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Reneging on an Agreement Part I
By: Rabbi Yosef Greenwald
There are two categories of agreements which can affect when an agreement is broken. In Bava Metzia, 49A, the Gemara discusses two different types of contractual agreements and the ramifications of nullifying each one.
Kinyan Kesef: When Goods Have Changed Hands
This Mishna states that Kesef (“money”) cannot acquire moveable objects (“Mitaltelin” – as opposed to real estate). The Gemara rules like R’ Yohanan who holds that although, on a Torah level, money can acquire objects, Hachamim nullified this Kinyan (an act of acquisition) to prevent a loss to the buyer who is not yet in possession of the item. Therefore, L’Halacha, a Kinyan is not complete until Meshicha (taking the item into one’s physical possession) was performed. Before the Meshicha is complete, either party can renege.
However, the Mishna does make a qualification if someone breaks an agreement where Kesef was paid or a down-payment was made on moveable objects. If someone breaks this kind of agreement, the Mishna says he is subject to a “Mi ShePara”. A Mi ShePara is a curse administered to he who goes back on his word (after paying for the item, before taking it into his possession): “He who punished the generation of the Mabul the Dor HaPalaga will punish one who goes back on his word…”
A Verbal Agreement
A person who only breaks a verbal agreement (before giving money) is not such a grave offender.
The above Gemara refers to such a practice as a “Mehusar Amana.” If a buyer and seller agreed on a deal and made up a price, though no goods or money have changed hands, if one party breaks this contractual agreement, the Mi ShePara curse is not administered since no actual Kinyan occurred.
However, there is some grievance against the reneging party, as he is considered to be Mehusar Amana – lacking good faith – for not honoring his word.
Exceptions to Mehusar Amana:
Changing Circumstances
There is a debate among the Rishonim if a person who breaks a verbal agreement to buy or sell an item is always considered Mehusar Amana.
There may be mitigating circumstances, with an instance of “T’re Tar’e” – literally “two markets”. For example, if Reuven and Shimon make an agreement where Reuven would supply Shimon with 100 sacks of flour, at the price of $2.00 a pound. Overnight, there was a flour shortage in the market, and the price of flour went up to $3.50 a pound, before the Kinyan was performed. This is considered a situation of T’re Tar’e, and if Reuven would break his verbal agreement with Shimon at this point, there is no grievance against him. The Shach says that we rule like the Rema, that in the case of T’re Tar’e, there is no claim against a person who breaks a verbal agreement, and he is not a Mehusar Amana.
Unforeseeable Circumstances
The Hattam Sofer (Shu”t H.M. 102) writes that if there is a change in circumstances that alters the details of the deal, one who reneges is not considered a Mehusar Amana.
For example, Levi is offered a job in the suburbs and he decides to sell his house in the city. Levi made a verbal agreement to purchase a house in the suburbs, and to sell his house in the city. Then, the company unexpectedly goes bankrupt and Levi’s job offer is canceled. Now he wants to renege on the verbal agreement to sell his house. Levi is going back on his word because the situation itself has changed, not because his word has no value. [This would also be the case if Levi had a sudden change of financial status.]
The Piske Hoshen points out that we cannot always use the rule of unforeseeable circumstances to remove the claim of Mehusar Amana. For example, if someone makes a verbal agreement to buy a car for a certain price. The next day, he gets an offer to buy a car at a better price. If he were to break his verbal contract with the first person, he would still be considered a Mehusar Amana.
In this case, the circumstances have not changed. When conducting business, it is understood that you could always get a better offer. But once you make a verbal agreement, even before the Kinyan, you made a commitment. The fact that a second person offered a better priced car is not considered to be a different set of circumstances which would remove the issue of Mehusar Amana.
No Exceptions for Mi ShePara
However, the Halacha of Mi ShePara does not leave any room for loopholes or exceptions. Mi ShePara applies to a person who breaks a completed Kinyan, reneging on an existing contract. This is a more serious infraction, as it carries the weight of a curse of Hachamim r”l. It makes no difference if the price of the item went up or down, or if his financial or personal circumstances changed.