The Case – Lawyer’s Creed or Greed?

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Rabbi Max Sutton, rosh bet din aram soba, Jerusalem, israel

Abe, an accomplished lawyer, was hired to negotiate a settlement on behalf of his client. Due to his client’s advanced age and inability to withstand the pressure of the negotiation process, Abe’s job included reviewing the relevant documentation prior to negotiations without his client’s assistance. The client signed a contract compensating Abe with a flat fee of fifty thousand dollars for his services, and the client immediately wired Abe ten thousand dollars in payment. After Abe’s office spent a few hours reviewing the material, Abe made a total of three phone calls and several text messages in negotiations over the next two weeks. Abe’s work was clearly only in the preliminary stages of development. Surprisingly, shortly thereafter, Abe’s client somehow managed to settle the entire dispute on his own in a single meeting with his opponents. Abe appeared in Bet Din claiming payment of the forty-thousand-dollar balance due as per the contract. He explained that he performed his services in a professional manner and the specific time frame of two weeks is irrelevant. He asserted that he charged a flat rate regardless of the duration of time required. Additionally, a contingency clause in the contract enabling Abe to collect 30 percent of any amount awarded was crossed out. Collection of percentage was not a relevant term in this case, as the client was not claiming payment from his opponents.  Strangely, the next clause which was not crossed out did entitle Abe to collect 30 percent from the amount awarded even if his client privately settled the matter without his knowledge. Abe claimed that the latter clause was not crossed out, only to ensure under the same terms, his flat fee of fifty thousand dollars from his client. The client countered that he is unwilling to pay an additional forty thousand dollars for a few hours of preliminary work which did not even assist him to settle the dispute. He expressed that the ten thousand dollars wired was already an outrageous sum for the services received. The client further defended that the clause ensuring payment in the event he privately settled, is only relevant as stipulated, to cases with a 30 percent contingency fee, and not for flat rate fees.

How should the Bet Din rule, in favor of Abe or the client and why?

Torah Law

By rule of the Shulhan Aruch when one hires a worker to make a pickup and the worker completes his assignment and delivers the item to his employer, the worker is entitled to his full wages. This ruling is applicable even in instances in which the item delivered was ultimately not of any benefit to the employer, nevertheless, once delivered the worker is entitled to his pay. In a classic ruling, a worker that was sent to deliver medicine to a patient was deemed entitled to his wages although the patient passed away upon the worker’s arrival. Since the worker completed his duties he is entitled to his wages in full.

In another ruling of the Shulhan Aruch, a donkey owner stipulated compensation for his drowning donkey in order to save his friend’s more valuable donkey from drowning. By law, if the more valuable donkey is saved, he is entitled to payment for his lost donkey as stipulated. If, however, he does not manage to save the more valuable donkey, he is only entitled to payment for his time and service. Since he did not manage to save his friend’s more valuable donkey as stipulated, he is not entitled to compensation for his donkey that he forfeited. Although he did not successfully complete his job, he is nevertheless entitled to wages for at least the service he performed.

Leading halachic authorities rule that in instances in which a contractor or employee do not complete the service they are hired for, they are not entitled to their full wages. This latter ruling submitted by early halachic authorities is consistent with the two aforementioned rulings of the Shulhan Aruch. By law, payment is only provided when a service or job is performed. If an employee or contractor only partially perform their assignment they are only entitled to a prorated fee.

Early halachic authorities specifically address the law with regard to a messenger sent to deliver a message and the sender happened to meet the recipient in a nearby location. In such an instance, if the sender manages to stop the messenger midway, he is only required to compensate him for the distance he already travelled.

By rule of the Shulhan Aruch, when the meaning of a clause in a contract is obscure, the holder collecting payment based on contract is at a disadvantage. Without clear proof that the contract includes the right to collect payment, the defendant is acquitted from liability. This is surely true when a more logical explanation is offered by the defendant to the meaning of the contract.

VERDICT: No Free Money

Our Bet Din ruled in favor of the client by dismissing Abe’s claim for additional payment. As expressed in Torah law, Abe is not entitled to additional payment since he did not provide sufficient legal services to his client to demand such exorbitant wages. Abe only made preliminary phone calls for his client and never once directly contacted the opposing party in negotiation. The client who fortunately made a settlement did not benefit from any of Abe’s services whatsoever. Although Abe did spend a few hours reviewing the paperwork, the payment of $10,000 which he already received is clearly enough compensation for his work.

Additionally, our Bet Din dismissed the claim that Abe was entitled to his wages even after his client chose to settle without his knowledge. Since it is possible that the said clause in the contract was limited to instances in which a 30 percent contingency is collected, Abe is not entitled to apply the clause to another area of the contract. In all instances in which the language or content of a contract is obscure, the party seeking to collect via the contract is at a legal disadvantage. Furthermore, it stands to reason that ensuring payment even if a client privately settles without his lawyer’s knowledge is only applicable to a contingency agreement. After all the toil, effort, and legal counsel a lawyer seeks to protect himself by ensuring his full percentage. However, when nearly no work is provided, a flat rate of payment is adjusted to compensate a lawyer accordingly.

YOU BE THE JUDGE

Who Gets the Rent?

Amy was recently widowed and was financially struggling to pay her monthly rent. Although her son-in-law was very affluent and provided her with most of her financial needs, Amy chose to sublet bedrooms in her apartment to young ladies studying in a nearby school. The income generated covered nearly half of the monthly rent and Amy actually enjoyed the company of some of her new tenants. Nine months thereafter, Joe the landlord first discovered that Amy had sublet his property. He immediately sent notice to Amy that her sublet arrangement was a material breach of their contract. Joe demanded of Amy to forward to him all the proceeds of the sublet arrangements of the past nine months, in addition to the rent she already paid. Joe explained that Amy had no legal right to sublet his property, making him entitled to all revenue collected in the interim. Amy defended that she was forced to earn the additional income as there was no other way for her to cover the rent. Joe responded that Amy traveled on three costly vacations since her husband’s passing and he does not believe that she lacks access to funds. Joe added that if Amy cannot afford the rent then she is to move out immediately and rent a cheaper apartment. He claimed that the material breach of contract is grounds for eviction and if she cannot “afford” the rent then he will evict her.

Is Joe entitled to the sublet proceeds? Can he evict Amy from his apartment?

How should the Bet Din rule and why?