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Expenses Paid Upon Agreement later Broken

An opportunity to acquire a business presents itself to Reuven. He approaches Shimon to be 50/50 partner and lead negotiations with the seller. Shimon hires a lawyer and accountant to help him crunch the numbers. After a price has been settled (thanks to shimon’s negotiations) Reuven decides that he can only go forward with the partnership if it is 60/40 in his favor. Shimon says 50/50 or nothing. The next day Reuven alone signs the deal with the seller.

Can Shimon be tovea the cost of his accountant and lawyer as well as the effort he put into the negotiated price (he is not interested in being tovea the partnership)?

There were no prior discussions as to who will pay these fees.

If you could also bring mare mekomos I would appreciate it.


Because there were no prior discussions as to payment, and Shimon paid the money out of his own pocket without consulting with Reuven, there will be two possible avenues by which Shimon can claim the money.

1. One avenue is the construct of “neheneh.” Reuven used Shimon’s investment and he took “benefit” from it. It was Shimon’s negotiations that led to the deal taking place.

2. Another possiblity is that Shimon can claim he spent money based on Reuven’s recommendation and knowledge, and therefore this is a case of somebody who spent money upon another’s instruction. This might lead to an obligation based on “garmi” or based on “arev.”

Concerning option (1), there is room to consider whether this can be a case of neheneh, because it might be similar to the exemption, according to many authorities, concerning somebody who pays another’s debts (see Shulchan Aruch, Choshen Mishpat 128:1; Shach 3; see also Sema and others who dispute this exemption). The point of the exemption is that the debtor can claim that he would have appeased the creditor and therefore there is no concrete benefit. Likewise in our case, Reuven might claim that he would have reached the same point without Shimon’s negotiations, input and investment. This question needs further investigation into the case.

Concerning option (2), it is not clear that Reuven actually “instructed” Shimon to performs actions that are worth money, and certainly not to lay out funds for a lawyer and accountant. If Shimon did this of his own volition, and not by instruction of Reuven, and if it was not self-understood that this will be done, Shimon will not be able to claim the money from Reuven.

However, if it was understood based on the agreement that Shimon will be laying out expenses, Shimon will have a good claim for payment based on Shulchan Aruch 14:5 (see also Noda Biyhuda, Tinyana 90; Rambam, Zechiya Umatana 6:24 and Raavad; Tur, Choshen Mishpat 39, citing from Rosh, and Rabbi Akiva Eiger 134).

[Concerning whether this is an obligation of garmi or arev, see Imrei Binah 61; Ritva, Bava Metzia 73b; Nachalas Zvi 292; Nesivos HaMishpat 200:13; both ideas can apply to our case.]

Because these questions are somewhat delicate, it is appropriate that the case should be decided in Beis Din.

Best wishes.

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