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# It is forbidden to pay for a sefer in advance before the printer published the sefer.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis approx min 40)]</ref> | # It is forbidden to pay for a sefer in advance before the printer published the sefer.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis approx min 40)]</ref> | ||
# Using advanced discounted payments for a yeshiva or non-profit tzedaka organization is permitted since this is only a rabbinic form of interest.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis approx min 40)]</ref> | # Using advanced discounted payments for a yeshiva or non-profit tzedaka organization is permitted since this is only a rabbinic form of interest.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis approx min 40)]</ref> | ||
===Buying on Credit when the Price is Unclear=== | |||
'''''Tarsha''''' | |||
# 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, Shulchan Aruch 173:1</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 the buyer's intention is purely to buy the item on credit in order to sell it immediately for a cheaper value that is considered a prohibited since it as though the cheaper price is stipulated as the value of the loan and yet he agreed to repay a higher amount.<ref>The Ritva 65a cited by Bedek Habayit 173 writes that if someone purchases a commodity on credit it is permitted if the price isn't clear. However, if the buyer immediately sells it for less it shows that the loan obligated him to pay more than the value of the item and is interest. Chatom Sofer YD 137 follows the Ritva and writes that one can't bring a proof from Shulchan Aruch 163:3 or Taz 163:6 who imply otherwise since they didn't have the Ritva.</ref> | |||
This section isn't finished. | |||
#Downpayments and early bird specials. 63b rav nachman says you can’t do an early bird special unless it is yesh lo. 65a he says you can do a downpayment and get the item now and pay more later as long as you don’t specify the price and tosfot 65b and 63b adds that if its price is evident in the market it is forbidden. | |||
Rama 173:7 says you can do poskin on parah or talit even ein lo. That’s based on tosfot 63b 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 and tiferet lmoshe - peiro will have a shuma later but parah will never | |||
Shach - parah is yatzah shaar in that the factors necessary to determine its price like per pound is shaar kavuah | |||
Taz argues on rama and says its only if it didn’t go up | |||
Chavot daat 173:11 there’s no shiybud haguf here if you give them a specific item, but there is for the general fruit which you can give them any fruit | |||
Rav chaim in gemara and tos not rama - with ashray bmata that’s partially yesh lo | |||
==Partnership of Jews and non-Jews== | ==Partnership of Jews and non-Jews== | ||
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<p class="indent">There are many other conditions and one must consult with a reliable orthodox rabbi regarding each situation and how to draw up a Heter Iska. <ref> Kitzur Shulchan Aruch 66:1-6. See Ribit Halacha LeMaseh chapter 20. One can see this [http://www.bethdin.org/docs/PDF15-Shtar_Iska.pdf shtar isko] on the website of the Beth Din of America </ref></p> | <p class="indent">There are many other conditions and one must consult with a reliable orthodox rabbi regarding each situation and how to draw up a Heter Iska. <ref> Kitzur Shulchan Aruch 66:1-6. See Ribit Halacha LeMaseh chapter 20. One can see this [http://www.bethdin.org/docs/PDF15-Shtar_Iska.pdf shtar isko] on the website of the Beth Din of America </ref></p> | ||
==Lending Commodities for Other Commodities== | ==Lending Commodities for Other Commodities== | ||
# It is rabbinically forbidden to lend items for the same quantity of that item.<ref>Shulchan Aruch 160:21</ref> | # It is rabbinically forbidden to lend items for the same quantity of that item.<ref>Shulchan Aruch 160:21. | ||
Why is it only rabbinic interest to lend commodities? | |||
*Rosh responsa 108:6 writes that the reason is that Biblically you can repay the same quantity of a commodity for that commodity and that is Biblically required as part of your loan. | |||
*Ritva 60b s.v. vtisbara, Ramban 60b s.v. ulbsof, Ran s.v. ulinyan, Nemukei Yosef s.v. eizhu batar mikara all write that it isn't Biblical interest since it isn't clear that a person will gain since the commodity might not go up in price. See also Taz 162:1 andRashi 62b sv bdiynenu safek.</ref> | |||
# It is Biblically forbidden to lend an item for a greater quantity of that item. For example, lending 100 apples for 120 apples is Biblical interest.<ref>Shulchan Aruch YD 160:21</ref> | # It is Biblically forbidden to lend an item for a greater quantity of that item. For example, lending 100 apples for 120 apples is Biblical interest.<ref>Shulchan Aruch YD 160:21</ref> | ||
# It is forbidden to lend an item to get back the same type of item. This is called ''Seah B'seah''. For example, lending out a 5 pound bag of flour to get back another bag of flour is forbidden.<ref>Bava Metsia 75a</ref> | # It is forbidden to lend an item to get back the same type of item. This is called ''Seah B'seah''. For example, lending out a 5 pound bag of flour to get back another bag of flour is forbidden.<ref>Bava Metsia 75a</ref> | ||
# This type of rabbinic ribbit is permitted if the borrower has some of the same type of the item he is borrowing. For example, if someone has one egg and wants to borrow five more eggs they can do so since they already have one.<ref>Bava Metsia 75a</ref> | # This type of rabbinic ribbit is permitted if the borrower has some of the same type of the item he is borrowing. For example, if someone has one egg and wants to borrow five more eggs they can do so since they already have one.<ref>Bava Metsia 75a</ref> | ||
# Some poskim hold that it is permitted to lend an item that is small or cheap and people wouldn't care about the fluctuation in the price such as lending a loaf of bread.<ref>Rama 162:1, Yalkut Yosef CM 159:18</ref> | # Some poskim hold that it is permitted to lend an item that is small or cheap and people wouldn't care about the fluctuation in the price such as lending a loaf of bread.<ref>Rama 162:1, Yalkut Yosef CM 159:18</ref> | ||
# It is forbidden even if one uses the language of selling them an item and the buyer will later sell back that item since the price might fluctuate in between and it is like a loan and not two sales.<ref>Taz 160:1 permits seah bseah when the language of sales is employed. Chelkat Binyamin 162:2 writes that many argue with the Taz.</ref> | # It is forbidden even if one uses the language of selling them an item and the buyer will later sell back that item since the price might fluctuate in between and it is like a loan and not two sales.<ref>Taz 160:1 permits seah bseah when the language of sales is employed. Chelkat Binyamin 162:2 writes that many argue with the Taz including Binat Adam 139:7, Sharit Chaim, Igrot Moshe n. 27, Chazom Ish 72:5, and Ritva Shabbat 148a s.v. bshabbat.</ref> | ||
===Yesh Lo=== | ===Yesh Lo=== | ||
# If a person owns some of the commodity that he is borrowing he can borrow as much as he wants and it is like he sold the lender his commodity. It works even if the borrower only has a little bit of that commodity since it is like he borrowed it several times each time selling to the lender his commodity. It is permitted to do such a loan all at one time.<ref>Gemara Bava Metsia 75a, Shulchan Aruch 160:2</ref> | # If a person owns some of the commodity that he is borrowing he can borrow as much as he wants and it is like he sold the lender his commodity. It works even if the borrower only has a little bit of that commodity since it is like he borrowed it several times each time selling to the lender his commodity. It is permitted to do such a loan all at one time.<ref>Gemara Bava Metsia 75a, Shulchan Aruch 160:2</ref> | ||
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===Stocks=== | ===Stocks=== | ||
# Short selling is a violation of borrowing commodities with interest. This type of transaction between two Jews is forbidden since the leniencies of borrowing commodities, namely, having a fixed market price that endures for a long time or having a position in that the stock one is short selling, are inapplicable.<ref>[https://traditiononline.org/short-selling-and-jewish-law/ Rav Aharon Levine (Tradition Spring 2010 pp. 67-71)] explains that short selling involves borrowing a commodity which is repaid with that commodity and not merely a cash loan. The commodities in this case are the stocks being sold short. Since the marketplace price is in flux constantly that doesn't permit the seah b'seah transaction. Additionally, the fact that selling outside the box is illegal prevents a person from shorting a position he already owns stock in. Therefore, it isn't possible for someone to have the stocks that he is borrowing while doing a short sell.</ref> For a Jewish marketplace this is a serious issue because either way there is an interest charge for borrowing the stocks for the time. Therefore, these issues need to be solved with a heter iska.<ref> [https://www.toraland.org.il/%D7%A9%D7%90%D7%9C%D7%95%D7%AA-%D7%95%D7%AA%D7%A9%D7%95%D7%91%D7%95%D7%AA/%D7%9B%D7%9C%D7%9B%D7%9C%D7%94-%D7%95%D7%9E%D7%A9%D7%A4%D7%98/%D7%9B%D7%9C%D7%9B%D7%9C%D7%94-%D7%95%D7%94%D7%9C%D7%9B%D7%94/%D7%9E%D7%9B%D7%99%D7%A8%D7%94-%D7%91%D7%97%D7%A1%D7%A8/ toraland.org.il] | #It is permitted to buy stocks and it isn't considered ribbit since it is an investment.<ref>Malveh Hashem 2:13:29 p. 169 writes that buying a stock is an investment in the company and has risk. Therefore, there is no question of interest. Marechet Hashulchan Ribbit p. 417, Mishna Halachot 5:116, and Mishpatei Ribbit v. 2 p. 356 citing Brit Yehuda 2:42 agree.</ref> | ||
# Buying stocks on margin is forbidden if the brokerage is Jewish since it is lending to the investor money to be able to buy the shares and charging them interest for that loan. This is Biblical interest, but it can be permitted with a heter iska.<ref>Laws of Interest 1:25, Mishnat Ribbit p. 62</ref> A regular heter iska doesn't work for this case.<ref>Mishnat Ribbit p. 62</ref> | # Short selling is a violation of borrowing commodities with interest. This type of transaction between two Jews is forbidden since the leniencies of borrowing commodities, namely, having a fixed market price that endures for a long time or having a position in that the stock one is short selling, are inapplicable.<ref>[https://traditiononline.org/short-selling-and-jewish-law/ Rav Aharon Levine (Tradition Spring 2010 pp. 67-71)] explains that short selling involves borrowing a commodity which is repaid with that commodity and not merely a cash loan. The commodities in this case are the stocks being sold short. Since the marketplace price is in flux constantly that doesn't permit the seah b'seah transaction. Additionally, the fact that selling outside the box is illegal prevents a person from shorting a position he already owns stock in. Therefore, it isn't possible for someone to have the stocks that he is borrowing while doing a short sell.</ref> For a Jewish marketplace this is a serious issue because either way there is an interest charge for borrowing the stocks for the time. Therefore, these issues need to be solved with a heter iska.<ref> Torat Ribbit 17:33 agrees that short selling is considered seah bseah and therefore forbidden. Additionally, he adds that the seller can’t return the dividends. If the stock price drops after the dividend its price reflects that then it is a shutfut and the seller who borrowed the stocks is entitled to them and returning them would be interest. A specific heter iska can be used. [https://www.toraland.org.il/%D7%A9%D7%90%D7%9C%D7%95%D7%AA-%D7%95%D7%AA%D7%A9%D7%95%D7%91%D7%95%D7%AA/%D7%9B%D7%9C%D7%9B%D7%9C%D7%94-%D7%95%D7%9E%D7%A9%D7%A4%D7%98/%D7%9B%D7%9C%D7%9B%D7%9C%D7%94-%D7%95%D7%94%D7%9C%D7%9B%D7%94/%D7%9E%D7%9B%D7%99%D7%A8%D7%94-%D7%91%D7%97%D7%A1%D7%A8/ toraland.org.il] agrees.</ref> | ||
# Buying stocks on margin is forbidden if the brokerage is Jewish since it is lending to the investor money to be able to buy the shares and charging them interest for that loan. This is Biblical interest, but it can be permitted with a heter iska.<ref>Laws of Interest 1:25, Mishnat Ribbit p. 62, Mishna Halachot 5:116</ref> A regular heter iska doesn't work for this case.<ref>Mishnat Ribbit p. 62</ref> | |||
# Buying a future contract of stocks doesn't involve interest.<ref>Ribbit Btachnit Chischon Lkol Yeled p. 33 writes that there's no ribbit with future contracts since there is no sale of the stocks until the settlement date at which point the money is paid and the stocks or the equivalent are exchanged. Therefore, he argues that it isn't similar to pesika (buying commodities at a future date). Even though there is a down payment made it is merely a security deposit and not a loan. He cites this from the Mishpat Shalom CM 209.</ref> | |||
# If a person leaves money in a Jewish investment account and it accrues interest leaving money there is forbidden since that would be Biblical interest. However, this transaction can be permitted with a heter iska.<ref>Laws of Interest 1:24, Mishnat Ribbit p. 62</ref> Some poskim would permit collecting interest if the brokerage firm is incorporated.<ref>Laws of Interest 1:24 based on Rav Moshe (Igrot Moshe 2:63)</ref> | # If a person leaves money in a Jewish investment account and it accrues interest leaving money there is forbidden since that would be Biblical interest. However, this transaction can be permitted with a heter iska.<ref>Laws of Interest 1:24, Mishnat Ribbit p. 62</ref> Some poskim would permit collecting interest if the brokerage firm is incorporated.<ref>Laws of Interest 1:24 based on Rav Moshe (Igrot Moshe 2:63)</ref> | ||
# Buying and selling options is permitted.<ref>Torat Ribbit 17:36 permits buying and selling options since they can go up or down. If you buy from the open market certainly it is a sale and even if you do it with your broker it is still like a sale and not like an advanced cash payment to get a cheaper deal later. Takanat Haribit p. 47 also permits and thinks it isn't asmachta since it is legally binding. Seder Haribit v. 1 p. 289 writes that buying options is permitted since it is a sale. It isn't like pesika al peirot since you don't necessarily get the fruit you're just buying the right to get them. This is explained by [https://www.yutorah.org/lectures/lecture.cfm/946426/rabbi-ike-sultan/ribbit-investing-in-bonds,-stocks,-short-selling,-naked-shorts,-buying-on-margin,-buying-futures,-options,-money-market-funds-as-they-relate-to-interest/ Rabbi Sultan (Investing in Bonds, Stocks, Short Selling, Buying Futures, Options)].</ref> | |||
===Lending Commodities as Part of a Work Contract=== | ===Lending Commodities as Part of a Work Contract=== | ||
# If a person hires a worker to plant a field if the employer wants to provide the seeds as a loan and get repaid afterwards he can do so. If it is common for the worker to supply the seeds to plant it the employer can arrange this loan at any time, but if it is common for the employer to supply the seeds to plant it then the employer can only make this arrangement if the worker didn't begin his work.<Ref>Gemara Bava Metsia 74b, Shulchan Aruch Y.D. 162:4. The reason is that before the worker starts his work the employer can build into the contract the arrangement for him to lend the worker his supplies and he'll get repaid. Since it is all part of the original contract it is considered hiring the worker for a lesser wage. However, once the worker starts working the employer can't retract and change the wages. Therefore, if he decides to lend him the commodities for the job it is seah bseah and is problematic. If the worker in that place is supposed to supply the seeds and begins his work it is as though he didn't begin his work since he is unprepared and as such it is still possible to renegotiate his wages.</ref> | # If a person hires a worker to plant a field if the employer wants to provide the seeds as a loan and get repaid afterwards he can do so. If it is common for the worker to supply the seeds to plant it the employer can arrange this loan at any time, but if it is common for the employer to supply the seeds to plant it then the employer can only make this arrangement if the worker didn't begin his work.<Ref>Gemara Bava Metsia 74b, Shulchan Aruch Y.D. 162:4. The reason is that before the worker starts his work the employer can build into the contract the arrangement for him to lend the worker his supplies and he'll get repaid. Since it is all part of the original contract it is considered hiring the worker for a lesser wage. However, once the worker starts working the employer can't retract and change the wages. Therefore, if he decides to lend him the commodities for the job it is seah bseah and is problematic. If the worker in that place is supposed to supply the seeds and begins his work it is as though he didn't begin his work since he is unprepared and as such it is still possible to renegotiate his wages.</ref> | ||
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==Foreign Currency== | ==Foreign Currency== | ||
# Rashba respona 4:287 forbids lending money of one currency for another currency since the coins change fixed with respect one to another. | # Rashba respona 4:287 forbids lending money of one currency for another currency since the coins change fixed with respect one to another. | ||
== | ===Expired or Altered Currency=== | ||
<p class="indent">The system of coins used in the days of the Gemara and Shulchan Aruch were intrinsically valuable commodities, such as silver or gold. In that system the size and weight of the money and the value of that metal determined the value of the coins.<ref>Gemara Bava Metsia 44a-b</ref> This is known as [https://en.wikipedia.org/wiki/Commodity_money commodity money] and is associated with the theory of economics [https://en.wikipedia.org/wiki/Metallism metallism]. Another system used is [https://en.wikipedia.org/wiki/Representative_money representative money] which could be used to redeem a commodity; this is also known as the [https://en.wikipedia.org/wiki/Gold_standard gold standard]. In 1971, America replaced this system with [https://en.wikipedia.org/wiki/Fiat_money fiat money], theoretically understood by [https://en.wikipedia.org/wiki/Chartalism chartalism], which has no intrinsic value and no representative value but has a value based on the government.</p> | |||
# | ====Fiat Money (Chartalism)==== | ||
# Today most money is paper or digital money, which has no intrinsic value and not representative of a commodity value. It is evaluated according to the assigned value according to the government and world markets. | |||
# It is forbidden to lend money and charge for inflation.<ref>Igrot Moshe YD 2:114 explains that since halacha views coins as stable and not changing charging for the inflation of the purchasing power of the coins is interest. The only time coins are reevaluated in Shulchan Aruch Y.D. 165:1 is if the coins changed sizes, however, the Rama there writes that if the purchasing power changed but not the size of the coin then one must return the new coins irrelevant of the inflation. Chazon Ish YD 74:5, Minchat Yitzchak 6:61, and Laws of Ribbis p. 52 agree. Note that Rav Moshe is discussing fiat money in 1971 and the Chazon Ish representative money as is evident in their words.</ref> | |||
# If a coin is invalidated and replaced with a new coin in a fiat money system the new coins need to be repaid since the size and weight of the old or new coins are irrelevant to the value of the coin. If the new coins has a different purchasing power compared to the old coins, if someone lent money in an old coin one must return the new coins according to the value the new coins have in relation to the old coins.<ref>Chazon Ish YD 74:5</ref> | |||
====Commodity Money (Metallism)==== | |||
# If the new currency is the same size and weight as the old currency but its purchasing power is different one can simply repay the loan with the new currency.<ref>Rama 165:1</ref> | |||
# If a person lent someone money in a currency and then that currency become invalidated and was replaced with a new coin, if the new coin is thicker or weightier than the old one, whether or not one can simply repay the loan with the new currency depends on the following factors: | |||
## If the prices of the marketplace reflects the new coin's thickness or weight then one can't repay the loan with the new currency, rather one should pay the amount of the new coins so that the sum total equates to the amount of silver of the old coins borrowed.<ref>Shulchan Aruch 165:1</ref> | |||
## If the prices of the marketplace do not reflect the new coin's thickness or weight and simply changed prices because of changes in supply and demand, one can repay with the new currency unless the new coin is more than 25% larger, in which case one needs to repay the amount of silver borrowed with the old coins.<ref>Shulchan Aruch 165:1</ref> | |||
# If one should have paid the new coins up to the quantity of silver that was borrowed and instead one repaid the loan with the new currency some say that it was a violation of Biblical interest and some say rabbinic.<Ref>Shach 165:2</ref> | |||
# We rely on non-Jewish experts to tell us that the coins are more or less than 25% larger than the old coins. If you are asking a hired professional economist they are trusted and if you're asking someone else you should ask two non-Jews one not in front of the other.<ref>Rama 165:1, Shach 165:7</ref> | |||
# If the government establishes how the old loans should be repaid then one can follow that standard based on [[dina dmalchuta dina]].<ref>Rama 165:1, Shach 165:8</ref> | |||
==Future Contracts of Commodities== | |||
# It is forbidden to pay in advance for the later delivery of a commodity since it is possible that the price of the commodity will rise. The two ways to permit this is if the seller has the commodity already or the marketplace price is already fixed.<ref>Shulchan Aruch Y.D. 163:1</ref> | |||
# If the price of the commodity drops the buyer can renegotiate his part of the deal and buy it for cheaper.<Ref>Mishna Bava Metsia 72b, Shulchan Aruch Y.D. 175:7</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> | |||
# 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> | |||
===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> | |||
===Repaying a Loan with a Future in Commodities=== | |||
# 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. Rabba in b"m 62b and Rav Oshiya on 63a explain that when a person pays the lender with a commodity at a future date there is a concern for ribbit since the price of the commodity might rise. This problem isn’t solved by the fact that there is an established market price since the borrower wouldn’t be able to buy the commodity with the pre-existing loan. Therefore, if the borrower wants to pay with a commodity at a later date and there is a concern that the commodity will change prices in between it is forbidden to do so since the transaction began as a loan and he might be repaid more than he lent. This is forbidden even if the price of the commodity is established in the marketplace.</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. | |||
* Rashba 62b clarifies that although when discussing seah bseah it is sufficient to have some of the commodity and halachically we consider it as though there were multiple sales using this commodity. However, in the case of a loan that was exchanged for a commodity it remains a loan and in order to permit the potential interest it is essential that it is viewed as a real sale. It is only possible to consider the exchange a real sale if the borrower has the quantity he is offering the lender at the time of the agreement to exchange for the commodity.</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.<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=== | |||
# 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> | |||
===Future Contracts=== | |||
# 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> | |||
== | ==Collateral Fields== | ||
# | # It is forbidden for a lender to use the collateral that the borrower provided without certain conditions.<ref>Shulchan Aruch 164:4</ref> | ||
# | # If the lender eats the fruit of the field of the borrower that was a collateral some say that it is Biblical interest,<Ref>Shulchan Aruch Y.D. 164:4</ref> while others hold it is only rabbinic interest.<ref>Rama 164:4</ref> | ||
== | ==Legal Subterfuge== | ||
# A person | # A person asks for a loan of $100 and the lender isn't interested. The lender counter offers him to lend him $100 worth of a commodity and he can sell it for that value and use the money. Then the borrower takes the commodity worth a $100 and offers the lender to buy back the commodity for $90. If the buyer accepts that deal it is forbidden since in effect the borrower borrowed $90 and is obligated to return $100 which is interest.<ref>Bava Metsia 62b, Shulchan Aruch Y.D. 163:3</ref> | ||
# | # This is considered legal subterfuge and even though it is forbidden to arrange, if it is already arranged, according to Sephardim the borrower can repay the full loan. However, according to Ashkenazim the the borrower shouldn't repay the full value of the loan since this is considered rabbinic interest.<ref>Shulchan Aruch and Rama 163:3</ref> | ||
# If between the time of the loan and the time of the resale of the commodity to the lender the price of the commodity dropped to $90 then it is permitted to sell the commodity back to the lender.<ref>Taz 163:6</ref> | |||
# If the borrower never took the commodity but everything was transacted orally it is considered rabbinic interest in all circumstances.<ref>Shach 163:6</ref> | |||
# If the borrower stipulated with the lender that they would go through with this entire series of transactions it is certainly interest.<ref>Rama 163:3. Rama implies it is Biblical interest while the Bach cited by Shach 163:11 explains that it is only rabbinic interest.</ref> | |||
# There is a dispute if it is permitted if the borrower only sells the commodity back to the lender at another time.<ref>Taz 163:7 is lenient since it doesn't appear like interest but two separate transactions. Nekudat Hakesef 163:3 forbids. Chelkat Binyamin 164:27 additionally cites the Graz, Tiferet Lmoshe, and Avnei Nezer who are strict, unlike the Chachmat Adam who is lenient.</ref> | |||
===Renting a Field to a Borrower=== | |||
# A person borrowed money and as a collateral gave the lender a field. Generally, the lender may not make use of that field without certain conditions. The lender then rents out the field to the borrower for a fixed rate. That is considered legal subterfuge to charge a borrower interest on his loan and is forbidden.<ref>Gemara Bava Metsia 68a, Shulchan Aruch Y.D. 164:1. Shach 164:1 explains that Shulchan Aruch holds like Rashi that doing so is Biblical interest.</ref> | |||
# If the entire series of transactions were stipulated from the beginning it is certainly forbidden.<Ref>Rama 164:1</ref> | |||
# If the field as a collateral was used by the lender and for that use a deduction was made to the loan for each year until the entire loan would be paid off, then if there is someone else in between the borrower and lender it is permitted. That is, if the lender rents out the field to someone else and that person then lends it to the borrower it is permitted.<ref>Shulchan Aruch 163:2</ref> | |||
# It is permitted to sell a field to someone and then rent it from them.<ref>Shulchan Aruch 164:3</ref> | |||
==Judging by the Time of Stipulation== | ==Judging by the Time of Stipulation== | ||
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# It is forbidden to lend money in order to get less than a prutah more than he lent.<ref>Tosfot Bava Metsia 61a s.v. im writes that based on a klal uprat it is possible to deduce that less than a prutah is excluded from ribbit. Rosh agrees. However, The Tur 161:1 cites the Ramah who disagrees. See Ritva 61a fnt. 35 who points out that the Ramah cited by Shitah Mikubeset 61a seems not be discussing this idea. Shulchan Aruch 161:1 follows the Ramah. See fnt. to Ritva who cites the Gedulei Trumah 46:1:1 who explained that the only dispute is whether a person can lend less than a prutah to receive interest but the Mishneh Lmelech Hilchot Malveh Vloveh 6:1 disagrees and says that it is a dispute where the loan is greater than a prutah to gain interest that is less than a prutah. Rav Elyashiv on Bava Metsia 61a s.v. sham btosfot comments that the Gra explains the Ramah who says that it is forbidden to take less than a prutah because a half shiur of something prohibited is also prohibited. Rav Elyashiv questions this because perhaps taking less than a prutah in one loan can’t possibly combine with another less than a prutah unless it would be another loan. </ref> | # It is forbidden to lend money in order to get less than a prutah more than he lent.<ref>Tosfot Bava Metsia 61a s.v. im writes that based on a klal uprat it is possible to deduce that less than a prutah is excluded from ribbit. Rosh agrees. However, The Tur 161:1 cites the Ramah who disagrees. See Ritva 61a fnt. 35 who points out that the Ramah cited by Shitah Mikubeset 61a seems not be discussing this idea. Shulchan Aruch 161:1 follows the Ramah. See fnt. to Ritva who cites the Gedulei Trumah 46:1:1 who explained that the only dispute is whether a person can lend less than a prutah to receive interest but the Mishneh Lmelech Hilchot Malveh Vloveh 6:1 disagrees and says that it is a dispute where the loan is greater than a prutah to gain interest that is less than a prutah. Rav Elyashiv on Bava Metsia 61a s.v. sham btosfot comments that the Gra explains the Ramah who says that it is forbidden to take less than a prutah because a half shiur of something prohibited is also prohibited. Rav Elyashiv questions this because perhaps taking less than a prutah in one loan can’t possibly combine with another less than a prutah unless it would be another loan. </ref> | ||
# There is no time limit to be considered a loan, even a loan for a moment is a loan and is subject to interest.<ref>Laws of Ribbit p. 116 citing Brit Yehuda 2:3</ref> | # There is no time limit to be considered a loan, even a loan for a moment is a loan and is subject to interest.<ref>Laws of Ribbit p. 116 citing Brit Yehuda 2:3</ref> | ||
# It is questionable if it is permitted to borrow something and return back a tiny bit extra. For example, if you split a cab and one person pays the whole fare and the other person owes him $4.96, it seems problematic to pay the full $5 and say keep the change. The reason is that giving the extra four cents is interest which you're paying at the time of the loan.<ref>Shulchan Aruch 160:4 holds that it is forbidden to give a gift at the time of the return of the loan even if one doesn't specify that it is for the loan. Shach 160:4, Taz 160:2, and Chavot Daat 160:2 agree.</ref> Many poskim permit it when it is an amount that is insignificant to both of them (that if it fell on the ground they wouldn't pick it up) and some specifically permit it when you say give the change to [[tzedaka]].<ref>Minchat Yitzchak 9:88, Laws of Ribbit p. 43</ref> | # It is questionable if it is permitted to borrow something and return back a tiny bit extra. For example, if you split a cab and one person pays the whole fare and the other person owes him $4.96, it seems problematic to pay the full $5 and say keep the change. The reason is that giving the extra four cents is interest which you're paying at the time of the loan.<ref>Shulchan Aruch 160:4 holds that it is forbidden to give a gift at the time of the return of the loan even if one doesn't specify that it is for the loan. Shach 160:4, Taz 160:2, and Chavot Daat 160:2 agree.</ref> Many poskim permit it when it is an amount that is insignificant to both of them (that if it fell on the ground they wouldn't pick it up) and some specifically permit it when you say give the change to [[tzedaka]].<ref>Minchat Yitzchak 9:88, Chelkat Binyamin 160:33, Horah Brurah 160:15, Laws of Ribbit p. 43, [https://www.yutorah.org/lectures/lecture.cfm/945081/rabbi-ike-sultan/ribbit-keep-the-change-(scott-hoberman)/ Rabbi Hoberman ("Keep the Change")]</ref> | ||
==Repaying Interest== | ==Repaying Interest== | ||
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# If the lender is poor it is forbidden for the borrower to give him charity aside from repaying the loan. If he would have given him charity anyway if not for the loan it is permitted.<ref>Chelkat Binyamin 160:254</ref> | # If the lender is poor it is forbidden for the borrower to give him charity aside from repaying the loan. If he would have given him charity anyway if not for the loan it is permitted.<ref>Chelkat Binyamin 160:254</ref> | ||
# Many poskim say that it is forbidden for a seller to allow people to buy on credit only if they spend a certain amount. The reason is that having a minimum to buy on credit is like making a loan to the buyers on condition that they do more business with you.<ref>Mishnat Ribbit 4:34 cites Brit Yehuda 10:36 and Kuntres Acharon Lkitzur Dinei Ribbit 7:1 citing Rav Elyashiv and Rav Bronsdorfer as holding it is forbidden because this condition forces the buyer to spend more and that is like lending money on condition that someone does business specifically with you (S"A 160:23). However, Rav Nissim Karelitz, Rav Halberstaum (Refidato Zahav), and Rav Ben Tzion Abba Shaul (Parshat Ribbit 10:20) permit it since it isn't clear that the buyer is buying extra because of the loan. Also the merchant can have such a limit not to in order to create such a condition but to benefit his bigger customers. Rav Karelitz held practically one shouldn't do this because it is common that a buyer will come to pay and then realize that he doesn't have enough and then go back in order to reach the limit, which would be obvious that he is doing so for the loan.</ref> | # Many poskim say that it is forbidden for a seller to allow people to buy on credit only if they spend a certain amount. The reason is that having a minimum to buy on credit is like making a loan to the buyers on condition that they do more business with you.<ref>Mishnat Ribbit 4:34 cites Brit Yehuda 10:36 and Kuntres Acharon Lkitzur Dinei Ribbit 7:1 citing Rav Elyashiv and Rav Bronsdorfer as holding it is forbidden because this condition forces the buyer to spend more and that is like lending money on condition that someone does business specifically with you (S"A 160:23). However, Rav Nissim Karelitz, Rav Halberstaum (Refidato Zahav), and Rav Ben Tzion Abba Shaul (Parshat Ribbit 10:20) permit it since it isn't clear that the buyer is buying extra because of the loan. Also the merchant can have such a limit not to in order to create such a condition but to benefit his bigger customers. Rav Karelitz held practically one shouldn't do this because it is common that a buyer will come to pay and then realize that he doesn't have enough and then go back in order to reach the limit, which would be obvious that he is doing so for the loan.</ref> | ||
# It is forbidden for the borrower give a lender a loan during or after the original loan unless he regularly did so previously because doing so is considered a favor to the lender. This is only an issue if the second loan is larger or for a longer period of time, otherwise some poskim hold that it is permitted to give the lender such a loan.<ref>Chelkat Binyamin 160:90 based on the Graz writes that for rabbinic questions of interest we follow the opinion that it is permitted to give a loan to one's lender.</ref> | |||
===Following Instructions of the Lender=== | ===Following Instructions of the Lender=== | ||
