Henry and Gladys, an elderly couple, finally consented to selling their home to their next-door neighbor, Bobby. For years, Bobby persistently knocked on the old couple’s door attempting to persuade them to sell him their home. On that day, Bobby shook hands with Henry and Gladys and finalized a verbal commitment to purchase their home for 2.2 million dollars. Henry called his lawyer to draw up a contract, and thereafter he notified his only son of the news. Henry’s son told his father that since Bobby’s last offer over 18 months ago the value of the property had appreciated substantially. Henry’s son was appalled with Bobby’s conduct, complaining that Bobby had no right to take advantage of his parents’ age and innocence. When Bobby heard of the son’s involvement, he explained to Henry that they shook on the deal and that it is immoral for him to renege on his word. The parties approached are Bet Din seeking a ruling whether Henry is ethically required to sell his home for the price they agreed upon or not.
How should the Bet Din rule and why?
According to the rule of the Shulhan Aruch, one who gives his word to complete a transaction is ethically required to perform as verbally agreed upon. This moral obligation is further confirmed when a handshake is added to the commitment. One’s moral obligation to keep his word is even in place in the event of a standard price fluctuation in the market. One who reneges on his word is viewed and labeled by our sages as an untrustworthy individual. Although in the absence of a signed contract a sale is not enforceable, nevertheless, one who reneges on his word is not only frowned upon by a Bet Din, but also severely taints his reputation in the market.
The above ruling is consistent with the view of the Shulhan Aruch and is thus customarily practiced by Sephardic Jewish communities worldwide. Notwithstanding, some Ashkenazic halachic authorities permit reneging on one’s word in the event of a price fluctuation. However, even in Ashkenazic communities, the common practice is to rule with stringency since several of their leading halachic authorities conform to the opinion of the Shulhan Aruch on the matter.
In instances in which either a buyer or seller mislead or manipulate one another in their business dealings, the above ruling is clearly subject to change. While it is a moral obligation to keep one’s word, in the event of deception or manipulation one is entitled to renege on a verbal commitment. Hence, if a Bet Din highly suspects that a buyer was aware of the innocence of the seller and that he manipulated him to sell below market price, the seller is entitled to renege without consequence. Since one’s word does not constitute a binding enforceable agreement, a victim can renege on his word when he is deceived. Keeping one’s word is only an ethical and moral obligation recorded by the Shulhan Aruch when both parties are dealing honestly. If, however, one’s counterpart is manipulative, no moral obligation is imposed on the victim.
Interestingly, a discussion between leading halachic authorities exists in the instance in which one gave his word to finalize a deal, and thereafter, before the signing of the contract, a drastic change in market price occurred. Some halachic authorities rule that in the event of drastic change or any extenuating circumstance, one is entitled to renege on one’s word. Whether or not a circumstance is considered extenuating is subject to the review and evaluation of a Bet Din.
Furthermore, even when not misled, an elderly couple should not be held responsible for their lack of ability to discern market value with accuracy. A certain measure of leniency is to be extended to the elderly or mentally impaired in such instances.
VERDICT: A Way Out
Our Bet Din ruled in favor of Henry and Gladys by allowing them to renege on their word. For the reasons mentioned in Torah law, Henry and Gladys are not even ethically required to sell Bobby their home for the amount they verbally agreed upon. Since Bobby evidently exploited the age and innocence of the elderly couple, no moral obligation exists to keep their word or handshake.
Furthermore, many Ashkenazic halachic authorities permit reneging on one’s word when there is a fluctuation in market price before signing, let alone if there is a drastic change in price. Henry and Gladys are of Ashkenazic origin and the true market value of their property is drastically higher than the agreed upon 2.2-million-dollar agreement.
Additionally, even if the elderly couple were not misled, they should not be held responsible for their inability to discern the market value of their home with accuracy. In such cases, leniency can be extended to the elderly or mentally impaired.
In Loving Memory of Vera Bat Carol, A”H
YOU BE THE JUDGE
Yaakov serves as an assistant rabbi of a prominent organization in Netanya, Israel. The head of the organization suggested to Yaakov that he travel to Panama City to raise funds for the organization, as they wished to launch the opening of a yeshiva high school. Yaakov complied and spent two weeks in Panama raising a total of $15,000 for the cause, in addition to collecting a $5,000 deposit towards the dedication of a sefer Torah donated to the organization by a member of the Panamanian community. As customary, Yaakov cashed the checks he received in Panama before leaving and he placed the money in his carry-on bag. The plane made a layover for refueling, allowing passengers to get on and off before continuing to its final destination. Yaakov spent the entire layover sleeping in an empty row, two rows behind his seat. When the plane prepared for takeoff Yaakov returned to his seat, but first checked for his carry-on bag in the overhead stowage bin. Unfortunately, his bag with the twenty thousand dollars cash was missing, not to mention his tefillin and other personal belongings that were also in the bag. Apparently, one of the passengers stole the bag as they disembarked during the layover. Upon arrival in Israel our Bet Din was confronted with the obvious dilemma of whether Yaakov is personally liable for the loss of the funds.
How should the Bet Din rule and why?