Sephardi Heter Iska

Heter Iska of Rav Meir Mazuz (Horah Brurah)

I, __(name of borrower)__ ("Borrower"), the undersigned, have received ___(amount of money)__ ("Capital") from __(name of lender)__ ("Lender") for the purposes of transacting business ("Iska"), which is to be considered half loan and half investment, until ___(date of termination of loan)__. I have obligated myself to invest these funds in any investment that I considered to be a good investment, and I will try my utmost to produce profits and limit losses. However, if I do use the funds for my own personal uses I shouldn't be considered a thief. The gains and losses from all of the funds should be split evenly between me and the Lender asides for one percent of the gains from the portion of the Lender that are to be paid to me as compensation for my work.

The Lender and I agreed that I will not be trusted to claim any losses unless I verify this with two kosher witnesses, known to be trustworthy individuals. We also agreed upon between us that I am not trusted to claim that I did not profit unless I take an oath.

The LENDER and I explicitly agreed that I have the right to pay the Lender ___(specified amount of money as the expected return)__ ("Settlement Amount") every ___(time interval, such as month or year)__ in lieu of his portion of the profits, and thereby I would exempt myself from an oath, and any profits greater than this Settlement Amount shall belong to me exclusively.

We agreed that any money or benefit that I give the Lender before I made profits shall be considered advanced payment of the Iska funds in a permitted manner. If it comes out that the profits were insufficient to cover these payments, the payments shall be deducted from the original Capital.

We also agreed that as long as I did not return the Iska funds they shall continued to be considered an Iska as defined above and subject to the above conditions. Also, any funds that I receive henceforth from the Lender shall be considered to be part of the Iska and subject to the above conditions.

We agreed that this agreement supersedes any other agreement we made regarding the Capital, whether that other agreement is made before or after this one. It is also agreed that even if one of the parties does not understand this agreement it is nonetheless binding. This agreement should be binding in court and bet din and no claim shall invalidate this agreement.

We agreed that any questions or conflicts that arise regarding this Iska agreement shall be mediated by ____(name of Bet Din)___.

All of the above was accepted through a formal act of acquisition by passing of a handkerchief in an important Bet Din.

________________________ (Borrower) signed on ___(day of month)___ day of __(month)___

________________________ (Lender)