Hilchos Choshen Mishpat
Volume IV : Number 1
Lending Money the Halachic Way
Is it necessary for witnesses to be present and for a contract to be
drawn up when lending money, or is this not required?
- Our Chazal forbade us from lending money to others without witnesses
present, or without a contract signed by witnesses. The custom today is
to rely on one witness seeing the transaction, or a note either
handwritten by the borrower, or signed by him, affirming that he has
borrowed money from the lender. It is also sufficient if the borrower
gives the lender some collateral to guarantee repayment of the loan, such
as a check made out for when the loan is due, or some item equivalent to
or greater in value that the loan.
Without any of the above, even today we may not lend.
- The above prohibition applies even if the lender is a Talmid Chacham
(Torah scholar), a relative to the lender, or a wealthy person about whom
there is no doubt that he will easily be able to repay the loan. (1)
However, if the lender knows the borrower to be a G-d fearing person who
would never deliberately lie, and the lender decides that if this
borrower should ever deny that he owes the money he will forgive the
debt entirely and will not seek recourse in Bais Din, if necessary he may
lend the money without witnesses, notes, or guarantees. It is still
preferable to follow the words of our Chaza"l even in this case. (2)
- It is proper that all agreements and obligations between two or more
people be put into writing and signed, even if the parties are good
friends or relatives. The agreement should be as detailed as possible.
This is true even if one of the parties may interpret this to mean that
you do not trust him.
Therefore, all agreements to hire a worker, contractor, or to sell or
rent items, etc. should be put into writing with all details and
conditions, even the most minute, explicitly spelled out. The purpose of
this is to prevent any friction and financial claims that may arise at a
later date, due to a misunderstanding, miscommunication, or forgetting
what the original agreement actually was. (3)
(1) The Gemara in Bava Metziah 75b states: "Rav Yehuda says in the name
of Rav, anyone who has money and lends it without witnesses, transgresses
the prohibition of (Vayikra 19:14) 'You shall not place a stumbling block
in front of the blind'." Rashi explains, because he is giving the
borrower the opportunity to entertain the thought of not repaying the
loan. The Gemara continues "Reish Lakish says that he causes himself to
be cursed, as it is written (Tehillim 31:19) 'Let the lying lips which
speak with arrogance and contempt against the righteous be silenced'."
Rashi explains, that since the borrower might forget about the loan and
deny it, people will accuse the lender of wishing to take money that is
not rightfully his, and curse him. The Gemara there states that this is
especially true when lending to a Torah scholar. Since he is absorbed in
his studies, he can easily forget about any money that he may have
borrowed. This is stated as the Halacha in the Rambam (Hilchos Halva'ah
2:7), and in the Shulchan Oruch, Choshen Mishpat 70:1, and agreed to by
the Rema, SM"A, and Shach there.
Although there are Achronim (later Halachic authorities) that mention
that they themselves are not stringent regarding this Halacha, as stated
in the Pilpulei Charifta (on the Gemara there in Bava Metziah) and in the
Aruch HaShulchan (on the Shulchan Oruch there), the Teshuvos Pri Yitzchok
(Vol. I Siman 48, and Vol. II Siman 49) concludes his discussion on this
matter by saying: "Chalila (Heaven forbid) to budge from the conclusion
of the Shulchan Oruch, which is the opinion of all Rishonim!"
The Tumim (Siman 70) and the Lechem Mishna (Hilchos Halva'ah Ch. 2) prove
that the reason for this Takkana was because our Chaza"l were concerned
that the borrower might forget about the loan, not that he would
intentionally lie and deny owing the money. Their proof is from the fact
that the Gemara says that witnesses to the loan are sufficient. If the
borrower wishes to lie, he can admit that the money was borrowed, but
claim that it was repaid, since the Halacha is (Choshen Mishpat 70:1)
that even if a loan was made in the presence of witnesses, it need not be
paid back in their presence! Therefore, it is clear that they did not
make this Takannah to prevent lying, but rather to prevent forgetfulness.
According to this, it makes sense that it is also sufficient to have a
note handwritten by the borrower attesting to the fact that the money was
actually borrowed, to jog his memory and remind him about the loan, if
necessary. Also, the presence of one witness is sufficient, which has the
credibility according to the Torah to obligate him in an oath. Although
there are Poskim that disagree with this conclusion, it is clear from the
Shach there (2) that the Shulchan Oruch holds that this is allowed, and
this is also the conclusion of the Chofetz Chaim, in his Sefer Ahavas
(2) If the lender knows the borrower to be a G-d fearing person, who
will not knowingly deny a debt that he owes, he is not transgressing
"Lifnei Iver" by lending without proof, since this borrower has no
temptation to deny the debt. If so, the only issue that remains is the
problem as stated by Reish Lakish, that the borrower causes curses to be
brought upon himself by other people who may hear that he claimed money
which is (allegedly) not his. Therefore, if the lender were to decide at
the time of the loan that he will never take the borrower to court if a
dispute arises, rather he will only discuss it privately with the
borrower, he has no reason to assume that others will hear about it and
curse him, and he may therefore loan the money without a note or
witnesses - if necessary.
If the lender would be willing to go one step further and state that if
the borrower would dispute the loan he forgives the loan entirely, and
has no claim at all against him, there is no need for any witnesses or
proof to be drawn up at the time of the loan at all.
(3) It is an obvious and well known fact that most disputes between
people arise from the fact that there are misunderstandings on issues
that were not clarified and put into writing before entering the
agreement. This is usually because it is unpleasant to make demands and
conditions, especially when the two parties are relatives, friends, or
one of them is a Torah scholar, as this implies a lack of trust between
them. The end result of this is that usually because of a lack of
evidence a Bais Din will leave the disputed money with the Muchzak - the
person who has control over the money, which results in the other party
losing money, and developing a hatred for the other party (and very often
for the Bais Din!).
Therefore - "HaChacham Einav B'Rosho!" (Koheles 2:14), a wise person
should see what will result, and the parties should put their agreement
into writing to the best of their ability, taking into consideration all
possible scenarios that might arise and be a cause for a possible
dispute. Even if it is too inconvenient to have professional help in
doing this, it should still be done by the parties to the best of their
If doing so results in any unpleasant feeling by the other party, you can
explain that the reason that you are insisting on this is because you are
concerned that you might forget over time exactly what the agreement was,
and you are therefore doing it for yourself, even though you have
absolute trust in the other party. You can also add that besides this,
you are doing this to fulfill a Takkanah of our Chaza"l, as we've
This week's class is based on a column by Rabbi Tzvi Shpitz, who is an
Av Bet Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His
column originally appears in Hebrew in Toda'ah, a weekly publication in
Jerusalem. It has been translated and reprinted here with his permission
and approval. His columns have recently been compiled and published in a
three volume work called Mishpetei HaTorah, which should be available
from your local Sefarim store.
Feedback is appreciated! It can be sent firstname.lastname@example.org.
This week's class is based on a column by Rabbi Tzvi Shpitz, who is an Av
Bais Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His
Column originally appears in Hebrew in Toda'ah, a weekly publication in
Jerusalem. It has been translated and reprinted here with his permission
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Please Note: The purpose of this column is to make people aware of Choshen Mishpat
situations that can arise at any time, and the Halachic concepts that may be used to resolve them. Each
individual situation must be resolved by an objective, competent Bais Din (or Rabbinic Arbitrator) in the
presence of all parties involved!