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A Proposal for a High School Course in Torah Ethics
Professor Steven (Shlomo Chaim) Resnicoff, Esq.
Ira (Yitzchak) Kasdan, Esq.

APPENDIX

Preliminary Torah Ethics Course Outline

Copyright 1999 The Aleph Institute Center for Halacha and American Law and Steven H. Resnicoff

The course will initially employ a lecture framework that will introduce students to the following concepts:

  • The Halachic responsibility to resolve disputes among Jews without resort to secular courts (the issur archa’os)
  • The structure and practice of batei din in the United States
  • Exceptions to the general prohibition against using secular courts
    • When the exceptions arise
    • Limits as to what one may collect in secular court in reliance on an exception
  • The structure of secular law in the United States
    • Federal law
    • State law
  • The interrelationship between Jewish law and secular law
    • "The law of the kingdom is law" - dina demalchuta dina
    • Application of this principal to matters involving civil law
    • Application of this principal to matters involving criminal law
    • The effect of commercial custom - minhag hasocharim
    • The effect of an agreement - tenai shebimamon

The course will then introduce students to a variety of Halachic and secular legal selections and will require students to apply the concepts raised by such authorities to specific hypothetical fact patterns.

The teaching materials will provide teachers with a variety of hypotheticals from which to choose, based on various factors. Some issues may arise in connection with the hypothetical sale and purchase of a house, with the relationship between an employer and an employee, with the filing of questionable insurance claims or tax returns.

The following, partial list of issues arising from the sale of a house may not represent the most cogent issues. Nevertheless, these examples illustrate the breadth of possibilities.

Stage #1 - Soliciting Someone to Sell His House

Assume that Reuven has a rich father-in-law who wants to purchase a house for him near the yeshiva where real estate values are very high. Shimon, who is relatively poor, has such a house only because he bought it many years ago when the price was low. Shimon is not thinking of selling his house. May Reuven offer to buy the house from Shimon - or is there a problem with the prohibition against coveting another person’s property (lo sachmod)? If Shimon initially rejects Reuven's offer, would it be permissible for Reuven to ask the head of the yeshiva to suggest to Shimon that he accept the offer? Would it be permissible for Reuven to ask his friends to ask Shimon to sell?

 Stage #2 - Negotiating for the Sale of a House

For purposes of this issue, assume that Shimon wanted to sell his house and put it up for sale before Reuven ever approached Shimon. Negotiations for the sale of the house give rise to various Halachic and secular law issues, including:

  • Suppose Reuven is really willing to pay $250,000 for the house. May he tell Shimon that "There is no way that I will pay more than $225,000 for the house," or would such a statement involve fraud (geneivas da’as)?
  • May Shimon say that he has already recieved an offer to sell the house for $260,000 (even though he has not) and that he would therefore only consider selling it to Reuven if Reuven offers more than $260,000? Suppose Reuven believes Shimon and, based on this belief, offers Shimon more than $260,000 and the sale is consummated. If Reuven later finds out that Shimon had lied to him, may Reuven undo the deal?
  • Suppose Reuven tells Shimon that Levi’s house is just as good as Shimon’s and Levi’s is available for $200,000. May Shimon tell Reuven about defects in Levi’s house (assuming, of course, that there are, in fact, such defects) or is Shimon limited to describing the advantages of his own house?
  • In describing the "advantages" of his own house, to what extent, if any, may Shimon engage in "puffery"?
  • Suppose Shimon knows about certain problems with his house (e.g., the basement floods, the plumbing is problematic, there are termites). May Shimon take any action to "cover up" such problems? Assuming that Shimon may not actively cover up problems, must he affirmatively disclose them or may he remain silent about them?
  • Suppose Shimon has lied to Reuven about certain defects in Shimon’s house and that Yehudah, a friend of Shimon’s, knows about the lie. If Yehudah cannot convince Shimon to tell Reuven the truth, should Yehudah tell Reuven because of the obligation not to stand by while another Jew suffers a financial loss (lo sa’amod al dam reyechah)? Would it make any difference if Yehudah’s knowledge is based on information given to him by Shimon "confidentially"? Would it make any difference if Yehudah were Shimon’s lawyer?
  • What if Dan owns the property next to Shimon’s and Dan wants to buy Shimon’s house. Must Shimon sell the house to Dan? Must Shimon give Dan an opportunity to purchase the house on the same terms that Reuven has offered? Do the answers to these questions depend on any particular facts?
  • Suppose Reuven and Shimon have orally agreed on terms for the sale of Shimon’s house, but they have not signed a written contract. Suppose Naftali would also like to buy a house within two blocks of the Bais Medrash. May Naftali go to Shimon and offer him more money than Reuven offered or would such conduct violate the rule against interfering with another person’s rights (e.g., ani mehafech bi’chararah)? Would the answer be any different if Reuven and Shimon had signed a written contract? Why or why not?
  • Suppose Reuven and Shimon have orally agreed on terms for the sale of Shimon’s house, but they have not signed a written contract. May either Reuven or Shimon change his mind and refuse to go through with the sale? If one of them did change his mind, would this indicate that he was not trustworthy (mechusrah amana)? Would the one who backed out receive a "curse" in bais din (a mi sheparah)? Are there any circumstances that might change the answers to these questions?

Stage #3 - The Contractual Terms

  • Suppose Reuven does not really want to live in Shimon’s house. Instead, he only wants to purchase the house if he first finds someone who will buy the house from him at a higher price than he pays Shimon. Of course, he does not explain this to Shimon. Instead, he asks Shimon to put a clause in the contract allowing Reuven to have the house inspected within a certain number of days and providing Reuven the right to cancel the contract should he be dissatisfied with the results of the inspection. Reuven knows from experience that a house inspection will always reveal some problems and he is relying on this contractual provision as a way out. Has Reuven acted properly? Why or why not?

    A similar question would arise if Reuven asked for the contract to be contingent on his ability to obtain a mortgage from a bank. In fact, Reuven, who is unemployed, knows that he does not qualify for a mortgage. Instead, to the extent Reuven may need some cash to buy the property before reselling it, Reuven is really relying on his rich father-in-law. Has Reuven acted properly in asking for the mortgage contingency clause?
  • What does the contract say about the mezzuzos on the house? May the seller replace the present mezzuzos with ones that, although still kosher, are of a lesser quality?

Stage #4 - Financing the Purchase

  • Does the financing of the purchase involve problems regarding the prohibitions against the giving or taking of "interest" (ribbis)? Consider, for example:
    • If the down payment is being held in an interest bearing account, who gets the benefit of any ribbis?
    • May a borrower pay a "finder’s fee" to a Jew who arranges a loan for him?
    • May someone pay interest to a "Jewish" bank or mortgage company?
    • May someone serve as a guarantor in an interest-bearing loan?
    • If someone obtains cash by borrowing someone else’s credit card, may the borrower pay directly to the credit card company any interest that accrues on the money borrowed?
  • What Halachic or secular rules might a purchaser violate if he includes false information in a mortgage application?

Stage #5 - The Closing Itself

Assume that the buyer pays part of the purchase price in cash:

  • Does secular law require that such a cash transaction be reported? If so, does Halacha allow (or require) such reporting?
  • Suppose that the seller or one of the lawyers knows that the purchaser wants to use cash in order to "launder" money. Does this affect the parties’ Halachic or secular obligations?
  • What if Reuven is willing to pay $300,000, but only wants the documents to reflect a purchase price of $250,000. Reuven agrees to pay the other $50,000 in cash. What Halachic, legal and practical problems may arise? If the cash turns out to be counterfeit, what could the seller do?

Other Possible "Cases"

  • Civil

Dispute between former employer and employee – The latter had signed a two-year term agreement with a two year "non-compete" and non-solicitation provision, but nevertheless left his employer to join another Jewish-owned business that directly competes with the first. Based on these actions, the employer accuses the former employee of breaching the contract and of hasagas g'vul. In addition, the employer claims that the employee hired away a non-Jewish worker and stole company secrets. Without admitting or denying the allegations against him, the employee claims that he desperately needed the new job (which doubled his old salary) and that, in any case, he was mistreated by his former boss who cheated him and his co-workers from certain promised (but never delivered) bonuses and benefits.

  • Civil/Criminal

Property dispute between Jewish and non-Jewish neighbors – A Jew with a large and growing family erects an extension to his house that arguably is prohibited under zoning ordinances, but not necessarily under Halacha. He funds the construction with a bank loan. In applying for the loan, the person omits possibly material information requested on the application form. A Jew who davens in the same shul as the home owner and is his neighbor but not a friend - indeed, he lives on the same street where the allegedly illegal construction took place and is not happy with the "monstrous" addition) - finds out about the possible fraud because he is a bank auditor. The frum auditor must decide whether to aid the community members who want the city to force the home owner to tear down the addition by revealing the alleged fraud to bank officials. When confronted by the frum auditor in a private conversation, the home owner admits that he knew that he possibly was committing fraud. In any case, as things develop, other bank officials discover the alleged crime and the home owner is prosecuted. The authorities seek to compel the auditor to testify against his fellow Jew.

Based on this fact pattern, this case can actually have three simultaneous "proceedings" – an administrative proceeding before the Zoning Board; a Beis Din action; and the criminal investigation and proceeding – with all their attendant legal, ethical issues and problems.

  • Business Negotiation

Another case study could start out with "negotiations" involving a business takeover or similar transaction. The deal can either: (i) close but later go sour, leading to claims and a lawsuit and/or Beis Din case, or (ii) can break down before it is completed, leading to litigation in that instance as well. The "negotiations" will be designed to raise ethical/moral/Halachic issues concerning emes and sheker, etc.


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