P'ninat Mishpat: Unsuccessful Transfer of Yeshiva – part I | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The defendant (=def), a non-profit run by the rosh yeshiva (=rydf) had run a yeshiva for years and did not want to continue due to financial and educational difficulties. They negotiated with the plaintiff (=pl), another educational non-profit, to have them take over the yeshiva at its location and pay rent to def. A written agreement was signed in June 2022. After starting to enter the educational sphere and preparing, physically and educationally, at the end of the 5782 "academic year," pl informed the students’ parents soon before the 5783 academic year that pl would be closing the yeshiva. [We will deal with different elements of the dispute in installments.] Pl cites various examples of def’s breach of contract, claiming they prevented pl from continuing the yeshiva’s operation. Breaches include that def did not tell pl they would have to pay rent also to a shul and a small school who share the building, def withheld names of potential donors, and they spoke against pl to students (thereby increasing damaging behavior). Pl sued def for189,300 NIS for workers who worked on the project, 60,900 NIS spent on students, and 200,000 NIS for hurting pl’s reputation, after they were forced to close the doors. Def responds that the agreement between them is invalid because it was signed by only rydf and not the second legal signatory (=ssgn). Def claimed they told pl about the need to negotiate with the other institutions and told pl repeatedly that they would not be reimbursed for any investment.

Ruling: Status of the contract : The two sides disagree factually whether def assured pl that the ssgn would sign or whether def told pl that ssgn had misgivings. The validity of the contract is actually not crucial because neither side is interested in upholding it, but are claiming damages from the other side’s alleged breaking of their understandings. In that regard, the abrogation of even an oral agreement which caused a loss of money can make the abrogator liable for losses based on the halachic concept of histamchut (reliance). Clearly, the word of rydf was sufficient for people to have a right to rely upon. In fact, both sides demonstrated in word and in deed that they saw themselves as bound by the agreement, and def even countersued pl based on it.
Validity of a witness: The director of pl during the relevant time period testified in beit din. Pl wanted to disqualify his testimony because the fact that they laid him off created animosity. We rule that while an "enemy" of a party is invalid as a dayan, he is fit to be a witness (Shulchan Aruch, Choshen Mishpat 33:1). The S’ma (33:1) explains that we do not suspect that someone will lie because of animosity, whereas the ruling of a dayan, which is based on fine logic, can be affected by prejudice. The Pitchei Teshuva (CM 33:2) cites an opinion that a major enemy is invalid as a witness, but many Acharonim disagree with that opinion. Furthermore, even if we do not count the director as a formal witness, his testimony was very well presented, and it helped fill in much information that beit din needed in a manner that seemed reliable enough to create certain presumptions.