now we’ve reached what I wanted to discuss: the form of payment. After a kinyan has taken place—and we’ll see the sources for this—the payment is like a debt. Like a debt. The question is whether it is a debt separate from the sale or an obligation that is part of the sale itself. We’ll discuss that at greater length shortly. Now—

12:18 Speaker 3 What do you mean when you say VAT falls on the seller?

12:21 Speaker 2 In a case where they did not specify it and agreed on a price.

12:26 Speaker 3 If we both know there’s VAT, and then he tells me he’s adding VAT, who has to pay it?

12:30 Speaker 2 If he quoted you a price—he said, “This is the price”—and did not tell you that it excludes VAT, that’s his problem.

12:37 Speaker 3 These days everyone does it.

12:39 Speaker 2 They don’t say it excludes VAT.

12:42 Speaker 3 They don’t say how much the VAT is.

12:43 Speaker 2 No, they don’t say how much the VAT is. They say “excluding VAT.” They need to say “excluding VAT.”

12:46 Speaker 3 They don’t tell you. They want to— they don’t tell you what they mean.

12:50 Speaker 2 They want to make it look cheap.

12:52 Speaker 3 Yes, and then when you come to pay, they tell you there’s VAT—another fifteen in VAT.

12:57 Speaker 2 Okay.

12:57 Speaker 3 Usually it’s...

13:01 Speaker 2 Okay, delivery and assembly generally fall on the buyer. If nothing was agreed upon, they fall on the buyer. Fines, as we said, depend on the time of the kinyan: whoever owns it at that time bears the fines. Again, if it depends on the person who committed the act and caused the fine, then he caused it; it doesn’t matter so much who owns it. But if it’s something imposed on the property—I can’t think of an example right now—then we look at the time. Now, how do you close a deal completely? Someone buys something from another person, agrees with him on the phone he is buying from him, or whatever it may be. All sorts of things come up, and it isn’t actually in his possession yet. “I’ll bring it to you later,” and so on. But he wants to feel secure that the deal is absolutely closed. So let’s look at two sources, numbers two and three. First, what happens if someone says, “I’m buying it from you. It’s a deal, one hundred percent. Don’t worry, it’s final”? After all those words, is the deal really closed?

14:04 Speaker 3 It all counts for nothing.

14:06 Speaker 2 Huh?

14:06 Speaker 3 Mere words.

14:11 Speaker 2 Mi shepara is another matter—yes, mi shepara; I should mention that too. So the Shulchan Aruch says, in source number two: “A sale is not concluded through words. If someone asks another, ‘How much will you take for this item?’ and he replies, ‘Such and such,’ and both agree and settle on the price, either of them may back out.” Even though they agreed on everything—“It’s a deal”—either one can back out. And, in parentheses, this is an entire lesson we encountered at the beginning: doing so is not proper. They can back out as a matter of law, but it is not proper. After a person gives his word, “The remnant of Israel shall not do wrong,” and a person must keep his word. Of someone who does not keep his word, it is said that the Sages are displeased with him; he is called lacking in trustworthiness. He is not a reliable person.

14:57 Speaker 3 But I’m talking about the time of the actual kinyan. Can he still back out then?

15:04 Speaker 2 Then make a kinyan.

15:05 Speaker 3 Huh?

15:05 Speaker 2 Make a kinyan.

15:06 Speaker 3 I had a case like this myself. Maybe this is the case you asked about. There was a car being sold for parts, and someone told me, “Look, come tomorrow and take it at eight in the morning.” He said, “You can take it at eight in the morning.” I called at eight, and he said, “Add another hundred shekels and you can take it.” I said to him, “Why? Why didn’t you keep your word?” [unclear] But I said, “If you come and lower the price, I won’t agree to it.” So a case like that is also a situation where—

15:30 Speaker 2 That case is the subject of a dispute cited by the Rema. He cites a dispute about what happens when there are two different market prices. There he is speaking more about a case where the market price changed. But some later authorities say that if you found a better price, you are already permitted not to keep your word. Okay? But it is disputed. So, look: on the one hand, the Alter Rebbe states the rule without qualification. He does not distinguish between a case where the price changed and one where it did not. That makes it seem that he is stringent. On the other hand, when he writes about honoring an agreed price, he does not use the word “forbidden.” The Rema says it is forbidden to back out. The Alter Rebbe writes, “It is proper for a person to keep his word.” He does not write “forbidden.” On the one hand, that applies in every situation, even if the market price changed or a better price became available. On the other hand, how should I put it? It depends on the person—how much he feels he needs the money, and so on. It says it is proper; he should make his own calculations. Now the Shulchan Aruch adds here: “Even if this took place before witnesses, and they said to them, ‘Be witnesses for us that this one sold and this one bought,’ it is of no effect.” There are two witnesses who saw it, but that changes nothing, because it is still only words. “Until the sale is concluded, each item in the manner appropriate to it: land through its form of kinyan, animals through their form of kinyan, and movable property through its form of kinyan.” He concludes: “Once the sale has been concluded, each item through its form of kinyan, neither party can back out, even if there were no witnesses.” In other words, the point here is not the witnesses. The Gemara says, “Witnesses were created only because of liars.” The whole purpose of witnesses is for people who lie—or perhaps do not remember,

17:18 Speaker 2 But people who trust each other don’t need witnesses. They make kinyanim, they do everything without witnesses. There’s one exception, a kinyan odita, which is something special, but other kinyanim don’t need witnesses. Now, there’s another important detail before you close a deal: making a kinyan. The second point is in source three: you also have to set a price. You can’t close a deal without setting a price. Even if we’ve agreed one hundred percent—“I’m buying it,” everything—and we’ve even made a kinyan, but afterward he says, “Wait, what’s the price?” Perhaps the seller will change the price afterward. He tells him the price, and suddenly it’s nothing like the price he had in mind. Then the kinyan never took effect in the first place. A kinyan takes effect only when there’s a price. Let’s look at the wording of the Shulchan Aruch: “Neither possession of the premises, nor the vessel, nor pulling, nor lifting effects acquisition unless he first sets the price at such-and-such an amount per measure.” Here we’re talking about buying something at a grocery store by weight, so it’s such-and-such an amount per kilo. “But as long as he has not set a price, there is no way for him to acquire it.” Nothing takes effect; we haven’t agreed on a price. “For as long as he has not set a price, neither party has fully resolved to proceed, since they may not agree on the amount.” They haven’t really made up their minds to go through with the sale. They’re taking into account that there may be an argument over the amount later. “But if the item has a fixed price, he acquires it even if they did not state the price.” If it’s something with a known price—everyone in the store knows exactly what it costs—they don’t necessarily have to discuss it explicitly. They know the price, so he acquires it. Now, how do you make a kinyan? As he said here, each thing has its own method of acquisition. In a store, most of the time you simply pick up the product and take it. You’ve bought it; that’s it. You’ve paid for it too, usually

19:05 Speaker 2 you pay. Even if you haven’t paid, you’ve taken the product and left, and the debt remains. Now, what happens with—

19:15 Speaker 4 The debt remains. That could happen in a store. After all, if you’re in a store, it isn’t—

19:20 Speaker 2 Yes. I’m saying that once you’ve taken it with the intention of buying it, and he’s told you—now we get to the money. Not that—or you’ve paid, or he’s told you, “Go ahead, pay later,” and you’ve already picked it up, it’s yours. So under the law you have fourteen days. Right? In the case of an in-store sale, you have those fourteen days.

19:40 Speaker 4 Online, it’s not that you don’t buy it, don’t smell it, don’t know how to take it.

19:43 Speaker 2 Online, no, it isn’t really a kinyan. For one thing, buying online is a problem because neither side is sure the item is even in stock. On today’s websites, you can click to buy something and get a call the next day saying it’s out of stock and offering you something else. Now, a kinyan cannot take effect on something that isn’t in a person’s possession. And in the terms you read there, behind the scenes, they themselves write that they aren’t obligated until they call you afterward and so on. Generally, in halacha, when there’s an obligation, it’s supposed to be mutual: I’m not obligated, and you’re not obligated either. So in principle, according to straightforward halacha, the click online doesn’t finalize the deal yet.

20:25 Speaker 4 Paying money, through the—they take it from the account.

20:27 Speaker 2 Right, now, paying money, paying money. The Torah says that money effects acquisition. But the Sages abolished that for various reasons. No, we won’t go into that now. They abolished acquisition through payment. In other words, if someone has paid but hasn’t yet taken the product, it isn’t a kinyan. However, he mentioned earlier mi shepara. There’s a curse upon someone who goes back on his word—but only when someone has paid money and then backs out, whether it’s the seller or the buyer. There’s a curse that applies—

20:59 Speaker 4 Mi shepara?

20:59 Speaker 2 Yes, mi shepara. People don’t know that.

21:01 Speaker 4 What is it?

21:02 Speaker 2 Mi shepara. Although the wording there is “will exact payment from one who does not keep his word,” it doesn’t apply to someone who merely spoke. It applies only when someone p-paid money. When money was involved.

21:13 Speaker 4 He paid, and then three days later [unclear].

21:16 Speaker 2 That’s another issue—deception. Someone who buys a product intending to return it is deceiving the seller. It’s also a kind of theft, because the seller doesn’t intend for that to happen. Unless it’s a store that fully takes into account that people will do this and doesn’t mind. I don’t know how often that’s the case. Maybe in large stores. Now, just a few words about kinyan sudar. It’s—

21:43 Speaker 4 If I buy it, I buy it intending to return it, but if I enjoy it, I’ll keep it.

21:50 Speaker 2 Okay, that’s called “taking an item from a craftsman to inspect it.” That’s how it appears in halacha.

21:55 Speaker 4 Is that a kinyan too?

21:56 Speaker 2 Taking it to try it out.

21:58 Speaker 4 I intend to return it, but if it turns out to be good, I’ll keep it.

22:02 Speaker 2 It’s a matter of degree—one person is eighty percent likely to buy it and twenty percent likely to return it, and another is twenty percent—

22:09 Speaker 4 Twenty percent likely to buy it.

22:09 Speaker 2 Yes. It’s basically the same thing.

22:11 Speaker 4 What, is that forbidden?

22:12 Speaker 2 No, seemingly, if you genuinely think you might buy it—

22:15 Speaker 4 Then it’s okay.

22:16 Speaker 2 Seemingly, it’s okay. Now, with various deals people make with each other, when they want to finalize things, there’s a kinyan called kinyan sudar. I’ll say a few words about it. The Shulchan Aruch says here that each thing is acquired in its own way. One thing is acquired by pulling, another by lifting, another by a document, and so on. But there’s one kinyan that works for almost everything: kinyan sudar. It’s good to know about it. It also comes up when you write a contract with someone or make other arrangements. If you want things to be settled, you make a kinyan sudar. And you can even do it remotely. The two people don’t have to be face-to-face.

22:55 Speaker 4 Remotely.

22:57 Speaker 2 Huh? Yes, like when selling the chametz. Yes, you don’t have to be there together. But there’s one particular thing about kinyan sudar that’s important to know: who has to provide the object used to make the kinyan sudar? That’s important, and many people don’t know it. Let’s look at one source here, Megillas Rus, chapter four: “Now this was formerly the custom in Israel concerning redemption and exchange, to confirm any matter: a man would remove his shoe and give it to his fellow, and this was the form of attestation in Israel. And the redeemer said to Boaz, ‘Acquire it for yourself,’ and he removed his shoe.” This is the source for kinyan sudar. We see here how they made acquisitions in cases of redemption and exchange. How would they acquire a field or other things? They would remove a shoe and use it to make the acquisition. By the way, I later saw commentaries discussing what this “shoe” was. It’s not certain that it means the kind of shoe we’re thinking of. Some opinions say it does; others say it was some other kind of object. In any case, they take something, lift it, and make the acquisition. Now, what does verse eight say? “And the redeemer said to Boaz, ‘Acquire it for yourself,’ and he removed his shoe.”

24:07 Speaker 4 Whose shoe?

24:08 Speaker 2 Exactly. It doesn’t say who removed it. “He removed his shoe”—whose shoe? Who performed that act? This is a dispute in the Gemara: do you use the buyer’s object or the seller’s object? The halacha is that you use the buyer’s object. Now, to remember that—I can’t remember “seller,” “buyer” myself—you have to understand what’s happening here. I want to sell this cup to someone, and the cup is at home. Right, let’s take something more substantial. A phone is at home. We’ve agreed that he’s buying it. He says to me, “Here, take the thousand shekels now.” But he wants to be sure he’s buying it and that I won’t give it to someone else. Agreed. Okay, let’s make a kinyan. Now, the phone is mine, it’s at home, and he wants to buy it. I’m, so to speak, exchanging it with him. So, in place of the phone in my house, for him to acquire it, I take something from him. He gives me something—takes his gartel out of his pocket, I don’t know, anything. By the way, a sudar doesn’t necessarily have to be a garment. The idea is...

25:09 Speaker 4 Exchange.

25:09 Speaker 2 It’s like an exchange. It’s like an exchange. It’s often called chalipin too, because one kind of chalipin is simply exchanging things—exchanging a cow for a donkey of equal value. Here they aren’t really of equal value, but this too is often called chalipin, kinyan sudar.

25:23 Speaker 4 He gives him back the...

25:25 Speaker 2 That’s it. There’s a dispute about whether he has to return the pen or not. In practice, the custom is to return it. Meaning, I do the—exchange, as it were... The sale of chametz. Yes. And you return it. Yes. According to the opinions that say you can keep it, once Aaron gives it to you to perform the transaction, you can take it home. But according to the other opinion, you have to leave it, and the custom is to leave it. Now, because the custom is to leave it, people were worried. That’s one of the reasons: they were worried you might take it. I’m making an exchange; you might feel free to take it. The buyer buys the item, takes the pen, goes home with it, and feels fine about it. Maybe he’ll tell you to return it, maybe not. So what did they do? A custom developed that other people standing by would provide the sudar or the pen—the object. The witnesses. The witnesses. They provide one of their own. They effectively give it to the buyer for the purpose of the sale, and the seller picks it up and performs the kinyan. That’s how the custom developed. How? No, but because it belongs to the witnesses, he won’t dare. He won’t feel comfortable keeping it. No. He sees that other people brought it, so he’ll return it to them.

26:42 Speaker 4 So what did he acquire with it?

26:43 Speaker 2 But they give it for the purpose of the sale. There’s a dispute about exactly how that works—how it becomes the buyer’s property. Whether it... In short, there’s a dispute about it...

26:52 Speaker 4 It’s just a gesture showing him that the kinyan has taken place. There isn’t any...

26:56 Speaker 2 No, it’s a kinyan. No, it’s a real kinyan, because when the witnesses supposedly give it to the seller, they first confer ownership of it on the buyer. The seller then effectively takes it from the buyer and makes the exchange with him. He takes it and gives the buyer what he has at home. By the way, it can also be a house, a car, anything. Even an obligation: “I now owe you such-and-such, and I’ll pay you.” That can also be done with a sudar.

27:19 Speaker 4 I can give him five shekels. Give them to me.

27:23 Speaker 2 Money. You can’t do it with money.

27:26 Speaker 4 You can’t.

27:27 Speaker 2 You can’t do it with money.

27:27 Speaker 4 Five shekels.

27:30 Speaker 2 Money—money neither acquires nor is acquired through exchange.

27:33 Speaker 4 You need an object.

27:34 Speaker 2 You need an object. The verse mentions a shoe, so it has to be something comparable to a shoe. There are disputes about whether you can use an animal or produce. There are various details. It doesn’t have to be worth a perutah. Even an object worth less than a perutah works, as long as it’s an object. Okay, sometimes you need this, and you need to know this tool and use it as a tool—literally and figuratively—when the need arises. When you want to finalize an agreement. In particular—and this is an innovation of the Alter Rebbe—many contracts today contain provisions involving asmachta. What does asmachta mean? Conditions that a person never really intended to fulfill. For example, penalties. A person says, “If I don’t supply you with the product, I’ll pay such-and-such a penalty.” Often he simply tells himself, “I’ll supply it. I know I can do it.” But in the end he doesn’t deliver. He never really intended from the outset to pay that penalty. So in principle, in halachah, an asmachta does not create a binding obligation. If there’s reason to think the person never truly resolved to undertake it, it doesn’t take effect. How can you nevertheless make it binding? It says that you must perform a kinyan before a distinguished beis din. “Distinguished beis din” means a beis din—some say the most distinguished one of that generation. You perform a kinyan before a distinguished beis din, and it binds you even to provisions like these. Now there’s a principle in halachah that a party’s admission is equivalent to a hundred witnesses. Anything a person admits is binding. Huh? Not only that: even if I now admit that something belonged to you, when everyone knows it didn’t, that admission makes it yours. It’s a type of kinyan. It’s called

29:26 Speaker 2 a kinyan odita.

29:27 Speaker 5 Why?

29:28 Speaker 2 Odita—a kinyan through admission. And, by the way, it has to be made before a beis din. Other forms of kinyan don’t, but this one has to be made before a beis din. So I admit it’s yours, and it becomes yours. The same applies when a person writes various things in a contract—he writes, “We performed a kinyan,” and so on. Whatever he writes, he is admitting that it happened. So even if it didn’t happen, it binds him as though it did.

29:54 Speaker 5 What? We performed a kinyan before a beis din.

29:56 Speaker 2 Right. So if you write in the contract, “We performed a kinyan before a distinguished beis din”—now, according to the Alter Rebbe... In general, the whole idea of odita looks like a false statement. Nevertheless, it works because a person is obligating himself. And the Alter Rebbe introduces a novel ruling here. You write, “We performed a kinyan before a distinguished beis din.” It’s very interesting. I still haven’t found his source for it. His innovation is that you must actually perform the kinyan. Meaning, perform the kinyan and write that it took place before a distinguished beis din. No, it doesn’t matter if there wasn’t a distinguished beis din. That’s not a problem; you just have to perform the kinyan. In other words, if you draw up a document—a contract—with all the details and penalties, and write that there was a kinyan before a distinguished beis din, but you didn’t actually perform a kinyan, it won’t work. You have to perform the kinyan, but you can write that it was before a distinguished beis din. So it turns out—

30:43 Speaker 5 A false statement is written here.

30:45 Speaker 2 Yes, that’s interesting. Should one avoid doing that in the first place? I don’t know, but it works. Yes, the custom is to include various phrases that strengthen a document: “We did it in the most effective manner,” “a kinyan in the most effective manner,” and so on. That’s what people write. So according to this, anyone drawing up a contract with someone—any contract, a rental, a sale, or anything else—would do well to perform a kinyan sudar too, to cover every angle according to halachah. So that’s what we see here. The sudar must belong to the buyer or to someone else. The emphasis is on what it says at the end: not to the seller. You have to remember that. If the seller takes out something of his own and lifts it, that accomplishes nothing. He has lifted his own property. Unless he first confers ownership of it on the buyer. Now, to confer ownership of it on the buyer, he needs someone else. He can’t—you can’t—I can’t give you ownership of something while it remains with me; I have to do it through someone else.

31:44 Speaker 5 No, I bring it to him.

31:45 Speaker 2 I bring it to him. Yes. Right. Right. Right. Right. Right. That’s possible. Now, about lifting it a certain number of handbreadths: on the one hand, you have to lift it three handbreadths. There are further details, but we won’t get into them now. Now he was talking about the form of payment. When you agree on something, you also need to agree on how to pay. What happens if we agreed on a form of payment? Say we agreed that payment would be in 200-shekel notes. I took the product home, and now I come to pay with 100-shekel notes. He says, “We agreed on 200-shekel notes.” I tell him, “Come on—when you repay a loan, does it matter which notes you use? I owe you a debt, and I’m paying it. It doesn’t matter how I pay it.” So the answer is that there’s a statement in the chapter Hazahav. The chapter begins, “Gold acquires silver,” and so on. What does that mean? There’s a product and there’s payment, so there are two possibilities: either pay first and then take possession of the product, or the other way around. If you do it the other way around and take the product first, taking possession of it acquires the payment. What does “acquires the payment” mean? It obligates you to pay as you agreed, in the form you agreed on. In the Gemara and the Mishnah, it mattered to people whether they received old coins or new coins. One person likes new coins; another specifically wants old ones because they’re more common in the marketplace—things like that. Today, though, it would be the form of payment. I want it in shekels, or in dollars. Now—

33:21 Speaker 6 Credit card.

33:22 Speaker 2 That’s it. Now, cash, credit cards, installments—all these things. Each one needs to be agreed upon. Afterward, once the buyer has taken the product home, the seller can’t say, “I specifically want cash.” He can’t do that. Why? Because whenever something hasn’t been agreed upon, you follow the customary practice. If it was agreed upon, then it was agreed upon. Now, what is the customary practice? That can vary somewhat, but generally, when you buy something in a store, they have to accept cash and they have to accept a credit card, but they don’t have to offer installments. No one has to let you pay in installments. They don’t have to accept a check either, and certainly not a postdated check. So it’s very important to agree on this at the outset if the seller insists on cash, or doesn’t accept checks, and so on, so there won’t be misunderstandings later. But if they didn’t agree, they follow the customary practice, which today is plainly cash or credit card. Um, now let’s move on... Let’s take a look at this for a moment... Cash, of course, is subject to the law, because there are restrictions on cash payments. In this case the law is binding on us. Why? Because a law on this subject becomes part of the customary practice; people take it into account. For example, someone comes and does a job for you that costs tens of thousands of shekels, and afterward—I don’t know—you want to pay cash, or he does, or something like that. The law will be binding in that case, even though it isn’t binding in every matter. In a situation like this, a person presumably took into account that he would pay cash only up to the amount the law permits, and no more. You can’t demand payment in installments without prior agreement. A check or a postdated check

35:08 Speaker 2 is the same. If you want to pay certain amounts specifically in dollars, specifically in... any of these different ways, that needs to be agreed upon in advance. If there was an agreement, you follow it, and that agreement is binding, including the exchange rate. Now, the subject of buying on credit. There are a few interesting points here. First, is a seller obligated to sell on credit? At first glance, what? Of course not. But there is a law that a person must lend to someone in need—to lend to a poor person, or to a wealthy person who suddenly needs a loan. Now you come to buy something in a store, and you’re in urgent need. Is the seller obligated to sell to you on credit? In principle, the poskim disagree about whether selling on credit is included in the obligation to lend. Some poskim, including the Pele Yoetz and Nesivos Hamishpat, write quite plainly: “What difference is there between lending money and lending merchandise—products?”

36:11 Speaker 6 I can go up to someone and say, “Give me a hundred shekels for a moment.” That wouldn’t be a loan, would it?

36:21 Speaker 2 No, when I say “obligation,” I don’t mean an obligation enforceable by a beis din. I mean—

36:25 Speaker 6 No, it is an obligation.

36:26 Speaker 2 I’m talking about a mitzvah incumbent on a person.

36:27 Speaker 6 Someone comes and borrows two hundred shekels from you at home; I can’t—

36:31 Speaker 2 Of course not.

36:32 Speaker 6 Well, it’s the same thing.

36:33 Speaker 2 No. Of course I’m not saying that the buyer can compel the seller. Certainly not. I’m asking whether there is—maybe if I use the word “mitzvah,” it’ll be clearer—a mitzvah for the seller to sell on credit. Now, this is an obligatory mitzvah. When a person has money available and someone needs a loan, then just as there is a mitzvah of tzedakah, an obligation to give tzedakah, there is a mitzvah to lend, which is even more important than tzedakah. Now, “if he has the means,” right? I think the wording is here. Number five.

37:04 Speaker 6 I don’t want to; someone else can fulfill it. I’m not fulfilling it.

37:07 Speaker 2 If you think there’s a risk to the money—let’s look here, let’s see. It’s brought in number five: “It is a positive mitzvah to lend to the poor of the Jewish people if one has the means.” Again, “has the means”—that expression is discussed in the laws of tzedakah. We don’t have the Alter Rebbe’s laws of tzedakah, so we don’t have his exact wording to tell us what it means. As it says, “If you lend money to My people, to the poor person with you.” Could this be optional? Our Sages said in the Gemara... In other words, it isn’t optional; it’s an obligation to lend to someone who needs it. Then he continues: “‘To the poor person with you’—how do we know that it is also a mitzvah to lend for a time to a wealthy person who needs a loan? The verse says, ‘to My people.’” I also wanted to bring section five, but I didn’t. Section five says that if this is someone you know you’ll have to press to get him to repay, there is a mitzvah of “Do not act as a creditor toward him.” So if you know it will come to a situation like that, don’t lend to him in the first place, so you won’t get into that situation. As for selling on credit, on the one hand, some say it is included in the mitzvah of lending. But the Chofetz Chaim wrote a book called Ahavas Chesed with various laws of this kind, and there he writes that selling on credit is not included in lending. He gives two reasons. His first reason is that someone who runs a store needs cash on hand all the time, because an opportunity might suddenly arise to buy merchandise, and he needs to have cash available. Therefore he isn’t obligated. According to that reason, it depends on how much he has. If he has plenty of money and it makes no difference to him, then seemingly it would be different. But the second reason he gives is that the Torah spoke about a loan, not about selling on credit. Selling on credit

38:46 Speaker 2 is not a loan. That’s what he writes. So the poskim disagree here. Um, another interesting point: what happens if someone doesn’t pay? He doesn’t pay for something that was sold to him on credit. Maybe let’s start one step earlier: when does he have to pay? I bought something on credit from Gabi. He didn’t tell me exactly when to pay. By when do I have to pay? There’s a rule concerning loans: an unspecified loan is for thirty days. If someone borrows without specifying the term, it’s thirty days. So how does that work?

39:19 Speaker 6 With wages.

39:20 Speaker 2 Like wages, like...

39:23 Speaker 6 Wages.

39:23 Speaker 2 Ah, okay, right. People... So the Bach says that with a sale, too, an unspecified sale on credit is for thirty days, and apparently the other poskim agree with that as well.

39:37 Speaker 6 If there’s a customary practice.

39:38 Speaker 2 If there’s a customary practice.

39:38 Speaker 6 No, if there’s... If you just bought something in a store for fifty shekels, you can’t pay for it in a month; you can only pay for it in six months. That’s not... not relevant.

39:48 Speaker 2 Well, it depends on the seller. But if the seller comes to you now and demands the money—

39:51 Speaker 6 Comes and demands it.

39:52 Speaker 2 Yes. Now what happens? He comes and asks for the money. This is less common in a store, but let’s say one person bought a phone from another. He said, “Pay me a thousand shekels in a month.” Within a month. A month passes, and the buyer says, “I don’t have the money right now; give me another month.” So the seller says, “Okay, return the item.” Are the sale and the payment dependent on each other, or not? There are three possibilities here. One is that someone sells you something without saying anything. Then you say, “Oh, I don’t have the money here.” “Okay, pay me tomorrow.” That isn’t really a sale on credit. It’s: “I don’t have the money right now; I’ll pay tomorrow.” Since it isn’t a sale on credit, the payment is part of the sale. And if tomorrow you come to him and say, “I don’t have it—tomorrow, later,” he can tell you, “Okay, return the item. That isn’t the kind of sale I intended.” The second possibility is essentially the same: someone sets a date for payment, but he doesn’t say “by then.” He says, “Pay me on Rosh Chodesh Elul, not before and not after.” That isn’t very common today, but... What’s behind it is that he knows he’ll need money on that day because he has a mortgage payment or something else due. He needs the money, but he tells you, “That’s when I need it, not now.” So the day he comes to you and demands the money is treated as though it were the day of the sale. And if he comes to you that day, it says he has to come and ask for the money at least twice. He comes to ask you for the money twice and you don’t give it to him; you tell him, “Later.” He

41:32 Speaker 2 comes to you again that same day, and you still don’t have the money to pay. He can say, “I’m canceling the sale.”

41:37 Speaker 7 Send a message.

41:40 Speaker 2 Just if he gets back in touch—meaning you need to contact him.

41:46 Speaker 7 And if he—

41:47 Speaker 2 What?

41:47 Speaker 7 If he used what he bought.

41:48 Speaker 2 If he ate it, there’s nothing to be done. Nothing to be done. If he ate it, perhaps in the end that means he committed theft retroactively—I don’t know—but there’s a debt. There’s nothing to be done. It’s like someone who broke something belonging to another person. What can you do? Nothing. Now, the third possibility is a sale on credit. A sale on credit tells me that he agreed to sell the item—after all, he’s a seller. He doesn’t specifically need payment right now. He also didn’t necessarily set a particular payment date. He told you, “Take it and pay me by Rosh Chodesh Elul.” In that situation, he separated the sale from the debt, so it’s as though the loan is a separate matter. Now Rosh Chodesh Elul comes, and he asks for the money. The buyer says, “I don’t have it.” It’s not right for him to say that. A person has a mitzvah to repay a loan and all his debts, but it doesn’t undo the sale, because by saying it was on credit, the seller separated the two. The same applies whether or not he set a specific payment date—no, no, if he didn’t sell it on credit but didn’t come that day to demand the money. He didn’t come that day; he came later. Once he didn’t come that day, or the following day, it says... It’s not entirely clear what “the following day” means. What?

43:05 Speaker 7 If it’s not—

43:08 Speaker 2 No, that doesn’t mean he’s allowed to be late with the money. It doesn’t mean that’s permitted. He has to pay, but if he doesn’t pay, it won’t undo the sale. That’s the point. The two are not dependent on each other.

43:18 Speaker 7 Another question about a sale on credit. All right, let’s say someone comes to [unclear], and that day he wants to get to know him. Uh, this person sends it to him, and somehow it’s not worth it for him. I don’t have the [unclear] here for tomorrow.

43:33 Speaker 2 Okay.

43:33 Speaker 7 That’s how it seems to me. It’s something like a grocery store. How does it work in a grocery store? Each person has his own list, his own account. Everyone has a card.

43:43 Speaker 2 Okay.

43:45 Speaker 7 For thousands.

43:45 Speaker 2 Okay, what’s the question?

43:47 Speaker 7 In other words, it’s like a loan to everyone. Right? In...

43:52 Speaker 2 You mean someone selling in a store?

43:54 Speaker 7 It’s as though it’s taken for granted that he’s selling it on credit.

43:59 Speaker 2 Ah, you mean if... Okay, that’s an important point. If the custom is to sell on credit, then that custom applies. For example, there’s a concept called “net 60.” There may be others...

44:13 Speaker 7 The small ones.

44:14 Speaker 2 If it’s a field where the custom is to sell on credit, then that’s fine. It’s not even a question. You don’t have to explicitly agree on it. Okay? To sum up, everything should be agreed upon. As long as things aren’t agreed upon, it creates problems. As they say, “Start like a non-Jew, finish like a Jew.” And when you want to settle something completely and definitively, you make the kinyan we discussed. That settles matters. From Boaz until today, that’s how it’s done: “A man would remove his shoe and give it to his fellow.” That’s how you settle matters.