Guaranteed Low Prices and Interest: Difference between revisions

# If a seller sells a product on credit he can't continue to use the product after he sold it. Doing so would be a form of interest since he sold the product he is entitled to be paid, therefore, letting the buyer pay later is a loan and the seller using the buyer's product is interest.<ref>Rama 174:1</ref>

# If the seller has the entire quantity of the product that he is selling and the buyer is prepaying it is permitted to charge a lower price for the commodity.<ref>Shulchan Aruch Y.D. 173:7</ref>

# If there is no fixed price in the market for an item it is permitted to pay for it in advance and have it delivered later.<ref>Gemara Bava Metsia 65a, Tosfot b"m 63b s.v. vamar, Rama 173:7</ref><ref>Rama 173:7 says you can do poskin on parah or talit even ein lo. That’s based on Tosfot 63b s.v. vamar that says if there’s no shuma then we’re not calling it agar natar we’re calling it tarsha. But what about the fact it might go up on its own like poskin al hapeirot?

* Bear Hagolah 173:18 and Tiferet Lmoshe on Shach 173:18 answer that fruit will have a market price if not now then at some later point, but a cow will never. Bear Hagolah and Tiferet Lmoshe are slightly different. Bear Hagolah says that there's no concern it'll go up in price because the seller can give the buyer a slightly cheaper cow. Chelkat Binyamin fnt. 173:349 thinks that this reasoning of the Bear Hagolah isn't precise. However, the Tiferet Lmoshe says that there's no concern it'll go up in price since the price isn't establish it never appears as interest. Chida in Birkei Yosef 173 sides with the Bear Hagolah. This approach is supported by many achronim including Shaar Deah 8, Chachmat Adam 139:4, Or Same'ach b"m 64a s.v. bs"a, Avnei Nezer YD 210:4, and Bet Meir on Taz 173:12 cited by Mesivta Yalkut Biurim b"m 63b p. 60.

* Rav Chaim Soloveitchik (on shas n. 75 cited by Mesivta Yalkut Mefarshim b"m 63b p. 60) explains that once the commodity is promised to the supplied even though he doesn't own it it is partially yesh lo and we're not concerned about the price fluctuation.

* Chelkat Binyamin 173:108 concludes that one can be lenient like the Bear Hagolah's approach and generally give a prepayment to receive more if the price of the item isn't readily determined and isn't going to become readily determined by people.</ref> Even so if the seller specifies that if you pay in advance there is one price and a higher price when buying later it is forbidden.<ref>Rama 173:7</ref> Additionally, if the price difference clearly indicates that it is because of interest it is problematic. The amount that is considered a small amount and not indicative of interest depends on the type of merchandise and the market. If it frequently is on sale then having a prepayment for that sale price is permitted since it doesn't look like there's a cheaper early price because of interest.<ref>Chelkat Binyamin 173:110</ref>

# It is forbidden for the perspective lender to counter the request of a loan with a subterfuge of having the lender borrow a commodity to then resell it to the lender for a cheaper price. Since the borrower originally requested a loan the borrower may not sell the commodity for a cheaper price when when the price is unclear in the marketplace.<ref>Taz 163:6</ref>

# If someone buys a certain amount of quantity of a commodity and it will mature naturally such as if someone bought gourds that were growing it is permitted for him to pay in advance even though when the gourds mature they would be more expensive.<ref>Bava Metsia 64a, Shulchan Aruch Y.D. 173:8</ref> The seller should then make sure to give him from the crop that he had when they arranged the sale.<ref>Hagahot Mordechai, Shach, and Taz. Chelkat Binyamin 173:112 writes that the Hagahot Mordechai doesn't mean that it is necessary to designate which very specific gourds he is going to sell, it is just necessary to say from his current crop he is going to sell and not going to buy others.</ref> As to the details of responsibility and insurance see footnote.<ref>Chelkat Binyamin 173:111 describes that most poskim hold that the mechanism here is a sale and as such it isn't the responsibility of the seller to buy others from the market if these ones spoil. If they were to do that it would be like poskin, stipulating to buy a future of a commodity, which is only permitted when the seller owns the product which isn't the case here. However, in the Biurim he writes that most rishonim indicate that even using the mechanism of pesika to have the seller responsible to ensure the commodity even if he has to buy more from the market. He says that one can rely on this lenient view.</ref>

# This leniency to advance cash to buy unripe produce only applies if it is normal for it to be sold in the market at that stage.<ref>Rama Y.D. 173:10 citing the Nemukei Yosef</ref> If it isn't normal for it to be sold that way then it is forbidden to pay less for buying it in advance. For example, one may not speculate and buy a vineyard of unripe grapes or grapevines for when they will ripen.<ref>Shulchan Aruch Y.D. 173:10-11, Taz 173:16</ref>

# Even if the producer doesn't have the product available it is permitted to make an advanced payment for all of the producer's product since there is risk involved and it is considered an investment as opposed to a loan.<ref>Bava Metsia 64a, Shulchan Aruch Y.D. 173:9. The example of the Gemara and Shulchan Aruch is a person selling all of the milk he will get from his cows, sheering from his sheep, or honey from his bees in one day. The Gemara explains that this isn't permitted based on the factor of yesh lo or the factor that naturally the product is produced like an immature gourd because there's nothing tangible from which the milk is created at the time of the sale which the buyer can acquire. Shach 173:21 and Taz 173:21 cite the gemara.</ref>

# It is permitted to buy a calf and advance the cash and only collect the cow later if the buyer assumes responsibility if the cow dies or depreciates after he pays the money.<ref>Shulchan Aruch Y.D. 173:10</ref>

===Marketplace Price Fixed (Yatza Hashaar)===

# If the price of the marketplace is fixed it is permitted to pay in advance for the later delivery of a commodity. The reason is since the marketplace price is fixed it is possible for the seller to purchase the commodity immediately with the funds of the buyer. Therefore, it is as though the commodity is already in the position of the seller.<ref>Mishna Bava Metsia 72b, Shulchan Aruch Y.D. 175:1</ref>  

# It is permitted to do a future contract for a commodity or stock when one doesn't buy the commodity now at all and doesn't pay for it but merely pays a margin deposit. That is considered as though one agreed to buy or sell something at a later date and there's no advanced payments.<ref>Ribbit Btachnit Chischon Lkol Yeled p. 33 writes that buying a future contract isn't considered like pesika since it is only an arrangement that one promises to later buy something when the contract is due. The fact that money is paid for the contract in advance is purely a deposit and that is why there is no interest paid for buying a future contract. He cites Mishpat Shalom cm 209 in his support.</ref>

# When buying a future of a commodity the seller must provide the buyer with the quantity specified irrelevant of the price change or if his wares of the commodity spoiled. That isn't considered interest since it isn't clear which commodity was sold to the buyer from the beginning.<ref>Tosfot b"m 64b s.v. hay, Rashba 64a s.v. haylech, Taz 173:18, Chelkat Binyamin 173:146. Tosfot 64b asks what is the difference between buying a barrel of wine which is problematic for interest and pesika? Tosfot explains that in pesika the seller takes all responsibility if it goes down or spoils. Since it wan’t specified which fruit he'd provide it doesn’t look like ribbit, while for a barrel of wine it looks like ribbit since the seller specifies which one.</ref> However, when the seller says he is buying specifically the wine that the seller owns then there's a greater concern of interest because if it spoils and yet the seller delivers good wine it seems that the buyer is benefiting because of his advanced payment. Nonetheless, it is permitted until the time when it is normal for wine to spoil if it was spoiled before it was sold.<ref>Chelkat Binyamin 173:146</ref>  

# When the buyer specifies a specific barrel at any time it is problematic and is only permitted if the buyer accepts the fact that if the price increases he will receive less commodity than originally specified.<ref>Gemara Bava Metsia 64a, Shulchan Aruch Y.D. 173:13, Chelkat Binyamin 173:146</ref> It is forbidden for the seller to accept the responsibility for the change in price.<ref>Shulchan Aruch Y.D. 173:13, Shach 173:24, Taz 173:17. Netivot Moshe on Taz 173:17 explains that essentially the Shach and Taz forbid the buyer to accept responsibility for the change in price and say that they're in disagreement with the Drisha who allowed this. However, the Netivot Moshe argues that the Drisha only allowed the buyer to accept responsibility for the change in price if the seller accepts another responsibility such as if it spoils. Chavot Daat 173:18 holds it is forbidden even in such a case.</ref>

#Some say that if the item is readily available in stores, such as fruit or vegetables that are in season, silverware, kitchen ware etc, it is considered Yatza Hashaar even though the price fluctuates.<ref>Shevet Halevi 3:109 holds that the dollar in Israel is considered like peirot but still is permitted to be borrowed because it is like Yatza Hashaar since it is accessible anywhere. In his opinion anything which is accessible anywhere is considered Yatza Hashaar even if the price fluctuates. Torat Ribbit 10:4 applies the Shevet Halevi who was discussing seah bseah to the laws of poskin al hapeirot.</ref> This opinion is contested.<ref> Torat Ribbit 19:5 quotes many poskim who argue with the Shevet Halevi including the Brit Yehuda ch. 18 fnt. 15, 20:13, Kitzur Dinei Ribbit of Rav Shternbuch 3:2, 4:6, and Klala Dribita Intro n. 5.</ref>

# Yatza Hashaar only applies if the specific item being bought has an established price and not if there's a similar product or raw material which is made into the product with an established price.<ref>Gemara Bava Metsia 72b, Rambam Malveh Vloveh 9:4, Shulchan Aruch Y.D. 175:2-3. What emerges from the Maggid Mishna Malveh Vloveh 9:4 is that for old grain and new grain that have separate prices and the price of the old grain is established, Rashi allows stipulating for old grain while the Rambam doesn't allow until it is a uniform fixed price for old and new grain. Also, if there's low quality mixed grains and pure grain and the pure grain has a fixed price one can still stipulate for the more expensive price before there's an established price.</ref>

==Return Policies==

## The language of the return policy should clearly state that if someone wants to return an item within a certain period of time the seller will buy it back. This language makes it evident that the original sale was complete and never voided even in the event that the buyer wants to return it.<ref>Chavot Daat 174:1, Machaneh Efraim 13, Nodeh Beyehuda 2:75, and Kereti 168:10 and 18. Pitchei Teshuva 174:1 cites Nodeh Beyehuda. Har Tzvi YD 139 disagrees with the Chavot Daat because it is contradicted by the Ritva 63a. The dispute in essence is whether the language that the original sale be a complete sale and then later it should be sold back completely avoids interest or perhaps language isn't sufficient if the transaction as a whole results in a situation of interest and the Torah understands it to be a case of a loan. Chelkat Binyamin 174:7 cites many poskim on both sides and concludes that one who is lenient like the Chavot Daat has what to rely upon. Laws of Interest p. 40 also concludes that way. Horah Brurah 174:4 and Malveh Hashem 2:10:16 are strict. Brit Yehuda 28:8 cites the dispute but in fnt. 22 he writes that majority of poskim are strict. However, he cites the Mahara Sason 49 who is lenient when they specify that the original sale was complete as long as it is up to the buyer to decide whether or not to return it and in that case the original sale was a sale.</ref>

## The seller specifies that the buyer can't return it before a certain period of time.<ref>Sama CM 207:11</ref>

# Some poskim hold that since generally the fact that the seller lets the buyer use the product is merely in order to interest him in order buying it and there's no time-value of money because of the fact that the seller had the buyer's money in the meantime it is permitted with whatever language they use. However, even according to this opinion if it is a large sale and the time-value of money does play a role and the seller is interested in using the money of the buyer between the time of the sale and the return then it is problematic.<ref>Chelkat Binyamin 174:3. He cites Chut Shani ch. 13 and Kuntres Kitzur Dinei Ribbit Hametzuyim 9:5 to support this approach.</ref>

# If someone sells a field or any product on condition that the seller can buy it back when he wants to that isn't a sale, rather it is considered a loan.<ref>Gemara Bava Metsia 65b, Rambam Malveh Vloveh 6:5, Rashba 3:435, Tur and Shulchan Aruch Y.D. 174:1. Netivot Shalom Ribbit 174:3:2 infers from the Taz that when Shulchan Aruch says it isn't a sale he means that if the buyer ends up returning the item otherwise it is considered a complete sale.</ref> Therefore, it is forbidden for the buyer to use the field or product. Doing so would be either Biblical interest or rabbinic interest.<reF>Shulchan Aruch 174:1 based on Rambam Malveh Vloveh 6:5 write that it is Biblical interest to eat the fruit of a field that was sold conditionally. Shach 174:1 writes that those who hold that eating the fruit of a mashkon is only rabbinic interest would say the same in this case. See however, Rambam Malveh Vloveh 6:5-7 and Even Haezel 6:4 s.v. vheneh biyarnu who seem to imply otherwise. Taz 174:1 writes that those who think that interest that is conditional upon someone's choice, ''Sad Echad Bribbit'', is rabbinic would deem this rabbinic as well.</ref>