Working Without a Contract – Jewish Law

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02 Dec 2009


Reuven heard of an apartment for sale in Jerusalem. He had a friend outside of Israel who had expressed an interest in purchasing an apartment in Israel, so Reuven approached the apartment owner and told him about his friend. Reuven mentioned to the owner that he was doing this as a favor to his friend because there is a mitzvah to live in Eretz Yisroel and he wanted to help his friend fulfill this mitzvah. After many negotiating sessions, Reuven succeeded in lowering the price from half a million dollars to four hundred fifty thousand dollars. At the time of payment, Reuven demanded that the seller pay him two percent of the sale price (i.e. nine thousand dollars) as a fee for acting as the agent. The seller refused to pay, arguing that Reuven had never mentioned that he was working for a fee. Moreover, Reuven had mentioned that he wasn’t charging the buyer which further indicated that he didn’t intend to charge the seller either. Furthermore, the seller argued, Reuven did him a disservice, since he lowered the price by fifty thousand dollars. Who is correct?


Before discussing the actual question, we wish to give a bit of general advice. When entering into any transaction, it is always best to spell everything out in writing in a clear and lucid manner as early as possible. Many Dinai Torah result from failing to heed this advice. This is especially important when hiring workers. The Chofetz Chaim in a number of places (Ahavas Chesed in a note at the end of Chapter 10, Sefas Tomim, Chapter 5) exhorts people to make explicit agreements when hiring workers. One should not let someone work for him unless he spells out clearly in writing exactly what the worker is supposed to do and how much he will be paid. The Chofetz Chaim states further that a reason that it is unwise for the employer to leave issues in the air is that the employer may underpay as a result and will thereby violate a number of negative commandments of the Torah. Specifically, he will be classified as a thief and as one who withholds his worker’s wages (osheik). In order to avoid this classification, the employer must make certain that he has not underpaid even by one cent, which will often necessitate that he pay more than he would have needed to pay if everything had been clearly specified.

As far as our question is concerned, the general rule governing any element of a transaction whose details are not specified is that custom prevails. Therefore, if it is customary to pay for a service one must pay and the amount he must pay is the customary amount. (See Shulchan Aruch Choshen Mishpot, section 331).

Often, there is no fixed customary amount. Rather, some people charge one amount and others charge a different amount. The rule in this case (See Gemoro Bovo Metsiyo, 76A and the Ritva thereon) is that a worker is entitled only to the lowest amount that some people charge. Thus, if some agents charge two percent and others charge one percent, an agent whose fee was not agreed upon in advance is entitled to just one percent. The reason for this is another rule (Bavo Kamo 46A) that the burden of proof rests on one who wants to charge a higher price. Even if only a minority charges a lower price, the worker can not demand more than the lower price since we do not follow a majority in issues that involve forcing someone to pay. (Bovo Basro 92)

One other significant issue that is particularly relevant nowadays is: whose custom prevails. A worker may be located in one country and his employer in a different country. The Talmud Yerushalmi (cited in the Ramo Choshen Mishpot 331, 1) discusses a case where the employer was located in Tiberias and his workers were from Ma’on — two neighboring towns with different customs. The Yerushalmi rules that the determining factor is where the worker was hired. Thus, if the employer came to the employees’ city, the custom of the employee’s city prevails. However, if the employee came to the employer’s city in order to be hired, the employer’s customs prevail.

R’ Moshe Feinstein (Choshen Mishpot, volume 2, siman 57) discusses an interesting case involving an American who came to Israel to find a shidduch for his child. The customary fee of a shadchan was, at the time, higher in the U.S. than in Israel. The successful shadchan asked for the American fee but the father replied that he only deserved Israeli prices. R’ Moshe ruled that even without the above Yerushalmi, the father is correct, since both parties were in Israel at the time and thus all the work was done in Israel.

Rabbi Feinstein continues by discussing a scenario where the shadchan has to work with two people who are located in different locations. He rules that the crucial factor is where the shadchan worked. Thus, if the groom is from Jerusalem where they pay one thousand dollars for a shidduch and the bride is from B’nai Brak where they pay twelve hundred dollars, if the shadchan traveled back and forth between the two locations, he would be entitled to twelve hundred dollars from the Jerusalem groom and one thousand dollars from the B’nai Brak bride! The reason is that he worked for the bride in Jerusalem and for the groom in B’nai Brak. However, if he remained at home and worked on the phone, it would depend on where the shadchan resided.

Thus, suppose IBM hires workers to work in Jerusalem. If they don’t make a contract, they would have to pay Israeli wages and follow Israeli customs, and not American wages and customs. Nowadays, this is probably true for the additional reason that this is the general custom of multi-national companies.

Returning to the original question, the arguments of the seller were not accepted. The argument that he worked for free for the customer is invalid since the fact that the agent was willing to work for free for the buyer does not imply that he intended to work for free for the seller. This is based on a ruling of the Shulchan Aruch (Siman 77, seif 7) that one can explain that he was willing to work for free for one side and not for the other. This is especially true in this case since the agent stated a reason which is only applicable to the buyer and not to the seller. The argument that the agent had done a disservice was not accepted either since at the end of the day, the agent was instrumental in selling the property. As we have seen, the fact that his fees were not discussed does not mean the agent intended to work for free either.

Thus, the Beis Din ruled that the seller must pay the agent the price that is customarily charged by the cheapest agents which was one percent of the sale price.

Rabbi Yosef Fleischman heads the Kollel Choshen Mishpat – Institute for Dayanim, Jerusalem, Israel, and its affiliated Beis Din, “Nesivos Chaim.”

This series is intended to give general guidelines only; since every circumstance is unique, actual cases should be referred to a Dayan or Beis Din.

The Institute for Dayanim is pleased to answer queries from the general public regarding monetary and business halachah, and to offer advice regarding the drafting of halachically valid contracts, wills etc.

The Institute for Dayanim can be reached by e-mail at, or via the website,

The words of this author reflect his/her own opinions and do not necessarily represent the official position of the Orthodox Union.