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Beit Midrash Series P'ninat Mishpat

Poor Job of Setting Up an Internet Site? – part I

An NPO (=pl) hired the defendant (=def) to help set up an internet site for fundraising use. Def identified three stages in developing the site, which was the basis for a contract to pay def for the first stage, including a functional specification document and other groundwork. During that time, they would negotiate the terms for work on the other stages. Def’s salary was 12,000 shekel plus 4% of revenue raised for a certain time. After presenting the functional specification, def helped pl choose a site developing software company (=SC) to do the next stage and negotiated their fee. Pl decided to hire a programmer (=RP) to replace def. RP reported to pl that def was responsible for many flaws in the planning, and pl also held def responsible for difficulties working with SC, including that SC was promised too much pay and was not sufficiently held responsible. Pl stopped paying def the promised percentage of profits and demands a return of some of the money already paid. Def is countersuing with the claim that pl did not do enough to utilize the opportunity, and he only agreed to a low salary because the percentage of the income was promised to him. The sides also dispute if the 4% is of the revenue produced specifically through the site, or whether it is for all of pl’s revenues during the period.
---- ---Iyar 4 5779
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Based on ruling 76109 of the Eretz Hemdah-Gazit Rabbinical Courts

Case:
An NPO (=pl) hired the defendant (=def) to help set up an internet site for fundraising use. Def identified three stages in developing the site, which was the basis for a contract to pay def for the first stage, including a functional specification document and other groundwork. During that time, they would negotiate the terms for work on the other stages. Def’s salary was 12,000 shekel plus 4% of revenue raised for a certain time. After presenting the functional specification, def helped pl choose a site developing software company (=SC) to do the next stage and negotiated their fee. Pl decided to hire a programmer (=RP) to replace def. RP reported to pl that def was responsible for many flaws in the planning, and pl also held def responsible for difficulties working with SC, including that SC was promised too much pay and was not sufficiently held responsible. Pl stopped paying def the promised percentage of profits and demands a return of some of the money already paid. Def is countersuing with the claim that pl did not do enough to utilize the opportunity, and he only agreed to a low salary because the percentage of the income was promised to him. The sides also dispute if the 4% is of the revenue produced specifically through the site, or whether it is for all of pl’s revenues during the period.



Ruling: Beit din’s appointed expert found that def’s own work was up to standard. As far as his work in hiring and working with SC, the expert believed he did not have enough evidence to decide conclusively. The site was left operational. While there were many things that needed to be fixed, such things are usually fixed in the next stage. It is unclear how much work would have been needed for this and whether the situation falls under the standard range.

Let us analyze the halacha according to the possibility that def did not work up to par. There is a machloket Tannaim (Bava Kama 100b) about work not done according to instructions, which is paskened in the Shulchan Aruch (Choshen Mishpat 306:3) as follows. The worker does not get the price he was promised but rather no more than the benefit that was accrued from his work. This is so even if the change was done accidentally, unless something happened that was beyond the worker’s control (ibid. 305:9).

It was clear that at the time that the first stage was completed, the system, if operational, would have problems that would need to be worked out. Def urged pl to begin using it in order to be able to fix those that arose, and also offered to stay on to help his replacement understand the strengths and weaknesses of the system, but pl refused. In such a case, we apply the rule that if one sold a flawed product to a buyer and the buyer used it after knowing about the flaw, the buyer can no longer void the sale based on the flaw (ibid. 232:3). The Maggid Mishneh (Mechira 15:3) adds that this also applies if the buyer could have uncovered the problem right away. According to some (Mishneh Lamelech ad loc.) this is only if used the object was used without being checked.

Therefore, we conclude that pl should have checked the status of the system before ending def’s work on it. We will continue with other elements of the case.
הלכה פסוקה
הרה"ג דוב ליאור
1 - אחריות לווה על פרעון ההלואה לאחר שנתן המחאה
2 - נזק תוך כדי בדיקת קנייה של אופנוע
3 - שטר שנכתב שלא כדין ובסופו היה קניין
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