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Ki Seitsei-Paid under Duress for Giving a False Guarantee



We recently had the following sheilo in our beis din and I would like to hear your opinion.

A was interested in developing and marketing a new product. In order to raise funds he turned to his wealthy neighborhood acquaintance B to invest in his product. He told B that his product was “guaranteed” to be an astounding success. B was convinced and invested a hundred thousand dollars. After two years it became apparent that the product was not going to succeed and A gave up and informed B that his investment went down the drain. Since he was very upset at A, B began embarrassing and cursing A in public. One day A gave B a hundred thousand dollars. A came to our beis din and demanded the money back, saying that he gave the money only in order to avoid further public embarrassment. B agreed to A’s report of the events and confirmed that he had publicly cursed and embarrassed A. But B claimed that the money is his because the real reason A gave him the money was because he had a guilty conscience about taking B’s money as an investment, and not to avoid continued harassment. Must B return the money to A?


Before we can answer your question we have to address the vital preliminary question: According to Torah law does A owe money to B because he misled A.

The basic case in the Gemoro (BK 99B) that deals with this question concerns one who was asked by a lender if a coin was counterfeit. After he gave his opinion that it was not counterfeit, the lender accepted it as payment for his loan and the borrower departed. The Gemoro rules that if it turns out that the coin was counterfeit, and the lender cannot retrieve his money from the borrower, the advisor is liable for the lender’s loss, unless the advisor was an expert who did not charge for rendering his opinion. An advisor who is not an expert or an expert who charges for his advice are all liable. The reason is because this causative damage is classified as garmi. Thus we see that someone who gives bad advice must compensate the one who consulted him for a loss he suffered due to his incorrect advice. This is the reason a beis din may be liable for an incorrect decision. (See CM siman 25 for the exact conditions.)

There is a major dispute among the Rishonim whether in order to render the advisor liable, the questioner must inform the advisor that he is going to base his actions upon his advice. The authoritative opinion (Shach 306, 12) is that liability is limited to cases where either the advisor was so informed or that it was apparent under the circumstances that this was the situation.

In our case, based on this it seems that A should be liable for the loss he caused B, since B based his decision on A’s claims which is very similar to the person who accepted a counterfeit coin based on someone’s incorrect judgment.

However, there are situations where the advisor is not liable. The Mishpat Hamazik (2, 18, 4) writes that if the person who gave the advice was an interested party, he is not liable for giving incorrect guidance because rational people do not base their decision on information that is supplied by one who has a vested interest in his advice being accepted. For example, one cannot sue a shadchan for withholding information that would have jeopardized the shidduch since shadchanim want to succeed and earn money.

This was definitely true in this situation since B knew that A had an interest in the success of the project and B should have done his own due diligence before investing his money. Additionally, people who invest money know that no investment is ever guaranteed, and any representation of a guarantee is a mere exaggeration. Therefore, even if in truth B’s investment was totally based on A’s exaggerated claim, A is not liable for B’s loss.

The reason for this ruling is that any liability falls under the category of garmi and garmi is limited to cases where it is fairly certain (Rosh BK 9, 13) that damages will ensue. Second, the loss has to be totally caused by the advisor and not a result of the investor’s carelessness.

Since in our case it was not a foregone conclusion that B was going to rely completely on A, and additionally A was only a contributing factor to B’s loss, A is not liable for B’s loss. Each of these reasons suffices independently.

Third, in your situation it also is not certain that B relied solely on A. He may have done his own due diligence. To prove his case B would have to prove that he relied totally on A.

We should add that even though many causative damages that are not considered garmi are considered gromo, for which one is often liable in dinei shomayim, the heavenly tribunal, this case would not even be gromo since the investor damaged himself by acting irrationally if he relied completely on what A told him.

Since we have now determined that A did not owe money to B, the money that he gave B is just a present. In order to determine the answer your question we must study the laws governing the legal validity of presents that are given under duress.

The basic law is stated in SA (CM 242, 1): “A present that was given under duress is invalid.” The Sema (note 1) explains that the reason is that in order for a present to be valid it must be given wholeheartedly and not be the result of duress. He elaborates that the duress does not have to be extreme like beatings or other physical pain but it includes any external pressure that can cause a person to give a present even though he really does want to give it.

The Gemara (BB 47B) says this does not include when one decides himself to give a present due to personal considerations. For example, if one donates money to a yeshiva that he really does not want to support, but he gives it in order that his grandson will be accepted, the present is valid since it did not result from outside pressure. Rather, the donor decided that it was in his interest to donate and so he made his own decision to donate and acted in accordance with his decision.

Similarly, if one gives a present because he has a guilty conscience the present is valid because the decision to give the present was made by the giver himself without pressure. However, being cursed and otherwise publicly embarrassed is definitely external pressure and if the present was a result of the public embarrassment the present would be invalid.

Thus we understand from the Torah perspective the issue that must be decided by the beis din. It is whether the reason for the giver’s decision was external pressure or his own internal considerations.

We should note further that B’s argument is pure conjecture on his part since he has no way of knowing what went on in A’s mind, whereas A knows what prompted his decision (shemo vebori). Furthermore, in this case there definitely was pressure and B has no real claim, just the speculation that this was not the impetus for A’s present. A does have a claim based on his knowledge of his thinking, but since he is asking beis din to force B to return the money his task is to convince beis din.

Since the key issue in the dispute is whether A intended to give a present or not, our issue is: upon whom falls the onus to prove his position, the recipient or the giver.

There are several proofs that our general assumption is that people do not usually give presents and if there is any plausible alternative explanation to explain that an action was not a present, then we assume that it was not intended as a present.

First, this is stated explicitly by the Sema (207, 10) in explanation of a ruling of the Ramo.

An interesting manifestation of this principle is a ruling of the Terumas Hadeshen that is recorded by the Ramo (246, 17). A father-in-law obligated himself to provide meals to his daughter and future son-in-law for a certain amount of years. Later, the young couple continued eating by the father-in-law for an extra two years. After the two years, friction developed between the father-in-law and the son-in-law and the father-in-law sued his son-in-law for the cost of the meals during those two years. The Terumas Hadeshen ruled that the son-in-law owes the money, since we assume that the father-in-law did not intend to give his son-in-law a present.

Similarly, the Ramo (264, 4) rules that if a person does a job for someone without having been hired for the task, and afterwards the beneficiary claims that the one who did the job did not intend to be paid but the one who did the job claims he worked with intent to be paid, we accept the worker’s claim because we assume that people do not work for free.

There are many more proofs but we will suffice with one more which is similar to your question. The Rashbo (res. 1, 883) was asked about a woman whose husband constantly bickered with her about her kesubo. One day, without saying anything, she was mocheil, that is, she agreed to forego her kesubo. When later on it came time to collect her kesubo she asked to be paid and claimed that she agreed to forego it only in order to end the bickering and her mechilo was not valid.

The Rashbo accepted her claim and said she was entitled to her kesubo. He explained that in general we only accept a claim that a woman agreed to forfeit her kesubo if the husband can prove that she did so entirely free from duress. This ruling is cited by the Ramo (Even Ho’ezer 105, 5). Thus we see again that it is necessary to prove that a present was given without coercion.

We should add that if A gave the money because he mistakenly thought that he owed it to B it would not be valid because a present that was given based on an error (even a halachic error according to almost all) is called a neseno beto’us which is not valid.

In conclusion: B has to return the hundred thousand dollars to A since he cannot prove that the money was not returned due to the pressure he placed on A. Also, he was not justified in pressuring A, and he should ask mechilo for the embarrassment he caused. B should know that one who publicly embarrasses another is considered as killing the person and he forfeits his olam habo.




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