Ribbit Related to Penalty Clauses: Difference between revisions
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Ribbit Related to Penalty Clauses (view source)
Revision as of 01:47, 3 December 2020
, 3 December 2020Text replacement - " Biblical" to " biblical"
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Many transactions involve a late fee if an obligation isn't repaid on time. The halacha considers such a penalty for late payment to be considered interest since it is a payment for the time-value of money. | Many transactions involve a late fee if an obligation isn't repaid on time. The halacha considers such a penalty for late payment to be considered interest since it is a payment for the time-value of money. | ||
==Loans== | ==Loans== | ||
# It is forbidden to charge or pay a late fee for a payment that is due. Having such a fee is a subterfuge of interest.<ref>Bet Yosef 177:14 cites a dispute between the Baal Hatrumot 4:32 and Ri Migash on the one hand, and the Rashba (teshuva 2:2, meyuchasot 221, 175) and Rabbenu Yerucham 16 on the other. The first group of rishonim held that it is permitted to have a late fee for a payment since it doesn't accrue over time. The second group says that it is forbidden because of it is a legal subterfuge around interest. Shulchan Aruch and Rama Y.D. 177:14 accept the Rabbenu Yerucham and Rashba.</ref> It is forbidden even on a one time basis and all the more if the late fee is recurring.<ref>Bet Yosef and Darkei Moshe 177:16 cite a heter iska document of the Ri Morleans who constructed a loan document with interest and replaced interest with late fees being considered presents. Either way, the Bet Yosef completely disregards this suggestion and claims it is absolutely interest. The Shach 177:33 holds that it is | # It is forbidden to charge or pay a late fee for a payment that is due. Having such a fee is a subterfuge of interest.<ref>Bet Yosef 177:14 cites a dispute between the Baal Hatrumot 4:32 and Ri Migash on the one hand, and the Rashba (teshuva 2:2, meyuchasot 221, 175) and Rabbenu Yerucham 16 on the other. The first group of rishonim held that it is permitted to have a late fee for a payment since it doesn't accrue over time. The second group says that it is forbidden because of it is a legal subterfuge around interest. Shulchan Aruch and Rama Y.D. 177:14 accept the Rabbenu Yerucham and Rashba.</ref> It is forbidden even on a one time basis and all the more if the late fee is recurring.<ref>Bet Yosef and Darkei Moshe 177:16 cite a heter iska document of the Ri Morleans who constructed a loan document with interest and replaced interest with late fees being considered presents. Either way, the Bet Yosef completely disregards this suggestion and claims it is absolutely interest. The Shach 177:33 holds that it is biblical interest, while he also cites the Mabit who thinks it is only rabbinic interest.</ref> | ||
# It is equally forbidden if it is a loan with a collateral.<ref>Shulchan Aruch Y.D. 177:17</reF> | # It is equally forbidden if it is a loan with a collateral.<ref>Shulchan Aruch Y.D. 177:17</reF> | ||
# It is permitted to pay a late fee with a commodity and not cash. That doesn't have the appearance of paying interest.<ref>Rivash 335, Rama 177:14, Shach 177:30. There is a discussion if Shulchan Aruch agrees with this ruling. In Shulchan Aruch Y.D. 177:17 he forbids late fees with a loan such that the lender can keep the collateral which is worth more than the loan and seems to contradict this Rama. Shcah 177:35 tries to answer that Shulchan Aruch agrees with the Rama, however, with a collateral it is forbidden since it has more of the appearance of interest than a regular payment with commodities. Yet, even this would be permitted with a land collateral since it even less has the appearance of interest with land as there's no fixed price for land.</ref> | # It is permitted to pay a late fee with a commodity and not cash. That doesn't have the appearance of paying interest.<ref>Rivash 335, Rama 177:14, Shach 177:30. There is a discussion if Shulchan Aruch agrees with this ruling. In Shulchan Aruch Y.D. 177:17 he forbids late fees with a loan such that the lender can keep the collateral which is worth more than the loan and seems to contradict this Rama. Shcah 177:35 tries to answer that Shulchan Aruch agrees with the Rama, however, with a collateral it is forbidden since it has more of the appearance of interest than a regular payment with commodities. Yet, even this would be permitted with a land collateral since it even less has the appearance of interest with land as there's no fixed price for land.</ref> | ||
