Beit Midrash

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Return of Money After Unused Services


Various Rabbis

Case: The plaintiff’s (=pl) mother (=dec) moved to Israel in her nineties and settled in an assisted-living home (=def), which served her well. The contract, signed soon after the mother moved in, stated that non-refundable payments to def would be made at the beginning of every month for the whole month. On Jan. 4, pl paid a monthly charge, and later on that day, dec suddenly died. After shiva, pl demanded a refund of half of the month’s payment since services were not rendered for the majority of the month. She made three claims. She signed a standard contract, which, according to legislation, must not be discriminatory, as a non-refund clause is. Also, when the contract was signed (after dec was settled), it would have been unfair to dec to move her around, and therefore it was signed under duress. Finally, it is immoral to make someone pay for services that were not rendered. Def claim that it is logical to have a one-month, no-refund policy because often the quarters are not re-occupied for a certain period, as happened here. They add that the room was set aside during shiva to have a candle lit in it. Def is willing, beyond the letter of the law, to return a fifth of the payment out of respect for dec.

Ruling: There is a machloket among Rishonim regarding the case of a renter who was prevented from continuing the rental. The Rashba says that even if the renter died, payment should continue. The Maharam says that in such a case, the renter is exempt. The Shulchan Aruch accepts the Rashba’s opinion. The Rama says that the question is unsreolved, and therefore whoever controls the money, keeps it. In our case, since pl paid, she is not entitled to a refund.
One could say that the payment to an assisted-living home is different than renting a home. In the latter case, the rental is like temporary buying and once this is done, there is no backing out. In contrast, regarding assisted living, one is paying for services, and we should compare it to one who hires a worker and then does not need him. (We do not need to get into the particulars of that issue because of the following).
Pl signed an explicit contract stating that the money would not be refundable, including in the case of death. The claim of being pressured into signing the contract is not valid because it is common for agreements to be made under a variety of situations of pressure, and an agreement is still an agreement. One can consider the possibility that the law of the land precludes unfair contracts, especially standardized ones where the weaker party has little ability to negotiate. In this case, though, the condition is fair. It is normal to pay in a manner of no refunds for a single unit of time, certainly for a month at a time. This allows both sides to plan their finances, as def explained sufficiently. Def’s willingness to return a fifth of the payment is beyond the letter of the law but will be made a binding gesture with this ruling.
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