This lesson and some of the following lessons deal with discrepancies in sales, whether in price, or in quality or quantity of the thing being bought and sold.

The laws of these lessons are based on the Torah verse: When you make a sale to your fellow or make a purchase from the hand of your fellow; one man should not defraud his brother" (Leviticus 25:14) and the Mishnaic and Talmudic texts in the fourth chapter of Baba Metzia.

The laws of discrepancy in price generally deal with a situation where a product is sold in all or most of the markets in the community, including the store where the sale is taking place, within a certain price range. The price is not marked on the item that the buyer wishes to purchase. The buyer asks the seller how much the item costs, and the seller, realizing that the buyer is entirely unfamiliar with the price of the item, quotes a price higher than the market price he charges other customers.

Or the buyer who has priced the item in other stores knows the price but the seller has not had a request to sell this item for a long time; he does not realize the normal market price, and quotes a price lower than normal.

Or, as may often be the case, both parties make an honest mistake as to what the price should be, and later discover the normal market price range.

For example, a clerk in a clothing store places an erroneous price tag on a suit, whether higher or lower than the market price in that store, and the price, as marked, is paid by the customer. Later, the buyer and/or the seller discovers the error. The laws of fraud, overreaching, and discrepancy in price are based on the negative commandment in the Torah verse quoted above. This command is part of the large class of negative commandments not to rob. There is no punishment administered when this commandment is violated since it lends itself to rectification by returning the overage or underage charged or rescinding the transaction. One is not flogged for violating a negative commandment, if he is liable to pay compensation (Rambam Laws of Sanhedrin 18:2). The commandment is to not overcharge or benefit from the undercharge by any Jew, male or female, whether in selling or buying. The law is violated if there is a discrepancy in price, whether in favor of the seller or the buyer.

There is an obligation on each of the parties to notify the other if he is aware of the discrepancy in price. The buyer must tell the seller that he is undercharging; the seller must notify the buyer that he is overpaying. If one fails to do so, he violates the Torah commandment.

The law is violated even if the discrepancy in price is less than the smallest coin in the realm, such as a penny in America (or 5 agorot in Israel). The wronged party may not bring a lawsuit to recover the discrepancy in price if the discrepancy in price is less than a penny, but the transgression is nevertheless present. The Rabbis of the Mishnah and the Talmud, and the codes, commentaries, and responsa literature discuss a variance from "the price." The Rabbis of the Mishnah and Talmud determined that:
(1) If the discrepancy from "the price" is exactly one-sixth, the sale is effective but the benefiting party; whether the seller or the buyer, will have to reimburse the wronged party for such one-sixth variance.

(2) If the discrepancy from "the price" is less than one-sixth, the discrepancy is disregarded and the transaction is effective without any adjustment in the price.

(3) If the discrepancy from "the price" exceeds one-sixth, then the sale is voidable by the wronged party; whether the seller or the buyer.
If the seller sold the item because he was under financial pressure to sell, he cannot later protest the sale as being subject to rules of discrepancy in price. Similarly, if the buyer had a great need for the item and overpaid in buying it, he cannot protest the sale as being subject to the laws of discrep- ancy in price. If neither the community; Beth Din, nor the merchants have a policy of setting prices, then each individual seller may set his own prices. The Beth Din shall appoint officers to see that set prices are not exceeded and that merchants who exceed them shall be punished. A merchant may not profit more than one-sixth in the sale of certain basic foods such as wine, oil, and grains. (This applies after taking into account all his costs.) The prices of eggs are regulated so that middlemen should not profit on the resales more than once. There should not be a cornering of the market in basic foodstuffs in order that the prices should not soar. But, as herein stated, Beth Din should examine if there are such pricing practices in the community, and if not, the laws of supply and demand will be practiced.
A seller is permitted to sell his merchandise at a price lower than the normal market price in order to entice customers into his store.

Very often there may be local laws that set price ceilings on goods sold (as distinguished from fixed prices), and the Beth Din will have to examine their application in the halachah in setting the normal market price.

If a person sells real estate or notes of indebtedness, the laws of discrepancy in price do not apply to the transaction, and any over-charge is not recoverable in Beth Din. The amount of overcharge is not relevant; it is not recoverable.

There is also authority that states that the laws of discrepancy in price do apply to real estate and notes of indebtedness if the discrepancy in price exceeds one-half of the normal market value of the real estate or the note of indebtedness. The fact that the laws of discrepancy in price do not apply in these cases does not mean that the seller or buyer of real estate or notes of Indebted- ness can overcharge or underpay. The violation of the Torah verse is applicable, and thus it is forbidden, except that the violation may not be sued upon in Beth Din.

The subject matter of this lesson is more fully presented in Volume VII Chapters 227 of "A Restatement of Rabbinic Civil Law" by E. Quint, published by Jason Aronson, Inc. and on sale at local Judaica bookstores.
Questions to quint@inter.net.il

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