Beit Midrash

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Delays of a Contractor – part I


Various Rabbis

Kiskev 19 5780
Based on ruling 76045 of the Eretz Hemdah-Gazit Rabbinical Courts

The defendant (=def), a company that bought a property, hired the plaintiff (=pl), a metal worker, to build there a light-material warehouse, which they rented out to a business (=re), which would start paying when the warehouse was ready. The work contract, for 260,000 shekels, was signed on July 8, and states that pl is to finish within a month and a half. Def gave pl a down payment check of 100,000 shekels, but it bounced and was replaced two weeks later. The work could not start until someone else built cement foundations, which occurred on Sept. 9. Pl finished the work only on Dec. 14. Pl demands that def finish the payments (76,361 shekels) and pay for improvements requested after the contract was made (4,000 shekels). Def is countersuing because pl finished the job late, which cost them lost rent (30,000 shekels). Also, pl refused to work when def had subcontractors with Arab workers at the site. This threat forced def to spend more money on workers. Pl says that this was necessary because of a spate of terrorist attacks at the time.

Ruling: Def claimed that he did not have to pay for improvements because they were mandated by the fire code inspectors and pl is thus required to use such standards. Beit din rejects def’s claim, as the agreement between the parties on building materials is binding. While pl is required to comply with fire standards, def is required to pay the difference between the cost of the agreed standards and the now required ones.

Regarding boycotting the Arab workers, while pl claimed that it had to with a specific security situation, there is strong evidence that this was his standard approach. Since he never claimed that he warned def in advance and since the standard in the field is not to make ultimatums on such a matter, pl had no right to cause def extra expenses.

How do we estimate the cost of hiring more expensive workers, considering that def had different options of how to deal with the threat? On the one hand, if a worker threatens to stop working in a manner that would cause a loss to the employer, the employer can hire others and put the cost on the worker (Shulchan Aruch, Choshen Mishpat 333:5). On the other hand, since the nature of the payment is for damages, the rule regarding damages is that we are to use the system of estimation that minimizes the damages (Bava Kama 58b). It is very difficult to calculate the difference in price between Jewish workers and non-Jewish workers. Based on compromise, we will estimate the damage based on the possibility that likely made most sense for def to have done – to delay pl’s work until after the Arab workers were finished. Our calculation is that this would have delayed the final product by another fifteen days, for which time the loss in rent would have been 9,000 shekels.

[Next time, we will focus on apportioning blame and cost for pl’s delay in finishing the work.]

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