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Taking Interest: Difference between revisions
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→Repaying a Loan with a Future in Commodities
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# When a person purchases a commodity at a future date by making an advanced case payment there are two possible leniencies: if the seller has the commodity or if the marketplace price is fixed. However, if the original transaction is a result of a loan that the seller owed to the buyer and he is using that loan to purchase a future of commodities this transaction can only be permitted when the seller owns the commodity.<ref>Bava Metsia 63a, Shulchan Aruch 163:1</ref> The reason for this distinction is because the leniency of having a marketplace price fixed is that it is possible for the seller to cover his obligation by purchasing the commodity in the marketplace at the time of the transaction. However, if he is doing this transaction as a repayment of a loan that unpaid debt can't possibly be used to buy a commodity in the market.<ref> Shach 163:4, Taz 163:4</ref> | # When a person purchases a commodity at a future date by making an advanced case payment there are two possible leniencies: if the seller has the commodity or if the marketplace price is fixed. However, if the original transaction is a result of a loan that the seller owed to the buyer and he is using that loan to purchase a future of commodities this transaction can only be permitted when the seller owns the commodity.<ref>Bava Metsia 63a, Shulchan Aruch 163:1</ref> The reason for this distinction is because the leniency of having a marketplace price fixed is that it is possible for the seller to cover his obligation by purchasing the commodity in the marketplace at the time of the transaction. However, if he is doing this transaction as a repayment of a loan that unpaid debt can't possibly be used to buy a commodity in the market.<ref> Shach 163:4, Taz 163:4</ref> | ||
# A person purchased a commodity at a future date with a preexisting loan that the seller owes him. As explained this is only permitted if the seller has that commodity. If later at the time of the delivery date they renegotiate that the seller will exchange the first commodity with another one, it is only permitted if the seller has the second commodity.<ref>Mishna Bava Metsia 60b, Shulchan Aruch Y.D. 163:2</ref> | # A person purchased a commodity at a future date with a preexisting loan that the seller owes him. As explained this is only permitted if the seller has that commodity. If later at the time of the delivery date they renegotiate that the seller will exchange the first commodity with another one, it is only permitted if the seller has the second commodity.<ref>Mishna Bava Metsia 60b, Shulchan Aruch Y.D. 163:2</ref> | ||
# A person purchased a commodity at a future date by making an advanced cash payment. Later when the commodity is due to be delivered he renegotiated with the seller to exchange the commodity he was supposed to acquire with another commodity for the current value of the commodity he is owed. This transaction according to some is only permitted if the seller owns a position of the second commodity that is sufficient to cover paying out this transaction. However, according to others it is permitted as long there is a fixed marketplace price. | # A person purchased a commodity at a future date by making an advanced cash payment. Later when the commodity is due to be delivered he renegotiated with the seller to exchange the commodity he was supposed to acquire with another commodity for the current value of the commodity he is owed. This transaction according to some is only permitted if the seller owns a position of the second commodity that is sufficient to cover paying out this transaction. However, according to others it is permitted as long there is a fixed marketplace price.<ref>Rif bava metsia 34b, Nemukei Yosef 34b quoting Rabbenu Chananel and Rav Hai Goan, Rashba 62b s.v. vki, and Gra Y.D. 175:10 are lenient. The Rif explains that as long as the initial transaction was a sale in the future of a commodity and not a loan it is permitted to switch over the first commodity to the second even if the borrower doesn’t have the commodity.</ref> | ||
<ref>Rif bava metsia 34b, Nemukei Yosef 34b quoting Rabbenu Chananel and Rav Hai Goan, Rashba 62b s.v. vki, and Gra Y.D. 175:10 are lenient. The Rif explains that as long as the initial transaction was a sale in the future of a commodity and not a loan it is permitted to switch over the first commodity to the second even if the borrower doesn’t have the commodity.</ref> | |||
===Stipulations for a Default on a Loan=== | ===Stipulations for a Default on a Loan=== | ||
# It is forbidden for a person to stipulate that if the borrower can't repay his own he must give a certain commodity to the lender for the price of the commodity that it was worth at the time of the loan. Since this transaction was conditionally a loan it must follow the rules of a loan exchanged for a future in commodities.<ref>Bet Yosef 163, Shach 163:4</ref> | # It is forbidden for a person to stipulate that if the borrower can't repay his own he must give a certain commodity to the lender for the price of the commodity that it was worth at the time of the loan. Since this transaction was conditionally a loan it must follow the rules of a loan exchanged for a future in commodities.<ref>Bet Yosef 163, Shach 163:4</ref> | ||
