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 Fellow Weekly -  Issue 98 

WHAT'S THE LAW

  

 

 
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Fellow Weekly raises issues of business law and ethics through lively emails by featuring your real-life scenarios answered by our leading authorities and professionals.

 

 

 

 

 

  

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CASE 198: Drafted n' Duped!

 

With apartments in high demand, Ray Field saw the following advertisement in the DC area Classifieds. "Airy, comfortable, spacious apt. contact present tenant Joe Berger ... must buy existing used furniture.
  
September 14th 1969... drafted! Dr. Ray Field, a young cardiologist in  NY Beth Israel Medical was summoned to provide ongoing care to US army veterans in the Armed Forces Retirement Home Washington Campus.

Incredibly, Ray and his wife Carol received permission to live off campus, in walking distance from the nearby fledgling Summit Hill Ahavas Torah Synagogue.

Desperate for a place to live, Ray agreed to purchase the existing furniture from Joe Berger for $2,000 (buying power of $12,314.11 in 2011 see CPI Inflation calculator) . Berger then put Ray in contact with the landlord.

Ray forwarded 12 head checks to the landlord and intended to meet Berger as they pulled in to their new home.

Excited, though apprehensive about their new beginnings, Ray and Carol pulled up to their new home in Summit Hill, knocked on the door and were warmly greeted by Berger.

Carol took one look at the furniture and almost fainted! "Joe!  This furniture is ten years old!  It's not worth more than $500! We're taking the apartment and here's $500 for the furniture."
 
"Mrs. Field, Indeed this furniture is ten years old. But, I moved in here a year ago and the previous tenant forced me to purchase this furniture from him for $2000. I'm just passing down the rip off  to you..."

 

 

What is the law?

 


Please email us with your comments and answers at [email protected].
Read next week's issue for the answer!

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Case # 197: Over the Range!

  

"Your fresh-cooked vegetables shouldn't come out of the microwave soft and mushy. Our sensor-equipped models take the guesswork out of cooking many common foods by using built-in sensors to automatically set power and time based on food moisture levels. "[GE Website]

"Convection oven cooking combined with microwave power produces beautifully baked and roasted foods fast. The convection fan is mounted on the right side of the oven and is surrounded by a 1550-watt heating element, allowing you to convection bake in your microwave oven at any temperature between 225 and 450 degrees."[GE Website]

Anita Gross drove by  David's Appliance Depot on Reisterstown Rd. in Baltimore, MD and saw her to dream GE Profile 1790 sensor technology Convection over-the range Microwave oven featured in the storefront window.

"We have one left. We'll give it to you at our bargain giveaway price of $950. We offer optional payment plans as well with no extra fees! You won't find a better deal anywhere in town...Don't give up this once in a lifetime opportunity. By the next shipment, we're raising the price to $1050", pressed the salesman...

Persuaded...though a bit wary...Anita handed the salesman three hundred fifty dollars cash and two post dated checks for three hundred dollars each.

Driving home with her prize in her trunk, Anita stopped off for a pizza at a local Kosher Pizza Shop when she eyed an advertisement in the "Where What When" Jewish Monthly on one of the tables. Abe's Appliances featured her dream 1790 for $694. Mortified, she went home, did some homework and found that she was duly ripped off - over the range! GE's suggested retail price was indeed $694. Incensed, Anita returned the next day to David's Appliance Depot and demanded a sale reversal.

"It's a done deal Madam..."

 

        May David's Appliance Depot charge $950 for merchandise valued at $694?

 

Does Anita have any recourse on the day of purchase?

 

Does Anita have any recourse the next day?

 

                                                     

 
 

 What's the Law? 

  

 

The Answer

We present you here with a concise ruling. For a more intricate elucidation, please see the detailed explanation below.

 

Generally, David's may not charge $950.  If Anita discovers that she was overcharged 16% of the going rate, she may have recourse (see detailed explanation).

 

 

 

 

Detailed Explanation
 
 

    

 Over the Range! Implicates the following four laws.

  1. Taking advantage of an individual by overcharging or underpaying is generally prohibited [Choshen Mishpat 227: 1].

 

  1. A customer who discovers, within the timespan necessary to ascertain the true value of the article (and return to the proprietor), that he or she paid more than 16% of the going rate, may generally rescind on the sale and demand his/her money back  [Choshen Mishpat 227: 2].

 

  1. After the timespan necessary to ascertain the true value of the article (and return to the proprietor, the customer forfeits this right to retract on the deal. We assume that the customer ascertained the value, pardons the proprietor and consents to having been overcharged [Choshen Mishpat 227: 7].

 

  1. Is a consumer who has not yet paid in full likely to consent to the degree of overcharge after the timespan necessary to ascertain the true value of the article, or does he/she view their holding on the money as leverage through which he/she can use to ensure a fair price as long as he/she still is in possession of the money?   [Ketzos HaChoshen 227: 3]

 

As valid arguments can be made to both sides, we would leave the status quo, and would not obligate the consumer to continue paying the full agreed upon price.

 

  1. Are head checks considered having paid for the article in full?

 

This depends upon the society. Generally in America one cannot receive cash for head checks. Additionally, the issuer retains the right to cancel the check. A check is simply an IOU.

 

However, in Israel it is common to be able to redeam third party head checks for cash. In addition, in Israel, like in Old British Law, it is a felony to indiscriminately cancel a check.

 

Thus, in an American style society, having given head checks is deemed as though the merchandise has yet to be paid for in full.  Whereas, there is strong reason to believe that in an Israeli style society, forwarding head checks is as though the merchandise is paid for in full.

 

 

Application

 

David's Appliance Depot overcharged Anita more than 16% of the going rate. Anita did not notify David's or return until the next day which was after the timespan necessary to ascertain the true value of the article. Thus, she theoretically, forfeited her opportunity for recourse. However, two thirds of the payment were in head checks. In America, we will assume that full payment was yet to be paid. We would therefore, allow Anita more time to rescind on the deal.

 


 
 

 

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Note:
 
Although we aim to present the correct ruling, varying details are always important and decisively influence every individual case. Our readers are thus encouraged to present their personal cases to a competent authority and not solely rely on the information provided.
 

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