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The plaintiff (=pl) had the defendant (=def) handle an investment sum of $5,000 at his discretion, with pl maintaining the ability to follow the investment’s progress and withdraw the money at any time. They signed a contract that stipulated the conditions for distributing profits, which were said to be potentially up to 50% annually. It also stated that there was significant risk in such an investment, and def told pl that it was unwise to invest all of his money in this manner. After achieving a 10% profit in the first few days, the investment plummeted to a mere $36. Pl does not claim that there was negligence in the way the investment was handled but said that he was not sufficiently warned about how dangerous the investment could be (def disputes this claim). Rather, pl says that he was misinformed about the transaction, and therefore, he should be reimbursed.
Ruling: Although there is discussion among the poskim on the degree to which a shomer (watchman, which is what def was, considering that the money remained in pl’s possession, with def having power of attorney) is obligated for indirect damage he causes (see Pitchei Teshuva, CM 55). However, here there cannot be such an obligation. Beit din’s research revealed that def acted in a normal manner for high potential gain, high-risk investments. In fact, pl did not claim that there was negligence. Furthermore, the contract stated that the investor waived the right to make claims of bad handling of the investment fund.
Regarding the claim that there was misrepresentation, there is no evidence that this is the case. Although def admits to having projected a potential of 50% profit, there is no evidence that such a profit was not possible. In fact, in a matter of a few days, there was a 10% gain, and the eventual great losses do not prove that there was no potential for continued gains. Contrary to pl’s claims, def operated against his directions, as all indications are that pl gave def free reign to invest as he saw fit.
The contract spelled out that the potential of loss was great, like the potential of gain, and suggested not to invest more than 40% of one’s portfolio in such an investment. Def did not stress orally that there was a chance of a total loss of the principal (which, in effect, happened), something which pl never considered but it is clear from the contract that this was a possibility. The Shulchan Aruch (Choshen Mishpat 61:13) rules that a husband who agreed to a ketuba with certain conditions cannot say afterward that he was not aware of what was written in it. The Rama continues that he is even responsible for implications one can draw from the contract’s language. One cannot claim that it is illogical for one to have agreed to the possibility of losing all his capital, as Tosafot (Ketubot 47a) says that it is normal for one to put himself in a situation of great loss if it also gives him the possibility of great gain.
P'ninat Mishpat (829)
Various Rabbis
159 - A Kibbutz Member’s Unauthorized Use of an Enrichment Course Fund
160 - Loss of Principal on an Investment
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P'ninat Mishpat P'ninat Mishpat: Agricultural Water Rights – part II
based on ruling 84122 of the Eretz Hemdah-Gazit Rabbinical Courts
P'ninat Mishpat P'ninat Mishpat: Sharing in Plumbing Expenses – part II
based on ruling 85013 of the Eretz Hemdah-Gazit Rabbinical Courts
P'ninat Mishpat P'ninat Mishpat: Return of Down Payment Due to War – part I
based on ruling 84044 of the Eretz Hemdah-Gazit Rabbinical Courts
Kuzari -Rabbi Ari Shvat Kuzari class 8- "Answering Questions on the Kuzari's Proof from Mass Revelation
Rabbis in Midrash
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Kuzari -Rabbi Ari Shvat Kuzari class 9 - "Seeing is Believing" (parag. 21-30)
These paragraphs elaborate on the theme that seeing and knowing is better than any attempt to prove logically, and begins explaining the difference between Israel and gentiles.
Ein Aya Various Universal Stages of the Geula Process
Rav Kook examines the various stages of redemption, explaining how (in addition to the obvious oft-mentioned stages of ingathering the exiles, reviving the Hebrew language, army, state etc.) the messianic dream of world prosperity, the State of Israel and world unity can and are realistically and logically gradually coming true.
Kuzari -Rabbi Ari Shvat Kuzari class 8- "Answering Questions on the Kuzari's Proof from Mass Revelation
How do we know that the "claim" of mass revelation to 2,000,000 witnesses at Mt. Sinai is really true? This important class answers all of the questions skeptics ask about this claim of the Kuzari.
Ein Aya Armies Still Necessary for Balance & the War Against Wars
Rav Kook explains why the world was originally divided into the various seemingly contradicting ideologies and cultures, in order to develop each one respectively. Swords or armies symbolize how each respective ideology defends themselves, as well as deters their opposing ideologies and cultures. On the other hand, the messianic era will be one of peace, and Rav Kook explains the transition to that stage, which mankind is already undergoing.
The Land of Israel LGBT'S IN ISRAEL
The question was asked, how can one make Aliyah with the LGBT parades?
Kuzari -Rabbi Ari Shvat Kuzari class 7 - Five Accumulative Proofs of G-d
As a preparation for the Kuzari's classic proof of G-d from the mass-revelation at Sinai, we start here with 5 other directions to strengthen our belief which also contribute to what the Kuzari will present as well.
Ein Aya Muscle & Meaning: The Dual Nature of Gevurah (Physical Strength)
Is physical strength and fitness a necessity or an ideal? Although it if often totally overlooked among topics of Judaism, Rav Kook writes that it clearly is also a necessity to deter the many enemies of Israel, but even in Y'mot HaMashiach, in the Messianic era, to a certain extent, it's ideal continues even after our enemies will have been finished off.
