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Case: The defendants (=def), yishuv residents of modest means, employed the plaintiff (=pl), a builder, to do renovations. Their contract portrayed pl as a building inspector, receiving a fee based on a percentage of money spent, and def as their own contractor. In actuality, pl was the contractor, and the formulation was done to eliminate a contractor’s usual level of responsibility. At some point in the middle of the work, war broke out, so that pl went to reserve duty and his Arab workers were banned from the yishuv. Eventually, pl returned to work, but had great difficulty finding workers. He unilaterally changed the mode of pay for the work he did, to a paid worker (1,500 NIS a day). In a third stage, after def looked unsuccessfully for another contractor, def agreed to pl’s new mode of pay. This lasted until pl finished the job, with much of his own work and some of workers. [The sides argued on different elements of the pricing; it will be presented in installments.] Def does not want to accept pl’s report of the hours/days he put into the work. Def complains that pl promised them an exemption from VAT for a large part of the money due, for payment in cash, but at some point pl decided he did not want to risk legal trouble and is demanding VAT. Ruling: Change in pay mode: It is logical that the old pay scale became somewhat unfeasible and we do not expect that pl’s continued work would be for free (Shulchan Aruch, Choshen Mishpat 264:4). However, when a worker starts working (or in this case, continues under new circumstances) and the sides did not discuss how much he would be paid, he is paid according to the lowest salary within the accepted range (see Bava Metzia 76a; K’tzot Hachoshen 332:3). However, in this case, once def agreed before the third stage to accept that price, it does not make sense to not extend that agreement retroactively to the second stage. Calculations of pl: In the general interactions between the sides, the reporting of pl was accepted as reliable. Therefore, for def to claim that in a certain instance, they are not willing to accept a claim would require them to provide a reasonable level of proof. On the other hand, regarding pl’s late claim that he did not receive payment for his work on air conditioners, since pl’s exact accounting did not list that as a missing payment, we will not accept that as an oversight without proof. VAT: Our beit din follows the rule that the law of the land must be kept, certainly when it comes to taxes. Therefore, VAT is to be paid. Regarding whether that should be on the account of pl or def, we accept pl’s claims for two reasons. For one, the prices that were specified were not including VAT, and therefore that should not be reduced from pl’s earnings. Second, the matter of giving a VAT reduction was an oral pledge and not a binding condition to use a different (and illegal) system. Therefore, if pl decided to stop using that system, it is not binding.
P'ninat Mishpat (834)
Beit Din Eretz Hemda - Gazit
865 - Complaints about Contractor’s Work – part II
866 - A Non-Contractor in Changing Times – part II
867 - A Non-Contractor in Changing Times – part I
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