The Case – A Tunisian Connection

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Zelig and Mendel, two prominent members of a well-known Hassidic sect, served as primary distributors of tallitot for their community. As per the specifications established by their Grand Rebbe, only tallitot manufactured in Tunisia were to be sold by the two distributors. This requirement was implemented in order to avoid the prohibition of sha’atnez. Since Tunisia did not grow flax, it was the ideal country for purchasing sha’atnez-free wool tallitot. Rahamin, a Tunisian Sephardic Jew, was their exclusive importer who purchased the tallitot from Arab factories in Tunis, and sold the merchandise to Zelig and Mendel, the retail distributors. After twelve years of successful cooperation, a major crisis arose. Rumors spread through the market that their tallitot were not one hundred percent wool. These rumors prompted Zelig and Mendel to do laboratory testing of their stock. The report determined that although the tallitot did not contain any linen, they nevertheless had an approximate forty percent polyester content.  

In Bet Din, Zelig and Mendel claimed nearly $600,000 in damages for their defective stock. They insisted that they were entitled to return the goods and have their money refunded. They explained that they could not sell the defective tallitot to their clients, since they did not meet the religious standards practiced in their circles. In addition, due to the extra-large size and heavy weight of each tallit, they could not be sold elsewhere and were virtually worthless. Rahamim defended his position claiming that although the purchase order was for a hundred percent wool garments, he stipulated at the time of sale that he was not responsible for the quality control of the merchandise. Contrary to standard practice in wholesale transactions, both parties agreed that the inspection of goods for quality control rested with the retailers. Rahamim expressed that he did not at any point come into contact with the merchandise, as it was picked up by the buyers directly from the port. He was therefore unwilling to take back six months of stock that should have been inspected by the retailers upon initial delivery. Rahamim pointed out that their failure to do so in a timely manner caused him to pay the Arabs in Tunis in full. As such, the merchandise is no longer returnable to its original source. Zelig and Mendel persisted that they were sold defective merchandise as per the purchase order signed by Rahamim.  

How should the Bet Din rule and why? 

Torah Law 

According to the ruling of the Shulhan Aruch, when an item is sold with a concealed defect the buyer is entitled to return the item for a cash refund.  

This ruling is applicable even if the item perishes in the buyer’s possession because of the defect. Furthermore, even if the buyer had the opportunity to inspect the item he purchased and prevent it from ruin, he is nevertheless entitled to his money back from the seller.  

The obvious reasoning behind this ruling is that a seller is responsible to inspect his product prior to its selling. If he fails to do so, he is responsible to reimburse the buyer, and bear the loss of any consequential damages caused by the concealed defect.  

If, however, it is understood at the time of sale that the inspection of the product is the sole responsibility of the buyer, the above rule differs. Since the item ultimately perished because the buyer failed to inspect it in a timely matter, he is not entitled to any reimbursement from the seller. The buyer is to bear the consequences of his negligence. Had he performed his basic duty of inspection he could have spared the item from ruin and returned it to the seller for a refund. 

While the above ruling is the opinion the Shulhan Aruch and is viewed as common law for all Sephardic Jewry, nevertheless, the view of leading Ashkenazic authorities differs. In their view, a seller of an item is always responsible for the consequences and damages of a concealed defect. Hence, according to this latter view, even if the seller does not come into physical contact with the item and inspection is the responsibility of the buyer, nevertheless, the seller is to bear the loss when the item is wasted or perishes because of the defect. The reasoning of this view is that a seller is always accountable when selling a defective item in the market. 

A defendant of Sephardic origin is absolved of payment when his claims of defense is in accordance with ruling of the Shulhan Aruch. Since he has possession of his funds, he is entitled to withhold payment by relying on the halachic authorities that are true to his heritage.  

Verdict:  Failure to Inspect 

Our Bet Din ruled in favor of Rahamim and absolved him of paying Zelig and Mendel for the defective tallitot. Since Zelig and Mendel were responsible for the quality control and inspection of the tallitot they must bear the loss. From the very onset Rahamim stipulated with them that it was their responsibility since he never came into contact with any of shipments. Had Zelig and Mendel inspected the tallitot in a reasonable amount of time, the tallitot could have been returned to the Arab factory in Tunis for a cash refund. By failing to conduct a basic inspection for over six months they consequently damaged the value of the goods. Nevertheless, prior to exempting Rahamim, we first verified that Rahamim did not deliberately buy defective tallitot at a cheaper price to increase his profit margin. This was verified with the help of a professional team of accountants appointed by our Bet Din, that reviewed Rahamim’s purchase costs and found that he paid nearly the same price for the tallitot throughout the many years of doing business.  

Although Ashkenazic halachic authorities require Rahamim to reimburse Zelig and Mendel, Rahamim, who is of Sephardic origin, is entitled to withhold payment and rely on the opinion of the Shulhan Aruch. 

YOU BE THE JUDGE 

Buyer’s Remorse? 

Eddie, an affluent businessman, was for years interested in purchasing Gladys’s private home. Gladys, a recent widow, was upset with how Eddie allegedly manipulated her late husband in their business dealings. She therefore rejected his multiple business offers and swore to him that she would never agree to sell him her home. Consequently, Eddie requested of Morris, his business associate, to purchase the home with the intent of selling it to him thereafter. Morris agreed, and the two signed a document, which read, “Upon Morris’s purchase of the home, he agrees to immediately sell the home to Eddie.” Morris purchased Gladys’s home using his own funds and thereafter refused to sell the property to Eddie. Eddie began to verbally harass Morris for reneging on their deal, so Morris suggested the two resolve the matter in Bet Din. Eddie was reluctant to sign on a binding of arbitration with our Bet Din, but ultimately did so to resolve the dispute in a timely manner. In Bet Din, Morris explained that he reneged on his commitment since he regretted getting involved in a deal that will bring extreme pain to a widow. Eddie contested, claiming that the agreement they signed was binding, and by law Morris is required to sell him the home. Furthermore, he countered that Morris was not truly concerned with the widow and is only reneging on the deal since the value of the property appreciated in the interim.  

Is Morris required to sell the home to Eddie as agreed upon or not?  

How should the Bet Din rule and why?