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Ruling: Relevance of par. 6.7 – Def claimed that the clause that allows pl to extract his investment applies only to the original situation, a new business owned by pl and def, whereas in this case, pl only bought out bil’s part in an existing business. Additionally, since pl gave his money to bil, pl should approach bil with claims.
Beit din rejects def’s claims. According to the arrangement between pl and def, the payment to bil was the formation of the partnership between pl and def. On top of the original agreement, where it talks about payment to create the partnership, the payment to bil is written as the partnership’s activator. Therefore, in the second iteration of the partnership, the money paid to bil is what pl recovers when par. 6.7 applies.
Def’s right to activate par. 6.8 – Def’s claim that pl lost his rights in the business because of professional failures and because pl used, for personal purposes, some of the money that arb allowed him to hold, is to be rejected. First, arb already ruled that pl worked sufficiently well in terms of par. 6.8, and while beit din is authorized to rule otherwise, there are not grounds to do so. Regarding pl’s use of the funds, examining the banking records, the one usage that was unauthorized was cancelled the next day; therefore, nothing was mishandled. In any case, par. 6.8 is apparently unenforceable because it draconically would have pl surrender his entire investment of 365,000 NIS due to minor inefficiency or misuse. This type of clause is an unenforceable asmachta. It differs from par. 6.7, which does not penalize def but just allows pl to undo the partnership and recover his payments.
P'ninat Mishpat (831)
Beit Din Eretz Hemda - Gazit
829 - P'ninat Mishpat: How Many Dayanim?
830 - P'ninat Mishpat: Undoing a Problematic Partnership – part I
831 - P'ninat Mishpat: Undoing a Problematic Partnership – part II
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