Chapter 66:4-6
Investment Contracts
4. However, it is forbidden for the recipient to buy the investor's share
of the profits at a predetermined price, which he will be required to give
him regardless of the outcome of the investment. Rather, the recipient must
be granted the right to choose himself.
5. When the investment was made for a particular time and the funds
remained in the possession of the recipient beyond the time when repayment
was due, he must give the investor a share of the profits for the
additional period as well. It is logical to assume that the funds remained
in this possession under the original terms. Nevertheless, [to avoid any
difficulty,] it is preferable to stipulate in the investment contract that
should the funds remain in the recipient's possession after the date when
payment is due, the terms of the agreement remain in effect.
6. The following is a suggested text for a heter iska agreement: I, the
undersigned, acknowledge that I received 100 gold pieces from Reuven
Hormitz of Ungvar under the terms of an iska agreement for half a year from
the date mentioned below. I have obligated myself to purchase any type of
merchandise which appears to me likely to reap a profit. This money will
take precedence over my own.
Any profit which G-d will grant me from this merchandise will be divided -
half going to me and half to the said Reuven. Similarly, any loss, heaven
forbid, will be divided equally between us.
I obligate myself to pay the said Reuven the principal and his half of the
profits immediately upon conclusion of the half-year period beginning on
the date mentioned below. My word will not be accepted should I claim that
the investment suffered a loss, unless it is supported by the testimony of
two trustworthy witnesses. Similarly, concerning the profit, my word will
be accepted only when supported by an oath.
Nevertheless, we agree to the following stipulation: Should I desire to
give him ten gold pieces as his share of the profits, he shall have no
further claim against me and the remainder of the profits belong to me
alone. This applies even if tit may be proven that there was substantial
profit.
All the laws accepting the statements of the possessor of this contract
[i.e., the investor] will apply even after the date when payment is due.
Until the money is returned, the terms of this agreement will continue to
be in effect. I acknowledge receipt of a wage for my efforts.
Ungvar, Shevat 28, 5631 Shimeon Eisenstein
Signed in our presence, the witnesses
Levi Blaustein
Yehudoh Heuchberger
