Recently, some of my students who were in Israel for the summer, hailed a cab late Friday afternoon. The cab driver said if they want to go with him they have to pay a price that was significantly higher than the usual and legal price. Since it was late and there weren’t any other cabs available, they agreed to pay his price and they paid it. Were they obligated to pay or could they just have paid the usual price and walked away?
The Gemoro (Bava Kama 116A, Yevamos 106A) discusses a similar case. The Gemoro rules that if a Jewish fugitive from jail comes to a stream and offers the (Jewish) ferry owner an unusually high price to take him across, he can afterwards pay the usual price with the claim: “I never meant to pay the high price and just wanted to get you to agree to take me across.”
In order to answer the question we must understand why the fugitive is allowed to make such a claim since, when one hires someone to do a job, even an oral agreement is legally binding.
The approach of many Rishonim (e.g. Ramban, Rashbo in Yevamos) is that this is specific to a situation similar to one who is a fugitive where the one who hired the ferry was acting under duress. The fugitive wasn’t acting out of choice but because the alternative was to be caught by his jailers. Therefore, if he offered an unusually high price we can understand that he never really meant to pay the higher price and offered to pay merely in order to get the ferry owner to cross him. Therefore, if the fugitive later makes such a claim we believe him and don’t require him to pay the extra amount which he offered, since we view the claim as being plausible.
There are several Rishonim (Ritva Yevamos ibid., Meiri, Ra’avad) who limit the right to afterwards refuse to pay to cases where the employee had a mitzva to act the way that he did. In the case of the ferry, every Jew has a mitzvah of “lo sa’amod al dam rei’echo” to save the fugitive. However, the other approach disagrees and rules that mitzvah is not a factor.
The third approach, which is the approach of Tosafos (Yevamos 106) and the Rosh and others, is that neither mitzvah nor duress are critical factors. Rather, the critical factor is that the employee is asking for an unusually high price. Tosafos clarifies that only if it is unusual to charge such a high price for this type of job is the one who hired not obligated to pay the price he agreed to pay. However, if a person offered to pay someone a high wage for a job which people frequently pay an unusually high amount, the agreement is binding. In this case the price is considered high because relative to other occupations the amount paid for the time the worker spent on the job is high.
The Ramo (264, 7) rules the third opinion and thus writes, “Some say that we only rule that the worker does not receive the compensation, which was agreed upon, if it is unusual to charge such a high price. However, if one agreed to pay a health practitioner an unusually high price he must fulfill his commitment (because they frequently charge high prices). However, if one agreed to pay a shadchan a substantial amount he is not obligated to pay.”
The Acharonim dispute whether the last ruling of the Ramo applies to a real estate agent as well. In general, there is no difference between one who serves as a real estate agent and a shadchan because they both make matches: the shadchan between a bride and a groom and an agent between a buyer and a seller. However, there is one difference which is significant for this halacha. When one matches a seller and buyer of a plot of land one is not doing a mitzvah whereas one who is a shadchan is doing a mitzvah. Therefore, there are poskim who restrict the ruling that one can refuse to pay someone who charges a higher than usual price to a shadchan who is doing a mitzvah.
However the Shach (264, 14) rules that there is no difference. Therefore, even if one who is engaging in a mundane matter asks for an unusually high wage, the employer who originally agreed to the price can later refuse to pay with the argument that he was not serious when he agreed to the unusually high price.
The Shach (364, 15) further cites a ruling of the Maharshal which seemingly disputes the Ramo because the Maharshal rules that one is obligated to pay a shadchan who asked for an unusually high price. However, the Shach argues that really there is no dispute because they are discussing two different situations. When the Maharshal ruled that one who agreed to pay a shadchan a high price is obligated to do so he was talking about a place where there were no rules about how much one pays a shadchan. Since the market was a free-for-all, no price is considered out of line. However, the Rama who ruled that one is not bound by his agreement to pay a high price to a shadchan was discussing a place where there were rules governing how much one pays a shadchan.
The Ketsos (264, 3) cites the Rosh to the effect that when the worker suffered even a small loss the employer is duty-bound to follow thru with his agreement. However, this is not the conventional opinion.
Therefore, coming back to the question, your students could have refused to pay the high price since there are rules about how much a taxi driver is allowed to charge and this is not a profession where one frequently pays a high price.
It is important to note that after your students paid, the Shulchan Aruch (264, 8) rules that they cannot use this argument to obtain a refund of their payment. The rationale is that the only reason we allow one to refuse to pay is because he claims that he wasn’t serious when he agreed to pay. However, if one actually paid he can no longer claim he wasn’t serious since, if he wasn’t serious, why did he pay?