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?
According to the ruling of the Shulhan Aruch, the sale of property is rendered null and void if the seller does not own the property at the time of sale. The basic reasoning behind this ruling is that one cannot sell property that one does not own. The seller’s inability to guarantee the sale of a property that is not in his possession renders the transaction null and void.
Albeit, in various commercial markets specific complex contracts are devised to enable a sale even prior to a seller taking possession, nevertheless, a casually written contract will not halachically suffice to complete such a sale.
According to the ruling of the Shulhan Aruch, a contract of sale is only valid if the proper terminology is used. Various incorrect terms can prevent a sale. Terms that indicate an intent to sell rather than actively selling, disqualify a contract. Hence, a contract that reads that one “agrees to sell” is invalid. Such terminology implies a future intent to sell as opposed to presently selling. Similarly, a standard “letter of intent” found in the market has little if any value in finalizing a sale.
By ruling of the Shulhan Aruch, one who reneges on his word is labeled by a Bet Din as an untrustworthy individual. According to our sages, reneging on one’s word is a form of corruption that ultimately taints the reputation of the offender. A person’s word is his honor, and one is ethically required to do his utmost to keep his word.
Biblical law explicitly details the severity and the consequences of one who inflicts pain and anguish to a widow. While it is forbidden to cause pain and anguish to anyone, the violation is compounded when paining a widow. One is required to treat a widow with care, dignity, and sensitivity on account of her loss.
As aforementioned, the violation of reneging on one’s word is a prohibition of rabbinic origin. Whereas causing pain and anguish to a widow is a prohibition of Torah origin. Hence, in the instance in which both laws coincide, the law that is of Torah law origin will obviously prevail.
Additionally, a Bet Din will actively protect a widow and chastise those who mistreat her. With no one to protect her, a Bet Din will do what they can to defend her when applicable.
Verdict: Contract Null and Void
Our Bet Din ruled in favor of Morris by releasing him of all obligation of the document he signed. As explained in the Torah Law section above, there are multiple reasons why the document he signed is null and void. Firstly, Morris did not own the property at the time he signed the contract with Eddie. One cannot sell what one does not own. Furthermore, the terminology used in the contract is invalid and does not constitute a sale. Eddie and David signed on a document that read that Morris “agrees to sell.” Such terminology implies a future intent to sell as opposed to effectively selling in the present. Thus, the contract is viewed as null and void.
Additionally, our Bet Din suggested that Morris not sell the property to Eddie. Although Morris gave his word to sell the property immediately upon its purchase, nevertheless, in this instance, Morris, is not required to keep his word. Keeping one’s word is a requirement of rabbinic origin, while paining a widow is a transgression of Torah origin. It is beyond the shadow of the doubt that the widow would have been deeply pained by Eddie’s devious scam to forcibly take ownership of her late husband’s home.
YOU BE THE JUDGE
A Five Star Insurance Company
During the Covid pandemic, Mindy graciously offered the basement of her home for storage of used human hair wigs that were donated to a hesed organization. Though the wigs were old, they retained some value, and were regularly distributed to those who were unfortunately ill and could not afford to purchase a new wig. In the interim, Mindy experienced a severe fire in her home that not only burnt her valuable belongings, but also damaged a substantial number of wigs that were deposited for her safekeeping. Thankfully, Mindy was insured with a five-star insurance company that very generously evaluated each specific item damaged. The insurance company not only compensated Mindy for the value of the old wigs at the time of the fire, but rather reimbursed her with the full cost of brand-new wigs. Representatives of the organization along with Mindy approached our Bet Din inquiring as to who is entitled to the compensation forwarded for the wigs.
Is the organization entitled to the handsome sum of money or perhaps is Mindy? How should the Bet Din rule and why?
(Needless to say, collection from the insurance company for the damages caused to the wigs was completely legal as per their specific insurance policy.)