By: Rabbi Meir Orlian, based on the writings of Rav Chaim Kohn, שליט''א, Founder, Business Halacha Institute

PROPER PRICING #5

Q: Can a store manager, salesperson or cashier make a "special deal" with the customer below the price set by the store owner?

A: The store manager, salesperson and cashier are all agents of the store owner and are required to act in his best interest. In general, an agent is required to follow the directions of his sender, and can take initiative only to the degree authorized by him. Thus, the store manager would typically be authorized to make even substantial "special deals" if he evaluated them to be in the best interest of the store; a salesperson would typically have some flexibility in order to secure the sale; the cashier would typically not be authorized to adjust the price other than for issues of small change. The specific application of this principle varies from store to store and from case to case. If an agent irresponsibly sold something below the price set by the owner, he is accountable for the difference. (See Shach 96:9 and C.M. 185:1)

PROPER PRICING #6

Q: Can the buyer or seller renege on an agreed price before delivery?

A: There are three stages in buying, each of which has a different halacha.

1. If there was only a verbal or informal written agreement, a person has a moral obligation to uphold his word, but it does not carry legal consequences. If a person recants his agreement, he is called mechusar amana, lacking trustworthiness. (Choshen Mishpat 204:7, 11)

2. If the buyer paid for the purchase, but did not yet do an act of acquisition (kinyan), the parties have legal ability to recant, but are subject to a curse of Beit Din, mi shepara: "The One who punished the generation of the Flood and the generation of Dispersion will punish one who does not uphold his word." (204:1, 4)

3. If the buyer already made an act of acquisition (kinyan), even if he did not pay yet, the transaction is legally completed and the parties cannot renege any more. (189:1)

We will discuss some common acts of kinyan in a later issue.

PROPER PRICING #7

Q: You set a price with your supplier based on the expected price from your customer. If your customer lowers his price, may you renege on the confirmed price with your supplier or cancel the order and buy the merchandise from him again at a lower price?

A: If the order from the supplier was completed with a kinyan, you cannot renege on the price or cancel the order, unless there was a clear statement that the agreed price was based on the expected price from the customer (C.M. 207:3 and Pischei Teshuva #5). A properly signed order form might be considered a kinyan if the common commercial practice is to consider such an order as final (201:1).

If there was no kinyan, the Rama (204:11) cites two opinions whether there is a moral obligation to uphold a commitment when there was a change in market circumstances meanwhile. The Rama holds that there is, but a number of Achronim question this ruling (Shach 204:8).

In any case, reneging on the price and canceling the order and re-buying would seem to have the same rule.