Question
I have a toy store and one of the items I sell is helium balloons. I buy the helium from a supplier who sells helium tanks. Since each month I use about two tanks, which sold for a thousand shekels per tank at the end of 2021, I gave my supplier at that time twenty-four monthly checks of two thousand shekels each to cover my purchases and to lock-in the price for the next two years. Since the source of the helium that is sold in Israel is the Ukraine, when Russia invaded the Ukraine in 2022, the wholesale price of helium doubled. I asked my supplier to keep our agreement but he refuses to give me helium, arguing that he pays much more than a thousand shekels per tank and the agreement doesn't require him to lose money. However, I maintain that he made a commitment and just like if the price went down drastically, he wouldn't lower the price and would force me to keep to my commitment, so too he must keep to his commitment if the tables are turned. Who is right?
Answer
There are two issues that deserve consideration. The first is whether by giving your supplier head checks your supplier became legally obligated to supply you with helium for the next two years. The second issue is that, assuming that the obligation was executed legally, can your supplier renege on his commitment due to the drastic rise in price? In this article we will assume that the commitment was executed legally and will examine if this commitment remains binding following the drastic price rise.
A primary source is a ruling of the Taz (EH 114, 2) concerning a person who married a woman who had a daughter and who obligated himself at the time of their marriage, in a legally valid manner, to provide for the daughter's support for the five years following their marriage. The SA (EH 114, 1) rules that the obligation remains binding even if prices rose in the interim.
The Taz comments that when the SA rules that the commitment is binding even if prices rise, he only means this to apply to the usual price rise. However, if there is an unusually steep rise in prices the husband is not obligated, because we assume that the husband never intended to commit himself to provide for his wife's daughter under such circumstances.
The source of the Taz's contention is a ruling of the Rambam and SA (CM 225, 3), based on the Gemara (Gittin 73A), concerning someone who sold a field and obligated himself to compensate his customer in case the customer suffers a loss due to his purchase. Whenever one sells a property, he must return his customer's money if the field did not really belong to him or if it had a previous lien on it which was exercised following the sale. This obligation is standard.
In the sale discussed by the SA, the seller increased his responsibility by legally obligating himself to recompense his customer for any loss that he suffers as a result of his purchase. The SA rules that this commitment is binding. Therefore if, for example, a gentile forced the customer to surrender the field to him (even with merely an unproven claim that the field was really his) the seller must refund the customer's payment.
However, the SA, based on the Gemara, rules that if the loss that was suffered by the customer is due to an unusual, unforeseen cause the seller need not reimburse his customer. The rationale for this ruling is that we assume that a person does not take into consideration occurrences that are unusual when he commits himself. Thus, we cannot assume that a seller accepts upon himself responsibility even under such circumstances.
The Taz contends that the commitment a person accepts upon himself to support his wife's daughter is comparable to the obligation to recompense a customer for his loss. Therefore, if we see from the Gemara that unusual, unforeseen circumstances are not included in one's commitment to recompense his customer, so too they are not included in one's commitment to support his wife's daughter. The Beis Shmuel (114, 3) cites the Taz, indicating that he agrees and the Haflo'o (114, 3) also agrees.
The Avnei Meluim (114, 2) contends that he has proof that the Taz is incorrect but does not offer any rationale for his position.
The Beis Meir brings proof that the ruling of the Taz is incorrect. He explains that the fallacy in the Taz's comparison is that only in the case of the Gemara, where there are different circumstances that may cause a loss to the customer, do we assume that the seller only thought about circumstances that can be expected and not those that are unexpected. However, when one commits himself to support his wife's daughter, he takes into account the fact that prices may rise and thus he is obligated even if prices rise. Since he took into consideration the possibility that prices will rise, we assume that he took into consideration even a steep price rise, if he did not stipulate otherwise, because it is the same circumstance, just to a different degree. This is in contrast to the loss of the field where the loss happened in a totally unforeseen manner.
A noteworthy conclusion we draw from this disagreement is that both the Taz and the Beis Meir agree that one is only obligated if he intends to obligate himself. The disagreement is if we can assume that a husband intends to obligate himself even if the price rise is unusually steep.
Another posek who disagrees with the Taz is the Sha'ar Mishpot (CM 60, 4). His argument is that while it is true that people do not take into account unusual, unforeseen circumstances, this lack of consideration only affects new obligations and not existing obligations. In the case of the SA, it is only when something occurs which adversely affects the customer's acquisition that the seller becomes liable to his customer. Therefore, if the trigger for this liability was unexpected at the time when the seller accepted responsibility, the trigger does not create liability.
However, in the case of the Taz the obligation to support his wife's daughter began as soon as they got married. Therefore, even an unexpected circumstance cannot free the husband from his existing and ongoing liability. This is similar to one who owes someone money and then suffers an unexpected change of circumstances which makes it difficult to repay, where he remains just as liable as before.
He cites as proof that unforeseen circumstances do not free one from a liability even though it was self-imposed, an implication of the SA (YD 232, 16) that if a person committed himself to give a large sum for his daughter's dowry, he remains liable even if his assets subsequently decline drastically. This is also evident from the Torah where it writes that if a person obligated himself to donate his value (erech) to hekdeish he remains obligated even if he can no longer afford to pay.
The Imrei Bina (Halvo'o 49, 4) refutes the objections of both the Sha'ar Mishpot and the Beis Meir. Against the Sha'ar Mishpot he argues that there is a difference between a commitment to pay an amount of money and a commitment to support someone. When one commits himself to pay a fixed amount (such as one who obligated himself to donate his value), since the debt is fixed, unforeseen circumstances do not affect the existing debt.
However, the obligation to support someone is not fixed. For example, if the daughter passes away, the husband is not liable to her heirs for the amount that it would have cost him to sustain her. (See EH 114, 5.) Therefore, the proper way to understand this obligation is that there is a new obligation whenever the daughter needs support. Thus, he agrees with the principle of the Sha'ar Mishpot and just objects that the Sha'ar Mishpot misclassified the obligation to support a daughter.
Against the Beis Meir he argues that the fact that the husband took into account the possibility that there will be a price rise and nevertheless committed himself to pay, does not prove that he took account even a steep price rise.
As far as how to decide the dispute between the Taz and the others, the Imrei Bina rules that since there is no clear-cut proof one cannot force the husband to keep supporting the daughter if there was a steep price rise.
From the entire discussion, we can deduce that even though there are diverse opinions in the particular cases, everyone agrees that one does not become obligated if common sense dictates that he never intended to become obligated. In the case of support of one's wife's daughter, it certainly is plausible that the husband intended to obligate himself to support the daughter even if there was a steep rise in prices, since come what may the girl needs to eat and the husband's obligation was made in order to persuade his wife, the girl's mother who cared for her daughter, to marry him.
In contrast, in your case of the sale of the helium, it seems much less plausible that a person would agree to risk losing an exorbitant amount of money in order to ensure that he has a customer for two years.
A case analogous to yours was discussed by Rav Shlomo Kluger. In his case (See Chochmas Shlomo-glosses on CM 60, 6) A legally obligated himself for a fixed price to supply B with an amount of wheat that grew in C's field, which A would need to buy from C at the going rate. Rav Kluger rules that if the price rises to an extent that common sense dictates that A never intended to lose that much, A is free from his obligation, since he certainly did not intend to honor his commitment under these circumstances.
The Gemara (BM 40B) says that it is obvious that middlemen only do business in order to earn a profit and not to just break even. In this light, certainly your supplier never intended to lose money in order to provide you with helium and he is not obligated to supply you at a loss.
Another completely different reason to allow your supplier to renege on his commitment is not based on the previous discussion but on the laws of ono'o-over and under charging. We recall that if one over or underpaid by more than one sixth of the going rate, the sale is void. Based on this rule, the Panim Me'iros (CM 8, cited by Pischei Teshuvo 227, 7) freed a supplier of skins who had legally committed himself to supply skins which he did not yet own at a fixed price, from his commitment because he maintained that the sale constituted ono'o. The reason he maintained it was ono'o is because the correct price is the market price at the time that the customer receives the skins. Since he must only pay for the skins at the time that he receives them, paying only the original price constitutes ono'o because it is more than a sixth under the current market price at that time.
Similarly, in your case you did not pay for the tanks at the time when you made your agreement since you only gave post-dated checks which are not money until the date on the check. Since by the time your check becomes cashable the price doubled, you will violate the laws of ono'o if you only pay half price for the helium. Since we invalidate sales where the customer underpaid by more than a sixth, we certainly do not obligate a seller to supply goods if the sale is ono'o. The Pischei Teshuvo also cites the Beis Efraim who concurs with the Panim Me'eiros.
We should note that this was a major issue in Israel in 2008, when the value of the dollar plummeted. Many contracts were made in dollars and when the value plummeted it adversely affected many sellers. The leading poskim in Eretz Yisroel issued a joint ruling that the sellers are not bound by their contracts even if they were properly executed if the price change was greater than 16% (i.e., one sixth) which means that they followed the ruling of the Panim Me'iros and Beis Efraim. (The ruling is printed in Hayoshor Vehatov vol. 7 page 26.) We note that this psak is in accordance with our first reason as well since a drop in price of up to sixteen percent is not that unusual.
In conclusion: Even if your agreement with your supplier was executed in a manner that was binding on your supplier, due to the drastic change in price he is entitled to void the agreement and return your checks for two reasons.
For the record, if the price had dropped drastically, you would similarly be entitled to back out of the agreement.
It goes without saying that if the original agreement was not executed in a legally binding manner, then your supplier would certainly not have to honor it.
