Write It Down!
Zevulun wishes to lend his brother, Yissochor, a sum of money.
Since the two brothers are on good terms, Zevulun sees no need to draw up a document
or have the transaction witnessed. Is he permitted to lend money in this way? Would
it make a difference if Yissochor was a talmid chochom (Torah scholar)?
(Tractate Bovo Metzia 75b) Rav Yehudah said
in the name of Rav: Whoever has money and lends without having the transaction
witnessed, transgresses the prohibition of, "Do not place a stumbling block in front
of a blind man." Rashi explains that since there were no witnesses to the
transaction, it enters the borrower's mind to deny the loan. Reish Lokish
stated that such a lender brings a curse upon his own head. The reason for this
is that when he comes to collect repayment of the loan and the borrower denies having
borrowed the money, other people will view
him as having falsely accused an innocent man (Rashi). The need for evidence
to support the loan is even stronger if the lender is a Torah scholar. Since he
is constantly preoccupied with Torah study, he is more likely to forget the details
of his financial dealings.
Oruch (Choshen Mishpot 70:1) rules that the preferred method of lending
money is by drawing up a document, since there is then no possibility of dispute
as to the details of the loan (Sema, Note 4). For these purposes, an IOU
in the borrower's own handwriting will suffice, since this acts as a reminder that
the loan took place (Shach, Note 2, unlike the Maharashdam). Witnesses
are otherwise required, unless the borrower gives collateral. In this case, the
fact that the borrower's property is in the hands of the lender prevents him from
denying the loan. Furthermore, if the lender took an oath, he would be believed
in the event of the borrower making such a denial (but only to claim up to the value
of the collateral – Sema, Note 3). Whoever lends money without a document,
witnesses or collateral has "placed a stumbling block in front of a blind man" and
brought a curse upon his head.
In the light of
the above, it would seem impossible to justify lending money, even to a close friend
or relative, without taking any of these measures. Is there any justification for
such practice? The Pilpula Charifta (to the Rosh, Note 100) notes
that the Rosh states that the reason for not lending without witnesses, etc.
is only in order to avoid a curse falling on one's head. Accordingly, the Pilpula
Charifta suggests that since only this reason is accepted, lending without witnesses,
etc. is not absolutely forbidden. If the lender does not mind risking a curse, he
may lend without witnesses, etc. The Oruch HaShulchan defends the practice
of lending money without taking any of the above measures by stating that nowadays
one only lends to people one knows and trusts. There is therefore no risk of forgetting
or denial. The Erech Shay notes that our Sages specifically discussed the
case of, "Whoever has money and lends". He argues that our Sages only forbade lending
money without taking precautions if one does so on a regular basis, if the money
is dedicated for this purpose. However, there is nothing wrong in occasionally lending
money without witnesses, etc.
In conclusion, it
is important to note that many authorities are of the opinion that one must strictly
follow the ruling of the Shulchan Oruch. Those who are involved with solving
financial disputes point out that one of the prime causes of such arguments is the
failure to draw up a sufficiently detailed document. Often, people feel uncomfortable
to ask for such a document, mistakenly assuming that the other party will interpret
it as a lack of trust. We are all human and we sometimes forget. Rather momentary
discomfort than later coming to an unnecessary bitter dispute.