Guaranteed Low Prices and Interest: Difference between revisions
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# If you specify that if the price goes up then it is an investment and if it goes down it is a loan, that is invalid and is considered a loan with ribbit.<ref>Tosfot b"m 54a s.v iy explains that since a person accepted the achrayut of the money it is certainly a loan.</ref> | # If you specify that if the price goes up then it is an investment and if it goes down it is a loan, that is invalid and is considered a loan with ribbit.<ref>Tosfot b"m 54a s.v iy explains that since a person accepted the achrayut of the money it is certainly a loan.</ref> | ||
==Yesh Lo== | ==Has a Position of that Commodity (Yesh Lo)== | ||
# If the seller of the commodity already has the commodity at the time of the transaction it is permitted. Since the seller has the commodity at the beginning we can view the transaction as though he sold the commodity immediately for the fair marketplace price.<ref>Mishna Bava Metsia 60b, Rav Oshiya on 63b, Shulchan Aruch Y.D. 163:1</ref> Even though they didn't formally have the buyer acquire that commodity at the beginning of the sale since this is only rabbinic interest it is permitted.<ref>Rashi writes that once money is paid the seller can't back out and if he does he is cursed with a Mi Shepara. However, the buyer didn't make a formal [[kinyan]] but it isn't necessary since this is only rabbinic interest. Bet Yosef 163:1, Taz 163:3, and Shach 163:3 cite this Rashi.</ref> | |||
# The seller has to have the full quantity of the commodity to fulfill his end of the deal at the time of the transaction for this leniency to apply.<ref>Rambam Malveh Vloveh 10:6, Ritva b"m 63a s.v. veshma mina, Shulchan Aruch Y.D. 163:1. Chelkat Binyamin 163:7 clarifies that even though the Rabbenu Yerucham was lenient even if the seller only had some of the commodity we follow the Shulchan Aruch.</ref> It isn't similar to the rules of seah bseah since this is considered a sale and not a loan. Therefore, it is necessary for the seller to sell his commodity to the buyer and having part of the commodity is insufficient, whereas for a loan, it is possible to view it as though the borrower lent out his commodity multiple times since something that he lent out remains in his property.<ref>Shach 163:2 and Taz 163:2</ref> | |||
# The seller is believed to say that he has the commodity he is transacting.<Ref>Rama 163:1</ref> | |||
# This leniency is specific to where the seller has the commodity and doesn't extend to where the seller has cash with which he could use to buy the commodity.<ref>Shulchan Aruch 163:1. The Rosh b"m 5:7 implies that it is sufficient for the seller to have cash. Bet Yosef 163:1 argues that this is a mistake and obviously it is necessary to have the commodity and cash is insufficient. The Tiferet Shmuel 5:1 and Pilpula Charifta 5:7:30 agree. Maharam Shif 63a s.v. haashri presents an approach to explain the Rosh if he actually meant that money is sufficient. Taz 163:4 argues that the Rashi, Tur, and Rosh hold that money is sufficient but decides that we should be strict. Gra 163:1 points out that the Mordechai and Hagahot Ashri in fact do have this leniency even if one just has cash. He also concludes that the Rambam thinks it is necessary to have the commodity and not just money.</ref> | |||
# It is permitted to charge a lower price than the marketplace price if the seller has the commodity at the time of the transaction. This isn't similar to relying on the leniency of Yatza Hashaar.<ref>Tosfot Bava Metsia 63b s.v. vamar, Ramban b"m 46a, Shulchan Aruch 173:7</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 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 a seller has the entire volume of the commodity that he is selling he can sell it with a down payment and deliver later and even offer a discounted price. | |||
# If the seller has the commodity but it isn't fully processed as long as it is only one or two steps away from being processed it is considered like he has the commodity.<ref>Rav in Bava Metsia 74a, Tur and Shulchan Aruch Y.D. 175:4</ref> | |||
# Pesika with Yesh Lo one can even charge a price that is evidently cheaper for the early payment, however, when it isn't completely Yesh Lo but the item is almost ready one do pesika but only at the fair price at the time of the sale.<ref>Ri (Tosfot b"m 63b s.v. vamar), Shach 175:7, Chelkat Binyamin 175:39</ref> Some allow charging a cheaper price with Yesh Lo even if it isn't ready as long as it is only one or two steps away from being processed.<ref>Rashi 72b s.v. posek, Gra 175:5</ref> | |||
# Once there is an established price there is no prohibition to pay now for future delivery of a commodity since it is like a sale.<ref>The Gemara Bava Metsia 63b explains that once there is a fixed price in the market it is permitted since it is not considered a benefit to the buyer as he could have bought it at that time. Also, since there's a marketplace price it is reasonably possible for the supplier to buy it and in which case there is no interest because it is simply a sale. In essence it is like the leniency of Yesh Lo (Rashi 63b s.v. itnihu, 72b s.v. ein lavin).</ref> According to Ashkenazim, if the price generally doesn't change for a few days then it is considered an established price. According to Sephardim, if the price generally doesn't change for two to three months then it is considered an established price.<ref>Chelket Binyamin 175:4-5. Rabbi Yochanan in Gemara Bava Metsia 72b states that the establishment of the price of the city marketplace is insufficient, it needs to be established in the great metropolis central markets. However, Rava on 63b according to Tosfot 63b s.v uposkim thinks that a city marketplace price is sufficient. Rif 34b thinks that Rava agrees with Rabbi Yochanan as does the Rambam Malveh Vloveh 9:4. However, the Rosh b"m 5:7 and Tur 175:1 are lenient like Tosfot. Shulchan Aruch follows the Rif and Rambam, while the Rama follows the Tosfot and Rosh.</ref> | |||
# A price is considered established even if there's a range of prices as long as it is reasonable that it is possible to be able to get the item in local stores at the price that they used for the futures sale (pesika).<ref>Chelket Binyamin 175:7</ref> | |||
# Pesika is only permitted when the price in the market is established for the quantity that one is purchasing. However, if the price is set for buying in bulk one can't use that when buying a future of individual items.<ref>Chavot Yair 189, Pitchei Teshuva 175:1, Chelket Binyamin 175:12. Even though the Chavot Yair writes that this is applicable to Yesh Lo as well, see the [https://www.hebrewbooks.org/pdfpager.aspx?req=849&st=&pgnum=212 Yagel Yakov 175] who questions this based on Shach 175:7. He answers based on the Peni Yehoshua b"m 63a s.v. Bpirush Rashi s.v. Yesh Lo that there's an idea of forbidden changing the price when there's yesh lo if it is intentionally a delayed sale. Peni Yehoshua himself explains that Rashi thinks one can't charge a cheaper price even though it is yesh lo if it was bought with a loan and not originally cash.</ref> | |||
# Pesika is permitted if it is done for a Talmid Chacham and it is evident that the money isn't needed by the supplier and the purchaser could have asked for it as a favor each time and instead it was done up front for convenience then it is permitted since it isn't for the time-value of money.<Ref>Chavot Yair 189, Pitchei Teshuva 175:2, Chelkat Binyamin 175:12</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> | |||
===Yesh Lo when the Item Naturally Matures=== | |||
# 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> | |||
==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. Milveh Hashem 1:9:27 has a lengthy piece discussing the reasons why having a fixed market price is reason to permit. One reason is that of Rashi 62b and 63b and Rivash 306 that since the seller could have bought the commodity it is like he has them. Alternatively, from the Gemara bava Metsia 63b it seems that the reason is that since the buyer didn't have to buy and get a delayed delivered and could have bought and received it today he didn't gain anything from this transaction. Milveh Hashem concludes that Rashi's reason has a basis and is supported by the Bet Yosef even though it is challenged by the Rashba b"m 72b.</ref> | |||
# This leniency works independent of the leniency of the seller owning the commodity (Yesh Lo).<Ref>Shulchan Aruch 163:1. See Gra 163:3 who cites Rashi who disagrees and requires both where the original sale starting with a loan.</ref> | |||
# It is forbidden for the seller to charge less than the marketplace price since the buyer is paying in advance, even though the marketplace price is fixed.<ref>Shach 163:4 writes that the leniency of Yatza Hashaar when the contract was set up with a loan doesn't allow charging more than the marketplace price. He is writing this to answer the doubt of the Prisha. Shulchan Aruch 175:1 and 173:7 clarify this point that when using the leniency of Yatza Hashaar one must charge only that price and not a lower price.</ref> | |||
#A product that is price regulated by the government is considered to have a fixed price such that it would be permitted to pay upfront for a discount.<ref>Milveh Hashem 1:9:27</ref> | |||
==Undetermined Price== | ==Undetermined Price== | ||
# 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? | # 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? | ||
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* 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. | * 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> | * 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> | ||
==Subterfuges== | ==Subterfuges== | ||
# 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> | # 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> | ||
==Buying All of the Producer's Product== | ==Buying All of the Producer's Product== | ||
# 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> | # 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> | # 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> | ||
==Repaying a Loan with a Future in Commodities== | ==Repaying a Loan with a Future in Commodities== | ||
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# 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 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> | # 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> | ||
==Sources== | ==Sources== | ||
<references/> | <references/> | ||
[[Category:Ribbit]] | [[Category:Ribbit]] | ||
