Lesson # 51 (part 2) - Formation of Contracts - 
Mere words effectuate a contract

It was stated in the last lesson (TT432): “In halachah, as in most legal systems, there must be an act that binds the parties to the contract. In some societies, the signing of the contract binds the parties. In halachah, the parties are usually bound by performing a kinyan. (See TT 428)”

Ordinarily, mere words, without a kinyan, cannot make binding an agreement between the parties. There are certain exceptions to this. Under certain conditions, a person may bind himself to perform an act without a kinyan having been performed. A person may bind himself by mere words, because of the psychological benefit that he derives from entering into the contract. There seem to be ten cases in Rabbinic literature in which an agreement was held to be binding without the necessity for a kinyan.

[1] The bailee case. To simplify things, we can define a bailee as a person who watches something for someone else. In halachah there are four types of bailees. (1) The unpaid bailee. For example, you are at an airport and you want to go to the duty free shop. You ask a friend to watch your carry-on bag. He is an unpaid bailee. The entire benefit is yours. (2) The paid bailee. You have a valuable painting and you are taking a trip. You store the painting with a warehouse that specializes in storing paintings. There is a charge for such storage. Both you and the storage facility benefit. Your painting is being watched, and they collect a fee. (3) You rent a car from Superior Auto Rental. You and the car rental company both benefit; they receive a rental fee, and you have the use of the car. In halachah, the liabilities in cases (2) and (3) are usually similar. (4) You borrow your friend’s computer. The benefit is all yours.

The scope and extent of liability of the person watching the object is not alike in of the four situations. Lets assume there is an earthquake and the object is lost or damaged in all four cases. The unpaid bailee (case 1 above) has the least amount of responsibility. He is doing you a favor and receives nothing in return. He is liable if he is negligent in watching your carry-on bag. He is not liable if your carry-on bag is lost or damaged because of the earthquake. The paid bailee (case 2 above) and the renter (case 3 above) are also not liable if the stored painting or the rented car is damaged or destroyed as a result of the earthquake. (The differences in liability between the unpaid bailee and the paid bailee/and or renter are discussed in Hoshen haMishpat chapters 291 to 347 and in A Restatement of Rabbinic Civil Law Volumes 8 and 9.) The borrower who borrowed your computer (case 4 above) is liable although the computer was destroyed by the earthquake. Since all of the benefit flowed to him from the borrowing he is almost like an insurer of your computer.

There is a Baraitha cited in Baba Mezia 94a that teaches that a paid bailee, whose liability for loss of the object is less than that of a borrower, may orally stipulate that he will accept the liabilities of a borrower. By orally accepting such additional liability, he will be liable for types of loss or damage to the object for which he would not be liable if he retained the liability of a just a paid bailee. For example, the storage company that is storing your painting will not be liable if there is an earthquake that destroys the warehouse where your painting is stored. However, if they accept the same liability as that of a borrower, they are liable if your painting is destroyed or damaged by the earthquake. The Talmud asks, how can the paid bailee be held liable by accepting the added liability with mere words? The Talmud records two answers. The second answer of Rabbi Yohanan states that even if there was no formal kinyan performed by the paid bailee to undertake additional liability, the undertaking is still binding. The bailee benefits in that he receives a reputation for being trustworthy. This consideration makes him liable for the higher standard of liability. In Talmudic language this is known as the “hanahah” (benefit) that he receives. “Hanahah” can be translated to refer to the psychological benefit. The psychological benefit that the obligor derives from the agreement is determined by society to make the agreement binding on the party.

[2] Marriage case. In Kiddushin 9b, Rav Gidal, in the name of Rav, taught that if the parents of the prospective bride and groom agree to bestow certain gifts on the newlywed couple, their promises made to each other are binding. As explained by Rashi, no formal kinyan need be made, since the hanahah that the parents derive from the marriage is sufficient to bind their promises.

[3] Surety case. A surety is person who tells the creditor, if the debtor does not pay, “I, the surety, will pay the debt.” In Baba Bathra 173b, the question of liability of the surety is discussed. In concluding the discussion, the Talmud states that the assumption of the obligation by the surety does not require a kinyan. After the question of how he becomes liable without a kinyan is discussed, Rav Ashi concludes that his obligation is binding because of the hanahah he receives in being trusted by the creditor. As explained by Rashi, the hanahah that the surety derives in that he is trusted obviates the necessity of a kinyan, and the mere words bind him.

About 40km between rest & property  [4] Case of transferring an obligation (Ma’amad shloshtan) In Gittin 13b, the Talmud states that if the creditor and the debtor and a third person are present together, the creditor may direct the debtor to pay the debt to the third party, and the obligation is effectively transferred. When the question was raised as to how the debt could be transferred without a kinyan, after some discussion, Rav Ashi answers, that the hanahah that flows to the debtor in that he can now face the new creditor with the same dilatory tactics is sufficient to bind the debtor. (The Talmud eventually gives another answer - namely that the Rabbis arbitrarily made this rule of law. The reason had to be given in response to a question raised in the Talmud, but not to question the basic assumption of Rav Ashi.)

[5] Case of partners dividing property. In Baba Bathra 106b, it is stated that if brothers (or partners) wish to divide property by lot, then as soon as the first brother draws his lot, he acquires that piece of property and the other brothers can no longer renege on the agreement. Since no kinyan has been made, what binds the brothers? Once again Rav Ashi states that they are bound by the mutual hanahah that each of the brothers obeys the others. (It seems significant that Rav Ashi is the Rabbi cited in several of these cases in showing that mere words can sometimes create an obligation. Rav Ashi lived toward the end of the Talmudic period and could thus include all the prior thinking of the Talmudic Sages in permitting agreement between parties to stand.)

[6] Forgiveness of a debt. In Kiddushin 16a, the Talmud discusses the right of a slave to redeem himself by paying to his master a proportionate share of the purchase price according to the amount of years still remaining to work. The Talmud states that the case of the slave is unique, since he cannot be freed on the mere declaration of the master that he is remitting the balance of the purchase price. Tosafoth there comment that the inference is, that if a person owing the money is not a slave, then a mere declaration can remit the obligation. While Tosafoth there question their own conclusion , in Baba Mezia 112a, they cite this Talmudic passage and hold that forgiveness of a debt does not require a kinyan; mere words are sufficient. Although it is not stated, this author presumes that the hanahah that the creditor derives is the pleasure that he has in being magnanimous enough to extinguish the debt. (The Tosafists were Rabbinic scholars mostly residing in France and Germany from the twelfth through the fourteenth centuries. Their commentaries are included on the printed pages of the Talmud.)

The subject matter of this lesson is more fully discussed in Volume 2, Chapter 60 of A Restatement of Rabbinic Civil Law by E. Quint and on sale at local Judaica bookstores.

Address comments to quint@inter.net.il

[The R'ei Homepage]
[The TORAH tidbits Homepage] [How to use TORAH tidbits]
[About The OU/NCSY Israel Center] [About TORAH tidbits]